Budget 2025: Big Relief for Farmers, Kisan Credit Card Limit May Increase to ₹5 Lakh

Budget 2025: The much-awaited Budget 2025 will be a savior for farmers with the proposal to enhance the Kisan Credit Card (KCC) limit from the present ₹3 lakh to ₹5 lakh. This step is targeted at helping farmers and stimulating rural demand, thus controlling the increasing cost of agriculture.

Why the Increase in KCC Limit is Necessary?

Increasing Farming Expenses: NABARD statistics reveal that up to October 2024, cooperative and regional rural banks have issued 167.53 lakh Kisan Credit Cards with an aggregate credit limit of ₹1.73 lakh crore. The credit limit has not been increased in a long time even though farm expenses are going up.
Support to Small Farmers: NABARD Chairman Shaji KV stated that loans to small farmers and allied activities such as animal husbandry and fisheries must be provided to increase financial inclusion.

Advantages of Kisan Credit Card Scheme

Short-Term Loans: Farmers can borrow at 9% per annum for agricultural purposes.
Interest Subsidy:

2% subsidy from the government.

Additional 3% discount for timely repayment, which reduces the interest rate to 4% per annum.
Ease of Access: The scheme, launched in 1998, aims to provide financial relief to farmers for agricultural and allied activities.

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Current Credit Card Data

Total Cards Issued (2024): 167.53 lakh cards with a limit of ₹1.73 lakh crore.
Dairy Farmers: 11.24 lakh cards with a credit limit of ₹10,453.71 crore.
Fishermen: 65,000 cards issued with a credit limit of ₹341.70 crore.

Expert Insights

Impact on Lifestyle of Farmers: CEO of fintech firm EdvRisk, Vishal Sharma mentioned that increasing KCC limit would boost agricultural productivity and income thereby enabling farmers to upgrade their lifestyle and repay their loans in due time.
Allied Farmer Campaign: NABARD is running a campaign to finance dairy and fish farmers so that allied activities too enjoy the subsidized credit.

The increase in the Kisan Credit Card loan limit as proposed in Budget 2025 would bring much-needed relief to the farmers by keeping in view the increasing agricultural cost and thus would improve their financial stability. The move would increase rural demand while boosting the growth of the agriculture sector.