What is the Modified Interest Subvention Scheme (MISS)?

MISS is a central-sector scheme administered by the Department of Agriculture & Farmers Welfare (DA&FW) that concessionalises short-term agricultural credit disbursed through the Kisan Credit Card (KCC). It provides a 2% per-annum interest subvention (IS) to eligible lending institutions on short-term crop loans up to ₹3 lakh, plus an additional 3% per-annum Prompt Repayment Incentive (PRI) to farmers who repay on or before the due date — bringing the effective rate of interest to 4% per annum. The scheme was originally introduced as the Interest Subvention Scheme in 2006–07 and was re-branded MISS after the Union Cabinet's August 2022 continuation approval.

How exactly does the 4% effective rate math work?

Public-sector banks, private-sector banks (rural / semi-urban branches), small-finance banks, cooperative banks and Regional Rural Banks (RRBs) lend to KCC farmers at 7% per annum for short-term crop loans up to ₹3 lakh — the 2% MISS interest subvention is paid to the lender by the Government of India, effectively concessionalising the rate from ~9% to 7%. If the farmer repays on or before the due date fixed by the bank (linked to the crop cycle, and capped at 12 months from the drawal date), the Government of India pays an additional 3% Prompt Repayment Incentive directly to the farmer's KCC loan account, reducing the effective rate to 4% per annum. Farmers who default or roll over the loan lose the PRI.

Does MISS cover KCC-Animal Husbandry and Fisheries loans?

Yes. From 2018–19 the Interest Subvention Scheme was extended to short-term working-capital loans up to ₹2 lakh availed through KCC by farmers engaged in animal husbandry (dairy, poultry, small ruminants, piggery) and fisheries (inland, marine and post-harvest). The same 2% IS + 3% PRI structure applies, so eligible loans up to ₹2 lakh attract an effective rate of 4% per annum on prompt repayment. For composite KCC holders (crop + AH&F), the aggregate MISS-eligible ceiling is ₹3 lakh per borrower at any point.

When was MISS last approved and what was the outlay?

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, approved the continuation of MISS on 17 August 2022 with a total outlay of ₹34,856 crore for the three financial years 2022–23, 2023–24 and 2024–25. The approval restored the 2% interest subvention paid to lending institutions after it had been contingent on internal absorption during FY 2021–22, and continued the 3% Prompt Repayment Incentive to farmers. The scheme is renewed periodically and remains contingent on annual budgetary allocation on the DA&FW demand-for-grants.

How is the subvention delivered — do farmers apply separately?

No. Farmers do not file a separate MISS application. The 2% interest subvention is automatically netted off the bank's applicable interest rate at loan sanction — the farmer is billed at 7% on the outstanding balance. Banks upload borrower-level loan data to the Direct Benefit Transfer for Interest Subvention Scheme (DBT-ISS) portal maintained under the RBI/NABARD framework, and DA&FW reimburses the subvention claim periodically. The 3% Prompt Repayment Incentive is credited directly to the borrower's loan account (or savings account) after the due-date repayment is confirmed by the branch and uploaded to the portal.

What counts as "prompt repayment" for the 3% PRI?

Repayment on or before the due date fixed by the bank, aligned to the crop cycle (typically 12 months from drawal, or the harvest-plus-marketing window for the crop financed). The farmer must repay the entire drawal — principal plus interest — by the due date. Partial repayments do not qualify. If the loan is rolled over, restructured, or classified NPA at any point in the cycle, the borrower forfeits PRI eligibility for that drawal.

Does MISS apply to KCC loans above ₹3 lakh?

