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Question
Rural credit system assumes importance because ______.
Options
It leads to an increase in the rural income
Savings are inadequate to finance farming and other economic activities
It leads to the overall development of the rural areas
It leads to a reduction in rural inequality
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Solution
Rural credit system assumes importance because savings are inadequate to finance farming and other economic activities.
Explanation:
In rural areas, farmers and small entrepreneurs often do not have sufficient savings to meet the expenses of farming, irrigation, seeds, fertilisers, or other economic activities. Hence, the rural credit system becomes important as it provides the necessary funds. This credit helps improve agricultural productivity, support rural livelihoods, and promote overall rural development.
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