Economy : Poverty & Inequality

Q 2 / 9

UPSC CSE Prelims 2020

Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

  1. Working capital for maintenance of farm assets
  2. Purchase of combine harvesters, tractors and mini trucks
  3. Consumption requirements of farm households
  4. Post-harvest expenses
  5. Construction of family house and setting up of village cold storage facility

Select the correct answer using the code given below:

EXPLANATION

Correct Option (b):

The Kisan Credit Card (KCC) scheme is designed to provide short-term credit support to farmers for various agricultural and allied activities. The eligible purposes for short-term credit under KCC include:

  • Working capital for the maintenance of farm assets, which covers immediate operational expenses.
  • Consumption requirements of farm households, aimed at addressing the basic needs of farmers and preventing distress.
  • Post-harvest expenses, including marketing and transportation of produce, which are integral to the crop cycle.

Therefore, statements 1, 3, and 4 are correct.

Incorrect Options:

  • Statement 2: The purchase of capital assets such as combine harvesters, tractors, and mini trucks typically requires medium or long-term agricultural loans, not short-term credit provided under the KCC scheme.
  • Statement 5: The construction of a family house and the setting up of a village cold storage facility are capital expenditures that fall under long-term investment credit, which is distinct from the short-term operational credit offered by KCC.
SOURCEIndian Economy by Ramesh Singh, Chapter on Government Schemes