Agricultural Credit MCQ Quiz - Objective Question with Answer for Agricultural Credit - Download Free PDF

The correct answer is option 1

1) Alleviating rural poverty through development of sustainable community institutions of the poor

Key PointsThe Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) was launched by the Ministry of Rural Development, Government of India, to reduce rural poverty. Its objectives include:

1. Main Objective (Correct Statement):

   • To alleviate rural poverty by promoting the development of sustainable and self-managed community institutions of the poor, such as Self-Help Groups (SHGs). These institutions work towards increasing the income and improving the quality of life of rural poor households.

2. To eradicate poverty among SC and ST classes:

   • This is not the sole objective. While the program focuses on inclusive development, it covers all rural poor, not just SC and ST communities. Special emphasis is given to socially excluded groups, but the program is not exclusively for SCs and STs.

3. Providing employment to rural women:

   • While DAY-NRLM promotes livelihoods for rural poor women through SHGs, skill development, and entrepreneurship, employment provision is not its specific objective.

4. Providing food grains to rural women at subsidized rates:

   • This is incorrect. The scheme does not involve the distribution of food grains. Subsidized food grains fall under schemes like the National Food Security Act (NFSA) and Public Distribution System (PDS).

The correct answer is option 1

1) Alleviating rural poverty through development of sustainable community institutions of the poor

Key PointsThe Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) was launched by the Ministry of Rural Development, Government of India, to reduce rural poverty. Its objectives include:

1. Main Objective (Correct Statement):

   • To alleviate rural poverty by promoting the development of sustainable and self-managed community institutions of the poor, such as Self-Help Groups (SHGs). These institutions work towards increasing the income and improving the quality of life of rural poor households.

2. To eradicate poverty among SC and ST classes:

   • This is not the sole objective. While the program focuses on inclusive development, it covers all rural poor, not just SC and ST communities. Special emphasis is given to socially excluded groups, but the program is not exclusively for SCs and STs.

3. Providing employment to rural women:

   • While DAY-NRLM promotes livelihoods for rural poor women through SHGs, skill development, and entrepreneurship, employment provision is not its specific objective.

4. Providing food grains to rural women at subsidized rates:

   • This is incorrect. The scheme does not involve the distribution of food grains. Subsidized food grains fall under schemes like the National Food Security Act (NFSA) and Public Distribution System (PDS).

The correct answer is option 1

1) Alleviating rural poverty through development of sustainable community institutions of the poor

Key PointsThe Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) was launched by the Ministry of Rural Development, Government of India, to reduce rural poverty. Its objectives include:

1. Main Objective (Correct Statement):

   • To alleviate rural poverty by promoting the development of sustainable and self-managed community institutions of the poor, such as Self-Help Groups (SHGs). These institutions work towards increasing the income and improving the quality of life of rural poor households.

2. To eradicate poverty among SC and ST classes:

   • This is not the sole objective. While the program focuses on inclusive development, it covers all rural poor, not just SC and ST communities. Special emphasis is given to socially excluded groups, but the program is not exclusively for SCs and STs.

3. Providing employment to rural women:

   • While DAY-NRLM promotes livelihoods for rural poor women through SHGs, skill development, and entrepreneurship, employment provision is not its specific objective.

4. Providing food grains to rural women at subsidized rates:

   • This is incorrect. The scheme does not involve the distribution of food grains. Subsidized food grains fall under schemes like the National Food Security Act (NFSA) and Public Distribution System (PDS).

