Budget 2025: FM announces raising of Kisan Credit Cards' interest subvention limit to Rs 5 lakh

Finance Minister Nirmala Sitharaman on Saturday announced a significant enhancement to the Kisan Credit Card (KCC) scheme, increasing the interest subvention limit from Rs 3 lakh to Rs 5 lakh.

In her 8th consecutive Budget presentation, Sitharaman also revealed plans to improve credit access for Micro, Small, and Medium Enterprises (MSMEs) by enhancing the credit guarantee cover for these businesses.

Additionally, the government plans to introduce customized credit cards with a Rs 5 lakh limit specifically designed for micro-enterprises, aiming to streamline their credit needs. The Kisan Credit Cards, which will continue to serve as a source of short-term loans, are expected to benefit 7.7 crore farmers, fishermen, and dairy farmers.

Sitharaman further emphasized the government's commitment to supporting export-oriented MSMEs by offering term loans of up to Rs 20 crore to well-performing businesses.

To strengthen the nation's self-reliance in urea production, the government also plans to reopen three dormant urea plants in the eastern region, with a new plant set to be built in Namrup, Assam, with an annual capacity of 12.7 lakh metric tonnes.

As of March 2024, the latest Economic Survey reports that there are 7.75 crore active KCC accounts with an outstanding loan of Rs 9.81 lakh crore. Originally introduced in 1998, the Kisan Credit Card scheme was designed to support farmers' short-term working capital needs, helping reduce their dependence on informal credit sources.

Expanding the KCC limit will offer further financial empowerment to farmers, enabling them to better meet their financial requirements for both crop cultivation and allied agricultural activities.