Budget 2025: Loan Limit on Kisan Credit Card May Rise to Rs 5 Lakh

Budget 2025: Farmers are likely to receive a significant gift in the upcoming 2025-26 budget. The government is preparing to increase the credit limit on Kisan Credit Cards (KCC) to ₹5 lakh. Let’s find out the full story.

Budget 2025: A significant gift is expected for farmers in the upcoming Budget 2025-26. The government is preparing to increase the loan limit on Kisan Credit Card (KCC) to ₹5 lakh. Currently, the maximum borrowing limit under the Kisan Credit Card (Budget 2025) scheme is ₹3 lakh. According to sources, this proposal may be included in the budget (Budget 2025), which will be presented in Parliament on 1 February.

Kisan Credit Card Scheme

The Kisan Credit Card scheme was launched in 1998. The aim of this scheme is to provide farmers with accessible and affordable credit for crop production and agriculture-related activities. Currently, a 9% interest rate applies to Kisan Credit Cards (Budget 2025). However, the government provides a 2% interest subsidy, and farmers who repay their loans on time receive an additional 3% discount. In this way, farmers can borrow at an interest rate of only 4%.

Why the Need to Increase the Borrowing Limit?

A senior official stated that the cost of agriculture has increased significantly in recent years, while the borrowing limit for Kisan Credit Cards (Budget 2025) has remained unchanged for a long time. The government is considering increasing this limit with the aim of increasing farmers’ income and strengthening the agricultural sector.

Potential Benefits of Increasing the Borrowing Limit

Vishal Sharma, CEO of fintech company Adwarisk, said that given the rising cost of agriculture, this change is much needed. This will enable farmers to use better equipment, improved seeds, and agricultural technology. Their income will also improve.

 

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Shaji K V Welcomes the Move

Shaji K V, Chairman of NABARD (National Bank for Agriculture and Rural Development), also welcomed this move. He said that this scheme is not only for large farmers but will also benefit small and medium-sized farmers, livestock farmers, and fish farmers. Agriculture is not limited to crop production (Budget 2025); the development of other related activities is also necessary.

Current Status and Figures

According to NABARD data, as of 30 June 2023, there were over 7.4 crore active accounts under the Kisan Credit Card (Budget 2025) scheme, with outstanding loans of ₹8.9 lakh crore. By October 2024, cooperative and regional rural banks had issued 167.53 lakh Kisan Credit Cards, with a total credit limit of ₹1.73 lakh crore. This includes a credit limit of ₹10,453.71 crore for dairy farmers and ₹341.70 crore for fish farmers.

Possible Improvements in Pradhan Mantri Fasal Bima Yojana

In addition to the Kisan Credit Card (Budget 2025), the government is also considering a plan to improve the Pradhan Mantri Fasal Bima Yojana. According to officials, the role of state governments may be limited to expedite and simplify the compensation process under the crop insurance scheme.