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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
The correct answer is Option 2 (1, 3 and 4 only). The Kisan Credit Card (KCC) scheme is primarily designed to meet the short-term credit requirements of farmers for cultivation and allied activities.
The following points justify why Option 2 is correct:
- Statement 1, 3, and 4: These are core objectives of KCC. It provides liquidity for working capital (maintenance of farm assets), consumption requirements of the household, and post-harvest expenses.
- Statement 2: Purchase of heavy machinery like tractors or mini trucks requires long-term investment credit, which falls outside the primary "short-term credit support" scope mentioned in the question context.
- Statement 5: Construction of houses or cold storage facilities are capital-intensive, long-term investments. KCC focuses on operational costs rather than major infrastructure development.
Thus, by eliminating long-term capital investments (2 and 5), we arrive at the correct combination of short-term needs.
PROVENANCE & STUDY PATTERN
Guest previewThis is a classic 'Definition Boundary' question. UPSC tested if you understand the difference between 'Working Capital' (Short-term/Recurring) and 'Capital Investment' (Long-term/One-time). Standard economy books list the 5 specific components of the KCC limit explicitly; if you missed the 'Short-term' keyword in the stem, you walked into the trap.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Explicitly lists 'Working capital for maintenance of farm assets' as a permitted use of KCC.
- Also groups working capital with allied activities and investment credit, linking it to routine farm requirements.
- Defines the KCC aim as providing adequate and timely short-term credit support to farmers.
- Specifies short-term credit requirements for cultivation of crops, aligning with working-capital needs.
- Describes KCC as designed to facilitate short-term formal credit to farmers.
- Identifies institutional intent to provide short-term credit through the scheme.
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