No. The 2% subvention and 3% PRI apply only to the aggregate short-term-loan drawal up to ₹3 lakh per borrower (₹2 lakh for KCC-AH&F). For drawals above ₹3 lakh — for example a farmer with a KCC crop-loan limit of ₹5 lakh — MISS applies only to the first ₹3 lakh; the balance is charged at the bank's applicable rate. This is why the ₹3 lakh RBI collateral-free threshold on KCC is tightly coupled to MISS — the two ceilings together define the concessional-credit envelope for small and marginal farmers. A parallel MISS subvention is also available on post-harvest loans up to ₹3 lakh pledged against a WDRA-accredited warehouse Negotiable Warehouse Receipt (NWR) for up to six months post-harvest.

MISS — Modified Interest Subvention Scheme

MISS is the central-sector scheme that concessionalises short-term crop and allied-activity credit disbursed through the Kisan Credit Card. It pays a 2% interest subvention to the lending institution plus a 3% Prompt Repayment Incentive directly to farmers who repay on time — bringing the effective rate on KCC loans up to ₹3 lakh to 4% per annum.

At a glance

Ministry:Department of Agriculture & Farmers Welfare (DA&FW), Government of India.
Introduced: 2006–07 as the Interest Subvention Scheme; renamed Modified Interest Subvention Scheme (MISS)after the Union Cabinet's August 2022 continuation approval.
Latest CCEA continuation: approved on 17 August 2022 with an outlay of ₹34,856 crore for FY 2022–23 to 2024–25.
Instrument: 2% interest subvention (IS) to eligible lending institutions + 3% Prompt Repayment Incentive (PRI) to farmers on due-date repayment.
Effective rate: 4% per annum on KCC short-term crop loans up to ₹3 lakh (9% base − 2% IS − 3% PRI = 4%).
KCC-AH&F cover: extended in 2018–19 to working-capital loans up to ₹2 lakh for animal husbandry, dairy, poultry and fisheries.
Delivery: automatic — no separate application; subvention is netted at billing, PRI credit posted to the loan account after due-date repayment via the DBT-ISS portal.

The effective-rate math

For a KCC short-term crop loan up to ₹3 lakh disbursed at the notified base rate of 9% per annum:

Bank's notified rate for KCC short-term crop loans: 9% p.a. — would fall on the farmer without MISS.
Less 2% MISS Interest Subvention paid by DA&FW to the lender via DBT-ISS.
Farmer billed at 7% p.a. on the outstanding balance.
Less 3% Prompt Repayment Incentive credited by DA&FW to the farmer's loan account on due-date repayment.
Net effective rate on prompt repayment: 4% p.a. — the farmer's all-in cost of KCC credit.

Missing the due date forfeits the 3% PRI for that drawal and the effective rate stays at 7% (or the bank's applicable rate). Rolled-over, restructured or NPA-classified drawals are ineligible for PRI in that cycle.

Coverage & ceilings

KCC short-term crop loans: up to ₹3 lakh per borrower — 2% IS + 3% PRI.
KCC-Animal Husbandry & Fisheries working capital: up to ₹2 lakh per borrower (added 2018–19). For composite KCC holders, aggregate MISS-eligible ceiling is ₹3 lakh per borrower at any point.
Post-harvest loans against NWR: small and marginal farmers can extend the concessional rate to post-harvest storage loans against a WDRA-accredited warehouse Negotiable Warehouse Receipt for up to six months post-harvest — see our WDRA & eNWR guide for the registration, repository (NERL / CCRL) and pledge-cycle flow.
Above the ceiling:the balance beyond ₹3 lakh (or ₹2 lakh for AH&F) is charged at the bank's applicable commercial rate.

Eligible lending institutions

Public-Sector Banks, Private-Sector Scheduled Commercial Banks (rural / semi-urban branches only), Regional Rural Banks (RRBs), Small Finance Banks (SFBs) and Cooperative Banks — State Cooperative Banks, District Central Cooperative Banks and Primary Agricultural Credit Societies (PACS). Subvention for cooperatives and RRBs flows through NABARD refinance. NBFCs and MFIs are outside the direct MISS pathway.

