RBI Grade B Current Affairs — 12 November 2026

India's Department of Agriculture and Farmers Welfare budget grew from ₹27,663 crore in 2013-14 to ₹1,40,528.78 crore in 2026-27, a five-fold increase over thirteen years. This PIB factsheet highlights expanded public investment across crop insurance, MSP procurement, digital agriculture, natural farming, and allied sectors like fisheries and animal husbandry, reflecting a structural shift in how the government funds agricultural development and farmer income support.

The five-fold budget expansion signals more than fiscal generosity — it represents a layered policy architecture built over successive Union Budgets. Understanding this requires mapping the schemes that consume this outlay.

The largest allocations flow through PM-KISAN (income support of ₹6,000/year to eligible farmers), Pradhan Mantri Fasal Bima Yojana (PMFBY, crop insurance), PM Krishi Sinchayee Yojana (irrigation), and the Agriculture Infrastructure Fund (AIF). The MSP (Minimum Support Price) mechanism, while not a direct budget line, triggers procurement spending through FCI and state agencies funded partly by this department.

Allied sectors — fisheries (PM Matsya Sampada Yojana), animal husbandry (National Livestock Mission), and horticulture (Mission for Integrated Development of Horticulture, MIDH) — now draw dedicated sub-budget lines, reflecting that 'agriculture' policy has broadened beyond crop production.

For NABARD aspirants, this matters because NABARD's own refinance operations, rural infrastructure development fund (RIDF), and credit guarantee mechanisms are downstream of these policy commitments. When the agriculture budget rises, NABARD's target credit flow, priority sector benchmarks, and institutional credit deployment all shift.

For UPSC, the testable angle is the policy rationale: does higher budget spending translate to farmer income doubling (the 2022 target that was not formally declared achieved), and what structural reforms — land records, e-NAM, FPO promotion — accompanied the fiscal expansion?

The examiner will blank out either the base year figure, the current year figure, or the multiplier — all three must be memorised exactly.

Under the Modified Interest Subvention Scheme, farmers borrowing short-term crop loans through Kisan Credit Cards pay a net interest rate of 4%. The base lending rate is 7%, reduced to 5.5% by a 1.5% government subvention to lenders. Prompt repayers receive an additional 3% incentive, bringing the effective rate to 4%. The scheme covers loans up to ₹3 lakh for crop cultivation, post-harvest, and allied activities, implemented through NABARD and scheduled commercial banks.

The Modified Interest Subvention Scheme (MISS) is India's primary mechanism to deliver affordable short-term agricultural credit — a core priority-sector lending instrument. It operates through a two-layer subsidy architecture built on top of the Kisan Credit Card (KCC) infrastructure.

Layer 1 — Lender-side subvention: The government compensates banks 1.5% on crop loans up to ₹3 lakh, so banks can lend at 7% gross but effectively receive 8.5%, making it commercially viable to price loans at 7% for farmers.

Layer 2 — Borrower-side prompt repayment incentive (PRI): Farmers who repay on time receive a 3% interest rebate, reducing their effective cost from 7% to 4%. This design nudges credit discipline — irregular repayers pay 7%, not 4%.

The scheme is routed through NABARD for cooperative banks and RRBs, and directly through the Ministry of Finance for scheduled commercial banks. This dual-channel delivery makes it simultaneously a NABARD refinance issue, an RBI priority-sector compliance matter, and a Union Budget fiscal outlay item.

For UPSC, the governance angle is the welfare delivery mechanism and rural credit outreach. For RBI, the KCC integration, priority-sector lending norms, and bank compliance matter. For NABARD, the refinance channel and cooperative bank participation are central. The ₹3 lakh ceiling, the 7% base rate, the 1.5% subvention, and the 3% PRI are the four numbers every examiner tests.