The correct answer is: Statements 1, 3, and 5 only

Key Points

• The KCC scheme was introduced to provide adequate and timely credit to farmers for their cultivation and ancillary needs:
  • This statement is correct.
  • The Kisan Credit Card (KCC) scheme aims to provide farmers with timely and adequate credit support for their cultivation and ancillary activities.
• The KCC scheme covers only short-term credit requirements of the farmers:
  • This statement is incorrect.
  • The KCC scheme covers both short-term and long-term credit needs of farmers, including working capital and term loans for various agricultural and allied activities.
• The KCC scheme offers both term loans and working capital loans:
  • This statement is correct.
  • The scheme provides farmers with both term loans for investment purposes and working capital loans for meeting their short-term production needs.
• The interest rate for loans under the KCC scheme is fixed at 2% per annum:
  • This statement is incorrect.
  • The interest rate for KCC loans is not fixed at 2% per annum. Interest rates may vary, and the government provides interest subvention to make loans affordable for farmers. Typically, the effective interest rate for farmers can be much lower due to subsidies and incentives.
• The scheme also provides crop insurance coverage to protect farmers against crop loss:
  • This statement is correct.
  • The KCC scheme includes provisions for crop insurance, offering protection to farmers against crop losses due to natural calamities, pests, and diseases.

Additional Information

• Kisan Credit Card (KCC) Scheme:
  • The KCC scheme was introduced by the Government of India in 1998 to ensure that farmers have access to adequate and timely credit at affordable rates.
  • The scheme aims to simplify the process of obtaining credit for farmers and reduce their dependence on informal sources of credit.
• Key Features:
  • KCC offers a flexible and simple credit delivery mechanism for meeting the comprehensive credit requirements of farmers.
  • It covers various types of agricultural and related activities, including crop production, post-harvest expenses, consumption needs, and investment credit requirements.
  • The scheme provides coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY) to protect against crop loss.

The correct answer is  NABARD’s Long Term Rural Credit Fund (LTRCF)

Key Points

• NABARD’s Long Term Rural Credit Fund (LTRCF): This scheme focuses on providing long-term refinance support to cooperative banks and Regional Rural Banks (RRBs) for lending to agriculture and rural development activities.
• The main objective of LTRCF is to facilitate sustainable and inclusive growth in rural areas by ensuring the availability of long-term credit for various developmental activities.
• Refinance Support: NABARD provides refinance to cooperative banks and RRBs to enable them to extend long-term loans for agriculture, allied activities, and rural infrastructure development.
• Sustainable Growth: The scheme aims to promote sustainable agricultural practices, enhance rural livelihoods, and improve rural infrastructure, contributing to the overall development of rural areas.
• Implementation: The fund is managed by NABARD, which ensures that the credit is utilized effectively for the intended purposes, supporting various rural development initiatives.

Important Points

• Pradhan Mantri Fasal Bima Yojana (PMFBY): This scheme provides insurance coverage for crops but does not focus on providing long-term refinance support to cooperative banks and RRBs.
• Kisan Credit Card (KCC) Scheme: This scheme provides short-term credit to farmers but does not focus on long-term refinance support for cooperative banks and RRBs.
• Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM): This scheme promotes self-employment and entrepreneurship among the rural poor but does not provide long-term refinance support.
• Cooperative banks and RRBs: While these institutions are beneficiaries of the LTRCF, they are not a scheme themselves.

Additional Information

• LTRCF Benefits: The fund helps in providing long-term credit support for agriculture and rural development, enabling sustainable and inclusive growth in rural areas.
• Eligibility: Cooperative banks and RRBs that extend long-term loans for agriculture and rural development activities are eligible for refinance support under LTRCF.
• Impact: LTRCF has significantly contributed to the development of rural infrastructure, promotion of sustainable agricultural practices, and enhancement of rural livelihoods.
• Monitoring: NABARD monitors the utilization of the refinance support to ensure effective implementation and impact of the credit provided.

The correct answer is option 1

1) Alleviating rural poverty through development of sustainable community institutions of the poor

Key PointsThe Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) was launched by the Ministry of Rural Development, Government of India, to reduce rural poverty. Its objectives include:

1. Main Objective (Correct Statement):

   • To alleviate rural poverty by promoting the development of sustainable and self-managed community institutions of the poor, such as Self-Help Groups (SHGs). These institutions work towards increasing the income and improving the quality of life of rural poor households.

