Managing expenses has become increasingly burdensome in this changeful age of inflation. Most people are dependent on credit cards or bank loans, or at least that’s how they view things, for all their financial needs. If you are considering a loan or a credit card, this update is useful for you.
A big decision by the Central Government has increased the limit of credit cards in the Kisan Credit Card (KCC) scheme from ₹3 lakhs to ₹5 lakhs. This measure aims at easier availability of credit and keeping a low-interest rate.
Inflationary Times Have Weakened Credits Instantly
I’m talking about inflation, where apparently every year, more people are walking in this direction of credit, trying to supplement their lifestyles. Banks and financial institutions extend loans and credit cards with respect to an individual’s CIBIL score and income. This new step by the government will now allow anybody to get financial support even if he doesn’t maintain a great credit story.
Credit Cards Are Fast-Rising in India
In the last few years, the credit card has found itself a lot in the limelight. Credit cards represent a means of flexibility as opposed to bank loans. Loaded with discounts, offers, and cashback, credit cards have become a preferred choice over traditional banking loans.
Kisan Credit Card (KCC): Now Larger Limit of ₹5 Lakhs
The Kisan Credit Card (KCC) scheme, originally devised for farmers, has now been extended to cover people involved in animal husbandry, dairy, and fisheries. The government has now upped the credit limit from ₹3 lakhs to ₹5 lakhs to augment financial support at lower interest rates.
IMPORTANT HIGHLIGHTS OF KCC SCHEME AMENDMENTS
- Enhanced Limit: The credit limit has been raised to ₹5 lakhs with effect from April 1.
- Reduced Interest Rates: Farmers and other eligible persons can now access funds at reduced interest rates.
- Expanded Coverage: Now, this scheme covers fisheries, dairy, and animal husbandry activities.
Effect of the KCC Scheme
Since its launch over a decade ago, Kisan credit cards have given access to over 7.72 crore farmers. In the previous year, alone, this facility has benefited more than 10 lakh people. The increased limit will, in turn prove advantageous in giving further strength to small-scale farmers and entrepreneurs to manage their expenditure more effectively.
KCC Budgetary Changes – What were the Changes?
In this Union Budget, Finance Minister Nirmala Sitharaman announced a 2.75% cut in the budget of the Agriculture Ministry, bringing it down to ₹1.37 lakh crore. However, to compensate for the cuts, the government has increased the allocation towards allied sectors as follows:
- Fisheries, Animal Husbandry, and Dairy – 37% increase (₹7,544 crore)
- Food Processing – 56% increase (₹4,364 crore)
This strategic shift allows farmers and rural entrepreneurs to keep receiving good financial support despite the budget cuts in this line.