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 o

1. A. 1, 2 and 5 only
2. B. 1, 3 and 4 only
3. C. 2, 3, 4 and 5 only
4. D. 1, 2, 3 4 and 5

Answer: B

Explanation

Kisan Credit Card Scheme (KCC) It is a type of loan given to farmers The scheme was introduced in 1998 It is not a credit card for farmers. Hence statements 2 and 5 are not correct. It is like an overdraft scheme for farmers- One can overdraw upto a limit. And interest has to be paid on the amount so overdrawn. Also, the limit of overdraft is fixed on the basis of the value of land, though the value of crop may also be considered. The Features of This Scheme Farmers need money before sowing. For example, to buy seeds, fertilisers etc. In this scheme, they have to pay back the loan amount/ overdraft after the harvest. Also, interest charged is concessional- 4,5,6%- But if they fail to payback post the harvest, then the interest charged increases to 13-14%- The subsidy component is, thus, removed. The scheme has been very successful- More than 10 crore KCCs have already been issued. Commercial, cooperative, Regional Rural Banks- All types of banks isssue KCCs Also, the loans given to farmers through KCC are counted in Priority Sector Lending- It is a means of giving loans to farmers. It is very helful and beneficial for farmers, as in order to increase agricultural production, the farmers need to buy various inputs such as seeds, fertilisers etc. This not only leads to an increase in farmers’ income but also in an increase in agricultural production Objectives/Purpose Kisan Credit Card Scheme aims at providing adequate and timely credit support from the banking system under a single window to the farmers for their cultivation & other needs as indicated below: To meet the short term credit requirements for cultivation of crops Post harvest expenses Produce Marketing loan Consumption requirements of farmer household Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery etc. Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc. Hence statements 1, 3 and 4 are correct. Hence option (b) is the correct answer.