KCC Interest Subsidy Scheme Yields ₹2.30 for Every Rupee Spent, Government Assessment Finds
A third-party study by ISEC finds the KCC-Modified Interest Subvention Scheme has generated ₹2.30 in net value addition per rupee invested, while KCC lending to animal husbandry surged 300% in five years.
The short answer
An independent assessment commissioned by the Department of Agriculture and Farmers Welfare has found that the Kisan Credit Card-Modified Interest Subvention Scheme (KCC-MISS) delivers ₹2.30 in net value addition for every rupee invested. The government has disbursed an estimated ₹1.87 lakh crore in interest subsidies since the scheme's inception through 2024-25. Outstanding KCC loans across all sectors have risen sharply, with animal husbandry credit alone jumping roughly 300% over five years.
The headline finding
ISEC Study Puts a Number on KCC-MISS Returns
The Institute for Social and Economic Change (ISEC), Bengaluru, has placed a concrete return figure on India's flagship farm credit subsidy programme. Every rupee channelled into the Kisan Credit Card-Modified Interest Subvention Scheme (KCC-MISS) generates ₹2.30 in net value addition across agriculture and allied activities, the ISEC assessment concluded.
The study was commissioned by the Department of Agriculture and Farmers Welfare to evaluate the scheme's performance across India's varied agro-climatic zones. Minister of State for Finance Pankaj Chaudhary disclosed the findings in a written reply to the Lok Sabha. Since the scheme's inception through 2024-25, the government has released an estimated ₹1.87 lakh crore in interest subsidies — a substantial fiscal commitment whose economic justification is now formally quantified.
On-farm impact
Cheaper Credit Spurs Cropping Intensity and Input Adoption
Beyond the headline return ratio, the ISEC report maps specific behavioural changes at the farm level attributable to concessional credit access.
- Area expansion and cropping intensity: Affordable working capital has encouraged farmers to bring more land under cultivation and to pursue diversified, multi-season cropping patterns.
- Timely input procurement: Access to low-cost funds has enabled farmers to purchase seeds, fertilisers, and agrochemicals at the right time, supporting productivity gains.
- Credit discipline via the Prompt Repayment Incentive (PRI): Farmers who availed the PRI component showed stronger repayment behaviour, which the report notes has increased banks' willingness to extend fresh credit — a virtuous cycle for agricultural lending.
The assessment also highlighted the scheme's role in supporting income diversification, with dairy, livestock, and fisheries increasingly financed alongside crop-farming activities.
Credit growth trajectory
Operative KCC Accounts and Outstanding Loans Both Climb
Government data show a steady upward trend in the overall KCC portfolio over the past five years. The number of operative KCC accounts rose from 7.15 crore in 2021-22 to 7.28 crore in 2025-26, while the aggregate outstanding loan amount expanded from ₹8.15 lakh crore to ₹10.08 lakh crore — a rise of nearly 23% over the period.
While the increase in account numbers is measured, the jump in outstanding credit underscores rising per-account utilisation, suggesting farmers are drawing larger working capital lines as input costs and farm scale increase. The data were presented in the Lok Sabha in the context of the ISEC assessment and reflect the broadening reach of formal agricultural credit.
Allied sectors surge
Animal Husbandry and Fisheries Post Triple-Digit Growth in KCC Lending
The most striking numbers in the government's disclosure concern KCC credit to non-crop segments.
Animal Husbandry: Outstanding KCC loans to the animal husbandry sector surged from ₹15,216 crore in 2021-22 to ₹60,997 crore in 2025-26, a jump of approximately 300%. Operative accounts in this category expanded from 15.08 lakh to 51.26 lakh — more than a three-fold increase.
Fisheries: KCC lending to the fisheries sector also posted sharp growth. Operative accounts climbed from 60,095 to 1.38 lakh, while outstanding credit rose from ₹1,531 crore to ₹5,355 crore, a gain of nearly 250%.
The ISEC report specifically noted that working capital support for inland fisheries has been particularly impactful for livelihood diversification in the North-Eastern region — a geography that has historically faced constraints in formal credit access.
Why it matters
A benefit-to-cost ratio of ₹2.30 per rupee invested provides the government with strong fiscal justification to sustain and potentially expand the KCC-MISS at a time when farm credit access remains a policy priority. The near-300% surge in KCC lending to animal husbandry and the 250% rise in fisheries credit signal that allied sectors are emerging as meaningful drivers of rural credit demand — a trend that banks, agri-NBFCs, and policymakers designing future rural finance architecture will need to account for. Traders and agri-businesses in dairy, livestock, and fisheries supply chains should note the growing financial capacity at the farm level as working capital access improves.
Frequently asked
- What is the KCC-Modified Interest Subvention Scheme (KCC-MISS)?
- The KCC-MISS is a government programme that provides concessional credit to farmers through the Kisan Credit Card, reducing their borrowing costs through interest subsidies. Since its inception through 2024-25, the government has disbursed an estimated ₹1.87 lakh crore under the scheme.
- What return does the KCC-MISS generate for every rupee invested?
- According to an assessment by the Institute for Social and Economic Change (ISEC), Bengaluru, every Re 1 invested under the KCC-MISS generates ₹2.30 in net value addition in agriculture and allied activities.
- How much has KCC lending to animal husbandry grown in recent years?
- Outstanding KCC loans for animal husbandry grew from ₹15,216 crore in 2021-22 to ₹60,997 crore in 2025-26, an increase of approximately 300%. Operative accounts in this segment rose from 15.08 lakh to 51.26 lakh over the same period.
- Has the total number of KCC accounts been growing?
- Yes. Operative KCC accounts increased from 7.15 crore in 2021-22 to 7.28 crore in 2025-26, while the total outstanding loan amount rose from ₹8.15 lakh crore to ₹10.08 lakh crore — a rise of nearly 23% over five years.
Source
This report summarises and analyses coverage from Rural Voice — Latest. The analysis and India context are IndianAgri's own.