2. To eradicate poverty among SC and ST classes:

   • This is not the sole objective. While the program focuses on inclusive development, it covers all rural poor, not just SC and ST communities. Special emphasis is given to socially excluded groups, but the program is not exclusively for SCs and STs.

3. Providing employment to rural women:

   • While DAY-NRLM promotes livelihoods for rural poor women through SHGs, skill development, and entrepreneurship, employment provision is not its specific objective.

4. Providing food grains to rural women at subsidized rates:

   • This is incorrect. The scheme does not involve the distribution of food grains. Subsidized food grains fall under schemes like the National Food Security Act (NFSA) and Public Distribution System (PDS).

The correct answer is  National Bank for Agriculture and Rural Development (NABARD)

Key Points

• National Bank for Agriculture and Rural Development (NABARD): NABARD is the apex development bank in India that is responsible for the regulation and supervision of cooperative banks and Regional Rural Banks (RRBs).
• The main objective of NABARD is to promote sustainable and equitable agriculture and rural development through effective credit support, related services, institutional development, and other innovative initiatives.
• Regulation and Supervision: NABARD ensures the flow of rural credit for agricultural and rural development activities by regulating and supervising cooperative banks and RRBs.
• Rural Credit: NABARD plays a crucial role in enhancing rural credit delivery systems and providing financial support for various agricultural and rural development projects.
• Implementation: The organization works in close coordination with the Reserve Bank of India (RBI), the government, and other stakeholders to implement its policies and programs effectively.

Important Points

• Reserve Bank of India (RBI): While the RBI is the central bank of India and regulates the banking sector, the specific regulation and supervision of cooperative banks and RRBs are the responsibility of NABARD.
• Securities and Exchange Board of India (SEBI): SEBI regulates the securities markets in India and does not focus on the regulation of cooperative banks and RRBs.
• Insurance Regulatory and Development Authority of India (IRDAI): IRDAI is the regulator of the insurance sector in India, not the banking sector.
• National Housing Bank (NHB): NHB is responsible for the regulation of housing finance companies and does not oversee cooperative banks and RRBs.

Additional Information

• NABARD's Role: NABARD supports various initiatives to promote agricultural and rural development, including refinancing for rural infrastructure projects, capacity building, and institutional development.
• Development Projects: NABARD provides financial assistance for irrigation, rural housing, microfinance, and other projects aimed at improving rural livelihoods and infrastructure.
• Impact: NABARD's efforts have significantly contributed to the development of rural areas in India, enhancing agricultural productivity and improving the overall quality of life for rural communities.
• Collaboration: NABARD collaborates with various national and international organizations to implement development programs and promote sustainable practices in agriculture and rural development.

The correct answer is  4% per annum

Key Points

• Interest Subvention Scheme: The Indian government introduced this scheme to provide additional financial support to farmers, ensuring they have access to affordable credit for their agricultural needs.
• The main objective of the interest subvention scheme is to reduce the financial burden on farmers by offering them subsidized interest rates on short-term crop loans.
• Additional Subvention: Farmers who repay their short-term crop loans promptly receive an additional subvention of 3%, effectively reducing their interest rate.
• Effective Interest Rate: With the additional subvention, the interest rate for farmers who repay promptly is reduced to 4% per annum.
• Implementation: The scheme is implemented by various banks, including public sector banks, private sector banks, and cooperative banks, ensuring wide coverage and accessibility for farmers.

Important Points

• 3% per annum: This is lower than the effective interest rate provided under the scheme with the additional subvention.
• 5% per annum: This rate is higher than the effective interest rate with the additional subvention.
• 6% per annum: This rate is also higher than the effective interest rate with the additional subvention.
• 9% per annum: This rate is significantly higher and not relevant to the effective interest rate under the scheme.

Additional Information

• Interest Subvention Scheme Benefits: The scheme helps farmers by reducing the cost of borrowing, encouraging timely repayment, and promoting financial discipline.
• Eligibility: The scheme covers farmers who take short-term crop loans for various agricultural activities and repay them promptly.
• Impact: The interest subvention scheme has significantly contributed to improving the financial inclusion of farmers, enhancing agricultural productivity, and supporting rural development.
• Monitoring: The scheme is closely monitored to ensure that the benefits reach the intended beneficiaries and to prevent any misuse or discrepancies.

