Yes, the collateral margin you receive can be used for Intraday Equity, Trading Futures and Shorting Options.
This margin cannot be used for buying stocks for delivery or for taking Long Option position, for this you will need cash in your account.
You can learn more here.
There is no interest charged for using collateral margin.
You can learn all about Liquid ETF’s here: Everything you need to know about Liquid Exchange Traded Funds (ETFs)