With the Narendra Modi government focusing on farmers, particularly to boost the rural economy, access to agricultural credit has witnessed substantial growth. This has particularly benefitted small and marginal farmers. According to the Economic Survey 2024-25, ground-level credit (GLC) to agriculture has shown a compound annual growth rate of 12.98 per cent from 2014-15 to 2024-25.

Providing adequate credit support to all farmers, especially small and marginal farmers, is crucial to improving agricultural productivity and income, the Survey said, pointing out that ground-level credit has increased from ₹8.45 lakh crore in 2014-15 to ₹25.48 lakh crore in 2023-24. Within this, the share of small and marginal farmers has significantly increased from ₹3.46 lakh crore (41 per cent) to ₹14.39 lakh crore (57 per cent) from 2014-15 to 2023-24.

A significant measure to improve credit access for small and marginal farmers includes increasing the limit for collateral-free agricultural loans.  The limit has been increased from ₹1.6 lakh to ₹2 lakh. The government has been implementing the Per Drop More Crop (PDMC) initiative since 2015-16. (PDMC is a component of the Pradhan Mantri Krishi Sinchayee Yojana). 

PDMC objective

PDMC aims to promote water efficiency. Financial assistance is provided at 55 per cent of the total project cost for small and marginal farmers, and 45 per cent for other farmers for installation of micro irrigation under the scheme.

“From 2015-16 to 2024-25, about 22,000 crore was released to States for implementation of PDMC Scheme and 95.58 lakh hectares has been covered. In addition to PDMC, the micro irrigation Fund (MIF) supports innovatiove projects through 2 per cent interest subvention to States on loans availed under MIF. Loans amounting to ₹4,709 crore has been approved. Of this, about ₹3,640 crore has been disbursed so far,” it said.

Rain-fed area development

Under the Rain-fed Area Development (RAD) programme, about ₹1,858.41 crore has been allocated, covering eight lakh hectares since its inception.

Kisan credit cards

The number of Kisan Credit Cards (KCC), which help farmers to meet their short-term working capital requirements, has crossed the 7.75-crore mark, with a loan outstanding of ₹9.81 lakh crore. The programme, which has been extended to cover the fisheries and animal husbandry sectors in 2018-19, has issued about 1.24 lakh cards to those in the fisheries sector and 44.40 lakh cards in the animal husbandry sector.

In addition to interventions such as the Modified Interest Subvention Scheme (MISS), which provides short-term agri-loans through KCC for working capital requirements at the concessional interest rate of 7 per cent, the Prompt Repayment Incentive provides a 3 per cent incentive to farmers who repay on time.

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