Prompt-repayment eligibility — the fine print

Repay principal + interest in full on or before the due date fixed by the bank.
Due date is aligned to the crop cycle (typically 12 months from drawal).
No rollover: a rolled drawal is treated as a fresh sanction and forfeits the PRI on the earlier cycle.
No NPA classification during the cycle.
Partial repayments do not qualify; the whole drawal must clear by the due date.

How the subvention is delivered

Farmers do not file a separate MISS application. The bank sanctions the KCC at the notified rate and nets the 2% subvention at billing; the farmer is billed at 7% on the outstanding balance. Borrower-level loan data is uploaded to the DBT-ISS portal(maintained under the RBI/NABARD framework); DA&FW reimburses the 2% subvention to the lender periodically. On due-date repayment the branch flags the drawal as “prompt-repaid” and DA&FW credits the 3% PRI directly to the KCC loan account (or the farmer's linked savings account) via DBT, typically in the following quarter.

Since 19 September 2023 the entire DBT-ISS claim pipeline has been consolidated on the Kisan Rin Portal (KRP) — a DFS-owned unified back-end that validates borrower-level KCC data, computes IS and PRI eligibility, and settles both flows in one place; see the KRP guide for the platform architecture and the companion KCC Ghar Ghar Abhiyan / WINDS Manthan initiatives launched the same day.

MISS in the wider seasonal-credit stack

Kisan Credit Card (KCC) is the credit instrument; MISS is the subsidy on that credit. Every MISS beneficiary is by definition a KCC holder.
PM-KISAN's ₹6,000/year DBT can fund farmer-share premium on PMFBY and the interest portion of the KCC loan during the growing season, reducing distress borrowing.
PMFBY and RWBCIS insure the notified crop — loanee KCC holders have insurance premium auto-deducted at drawal unless opted out at least seven days before the state-notified cut-off.
Soil Health Cards and PMKSY Per Drop More Crop reduce input cost and irrigation risk on the same field the KCC loan finances, improving repayment discipline and PRI eligibility.
For allied-activity farmers, KCC-AH&F under MISS pairs with NLM, Rashtriya Gokul Mission, NPDD and PMMSY capex subsidies.

Grievance redressal

First raise billing or PRI-credit issues with the branch manager; escalate to the bank's regional / zonal office. For cooperative-bank and RRB borrowers, the NABARD district office is the next step; for unresolved lender grievances the Banking Ombudsman of the RBI can be approached 30 days after the first written complaint. National-level policy grievances can be filed on pgportal.gov.in.

References

Department of Agriculture & Farmers Welfare (DA&FW) — MISS operational guidelines and annual notifications.
Press Information Bureau (PIB) — CCEA release dated 17 August 2022 approving MISS continuation with a ₹34,856 crore outlay for FY 2022–23 to 2024–25.
Reserve Bank of India (RBI) — Master Directions on Priority Sector Lending and periodic circulars on interest-subvention operations for KCC borrowers.
NABARD — refinance framework for cooperative banks and RRBs under MISS.
DBT-ISS portal— the settlement backbone for interest-subvention claims and PRI credits between lenders and DA&FW.

