Indian Economy Quiz: Day 03

November 3, 2022

Which of the following steps that will result in containing inflation?
(1) Increasing Cash Reserve Ratio (CRR)
(2) Decreasing Statutory Liquidity Ratio (SLR)
(3) Permitting Central agencies to import duty free pulses and sugar.
Select the correct answer using the codes given below:

(A) 1 only
(B) 1 and 3 only
(C) 2 and 3 only
(D) 1, 2 and 3

Show Answer

Answer: (b)

In order to curb inflation if CRR is increased, then it may take liquidity from markets as banks will have to deposit more money with RBI.
Moreover inflation may also be curbed by Permitting Central/State agencies to import duty free pulses and sugar.
However, Decreasing SLR will leave more money with banks to give loans, which in turn will lead to inflation.

Regarding Himachal Pradesh, how many of the below given pair(s) is/are correctly matched?
1. Fiscal deficit (target 2022-23) = Rs 9,602 crore
2. Revenue deficit (2022-23 estimated) = Rs 3,903 crore
3. GSDP (2022-23 at current prices projected) = Rs 1,92,690 crore

(A) 1 pair only
(B) 1 pair only
(C) 1 pair only
(D) 1 pair only

Show Answer

Answer: (c)

Who recommends the MSP and issue prices?

(A) Ministry of agriculture
(B) Planning commission
(C) Commission for Agricultural Costs and Prices
(D) NABARD

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Answer: (c)

CACP was set up in 1985 and recommends for MSP, issue prices as well as procurement prices.

Which of the following five year plan had the objectives of rapid industrialization, increase in the national income, expansion of the opportunities for employment and reduction in the inequalities w.r.t. income and wealth?

(A) 2nd five year plan
(B) 5th five year plan
(C) 4th five year plan
(D) 7th five year plan

Show Answer

Answer: (a)

The 2nd five year was formulated with reference to the following principal objectives:

a sizeable increase in national income so as to raise the level of living in the country;

rapid industria lisation with particular emphasis on the development of basic and heavy industries;

a large expansion of employment opportunities; and

reduction of inequalities in income and wealth and a more even distribution of economic power.

Which of the following statement is incorrect?

(A) Literacy rate is defined as the percentage of population aged 6 years/above who can both read/write with understanding a short simple statement on her everyday life.
(B) Persons who were either ‘working’ or ‘seeking or available for work’ constitute the labour force.
(C) Sex ratio is defined as the number of females per 100 males.
(D) WPR is defined as the percentage of employed persons in the population.

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Answer: (c)

Sex ratio is defined as the number of females per 1000 males.

Consider the following statements :
1. When GST was introduced, the central government guaranteed states a 14% compounded annual growth in their GST revenue for a period of five years.
2. In 2021-22, Himachal Pradesh estimated to receive Rs 2,695 crore in the form of GST compensation grants.
Select the correct statement(s) using the codes below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

When the GST was introduced, the central government guaranteed states a 14% compounded annual growth in their GST revenue for a period of five years.
During 2018-22, Himachal Pradesh has relied on GST compensation grants to achieve the guaranteed SGST revenue level.
In 2021-22, Himachal is estimated to receive Rs 2,695 crore in the form of GST compensation grants, which is about 28% of its own tax revenue.

Which of the following statement(s) is/are correct?
1. Base Year for Index of Industrial Production is 2011-2012.
2. The eight core industries of India represent about 40% of the weight of items that are included in the IIP.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time
Base Year for IIP is 2011-2012.
The eight core industries of India represent about 40% of the weight of items that are included in the IIP

Which of the following is/are incorrect regarding IMF?
1. IMF was established in 1944 in the aftermath of the Great Depression of the 1930s.
2. IMF functions as a regulatory body and also focuses on administering a code of conduct for exchange rate policies.
Select the answer using the codes below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (d)

Quaternary sector implies

(A) Activities related to mining and quarrying
(B) Activities related to manufacturing
(C) Fishing activities
(D) Research and developmental activities

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Answer: (d)

The famous ‘LiFE’ report is released by which of the following organizations?

(A) Ministry of Environment, Forest and Climate Change
(B) NITI Aayog
(C) The Energy and Resources Institute
(D) UN Environment Programme

Show Answer

Answer: (b)

LiFE was introduced by Prime Minister Narendra Modi—at COP26 in Glasgow on 1 November 2021

The word is LiFE means ‘Lifestyle For Environment’.

