Ahead of the release of the Budget 2023, more incentives for the plans in the agricultural sector may be included in the budget. SBI research recommended that the government concentrate on agriculture and the rural economy and evaluate some of the programmes like the Kisan Credit Card.
The Kisan Credit Card (KCC) programme enables farmers to make credit-based purchases of agricultural goods and services whenever they choose. According to the RBI statement, it intends to provide farmers with sufficient and timely loan support from the banking system through a single window with a flexible and simplified method for their farming and other needs.
To ensure that farmers only pay a modest interest rate to the bank when applying for this credit card, the government recently launched the Interest Subvention Scheme (ISS).
The Government of India created the Interest Subvention Scheme (ISS), now known as the Modified Interest Subvention Scheme (MISS), to offer farmers short-term credit at reduced interest rates to ensure that the farmers have to pay a low-interest rate to the bank.
In the budget statement for 2006–07, the finance minister stated that the government had resolved to guarantee that farmers obtain short-term credit at 7% with a maximum of Rs 3.00 lakh on the principal amount.
According to SBI Research, the payment of interest should be sufficient to renew KCC loans, and this should be declared in the budget for 2023, reported CNBC TV18.
To renew KCC loans, principal and interest must be paid to guarantee interest subvention. It is suggested that paying interest alone should be sufficient for small- and marginal-farmer KCC loans up to Rs. 3 lakh to be renewed.
The State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, and Central Bank of India are a few well-known Indian institutions that provide the Kisan Credit Card programme.
From one bank to the next, the KCC's credit limit and interest rate are different. The issuing bank may determine additional fees and charges, such as processing costs, insurance premiums, etc.
Self-help groups (SHGs) or joint liability groups (JLGs) of farmers, including tenant farmers, sharecroppers, etc., may apply for KCC. Farmers who are individual or joint borrowers and owner cultivators, tenant farmers, oral lessees, and sharecroppers may also do so.
The borrower must be at least 18 years old and no older than 75. Senior citizens must have a co-borrower who is a legal heir in order to qualify for credit.