Good news for Indian farmers. The central government is set to unveil the Union Budget for 2025–26 in Parliament on February 1. This budget may offer significant relief to farmers, as there are plans to raise the Kisan Credit Card limit from Rs 3 lakh to Rs 5 lakh. Experts note that the last adjustment to this limit occurred quite some time ago, and there have been ongoing requests for an increase since then.
The Kisan Credit Card Scheme was initiated in 1998, providing short-term crop loans to farmers involved in agricultural activities at an interest rate of 9 percent. The government offers a 2 percent interest discount to farmers, and those who repay their loans on time receive an additional 3 percent reduction, resulting in an effective annual interest rate of just 4 percent. As of June 30, 2023, there were over 7.4 crore active credit card accounts under this scheme, with an outstanding loan amount of Rs 8.9 lakh crore.
Agricultural experts highlight that the rising costs of farming have not been matched by an increase in the Kisan Credit Card loan limit for many years. Raising this limit could enhance production in the agricultural sector and boost farmers’ incomes.
This government initiative would not only improve farmers’ living standards but also reduce risks for the banking system, as timely loan repayments are expected. The Kisan Credit Card aims to support not only large landholders but also small-scale farmers and those involved in activities like animal husbandry and fisheries.
