Question : Assertion: Institutional sources of credit contribute to rural development and poverty alleviation.
Reason: They provide financial support to small farmers and rural entrepreneurs, enabling them to invest in productive activities.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer:
Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.
The assertion is true. Access to credit allows small farmers and rural entrepreneurs to obtain funds that can be used for various purposes, including purchasing agricultural inputs, investing in livestock, improving infrastructure, and expanding their businesses. This, in turn, stimulates economic growth and development in rural areas.
The reason provided is that institutional sources of credit provide financial support to small farmers and rural entrepreneurs, enabling them to invest in productive activities. This reason is the correct explanation of the assertion. Without access to credit, many small farmers and rural entrepreneurs would lack the necessary capital to invest in their businesses and improve their livelihoods. By providing financial assistance, institutional sources of credit empower individuals to engage in income-generating activities, enhance agricultural productivity, create employment opportunities, and contribute to overall rural development.
Therefore, both the assertion and the reason are true, and the reason is the correct explanation of the assertion.
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