NEW DELHI: The Union Cabinet on Wednesday approved a hike in the Minimum Support Price (MSP) for the 2025-26 Kharif season and extended the interest subvention scheme for farmers. It also approved two multi-tracking railway projects in Maharashtra and Madhya Pradesh, as well as a four-lane highway project in Andhra Pradesh.
The Cabinet approved a hike in paddy MSP by three percent or Rs 69 per quintal to Rs 2,369 for the 2025-26 Kharif season and up to nine percent rise in rates of pulses and oilseeds, according to Union Minister Ashwini Vaishnaw. The cost to the exchequer of the MSP decision is Rs 2,07,000 crore, and continuation of the subvention scheme will cost Rs 15,642 crore.
The announcement comes amid the southwest monsoon reaching earlier than usual, giving a boost to the sowing of kharif crops, which contribute over 50 per cent of India’s total annual foodgrain production.
Under the Modified Interest Subvention Scheme (MISS) for 2025-26, farmers will continue to receive short-term credit at an affordable rate through the Kisan Credit Card (KCC). The continuation of the scheme will cost exchequer Rs 15,640 crore, the Minister said.
Under MISS, farmers get short-term loans of up to Rs 3 lakh through KCC at a subsidised interest rate of 7 percent, with 1.5 percent interest subvention provided to eligible lending institutions.
Additionally, farmers who repay loans promptly are eligible for an incentive of up to 3 percent as the Prompt Repayment Incentive (PRI), effectively reducing their interest rate on KCC loans to 4 percent.
However, for loans taken exclusively for animal husbandry or fisheries, the interest benefit is applicable up to Rs 2 lakh. No changes have been proposed to the structure or other components of the scheme, which covers over 7.75 crore KCC accounts in the country.
On the infrastructure front, the government approved over Rs 7,000 crore for various projects, including a four-lane road project on the Badvel-Nellore National Highway in Andhra Pradesh, the four-laning of the 135-km Wardha-Ballarshah rail line in Maharashtra, and the 41-km Ratlam-Nagda line in Madhya Pradesh.
The two railway multi-tracking projects, costing approximately Rs 3,399 crore, will add about 176 km to the existing Indian Railways’ network across four districts in Maharashtra and Madhya Pradesh, he said.
He stated that the rail projects will enhance line capacity, enabling faster and seamless movement of passengers and goods, and improve connectivity for approximately 784 villages with a combined population of nearly 19.74 lakh.
The Badvel-Nellore project in Andhra Pradesh will cost Rs 3,653.10 crore for the construction of a 108.134-km 4-lane highway corridor under the Design-Build-Finance-Operate-Transfer model. “This corridor will connect important nodes on the Visakhapatnam-Chennai, Hyderabad-Bengaluru and Chennai-Bengaluru industrial corridors and provide strategic access to the Krishnapatnam Port,” he said.