The correct answer is  7% per annum

Key Points

• Kisan Credit Card (KCC) Scheme: The KCC scheme was launched by the Indian government to ensure timely and adequate credit for farmers to meet their agricultural needs.
• The main objective of the KCC scheme is to provide farmers with access to credit at a subsidized interest rate to support their agricultural activities and reduce their financial burden.
• Subsidized Interest Rate: Under the KCC scheme, the subsidized interest rate provided to farmers is 7% per annum.
• Eligibility: The scheme covers farmers engaged in crop cultivation, animal husbandry, fisheries, and other allied activities.
• Implementation: The scheme is implemented by various banks, including public sector banks, private sector banks, and cooperative banks, ensuring wide coverage and accessibility for farmers.

Important Points

• 3% per annum: This rate is lower than the subsidized interest rate provided under the KCC scheme.
• 4% per annum: This rate is also lower than the actual subsidized interest rate.
• 5% per annum: This rate is less than the subsidized interest rate provided under the KCC scheme.
• 6% per annum: This rate is lower than the actual subsidized interest rate.

Additional Information

• KCC Benefits: The scheme helps farmers meet their short-term credit requirements for crop production, post-harvest expenses, and other agricultural activities, ensuring financial stability and reducing dependency on informal credit sources.
• Interest Subvention: The government provides an interest subvention of 2% per annum to banks, which allows them to offer loans to farmers at the subsidized interest rate of 7% per annum.
• Timely Credit: The KCC scheme ensures that farmers have access to timely credit, enabling them to purchase necessary inputs and carry out agricultural activities without financial constraints.
• Impact: The KCC scheme has significantly contributed to improving the financial inclusion of farmers, enhancing agricultural productivity, and supporting rural development.

The correct answer is option 1

1) Alleviating rural poverty through development of sustainable community institutions of the poor

Key PointsThe Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) was launched by the Ministry of Rural Development, Government of India, to reduce rural poverty. Its objectives include:

1. Main Objective (Correct Statement):

   • To alleviate rural poverty by promoting the development of sustainable and self-managed community institutions of the poor, such as Self-Help Groups (SHGs). These institutions work towards increasing the income and improving the quality of life of rural poor households.

2. To eradicate poverty among SC and ST classes:

   • This is not the sole objective. While the program focuses on inclusive development, it covers all rural poor, not just SC and ST communities. Special emphasis is given to socially excluded groups, but the program is not exclusively for SCs and STs.

3. Providing employment to rural women:

   • While DAY-NRLM promotes livelihoods for rural poor women through SHGs, skill development, and entrepreneurship, employment provision is not its specific objective.

4. Providing food grains to rural women at subsidized rates:

   • This is incorrect. The scheme does not involve the distribution of food grains. Subsidized food grains fall under schemes like the National Food Security Act (NFSA) and Public Distribution System (PDS).

The correct answer is option 1

1) Alleviating rural poverty through development of sustainable community institutions of the poor

Key PointsThe Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) was launched by the Ministry of Rural Development, Government of India, to reduce rural poverty. Its objectives include:

1. Main Objective (Correct Statement):

   • To alleviate rural poverty by promoting the development of sustainable and self-managed community institutions of the poor, such as Self-Help Groups (SHGs). These institutions work towards increasing the income and improving the quality of life of rural poor households.

2. To eradicate poverty among SC and ST classes:

   • This is not the sole objective. While the program focuses on inclusive development, it covers all rural poor, not just SC and ST communities. Special emphasis is given to socially excluded groups, but the program is not exclusively for SCs and STs.

3. Providing employment to rural women:

   • While DAY-NRLM promotes livelihoods for rural poor women through SHGs, skill development, and entrepreneurship, employment provision is not its specific objective.

