InterviewSolution
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InterviewSolution
| 1. |
Why is credit a crucial element in the economic development? |
| Answer» (1) If cheap credit is not provided to the farmers they will be forced to arrange the capital at high rate which will increase the cost ofproduction. The high cost of production put the farmers into a debt trap. (ii) Cheap and affordable credit is also mustmanufacturing sector to purchase rawmaterial and other inputs. (iii) Cheap and affordable credit is required to decrease the dependency on informalsources of credit.(iv) Most of the Indian farmers are very poor so they do not have any surplus savings. (v) Cheap and affordable credit is also required for establishing new manufacturing unitsespecially small scale units. | |