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Kisan Credit Card (KCC) Scheme — Govt Scheme for UPSC | Vaidra
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Kisan Credit Card (KCC) Scheme

Ministry of Agriculture and Farmers WelfareactiveAgricultureLaunched: 1998-08-01

About the Scheme

Kisan Credit Card provides flexible revolving credit to farmers for agricultural inputs, allied activities, and consumption needs. 7.75 crore active KCC accounts (March 2024); ₹9.81 lakh crore outstanding. Budget 2025-26 raised limit from ₹3 lakh to ₹5 lakh under Modified Interest Subvention Scheme (MISS). Extended to fisheries (1.24 lakh KCCs) and animal husbandry (44.40 lakh KCCs).

Target Beneficiaries: 7.75 crore active KCC accounts; ₹9.81 lakh crore outstanding (Mar 2024); 44.40 lakh KCCs for animal husbandry; 1.24 lakh for fisheries

Official Website →

✦Key Features

  • 7.75 crore active KCC accounts; ₹9.81 lakh crore outstanding (Economic Survey 2024-25)
  • Interest rate: 7% p.a. on crop loans; 3% interest subvention = effective 4% for timely repayment
  • Budget 2025-26: MISS loan limit raised ₹3 lakh → ₹5 lakh; 5.9 crore farmers mapped via Kisan Rin Portal
  • Extended to fisheries (₹2 lakh limit; 1.24 lakh KCCs) and animal husbandry (₹2 lakh; 44.40 lakh KCCs)
  • Collateral-free up to ₹1.60 lakh; RuPay KCC debit card for ATM/PoS use
  • PM-KISAN beneficiaries automatically eligible for KCC
  • Coverage: agriculture + allied activities + post-harvest + consumption needs

✓Eligibility Criteria

  • Individual or joint farmers who are owner cultivators of their land
  • Tenant farmers, oral lessees, and sharecroppers are eligible to apply for credit
  • Self Help Groups or Joint Liability Groups of farmers and individual cultivators
  • Farmers involved in animal husbandry, dairy, poultry, and fisheries sectors

★Benefits

  • Provision of adequate and timely credit for crop production and post-harvest expenses
  • Interest subvention of 2% and an additional 3% for farmers who repay loans promptly
  • Flexible withdrawal and repayment facility based on the crop harvesting cycle
  • Insurance coverage against crop damage due to natural calamities under associated schemes

▶Application Process

  • Visit the nearest commercial, rural, or cooperative bank to obtain the KCC application form
  • Fill the form with details of landholding and crops proposed to be grown
  • Verification of land records or tenancy status by the bank's field officer
  • Sanction of the credit limit and issuance of the KCC card with a passbook

₹ Budget Allocation

3000

Funding Ratio (Centre:State): Implemented by Commercial Banks, RRBs, and Cooperatives; Interest subvention is 100% Central Government funded

Exam Relevance

GS Paper: GS3

Prelims Relevance8%
Mains Relevance8%

Syllabus Tags

AgricultureCreditFarmersBankingGS3

Historical Context

Introduced in 1998 based on the recommendations of the R.V. Gupta Committee.

Exclusion Criteria

  • Individuals with no involvement in agriculture or allied activities
  • Defaulting farmers of previous institutional loans (criteria vary by bank)

Sub-Schemes

Animal Husbandry & Fisheries KCC

KCC for Dairy farmers and Fishers.

Challenges

  • Cumbersome documentation process for small farmers
  • Non-inclusion of landless laborers and tenant farmers in many regions
  • Diversion of credit for non-agricultural consumption purposes
  • Low awareness about the KCC-integrated personal accident insurance

Reforms & Recommendations

  • Digitization of land records to enable 'Instant KCC' through Fintech
  • Promotion of 'Joint Liability Groups' (JLGs) to provide KCC to tenant farmers
  • Flexible repayment cycles aligned with specific crop harvesting periods

Performance Statistics

Metric

7.75 Crore

Source: PIB/Ministry of Agriculture

Metric

₹9.81 Lakh Crore

Source: Reserve Bank of India

Critical Analysis

KCC has revolutionized agricultural credit by reducing the dependency of farmers on non-institutional sources (moneylenders). The inclusion of animal husbandry and fisheries has widened its safety net. However, there is a persistent 'credit deepening' issue where large farmers benefit more than small/marginal ones. The rigid 'land title' requirement often excludes tenant farmers and sharecroppers, who are the most vulnerable. Additionally, while the interest subvention makes it attractive, the high NPA levels in the agri-sector pose a systemic risk to rural banking.

SDG Linkages

SDG 1 (No Poverty)SDG 2 (Zero Hunger)

Constitutional Backing

Article 48 (Organization of agriculture and animal husbandry)Directive Principles of State Policy

Technology Used

JanSamarth PortalDigital Land Records IntegrationDirect Benefit Transfer (DBT)

Success Stories

Ghar Ghar KCC Abhiyaan

Key Takeaways

  • Revolving credit facility for crops and allied activities
  • Interest rate as low as 4% with prompt repayment
  • Validity of 5 years with annual renewal based on performance

Previous Year Questions

2022
2022
2022
2022
2022
2022
2023
2023
2024
2024
2024
2024
2024
2025

Probable Questions

Evaluate the role of the Kisan Credit Card (KCC) scheme in achieving the goal of doubling farmers' income by providing timely credit.

MediumHigh

Mains Answer Fodder

Financial Inclusion in Agriculture, Interest Subvention Scheme (ISS), PRI (Prompt Repayment Incentive), 4% Effective Interest Rate, Credit-led Growth in Rural Economy. Useful for GS3 Agriculture Finance and Economy questions.

Convergence Schemes

  • PM-KISAN (Saturation drive)
  • Modified Interest Subvention Scheme (MISS)
  • PM Fasal Bima Yojana

Sector Tags

AgricultureBankingFinancial Inclusion