KCC Loan Limit 2025: The government has enhanced the Kisan Credit Card (KCC) loan limit under the Modified Interest Subvention (MIS) Scheme from ₹3 lakh to ₹5 lakh, according to Union Finance Minister Nirmala Sitharaman while presenting the Union Budget 2025-26. The move is likely to increase access to finance for 7.7 crore farmers, including fisheries and dairy farming.
This way, Sitharaman also defined the importance of KCC. She said
“Kisan Credit cards facilitate short-term loans for 7.7 crore farmers, fishermen and dairy farmers. The loan limit under the modified Interest subvention schemes will be enhanced from Rs 3 lakh to Rs 5 lakh for loans taken through KCC.”
Enhanced Financial Support for Farmers
The KCC scheme, introduced in 1998, offers short-term crop loans to farmers at a benchmark interest rate of 9%. The existing interest subvention scheme allows loans up to ₹3 lakh at a concessional interest rate of 7% per annum, with a 3% subvention for timely repayment, thus reducing the interest rate to 4% per annum. Interest rates for loans above ₹3 lakh are determined by the respective banks.
With this change, more farmers will get institutional credit; this will further reduce the amount of private moneylenders, increasing productivity. This will ensure that farmers get enough credit to enhance the productivity level for that particular crop or practice, with it picking up the rural economic growth curve. We feel this KCC loan limit should be periodically reviewed for next few years to adjust for the rise in inflation. We also need to focus on making sure the disbursal of these loans happens quickly, where technology such as AI can be a wonderful enabler. Automation in kcc loans increases its efficiency and lets farmers meet their needs on time, which reduces the risk to crop failures because of lack of finance at the time of sowing,” said Vishal Sharma, Co-founder & CEO, AdvaRisk.
According to NABARD Chairman Shaji KV, the scheme hopes to benefit farmers who have both landholdings and others having minimum holdings in land besides all those who indulge in allied activities such as livestock and fisheries. “Agriculture is not only crop production; these sectors too need access to subsidised credit to enhance their per capita income. To help this, we are running a campaign in coordination with the Department of Financial Services, involving all banks and rural financial institutions, to ensure that the animal husbandry and fisheries sectors get sufficient credit. We are also motivating state governments to register fish farmers, as increasing registration is a must. Once farmers are registered and linked to their activities, we can efficiently ask banks to give loans,” he said. ### Expansion of Credit and Financial Inclusion
As of October 2024, 167.53 lakh KCCs with a total credit limit of ₹1.73 trillion were issued by Cooperative Banks and Regional Rural Banks (RRBs) as part of the saturation drive. This includes:
- 11.24 lakh KCCs with a credit limit of ₹10,453.71 crore for dairy farmers
- 0.65 lakh KCCs with a credit limit of ₹341.70 crore for fish farmers
The government will provide more financial support to these sectors through the revised loan limit, thereby increasing the financial security of the rural population.
Other Important Agricultural Decisions in Budget 2025-26
The government has also initiated several programs to enhance the agricultural sector.
To cut down import dependence and increase the production of fertilizers in the domestic industry, three state-owned urea plants in the eastern region will be revived. Along with this, a new urea unit with a production capacity of 12.7 lakh metric tonnes per year shall also be set up at Namrup, Assam.
For the cotton farmers, a five-year Mission for Cotton Productivity has been proposed in order to develop productivity and generate extra-long staple cotton varieties.
“For the good of lakhs of cotton-growing farmers, I am delighted to announce a Mission For Cotton Productivity. This 5-year mission will facilitate significant productivity and sustainability in the production of cotton and promote extra-long staple varieties of cotton. The best science and technology support will be provided to the farmers,” Sitharaman said.
She further added that this will align with the integrated 5F vision of the textile sector, thus helping increase incomes for farmers and ensuring a steady supply of quality cotton toward rejuvenating India’s traditional textile sector. The finance minister also announced a framework for sustainable fisheries utilization in India’s Exclusive Economic Zone (EEZ) and high seas. This initiative will particularly benefit the Andaman and Nicobar Islands and Lakshadweep Islands by utilizing untapped marine resources to drive economic development and employment in coastal areas. India currently ranks second globally in fish production, with aquaculture and seafood exports reaching ₹60,000 crore.
