No Proposal for Farm Loan Waiver, Says Finance Minister Nirmala Sitharaman
New Delhi, March 23 — The central government is not considering any proposal for a complete farm loan waiver, Finance Minister Nirmala Sitharaman informed Parliament on Monday.Responding in the Lok Sabha, the minister said the government is instead focusing on strengthening farmers’ financial stability through targeted schemes and improved access to institutional credit.
Government Focuses on Credit Support via Kisan Credit Card Scheme
The government continues to provide timely and affordable credit to farmers through the Kisan Credit Card (KCC) scheme. Under the Modified Interest Subvention Scheme (MISS), crop loans of up to ₹3 lakh are offered at subsidized interest rates, with additional incentives for prompt repayment.To further ease access to credit, the limit for collateral-free short-term agricultural loans—including allied activities—has been increased from ₹1.60 lakh to ₹2 lakh.
RBI Priority Sector Lending Boosts Agricultural Credit Flow
The Finance Minister highlighted that adequate credit flow to agriculture and other key sectors is being ensured under Priority Sector Lending (PSL) norms issued by the Reserve Bank of India.These measures are aimed at improving liquidity and supporting rural economic growth.
PM-KISAN and Crop Insurance Strengthen Farmer Welfare
The government has also rolled out multiple welfare initiatives, including income support through Pradhan Mantri Kisan Samman Nidhi and crop insurance schemes to protect farmers against uncertainties.These efforts are designed to provide both financial stability and risk mitigation for farmers across the country.
Disability Pension Tax Exemption to Continue Under New Law
Addressing a separate query, Nirmala Sitharaman clarified that tax exemption on disability pensions for armed forces personnel will continue under the new Income-tax Act, 2025.She explained that while earlier provisions under the Income-tax Act, 1961 and Income-Tax Act, 1922 ceased to operate with the new law, the exemption has been explicitly retained in the Finance Bill, 2026.
The move ensures continuity of benefits without any withdrawal of existing exemptions.
Over 1.47 Lakh Armed Forces Personnel Retired with Disability
As of January 31, 2026, a total of 1,47,263 armed forces personnel have retired with disabilities, while 89,598 personnel invalided out of service are receiving disability pensions, the minister informed Parliament.She emphasized that the updated tax provisions are intended to maintain the existing legal framework rather than introduce new liabilities.
Medical Boards Determine Fitness and Disability in Armed Forces
The minister also detailed the medical evaluation process for armed forces personnel. Annual health assessments are conducted to evaluate physical and systemic conditions, supported by specialized tests based on service roles.Personnel diagnosed with medical conditions are placed under Low Medical Classification and undergo periodic reviews. Final medical classification is determined by duly constituted Medical Boards under armed forces regulations.
If found unfit for service, personnel may be invalided out on medical grounds, with disability assessments carried out as per established guidelines.
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