Ahead of 20th PM-Kisan Installment, Modi Government Extends Interest Relief on Kisan Credit Card Loans

As over 11 crore farmers across India await the 20th installment of PM-Kisan Samman Nidhi, the Modi government has announced a major relief measure related to Kisan Credit Cards (KCC) during a recent cabinet meeting. The decision is expected to directly benefit millions of farmers by continuing to make short-term agricultural loans more affordable.

What Has the Cabinet Decided?

Union Minister for Information and Broadcasting, Ashwini Vaishnaw, shared that the Cabinet has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025–26. Under this scheme:

• A 1.5% interest subvention will be provided to banks and lending institutions.

• The government is expected to bear a burden of ₹15,640 crore to keep the scheme running.

This move ensures that farmers availing loans under the Kisan Credit Card (KCC) scheme continue to access credit at significantly reduced interest rates, encouraging timely repayment and reducing dependence on informal moneylenders.

How Do Farmers Benefit from KCC Loans?

Under the current structure of the Kisan Credit Card Scheme:

• Farmers can borrow up to ₹3 lakh for crop production or agricultural operations.

• The nominal interest rate is 7%, from which:

  • 1.5% is subvented (paid by the government).

  • An additional 3% discount is given under the Prompt Repayment Incentive (PRI) if the loan is repaid on time.

• Effective interest rate: just 4%, making it one of the cheapest credit options available to farmers.

For allied sectors like animal husbandry or fisheries, the interest benefit is applicable on loans up to ₹2 lakh.

PM-Kisan 20th Installment: When Will ₹2,000 Be Credited?

Farmers are also eagerly anticipating the 20th installment of the PM-Kisan Samman Nidhi Yojana, under which eligible landholding farmers receive ₹6,000 annually in three equal installments of ₹2,000.

• The 19th installment was credited on February 24, 2025, which fell under the December–March cycle.

• The 20th installment is expected between April 1 and July 31, 2025.

• Given previous trends, it's likely that the next ₹2,000 payout may be disbursed by late June, about a month ahead of schedule.

Important Note: Farmers who have not yet linked their Farmer ID or completed e-KYC may face delays in receiving this installment.

Kisan Credit Card: Key Stats and Background

• As of 2025, there are over 7.75 crore active KCC holders across the country.

• In FY 2023–24 alone, a staggering ₹25.49 lakh crore worth of loans were disbursed under the scheme.

• The KCC scheme was launched in 1998 to protect farmers from falling into the trap of high-interest loans from informal sources.

• It enables farmers to access short-term credit for agriculture, livestock, fisheries, and related activities at concessional interest rates.

Conclusion: A Two-Pronged Relief Strategy

With the continuation of interest relief under MISS and the 20th installment of PM-Kisan expected soon, the government aims to provide financial stability and liquidity to farmers as they prepare for the Kharif season.

These back-to-back measures are designed not only to ease the burden on small and marginal farmers but also to strengthen rural credit access and encourage timely repayment behavior.