Government Boosts Farmers’ Income with New Credit Schemes
The National Statistics Office (NSO) has reported data from the Situation Assessment Survey (SAS) of Agricultural Households, revealing insights into the financial status of rural agricultural families. The latest findings from the NSS 77th round, conducted between January and December 2019, indicate the average monthly income of agricultural households and their outstanding loans for the agricultural year from July 2018 to June 2019.
Since 2019, there has been a noticeable gap in available data regarding average monthly income and outstanding loans, which affects the understanding of the economic conditions faced by farmers. In response to these conditions, the Government of India has been proactive in enhancing farmers’ welfare and incentivizing agriculture.
Support for Agricultural Development
Agriculture, being a state matter, sees various initiatives taken by State Governments to support farmers. The central government further complements these efforts through policy measures, developmental programs, and financial support. This includes the implementation of numerous Central Sector and Centrally Sponsored Schemes aimed at bolstering agricultural incomes.
Rising Agricultural Loans
According to the Reserve Bank of India (RBI), the outstanding advances to agriculture and allied activities from Scheduled Commercial Banks have shown a significant increase over recent years. Data reveals that as of March 2025, these advances are projected to reach ₹23,67,024 crore, showcasing the government’s strategy to improve access to credit for farmers.
Promotion of Institutional Credit
The government has enacted various measures to enhance institutional credit availability among rural households. This includes setting annual agriculture credit targets for banks and implementing schemes such as the Kisan Credit Card (KCC), which grants farmers easier access to affordable loans.
Long-Term Economic Empowerment Measures
To facilitate long-term growth and security for farmers, the Indian government has introduced structured economic empowerment initiatives. These consist of direct cash benefit schemes like PM Kisan, crop insurance options such as PMFBY, and grant-based programs like Krishonnati Yojna.
Modified Interest Subvention Scheme
One of the pivotal schemes being implemented is the Modified Interest Subvention Scheme (MISS), which offers concessional interest rates on short-term loans acquired through KCC. This initiative aims to provide farmers with easier access to essential working capital. Under this scheme, farmers enjoy a subsidized interest rate of 7%, with an interest subvention of 1.5% provided upfront to lending institutions. Moreover, timely loan repayments can earn farmers an additional Prompt Repayment Incentive (PRI) of 3%, effectively lowering the interest rate to just 4% per annum.
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