Answer:
Savita,
a small farmer, in order to cultivate wheat on her 1 hectare of land, decides
to borrow money from Tejpal Singh, a large farmer, on the following terms
(i) Tejpal Singh agrees to give Savita
the loan at an interest rate of 24 per cent for four months which is a very
high interest rate. Savita also has to promise to work on his field as farm
labourer during the harvest season at `
35 per day.
(ii) The rate of interest charged by Tejpal Singh was higher than that of
banks. If Savita had taken the loan from the bank, interest would have been
lower and she could have easily repaid the loan and her condition would have
been far better.
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