look news india
To financially strengthen crores of farmers of the country and to give a new impetus to the rural economy, the Central Government is preparing comprehensive reforms in the Kisan Credit Card Scheme. Amidst the rising prices of agricultural costs, fertilizers, seeds and modern agricultural equipment, the government is reviewing the Modified Interest Subvention Scheme (MISS) available under KCC. According to sources, discussions are underway to make the interest subsidy rules more farmer-friendly to provide institutional loans to farmers at lower costs.
Currently, more than 7.75 crore active KCC accounts are being operated through government, co-operative and regional rural banks across the country. Providing loans at affordable interest rates to small and marginal farmers of major agricultural states like Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, Maharashtra, Haryana and Punjab is one of the top priorities of the government.
Current mathematics of interest subvention: How do farmers get loan at only 4%?
The interest structure on agricultural loans under Kisan Credit Card is very transparent and concessional. Normally banks charge 9% to 10% annual interest on agricultural loans, but after government subsidy this rate becomes extremely low:
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7% Base Rate: The central government provides a direct interest subvention of 1.5% to 2%, thereby setting the starting interest rate for farmers at 7%.
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3% On Time Payment Incentive (PRI): If a farmer repays his loan within the stipulated time limit (1 year), he gets an additional rebate of 3% (Prompt Repayment Incentive) from the government.
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Effective rate only 4%: By combining both the rebates, the farmer effectively has to pay only 4% annual interest.
Will the increase in loan limit from ₹3 lakh to ₹5 lakh come under the ambit of subsidy?
Ever since the announcement in the agriculture budget to increase the total loan limit of KCC from ₹3 lakh to ₹5 lakh, there is curiosity among the farming community whether the benefit of interest subsidy will also be extended to ₹5 lakh. At present, the concessional interest rate of 4% is applicable mainly to short-term crop loans up to ₹3 lakh. Farmers involved in animal husbandry and fisheries get this benefit up to a limit of ₹ 2 lakh. If the government extends interest subvention to the entire limit of ₹5 lakh, it will significantly increase the working capital of small and marginal farmers in the country.
Big support of KCC for animal husbandry, dairy and fish farming also
The scope of KCC is no longer limited to traditional farming and crop production only. The government has also included cattle farmers, dairy operators, poultry farmers and fish farmers in the mainstream of institutional credit. Under Animal Husbandry KCC, loans are provided for animal fodder, medicines, maintenance and shed construction to promote alternative sources of income in rural areas.
Eligibility and Requirements for KCC Scheme
The following categories are eligible to apply for Kisan Credit Card:
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All individual or joint landholding farmers who own agricultural land.
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Tenant farmers, oral lessees and lease farmers.
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Farmers associated with Self Help Groups (SHG) or Joint Liability Groups (JLG).
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Farmers involved in animal husbandry, dairy, fisheries and horticulture activities.
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The minimum age of the applicant should be 18 years and maximum age should be 75 years (co-applicant may be mandatory for applicants above 60 years of age).
Documents required for application
The government has simplified the process of making KCC. Mainly these documents are required at the time of application:
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Identity Proof: Aadhar Card, Voter ID, or PAN Card.
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Residence Proof: Aadhar Card, Electricity Bill or Ration Card.
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Land Records: Copy of Khasra-Khatauni, land confiscation or lease contract documents.
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passport size photo And bank account details.
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Affidavit: Declaration by the applicant that he/she is not in default with any other bank.
How to apply online and offline from Kisan Loan Portal (KRP)?
The government has made the process of application and verification completely digital through ‘Kisan Rin Portal’ (fasalrin.gov.in) and ‘Jan Samarth Portal’ (jansamarth.in).
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Online Process: Farmers can complete e-KYC by visiting the official Kisan Loan Portal or Jan Samarth Portal and entering their Aadhaar and mobile number. After entering your land details and crop rotation, select the nearest bank branch (SBI, PNB, BoB or Gramin Bank) and submit the form.
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Offline Process: Farmers can visit their nearest bank branch, Primary Agricultural Credit Committee (PACS), or Common Service Center (CSC) and fill a simple one-page KCC form and submit it along with the documents. Banks are instructed to issue the card within 14 days after completion of the documents.
KCC is proving to be a boon for farmers who make timely repayments, as it provides them safe and affordable loans by saving them from the heavy interest cycle of local moneylenders. There is every possibility of final approval on the new interest subvention policies in the upcoming cabinet meetings.