Read the following passage and answer the question that follows.
During the last five years, about 13 States/Union Territories (UTs) have announced farm loan waiver schemes. Debt waiver can bring some relief to selected groups of farmers in the short run, but has negative effects on fiscal deficit of States, credit allocation and credit discipline of borrowers and also creates a moral hazard problem. Moreover, only a small proportion of farmers benefit from such schemes. It has been found that the announcement of loan waivers in the past has slowed down credit flow to the sector in the States. There is no credible evidence to show that the loan waiver schemes have reduced the distress of the farmers. The Commission, therefore, is of the considered view that farm loan waiver is not a solution to address agrarian problems but need to address structural and institutional deficiencies in the sector by undertaking comprehensive reforms in agricultural marketing and trade policies, logistics and infrastructure and institutional arrangements.
Q. With reference to the above passage, which of the following statement(s) is/are incorrect?
Select the correct answer using the codes given below:
Read the following passage and answer the question that follows.
During the last five years, about 13 States/Union Territories (UTs) have announced farm loan waiver schemes. Debt waiver can bring some relief to selected groups of farmers in the short run, but has negative effects on fiscal deficit of States, credit allocation and credit discipline of borrowers and also creates a moral hazard problem. Moreover, only a small proportion of farmers benefit from such schemes. It has been found that the announcement of loan waivers in the past has slowed down credit flow to the sector in the States. There is no credible evidence to show that the loan waiver schemes have reduced the distress of the farmers. The Commission, therefore, is of the considered view that farm loan waiver is not a solution to address agrarian problems but need to address structural and institutional deficiencies in the sector by undertaking comprehensive reforms in agricultural marketing and trade policies, logistics and infrastructure and institutional arrangements.
Q. With reference to the above passage, which of the following statement(s) is/are incorrect?
The correct option is C
Both 1 and 2
Explanation:
Statement 1 is incorrect: Refer the following lines from the passage, “Debt waiver can bring some relief to selected groups of farmers in the short run, but has negative effects on fiscal deficit of States, credit allocation and credit discipline of borrowers and also creates a moral hazard problem.”
Here it is explained that loan waiver has negative impacts on various levels and it creates additional problems as well. Hence the statement is incorrect.
Statement 2 is incorrect: Refer the following lines from the passage, “The Commission, therefore, is of the considered view that farm loan waiver is not a solution to address agrarian problems but need to address structural and institutional deficiencies in the sector by undertaking comprehensive reforms in agricultural marketing and trade policies, logistics and infrastructure and institutional arrangements.”
Here it is mentioned that loan waiver is not providing sufficient relief to the farmers as well and there is no mention of short term reliefs. Hence the statement is incorrect.
Both 1 and 2
Explanation:
Statement 1 is incorrect: Refer the following lines from the passage, “Debt waiver can bring some relief to selected groups of farmers in the short run, but has negative effects on fiscal deficit of States, credit allocation and credit discipline of borrowers and also creates a moral hazard problem.”
Here it is explained that loan waiver has negative impacts on various levels and it creates additional problems as well. Hence the statement is incorrect.
Statement 2 is incorrect: Refer the following lines from the passage, “The Commission, therefore, is of the considered view that farm loan waiver is not a solution to address agrarian problems but need to address structural and institutional deficiencies in the sector by undertaking comprehensive reforms in agricultural marketing and trade policies, logistics and infrastructure and institutional arrangements.”
Here it is mentioned that loan waiver is not providing sufficient relief to the farmers as well and there is no mention of short term reliefs. Hence the statement is incorrect.
