Day-706 | Daily MCQs | UPSC Prelims | ECONOMY

Answer: A
Explanation:
• Statement 1 is correct: The Government has established a Special Window for Completion of Affordable and Mid-Income Housing (SWAMIH investment fund) for funding stalled projects that are net-worth positive and registered under RERA. It also includes those projects that have been declared as Non-Performing Assets (NPAs) or are pending proceedings before the National Company Law Tribunal under the Insolvency and Bankruptcy Code.
 The fund was first established in 2019 and as on 16th November 2023, 342 proposals aggregating to ₹37,554 crore have been approved under the fund.
• Statement 2 is incorrect: The Fund is sponsored by the Ministry of Finance and is managed by SBICAP Ventures Ltd., a State Bank Group company. The fund has no precedent or comparable peer fund in India or in the global markets.

Answer: C
Explanation:
• Statement 3 is incorrect: The RoDTEP scheme is notified by the Department of Commerce (Ministry of Commerce and Industry) and administered by the Department of Revenue (Ministry of Finance).
• About the scheme:
• Statement 1 is correct: RoDTEP (Remission of Duties and Taxes on Exported Products) has been launched by the government for exporters. The scheme provides for rebate of Central, State and Local duties/taxes/ levies which are not refunded under any other duty remission schemes.
• Statement 2 is correct: It was launched in 2021 to replace the MEIS (Merchandise Exports from India Scheme), which was not WTO-compliant. Hence, RodTEP, which is a WTO-compliant scheme, was launched.
• Statement 4 is correct: The Centre has extended the benefits under the scheme to export oriented units (EOUs), units in special economic zones (SEZs) and Advance Authorisation (AA) holders. Hence, exporting firms who use the Advance Authorisation (AA) scheme, that permits duty-free import of inputs that are physically incorporated in the export product will also be covered.

Answer: B
Explanation:
Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
• Statement 1 is correct: India’s seemingly healthy economic momentum has, so far, not translated into a commensurate increase in more productive employment opportunities for the millions entering the labour force every year. Due to increasing mechanization and capital use, the employment generation in India has become more and more capital-intensive, with fewer workers employed between 2000 and 2019 than in the 1990s. The skill intensity of employment in industry and services increased during this period, which was contrary to the labour market needs of the country.
 Between 2000 and 2012, employment in India experienced an annual growth rate of 1.6 per cent, while gross value added grew at a much faster rate, at 6.2 per cent.
 Labour productivity consistently increased alongside capital deepening, indicating that economic growth was increasingly associated with technological progress and productivity gains rather than employment.
• Statement 2 is correct: In India, agriculture still engages about half of the workforce, and about 85 percent of its farmers are small and marginal. The sector is characterised by what is called disguised unemployment. Agriculture sector still engaging close to 50% of the workforce does not explain the lack of productive employment generation in India. It is an effect rather than a cause.

Answer: D
Explanation:
Money multiplier is the maximum limit to which money supply can be affected with the change in the amount of deposits. It is the ratio of the money supply to the monetary base (i.e. central bank money).
• Statement 1 is correct: Dovish monetary policy refers to the expansionary monetary policy. During the period, in case of a reduction in the requirement of reserves by the banks, there is an increased lending by the banks. This increases the value of the multiplier.
• Statement 2 is correct: The currency deposit ratio (cdr) is the ratio of money held by the public in currency to that they hold in bank deposits. During the festival season, there is a high demand for
• currency, eg during Diwali season, for the transactions. Hence, currency deposit ratio tends to go up during the day.
• Statement 3 is correct: A rise in digital transactions like UPI reduces the currency-deposit ratio as there will be less demand for cash. Moreover, there will be a tendency for people to shift their money more to bank accounts.

Answer: D
Explanation:
All of them are part of ‘above the line’ fiscal measures.
• “Above-the-line” fiscal measures include those for which full cost is reflected in the fiscal deficit, government debt, and increased borrowing needs in the short term. These measures include additional spending (for example, health services and unemployment benefits, expenditure on schemes like PM Kisan Samman Nidhi, etc, subsidised food programmes); capital grants and targeted transfers (for example, wage subsidies or direct transfers); or tax measures (for example, tax cuts or other relief) provided through standard budget channels.
• Whereas, “Below-the-line” measures are defined as generally involving the creation of assets, like equity injections, loans, asset purchase etc., which may have little or no upfront impact on the fiscal deficit although they can later increase debt or reduce liquidity.