Frequently asked questions

What is the Modified Interest Subvention Scheme (MISS)?: MISS is a central-sector scheme administered by the Department of Agriculture & Farmers Welfare (DA&FW) that concessionalises short-term agricultural credit disbursed through the Kisan Credit Card (KCC). It provides a 2% per-annum interest subvention (IS) to eligible lending institutions on short-term crop loans up to ₹3 lakh, plus an additional 3% per-annum Prompt Repayment Incentive (PRI) to farmers who repay on or before the due date — bringing the effective rate of interest to 4% per annum. The scheme was originally introduced as the Interest Subvention Scheme in 2006–07 and was re-branded MISS after the Union Cabinet's August 2022 continuation approval.
How exactly does the 4% effective rate math work?: Public-sector banks, private-sector banks (rural / semi-urban branches), small-finance banks, cooperative banks and Regional Rural Banks (RRBs) lend to KCC farmers at 7% per annum for short-term crop loans up to ₹3 lakh — the 2% MISS interest subvention is paid to the lender by the Government of India, effectively concessionalising the rate from ~9% to 7%. If the farmer repays on or before the due date fixed by the bank (linked to the crop cycle, and capped at 12 months from the drawal date), the Government of India pays an additional 3% Prompt Repayment Incentive directly to the farmer's KCC loan account, reducing the effective rate to 4% per annum. Farmers who default or roll over the loan lose the PRI.
Does MISS cover KCC-Animal Husbandry and Fisheries loans?: Yes. From 2018–19 the Interest Subvention Scheme was extended to short-term working-capital loans up to ₹2 lakh availed through KCC by farmers engaged in animal husbandry (dairy, poultry, small ruminants, piggery) and fisheries (inland, marine and post-harvest). The same 2% IS + 3% PRI structure applies, so eligible loans up to ₹2 lakh attract an effective rate of 4% per annum on prompt repayment. For composite KCC holders (crop + AH&F), the aggregate MISS-eligible ceiling is ₹3 lakh per borrower at any point.
When was MISS last approved and what was the outlay?: The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, approved the continuation of MISS on 17 August 2022 with a total outlay of ₹34,856 crore for the three financial years 2022–23, 2023–24 and 2024–25. The approval restored the 2% interest subvention paid to lending institutions after it had been contingent on internal absorption during FY 2021–22, and continued the 3% Prompt Repayment Incentive to farmers. The scheme is renewed periodically and remains contingent on annual budgetary allocation on the DA&FW demand-for-grants.
How is the subvention delivered — do farmers apply separately?: No. Farmers do not file a separate MISS application. The 2% interest subvention is automatically netted off the bank's applicable interest rate at loan sanction — the farmer is billed at 7% on the outstanding balance. Banks upload borrower-level loan data to the Direct Benefit Transfer for Interest Subvention Scheme (DBT-ISS) portal maintained under the RBI/NABARD framework, and DA&FW reimburses the subvention claim periodically. The 3% Prompt Repayment Incentive is credited directly to the borrower's loan account (or savings account) after the due-date repayment is confirmed by the branch and uploaded to the portal.
What counts as "prompt repayment" for the 3% PRI?: Repayment on or before the due date fixed by the bank, aligned to the crop cycle (typically 12 months from drawal, or the harvest-plus-marketing window for the crop financed). The farmer must repay the entire drawal — principal plus interest — by the due date. Partial repayments do not qualify. If the loan is rolled over, restructured, or classified NPA at any point in the cycle, the borrower forfeits PRI eligibility for that drawal.
Does MISS apply to KCC loans above ₹3 lakh?: No. The 2% subvention and 3% PRI apply only to the aggregate short-term-loan drawal up to ₹3 lakh per borrower (₹2 lakh for KCC-AH&F). For drawals above ₹3 lakh — for example a farmer with a KCC crop-loan limit of ₹5 lakh — MISS applies only to the first ₹3 lakh; the balance is charged at the bank's applicable rate. This is why the ₹3 lakh RBI collateral-free threshold on KCC is tightly coupled to MISS — the two ceilings together define the concessional-credit envelope for small and marginal farmers. A parallel MISS subvention is also available on post-harvest loans up to ₹3 lakh pledged against a WDRA-accredited warehouse Negotiable Warehouse Receipt (NWR) for up to six months post-harvest.

Rate structure, ceilings, extension to AH&F and the August 2022 CCEA outlay above summarise publicly available guidelines on agriwelfare.gov.in and PIB releases. MISS is renewed periodically and the effective rate depends on continued budgetary allocation and Cabinet approval; farmers should verify the current subvention-rate notification with their financing bank or the nearest NABARD office before planning the seasonal-credit cycle.