KCC Interest Subsidy Scheme Delivers Rs 2.30 Return for Every Rupee Invested, Finds Govt Assessment
A government-commissioned assessment by ISEC found that every Re 1 invested under the KCC-Modified Interest Subvention Scheme generates Rs 2.30 in net value addition. The scheme has reduced farmers' borrowing costs, improved cropping intensity and credit discipline, while KCC lending to animal husbandry and fisheries has grown sharply over the past five years.
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The government's flagship Kisan Credit Card-Modified Interest Subvention Scheme (KCC-MISS) has generated substantial economic benefits for the farm sector, with every Re 1 invested under the scheme creating Rs 2.30 in net value addition in agriculture and allied activities, according to a third-party assessment conducted by the Institute for Social and Economic Change (ISEC), Bengaluru.
The assessment, commissioned by the Department of Agriculture and Farmers Welfare, evaluated the performance of the KCC-MISS across India's diverse agro-climatic regions. The findings were shared by Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha on Monday.
According to the report, the government has provided an estimated Rs 1.87 lakh crore as interest subsidy under the Modified Interest Subvention Scheme since its inception up to 2024-25, significantly reducing the borrowing cost for farmers.
The study found that concessional credit under the scheme has encouraged farmers to cultivate larger areas, increase cropping intensity and adopt more diversified cropping patterns across seasons. Better access to affordable working capital has also enabled timely purchase of farm inputs, contributing to higher productivity.
The report highlighted that farmers availing the Prompt Repayment Incentive (PRI) demonstrated better credit discipline, strengthening banks' confidence in extending fresh loans. It also noted that the scheme has supported income diversification by promoting dairy, livestock and fisheries alongside crop farming. Working capital support for inland fisheries has been particularly beneficial for diversification in the North-Eastern region.
The government's data also show a steady rise in the scale of Kisan Credit Card lending. The number of operative KCC accounts increased from 7.15 crore in 2021-22 to 7.28 crore in 2025-26. During the same period, the outstanding loan amount rose from Rs 8.15 lakh crore to Rs 10.08 lakh crore, registering an increase of nearly 23 percent over five years.
Credit expansion has been especially strong in the allied sectors. Outstanding loans under KCC for animal husbandry surged from Rs 15,216 crore in 2021-22 to Rs 60,997 crore in 2025-26, a jump of around 300 percent. The number of operative accounts also increased sharply from 15.08 lakh to 51.26 lakh.
Similarly, KCC lending to the fisheries sector witnessed rapid growth. The number of operative accounts rose from 60,095 to 1.38 lakh during the period, while the outstanding amount climbed from Rs 1,531 crore to Rs 5,355 crore, an increase of nearly 250 percent.
