Budget 2025: Kisan Credit Card Scheme To Be Enhanced To Rs 5 Lakh
The KCC scheme is a program that provides farmers with credit for their production, post-harvest expenses, and other needs.
The government has proposed to enhance the limit of the Kisan Credit Card to Rs 5 lakh from Rs 3 lakh currently, Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2025-26.
The KCC scheme is a program that provides farmers with credit for their production, post-harvest expenses, and other needs. The government had introduced this scheme to enable farmers to meet their short-term working capital requirements promptly and hassle-free.
The government's decision to enhance the short-term loan limit under the KCC scheme is expected to drive growth in India's credit card market.
Public sector banks such as State Bank of India, Union Bank of India, and Canara Bank, which actively extend KCC loans, are likely to see a boost in lending revenue, analysts said.
Further, private sector leaders in the credit card segment, including HDFC Bank, Axis Bank and ICICI Bank also stand to benefit from increased credit adoption, further strengthening their market position.
The scheme is implemented by the Ministry of Agriculture and Farmers' Welfare for farmers, fishermen, and dairy farmers.
As of March 2024, India has 7.75 crore operational KCC accounts with a loan outstanding of Rs 9.81 lakh crore, India's Economic Survey for 2025-26 had said on Friday.
KCC was further extended to meet the working capital needs of fisheries and animal husbandry in 2018-19, along with the enhancement of the limit for collateral-free loans to Rs 1.6 lakh.
As of 31 March 2024, 1.24 lakh KCC and 44.40 lakh KCC were issued to fisheries and animal husbandry activities, respectively.
