KCC: The government’s major declaration has resulted in doubling farmers’ income
KCC: The Modi administration wants to see farmers’ incomes quadruple. The government has started many farmer-focused initiatives in response to this. The Modi administration has recently introduced initiatives like the Pradhan Mantri Fasal Bima Yojana and the Pradhan Mantri Kisan Samman Nidhi to provide financial help to farmers. Of all of them, Pradhan Mantri Kisan Samman Nidhi is the most ambitious. This gives farmers support of Rs 6,000 a year.
Addition of a 3% yearly interest subsidy
The government has officially approved the interest subsidy scheme for short-term loans up to Rs 3 lakh taken out using the Kisan Credit Card during the current financial year. Program participants may get loans at a 7% concessional interest rate. Farmers get an extra 3% yearly interest subsidy if they return the loan on schedule. The Reserve Bank of India states that “this also means farmers will get short-term loans for related activities including animal husbandry, dairy, fisheries, beekeeping, etc.” to those who repay the loan in the way mentioned above.
1.5% Interest Subsidy for Farmers
In a circular, the Reserve Bank of India said that in 2024–2025, lending institutions will get an interest subsidy rate of 1.5%. The Reserve Bank claims that the purpose of the KCC interest refund is to incentivize farmers to hold their products in warehouses rather than sell them on the spur of the moment. This facility will be available to small and marginal farmers for six months after harvest.
The RBI circular states that for the first year on the loan amount restructured to assist farmers impacted by natural catastrophes, banks would have access to the interest discount rate of that year. These modified loans will be charged interest at the usual rate starting in the second year.
