Question : Assertion: Institutional sources of credit provide loans to farmers at lower interest rates.
Reason: These institutions receive financial support from the government and have a social objective.
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 is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Institutional sources of credit, such as government-supported financial institutions, often provide loans to farmers at lower interest rates. The reason for this is that these institutions receive financial support from the government and are tasked with fulfilling social objectives, including promoting agricultural development and supporting farmers. As a result, they offer loans with lower interest rates to make credit more accessible and affordable for farmers, thereby facilitating their financial needs and promoting agricultural growth.
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