Budget 2025 LIVE: Finance Minister Nirmala Sitharaman revealed on Saturday that Kisan Credit Cards (KCC) will persist in offering short-term loans to 7.7 crore farmers, fishermen, and dairy farmers. She announced the proposed increase in the Kisan Credit Card (KCC) loan limit from Rs 3 lakh to Rs 5 lakh Furthermore, the loan cap within the revised interest subvention scheme will be raised from Rs 3,000 to Rs 5,000 for KCC loans, enhancing financial assistance for agricultural activities.
The Kisan Credit Card (KCC) scheme is a government initiative in India that offers credit assistance to farmers. Established in 1998 by the Ministry of Agriculture and Farmers' Welfare, this program aims to support agriculturalists in securing financial resources.
Sandeep Chilana, Managing Partner, Chilana & Chilana Law Offices, said: “Raising the loan limit for farmers under KCC Scheme is a positive step that will give farmers better access to formal credit and reduces their reliance on high-interest informal borrowing. However, the key challenge will be ensuring smooth and quick loan disbursal, especially for small and marginal farmers. The government must also put safeguards in place to prevent over-borrowing and ensure that increased credit translates into real benefits for farmers rather than additional debt burdens.”
Rajarshi Dasgupta, Executive Director - Tax, AQUILAW, said: “With the increase in prices on procurement in the hands of farmers, such enhancement will meet farmers' short-term working capital needs and will reduce KCC reliance on informal credit sources.”
Additionally, FM Sitharaman unveiled the Dhan Dhanya Krishi Yojna in collaboration with states, aiming to benefit 1.7 crore farmers in 100 districts. The scheme is designed to create opportunities in rural areas, making migration optional rather than necessary.
"Budget 2025 announces reforms in the agriculture sector including Dhan Dhanya Krishi Yojna, high yield seed varieties, and crop diversification to allow for greater produce and creation of employment. This helps farmers achieve self-sufficiency and reduce migration. These measures will allow for higher export of produce outside India and boost cross-border trade, and ultimately limit migration to metro cities," said Moin Ladha, Partner, Khaitan & Co.
The Finance Minister highlighted key areas addressed in the Union Budget, including taxation, power, urban development, mining, the financial sector, and regulatory reforms. These sectors are crucial to the government's efforts to drive growth, improve infrastructure, enhance governance, and promote sustainable development across various industries.
Eligibility criteria for the Kisan Credit Card (KCC) Scheme
Individual or joint borrowers who are owner cultivators, tenant farmers, verbal lessees, and share croppers are eligible. Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers, including tenant farmers and share croppers, are also eligible.
The KCC cards facilitate seamless transactions with input dealers and enable farmers to have sales proceeds credited to their accounts when selling their produce at mandies, procurement centers, etc.
Kisan Credit Card accounts
The Economic Survey 2024-25, as presented by Union Finance Minister Nirmala Sitharaman on Friday, highlighted that as of March 2024, there were a total of 7.75 crore operational Kisan Credit Card (KCC) accounts, with an outstanding loan amount of rs 9.81 lakh crore.
Of these, 1.24 lakh KCCs were specifically issued for fisheries, while 44.40 lakh were allocated for animal husbandry.
The report also mentions that under the Modified Interest Subvention Scheme (MISS), the digitization of claim processing has been implemented through the Kisan Rin Portal (KRP) starting from the financial year 2025. By December 31, 2024, claims totaling over ₹1 lakh crore had been processed, benefitting around 5.9 crore farmers who are part of the MISS-KCC scheme and have been mapped through KRP.
Furthermore, as part of government initiatives to support priority sectors such as agriculture, banks are now required to allocate 40 percent of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE), whichever is higher. These measures have significantly reduced the reliance on non-institutional credit sources, from 90 percent in 1950 to approximately 25 percent in the financial year 2022.