The Kisan Credit Card (KCC) scheme is a government initiative that aims to provide affordable credit to farmers in India. The scheme was launched in 1998 by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) to help farmers meet their agricultural expenses and improve their productivity.
Under the KCC scheme, farmers are provided with a credit card that they can use to avail of loans for various agricultural purposes, such as buying seeds, fertilizers, pesticides, and other inputs, as well as for meeting their working capital needs. The credit card also allows farmers to withdraw cash for their personal expenses.
One of the key benefits of the KCC scheme is the subsidy provided by the government on interest rates. Farmers who avail of loans under the KCC scheme are eligible for a subsidy on the interest rates charged by banks. This subsidy helps make credit more affordable for farmers, especially small and marginal farmers who may not be able to access credit at commercial rates.
The subsidy on the KCC scheme is typically provided through direct benefit transfer (DBT) into the farmer’s bank account. The subsidy amount is calculated based on the interest rate charged by the bank and the maximum support price (MSP) for the crop being grown by the farmer. The subsidy amount is usually credited to the farmer’s account on a quarterly or half-yearly basis.
The subsidy on the KCC scheme has been instrumental in improving financial inclusion for farmers and encouraging them to adopt modern agricultural practices. By making credit more affordable and accessible, the scheme has helped increase farm productivity, enhance crop yields, and improve the overall financial well-being of farmers.
In conclusion, the subsidy on the Kisan Credit Card scheme plays a crucial role in supporting the livelihoods of farmers in India. By providing affordable credit and financial support, the scheme helps farmers meet their agricultural expenses and enhance their productivity. The government’s subsidy on interest rates makes credit more accessible to farmers, especially small and marginal farmers, and enables them to invest in their farms and improve their incomes.