4. Providing food grains to rural women at subsidized rates:

   • This is incorrect. The scheme does not involve the distribution of food grains. Subsidized food grains fall under schemes like the National Food Security Act (NFSA) and Public Distribution System (PDS).

The correct answer is: Statements 1, 3, and 5 only

Key Points

• The KCC scheme was introduced to provide adequate and timely credit to farmers for their cultivation and ancillary needs:
  • This statement is correct.
  • The Kisan Credit Card (KCC) scheme aims to provide farmers with timely and adequate credit support for their cultivation and ancillary activities.
• The KCC scheme covers only short-term credit requirements of the farmers:
  • This statement is incorrect.
  • The KCC scheme covers both short-term and long-term credit needs of farmers, including working capital and term loans for various agricultural and allied activities.
• The KCC scheme offers both term loans and working capital loans:
  • This statement is correct.
  • The scheme provides farmers with both term loans for investment purposes and working capital loans for meeting their short-term production needs.
• The interest rate for loans under the KCC scheme is fixed at 2% per annum:
  • This statement is incorrect.
  • The interest rate for KCC loans is not fixed at 2% per annum. Interest rates may vary, and the government provides interest subvention to make loans affordable for farmers. Typically, the effective interest rate for farmers can be much lower due to subsidies and incentives.
• The scheme also provides crop insurance coverage to protect farmers against crop loss:
  • This statement is correct.
  • The KCC scheme includes provisions for crop insurance, offering protection to farmers against crop losses due to natural calamities, pests, and diseases.

Additional Information

• Kisan Credit Card (KCC) Scheme:
  • The KCC scheme was introduced by the Government of India in 1998 to ensure that farmers have access to adequate and timely credit at affordable rates.
  • The scheme aims to simplify the process of obtaining credit for farmers and reduce their dependence on informal sources of credit.
• Key Features:
  • KCC offers a flexible and simple credit delivery mechanism for meeting the comprehensive credit requirements of farmers.
  • It covers various types of agricultural and related activities, including crop production, post-harvest expenses, consumption needs, and investment credit requirements.
  • The scheme provides coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY) to protect against crop loss.

The correct answer is  NABARD’s Long Term Rural Credit Fund (LTRCF)

Key Points

• NABARD’s Long Term Rural Credit Fund (LTRCF): This scheme focuses on providing long-term refinance support to cooperative banks and Regional Rural Banks (RRBs) for lending to agriculture and rural development activities.
• The main objective of LTRCF is to facilitate sustainable and inclusive growth in rural areas by ensuring the availability of long-term credit for various developmental activities.
• Refinance Support: NABARD provides refinance to cooperative banks and RRBs to enable them to extend long-term loans for agriculture, allied activities, and rural infrastructure development.
• Sustainable Growth: The scheme aims to promote sustainable agricultural practices, enhance rural livelihoods, and improve rural infrastructure, contributing to the overall development of rural areas.
• Implementation: The fund is managed by NABARD, which ensures that the credit is utilized effectively for the intended purposes, supporting various rural development initiatives.

Important Points

• Pradhan Mantri Fasal Bima Yojana (PMFBY): This scheme provides insurance coverage for crops but does not focus on providing long-term refinance support to cooperative banks and RRBs.
• Kisan Credit Card (KCC) Scheme: This scheme provides short-term credit to farmers but does not focus on long-term refinance support for cooperative banks and RRBs.
• Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM): This scheme promotes self-employment and entrepreneurship among the rural poor but does not provide long-term refinance support.
• Cooperative banks and RRBs: While these institutions are beneficiaries of the LTRCF, they are not a scheme themselves.

Additional Information

• LTRCF Benefits: The fund helps in providing long-term credit support for agriculture and rural development, enabling sustainable and inclusive growth in rural areas.
• Eligibility: Cooperative banks and RRBs that extend long-term loans for agriculture and rural development activities are eligible for refinance support under LTRCF.
• Impact: LTRCF has significantly contributed to the development of rural infrastructure, promotion of sustainable agricultural practices, and enhancement of rural livelihoods.
• Monitoring: NABARD monitors the utilization of the refinance support to ensure effective implementation and impact of the credit provided.