Which of the following statement(s) is/are correct?
1. Machine age in India began with cotton, textile, jute and coal-mining industries in the 1850s.
2. At the time of independence, the Indian economy was underdeveloped with agriculture contributing to less than 10 per cent of the GDP.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

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Answer: (a)

At the time of independence, the economy was underdeveloped with agriculture contributing to more than 60 per cent of the GDP

Which of the following statement(s) is/are correct?
1. A Central Bank Digital Currency (CBDC) can be used to purchase G-Secs.
2. CBDC will make the monetary and payment systems more efficient.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

Which of the following statement(s) is/are correct?
1. As per Section 45ZN of the RBI Act, 1934 if RBI fails to meet the inflation target, it has to present a report to the government explaining the reasons for the failure.
2. In the report, the central bank will have to mention the remedial actions it proposes to take for keeping inflation in the targeted range.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

Section 45ZN of the Reserve Bank of India (RBI) Act, 1934:
States that in case the RBI fails to meet the inflation target, it has to present a report to the government explaining the reasons for the failure.
In the report, the central bank will have to mention the remedial actions it proposes to take.

Which of the following statement(s) is/are incorrect?
1. Any change in design of a currency note has to be approved by the RBI’s Central Board and the central government.
2 The Reserve Bank of India Act, 1934, gives RBI the “sole right” to issue banknotes in India.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (d)

Changes in the design and form of bank notes and coins are decided by the Reserve Bank of India (RBI) and the central government.
Changes in the design of coins are the prerogative of the central government.
Any change in design of a currency note has to be approved by the RBI’s Central Board and the central government.

Which of the following statement(s) is/are correct regarding NITI Aayog?
1. Union Finance Minister is the Chairperson of NITI Aayog.
2. Chief Ministers of all states and Lt. Governors of Union Territories are part of its governing council.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (b)

Structure of NITI Aayog

Chairperson: Prime Minister

Vice-Chairperson: To be appointed by Prime-Minister

Governing Council: Chief Ministers of all states and Lt. Governors of Union Territories.

Which of the following statement(s) is/are correct?
1. Poverty estimation in India is carried out by NITI Aayog’s task force.
2. The calculation of poverty line is based on the data captured by the National Sample Survey Office .
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

Poverty estimation in India is carried out by NITI Aayog’s task force through the calculation of poverty line based on the data captured by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI).

Which of the following statement(s) is/are correct regarding Capital Adequacy Ratio?
1. It is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities.
2. Banks are supposed to maintain their CRAR at 9% or above according to Basel-III norms.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

What is Capital Adequacy Ratio?

It is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities.
It is decided by central banks and bank regulatorsto prevent commercial banks from taking excess leverage and becoming insolvent in the process.

ØBanks are supposed to maintain their CRAR at 9% or above according to Basel-III norms.

Which of the following statement(s) is/are correct?
1. Union budget 2021-22 allowed RRBs to extend credit for education, housing and even small businesses in rural India.
2. EASE reforms were launched in 2018 for the public sector banks.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (b)

RRBs will soon extend credit for education, housing and even small businesses in rural India.
To provide credit to rural consumers,the government is planning to leverage the 15,000-odd strong network of the 43 Regional Rural Banks (RRBs)in the country by asking them to expand their portfolio by adding new segments.
The initiatives and targets will be part of the Enhanced Access & Service Excellence (EASE) reforms being undertaken by the Centre.
EASE reforms were launched in 2018 for the public sector banks and are currently in their fifth phase.

Which of the following statement(s) is/are correct?
1.The bad loans of MSMEs as a per cent of gross advances has increased since 2020.
2. MSMEs in India typically rely on NBFCs for their financing needs.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (c)

According to the RBI, bad loans of MSMEs now account for 9.6 per cent of gross advances of Rs 17.33 lakh crore as against 8.2 per cent in 2020.
MSMEs in India typically rely on NBFCs for their financing needs, which in itself has been enduring a liquidity crunch since September 2018.

Which of the following statement(s) is/are correct?
1. Commission for Agricultural Costs and Prices has the power to approve any change in the Minimum Support Prices (MSP).
1. Recently, Minimum Support Prices (MSP) for all mandated rabi crops has been increased for marketing season 2023-24.
Select the answer using the codes given below:

(A) 1 only
(B) 2 only
(C) Both 1 and 2
(D) Neither 1 nor 2

Show Answer

Answer: (b)

The Cabinet Committee on Economic Affairs under the chairmanship of Prime Minister approved the increase in the Minimum Support Prices (MSP)for all mandated rabi crops for marketing season 2023-24.