Social Science (087) — AI-generated practice question

When a farmer borrows from a moneylender at high interest, most of her harvest earnings go towards repaying debt, leaving little for investment in land or inputs.

Access to cheap bank credit solves this by providing loans at reasonable interest rates. As stated in the textbook, if a local bank gives Laxmi credit at a reasonable rate, she can buy seeds, fertilisers, pumpsets and equipment in time, improving her cultivation without being trapped in a debt cycle.

Connection to employment generation: With cheap credit and irrigation, farmers like Laxmi can take a second crop (e.g., wheat in rabi season). One hectare of wheat can provide employment to two people for 50 days. When many farmers benefit, this significantly reduces underemployment in agriculture, creating more productive employment within the agricultural sector itself.

Source: How to Create More Employment?, Chapter 2

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• The question has two parts — cheap credit solving debt trap and link to employment — address both clearly.
• Examiners want you to connect credit → better cultivation → second crop → more employment using the Laxmi example from the textbook.
• Mentioning specific details (reasonable interest rate, second crop, 2 people × 50 days) shows you've read the chapter carefully and earns full marks.
• Avoid generic statements; always anchor to the textbook example.