The correct answer is  To provide direct income support of ₹6,000 per year to small and marginal farmers in three equal installments

Key Points

• Pradhan Mantri Kisan Samman Nidhi (PM-KISAN): This scheme was launched by the Indian government to provide financial support to farmers, particularly small and marginal farmers.
• The primary objective of PM-KISAN is to provide direct income support of ₹6,000 per year to small and marginal farmers in three equal installments of ₹2,000 each.
• Eligibility: The scheme covers small and marginal farmer families who own cultivable land up to 2 hectares.
• Implementation: The financial assistance is transferred directly to the bank accounts of eligible farmers through the Direct Benefit Transfer (DBT) system, ensuring transparency and efficiency.
• Support for Agricultural Needs: The scheme aims to support farmers' financial needs for purchasing inputs, ensuring proper crop health, and meeting other agricultural requirements.

Important Points

• To provide subsidized seeds and fertilizers to farmers across the country: This is not the primary objective of PM-KISAN. This objective is addressed by other schemes.To offer comprehensive insurance coverage for farmers' crops against all risks: This is the primary objective of the Pradhan Mantri Fasal Bima Yojana (PMFBY), not PM-KISAN.
• To develop and enhance irrigation infrastructure in rural areas: This objective is addressed by schemes like the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), not PM-KISAN.
• To provide subsidized marketing facilities to farmers across the country: This is not the primary objective of PM-KISAN. This objective is addressed by other schemes.

Additional Information

• PM-KISAN Benefits: The scheme helps in providing assured income support to small and marginal farmers, reducing their financial burden and promoting agricultural activities.
• Impact: PM-KISAN has significantly contributed to enhancing the income stability of farmers, enabling them to invest in essential agricultural inputs and improve their productivity.
• Monitoring: The scheme is monitored through a robust online platform to ensure timely and accurate disbursal of funds to eligible beneficiaries.

The correct answer is: Statements 1, 2, and 4 only

Key Points

• RRBs were established to provide credit and banking facilities to rural and agricultural sectors:
  • This statement is correct.
  • Regional Rural Banks (RRBs) were set up to enhance the availability of credit and banking services in rural areas, specifically targeting the agricultural sector and other rural industries.
• RRBs are jointly owned by the Central Government, State Government, and Sponsor Banks:
  • This statement is correct.
  • The ownership of RRBs is divided among the Central Government (50%), State Government (15%), and Sponsor Banks (35%). This tripartite ownership model aims to ensure adequate support and governance for the RRBs.
• RRBs primarily focus on serving urban and metropolitan areas:
  • This statement is incorrect.
  • RRBs are specifically designed to serve rural areas, not urban or metropolitan regions. Their primary mandate is to improve the flow of credit and banking services in rural and underserved areas.
• RRBs are regulated by the National Bank for Agriculture and Rural Development (NABARD):
  • This statement is correct.
  • RRBs operate under the regulatory supervision of NABARD, which provides guidance and support to ensure their effective functioning in rural credit delivery.
• RRBs are restricted to providing only short-term loans for agricultural purposes:
  • This statement is incorrect.
  • RRBs offer a variety of financial services, including both short-term and long-term loans, to cater to various needs of the rural and agricultural sectors. They are not restricted to providing only short-term loans.

Additional Information

• Regional Rural Banks (RRBs):
  • Established under the Regional Rural Banks Act, 1976, RRBs aim to provide banking services to rural areas, focusing on small and marginal farmers, agricultural laborers, and rural artisans.
  • RRBs offer various financial products, including savings and current accounts, fixed deposits, and loans for agriculture, small enterprises, and rural development projects.
• Role of NABARD:
  • NABARD plays a crucial role in regulating and supporting RRBs. It provides refinance facilities, monitors their performance, and ensures that they operate efficiently and in line with their mandate to support rural development.