Page 72 - Understanding Economics for Class 10

 The funds obtained by Krishak Cooperative are utilized to offer loans to its members,
facilitating subsequent lending cycles upon loan repayment.
 The cooperative provides loans for diverse purposes such as agricultural equipment
purchases, cultivation and agricultural trade, fishery ventures, construction of houses, and
Goyal Brothers Prakashan
other miscellaneous expenses.

Let‘s work sheet out (Page No. 47)
1. List the various sources of credit in Sonpur.
Ans. Various sources of credit in Sonpur are:
(i) Village money lenders
(ii) Agricultural traders
(iii) Banks
(iv) Land owner employers who provide loan to landless people
(v) Krishak Cooperative Society

2. Underline the various uses of credit in Sonpur in the above passages.
Ans. In Sonpur, Credit is needed for the following reasons:
(i) Shyamal and Arun needs loan for buying farm inputs that helps in cultivating their land.
(ii) To meet daily expenses and expenses on sudden illness and family functions, Rama
needs credit.

3. Compare the terms of credit for the small farmer, the medium farmer and the landless
agricultural worker in Sonpur.
Ans. Interest rate, collateral and documentation requirement, and the mode of repayment together
comprise the terms of credit.
Terms of credit
Small farmers Medium farmers Landless farmers
High rate of interest is They usually take Along with the interest
charged by traders and loan from banks and rate charged, they have to
moneylenders. cooperatives, who charge work for the moneylender.
very low rate of interest.
They have to promise the Loan can be repaid They have to work for the
traders that they are going anytime in the next three landowner to repay the
to sell their harvest to them years. loan. They are ill treated
at low prices so that traders by landowner but still
can sell it at higher prices keeps on working as there
later on. This is done to is no other source of credit
ensure that borrower repays for them.
loan promptly.

4. Why will Arun have a higher income from cultivation compared to Shyamal?
Ans. Reasons of Arun having a higher income from cultivation compared to Shyamal are:
(i) Arun is big landowner (owns 7 acres) as compared to Shyamal (owns 1.5 acres).
(ii) Arun gets a loan at a comparatively low rate of interest than Shyamal. Arun gets it for
8.5% per annum from banks whereas Shyamal gets it for 60% per annum from village
moneylender and after few years started getting at 36% per annum from agricultural trader.

Economics Class X E-63