Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?
- 1.Working capital for maintenance of farm assets
- 2.Purchase of combine harvesters, tractors and mini trucks
- 3.Consumption requirements of farm households
- 4.Post-harvest expenses
- 5.Construction of family house and setting up of village cold storage facility
Select the correct answer using the code given below:
Answer & explanation
Answer: (b) 1, 3 and 4 only
The short-term limit under the Kisan Credit Card covers crop cultivation, post-harvest expenses, produce marketing loans, the consumption needs of the farmer's household and working capital for maintaining farm assets. Buying machinery or building assets such as a cold store is investment credit, which forms the separate long-term portion, so only 1, 3 and 4 are correct.
- ✓ 1. Working capital for maintenance of farm assets and allied activities is one of the listed purposes and is part of the short-term limit.
- ✗ 2. Buying combine harvesters, tractors or mini trucks is investment in assets. The KCC's investment credit forms the long-term limit portion, not the short-term one.
- ✓ 3. Consumption requirements of the farmer household are a listed purpose and count in the short-term limit.
- ✓ 4. Post-harvest expenses are a listed purpose and count in the short-term limit.
- ✗ 5. Building a family house is not among the listed purposes, and setting up a cold storage facility is an investment (long-term) need rather than a short-term one.
Remember · KCC short-term limit: crop cultivation, post-harvest expenses, produce marketing loan, household consumption and farm-asset maintenance. Asset purchases fall under the long-term investment component.
Sources
- RBI, Master Circular: Kisan Credit Card (KCC) Scheme (July 2018) ↗ “b. Post-harvest expenses; c. Produce marketing loan; d. Consumption requirements of farmer household; e. Working capital for maintenance of farm assets and activities allied to agriculture; … Note: The aggregate of components ‘a’ to ‘e’ above will form the short term credit limit portion and the aggregate of components under ‘f’ will form the long term credit limit portion.”
Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·