By The Sampadak Express
In a significant move to support farmers, Finance Minister Nirmala Sitharaman, while presenting the Union Budget for 2025, announced an enhancement of the Kisan Credit Card (KCC) scheme. The loan limit under the KCC interest subvention scheme has been raised from Rs 3 lakh to Rs 5 lakh. This decision aims to provide greater financial assistance to farmers, fishermen, and dairy farmers, making it easier for them to access affordable credit for agricultural activities.
Expansion of Kisan Credit Card Scheme
Sitharaman highlighted that the Kisan Credit Card scheme facilitates short-term loans for approximately 7.7 crore farmers, including those involved in fishing and dairy farming. With the loan limit now raised under the modified interest subvention scheme, farmers will be able to borrow up to Rs 5 lakh at subsidized interest rates. This move is expected to provide significant relief, allowing farmers to meet their financial needs, especially for purchasing seeds, fertilizers, and equipment.
The Finance Minister also pointed out the government’s commitment to promoting self-reliance in urea production. To further enhance urea supply in the country, the government has reopened three dormant urea plants in the eastern region. Additionally, a new urea plant with an annual capacity of 12.7 lakh metric tonnes will be established at Namrup in Assam.
What is the Kisan Credit Card (KCC)?
The Kisan Credit Card (KCC) scheme, introduced in 1998, has been a game-changer for the farming community in India. Designed to simplify the loan process for farmers, the scheme provides affordable credit for agricultural activities. The interest rate on loans under the KCC scheme is a nominal 4% per annum, making it highly accessible for farmers in need of financial support.
Under the KCC scheme, farmers can avail loans of up to Rs 5 lakh (as per the recent increase) for a maximum tenure of five years. This loan can be used for a variety of purposes, including crop cultivation, purchasing agricultural equipment, and funding other farming-related activities. The validity of the Kisan Credit Card is also five years, after which farmers can renew it.
Eligibility Criteria for Kisan Credit Card
The KCC scheme is open to a wide range of farmers. Applicants must be between 18 years of age and have no upper age limit. Farmers can be owner-cultivators, sharecroppers, tenant farmers, or members of self-help groups or joint liability groups. They must be engaged in the production of crops or allied activities, including animal husbandry or non-farm activities like fishing.
The scheme has been designed to cater to the needs of both small and large-scale farmers. It allows them to access timely credit to ensure uninterrupted farming operations. Additionally, a significant change in the policy was recently made by the Reserve Bank of India (RBI), which raised the guarantee-free loan limit from Rs 1.60 lakh to Rs 2 lakh. This means that farmers can now borrow up to Rs 2 lakh under the KCC scheme without providing any collateral or guarantee.
Impact of the Kisan Credit Card Scheme
The KCC has been instrumental in improving access to credit for millions of farmers across the country. By removing barriers such as lengthy paperwork and high-interest rates, the scheme has enabled farmers to secure financial support quickly and efficiently. The increase in the loan limit to Rs 5 lakh is expected to further ease the financial burden on farmers, especially those requiring larger sums to meet their agricultural needs.
This decision aligns with the government’s continued focus on strengthening the agricultural sector, improving farmers’ welfare, and promoting self-sufficiency in key agricultural inputs like urea. With the expansion of the Kisan Credit Card scheme and additional measures for urea production, the government aims to support sustainable growth in India’s agricultural sector.
The increased loan limit under the Kisan Credit Card scheme is a welcome move for farmers, providing them with greater financial flexibility. By raising the cap to Rs 5 lakh, the government is ensuring that farmers have the resources they need to expand their agricultural activities and improve productivity. As India continues to prioritize agricultural reforms, initiatives like the Kisan Credit Card will play a crucial role in fostering a more resilient and self-reliant farming community.
