Indian Economic Development Chapter 5 Rural Development VBQs Set 01

A. Multiple Choice Questions

Choose the correct option:

Question. Which of the following is a non-institutional source of rural credit?
(a) Cooperative Societies
(b) Commercial Banks
(c) Moneylenders
(d) Regional Rural Banks
Answer: (c) Moneylenders

Question. Short period credit is needed for:
(a) maintenance of the existing land
(b) purchase of new land
(c) purchase of seeds and manures
(d) purchase of machinery
Answer: (c) purchase of seeds and manures

Question. Distress sale by the farmers refers to:
(a) the sale of rotton crop
(b) the sale of crop through the commission agents
(c) the sale of crop at the minimum support price fixed by the government
(d) the sale of crop immediately after harvest owing to urgent cash needs of the farmers
Answer: (d) the sale of crop immediately after harvest owing to urgent cash needs of the farmers

Question. Which of the following is an emerging challenge related to rural development in India?
(a) Provision of credit
(b) Agricultural marketing
(c) Organic farming
(d) Irrigation
Answer: (c) Organic farming

Question. Which of the following is not related to agricultural marketing?
(a) Storage
(b) Preservation
(c) Processing
(d) Use of chemical fertilisers
Answer: (d) Use of chemical fertilisers

Question. Which of the following is expected to improve the marketing system?
(a) Regulated markets
(b) Improvement in transportation
(c) Minimum support price
(d) All of the options
Answer: (d) All of the options

Question. MSP means:
(a) Minimum support price to the farmers
(b) Maximum support price to the farmers
(c) Minimum price of the crop in the retail market
(d) Maximum price for the farm inputs
Answer: (a) Minimum support price to the farmers

Question. The principal lingering challenge in rural areas is:
(a) challenge of rural marketing
(b) challenge of rural credit
(c) both (a) and (b)
(d) none of the options
Answer: (c) both (a) and (b)

Question. Long-term credit is required for:
(a) purchase of additional land
(b) purchase of machinery
(c) for carrying out permanent improvements on existing land
(d) both (a) and (c)
Answer: (d) both (a) and (c)

Question. Cooperative credit societies are to ensure:
(a) timely and rapid flow of credit to the farmers
(b) elimination of moneylenders as credit agencies
(c) spread of credit facilities across all regions of the country
(d) All of the options
Answer: (d) All of the options

Question. Which of the following is the correct statement with respect to National Bank for Agricultural and Rural Development (NABARD)?
(a) It serves as an apex funding agency for the institutions providing credit in rural areas
(b) It takes appropriate measures to improve the credit delivery system
(c) Both (a) and (b)
(d) None of the options
Answer: (c) Both (a) and (b)

Question. Which of the following statements highlight the glaring deficiencies of rural banking system?
(a) Institutional credit has invariably been tied to collateral
(b) Laxity in recovery of loans, owing to political reasons
(c) Both (a) and (b)
(d) None of the options
Answer: (c) Both (a) and (b)

Question. The need for organic farming arises due to which of the following reasons?
(a) It is environment-friendly
(b) It sustains soil fertility
(c) Both (a) and (b)
(d) None of the options
Answer: (c) Both (a) and (b)

B. Fill in the Blanks

Choose appropriate word and fill in the blank:

Question. The gestation lag between sowing and harvesting of crops leads to ________ crop-caring cost. (high/low)
Answer: high

Question. Landlords, village traders and moneylenders are some important sources of ________ credit. (institutional/non-institutional)
Answer: non-institutional

Question. On the eve of independence, ________ sources show notional existence. (institutional/non-institutional)
Answer: institutional

Question. Self Help Groups (SHGs) and Micro Credit Programmes are an emerging phenomenon in the context of ________ credit. (urban/rural)
Answer: rural

Question. Agricultural marketing ________ simply refer to the farmers' act of bringing their produce to the market for sale. (does/does not)
Answer: does not

Question. ________ is a significant progressive step in the context of agricultural market system. (Cooperative marketing/Provision of warehousing facilities)
Answer: Cooperative marketing

Question. Diversification of crop production ________ market risks. (maximises/minimises)
Answer: minimises

Question. With the nationalisation of commercial banks, the concept of ________ was put into practice in India. (social banking/cultural banking)
Answer: social banking

Question. High crop productivity led to ________ revolution in horticultural farming in India. (golden/green)
Answer: golden

Question. ________ fertilizers erode soil fertility. (Organic/Chemical)
Answer: Chemical

C. True or False

State whether the following statements are True or False:

Question. Rural development means an action-plan for the social and economic growth of the rural areas.
Answer: True

Question. Medium-term credit is required for purchase of additional land.
Answer: False

Question. Commercial banks, regional rural banks and cooperatives are institutional sources of credit in India.
Answer: True

Question. The State Bank of India (SBI) was set-up in 1955 with a focus on urban credit.
Answer: False

Question. Reserve Bank of India (RBI) is the apex institution handling policy, planning and operation in the field of rural credit.
Answer: False

Question. Institutional sources of credit has gone a long way in liberating the farmers from the debt trap of mahajans and moneylenders.
Answer: True

Question. Agricultural marketing does not include the grading of produce according to its quality.
Answer: False

Question. Distress sale refers to the situation when the farmers are compelled to sell their produce immediately after the harvest, irrespective of the prevailing market price.
Answer: True

Question. Cooperative marketing is a significant progressive step in the context of agricultural produce grading system.
Answer: False

Question. Animal husbandry is an important area of employment in India different from crop farming.
Answer: True

D. Matching/Chronological

Question. From the set of statements given in Column I and Column II, choose the correct pair of statements:
Column I
(a) Non-institutional source of rural credit in India
(b) Medium-term credit
(c) Cooperative credit societies
(d) Chemical farming
Column II
(i) Regional rural banks
(ii) For purchase of additional land
(iii) Adequate credit to the farmers at reasonable rate of interest
(iv) Tastier and healthier food
Answer: (c) Cooperative credit societies— (iii) Adequate credit to the farmers at reasonable rate of interest

Question. Identify the correct sequence of alternatives given in Column II by matching them with respective items in Column I:
Column I
(a) Horticultural crops
(b) Short-term credit
(c) Diversification of crop production
(d) Organic farming
Column II
(i) Sustains soil fertility
(ii) Shift from single-cropping system to multi-cropping system
(iii) Purchase of inputs
(iv) Fruits, vegetables and flowers
Answer: (a)-(iv), (b)-(iii), (c)-(ii), (d)-(i)

E. 'Very Short Answer' Objective Type Questions

Question. What do you mean by agricultural credit?
Answer: Agricultural credit means credit for the farming activity.

Question. Define non-institutional sources of agricultural credit.
Answer: Landlords, village traders and moneylenders are the three important sources of non-institutional agricultural credit in India.

Question. Name three institutional sources of agricultural credit.
Answer: Three institutional sources of agricultural credit are: (i) Cooperative credit societies, (ii) Commercial banks, and (iii) Regional rural banks.

Question. What is meant by agricultural diversification?
Answer: Agricultural diversification refers to the reallocation of some of farm's productive resources into new activities or crops.

Question. Define the concept of micro-credit.
Answer: Micro-credit refers to small loans meant for the impoverished people.