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Question 1 of 20
1. Question
Consider the following:
1. OPEC Reference Basket
2. Brent Crude
3. West Texas Intermediate (WTI)
4. Dubai Crude
How many of the above are primary benchmarks for crude oils?
Correct
Answer: C
Explanation:
A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil.
There are three primary benchmarks:
West Texas Intermediate (WTI)
Brent Blend
Dubai Crude
Other well-known blends include:
OPEC Reference Basket used by OPEC
Tapis Crude which is traded in Singapore
Western Canadian Select used in Canada
Bonny Light used in Nigeria
Urals oil used in Russia
Mexico’s Isthmus
Incorrect
Answer: C
Explanation:
A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil.
There are three primary benchmarks:
West Texas Intermediate (WTI)
Brent Blend
Dubai Crude
Other well-known blends include:
OPEC Reference Basket used by OPEC
Tapis Crude which is traded in Singapore
Western Canadian Select used in Canada
Bonny Light used in Nigeria
Urals oil used in Russia
Mexico’s Isthmus
Question 2 of 20
2. Question
Consider the following statements regarding steel industry of India:
1. India is third largest manufacturer of crude steel in the world.
2. India has become the second largest consumer of finished steel in the world.
Which of the above statements is/are correct?
Correct
Answer: B
Explanation:
Statement 1 is incorrect:
India is second largest manufacturer of crude steel in the world. India’s crude steel production was 126.26 MT in 2022-23. India had occupied second position surpassing Japan in 2018. China is number one producer of crude steel in the world.
Statement 2 is correct:
India has become the 2nd largest consumer of finished steel in the world. The finished steel consumption was 106 million tons (MT) during the Fiscal Year 2022.
The per capita steel consumption in the World is around 233 kg.
However, the per capita consumption of steel in India is around 2 kg, gone up by 50% in last 8 years, which is 1/3rd of the average world per capita steel consumption.
China remains the number one consumer also of the finished steel.
Additional Information
⮚ The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
Key features of the NSP 2017:
● Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs
● Encourage adequate capacity additions
● Development of globally competitive steel manufacturing capabilities,
● Cost-efficient production
● Domestic availability of iron ore, coking coal & natural gas,
● Facilitating foreign investment
● Asset acquisitions of raw materials
● Enhancing the domestic steel demand
● The policy projects crude steel capacity of 300 million tones (MT), production of 255 MT and a robust finished steel per capita consumption of 158 kg by 2030 – 31, as against the current consumption of 61 Kg.
The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
Incorrect
Answer: B
Explanation:
Statement 1 is incorrect:
India is second largest manufacturer of crude steel in the world. India’s crude steel production was 126.26 MT in 2022-23. India had occupied second position surpassing Japan in 2018. China is number one producer of crude steel in the world.
Statement 2 is correct:
India has become the 2nd largest consumer of finished steel in the world. The finished steel consumption was 106 million tons (MT) during the Fiscal Year 2022.
The per capita steel consumption in the World is around 233 kg.
However, the per capita consumption of steel in India is around 2 kg, gone up by 50% in last 8 years, which is 1/3rd of the average world per capita steel consumption.
China remains the number one consumer also of the finished steel.
Additional Information
⮚ The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
Key features of the NSP 2017:
● Create self-sufficiency in steel production by providing policy support & guidance to private manufacturers, MSME steel producers, CPSEs
● Encourage adequate capacity additions
● Development of globally competitive steel manufacturing capabilities,
● Cost-efficient production
● Domestic availability of iron ore, coking coal & natural gas,
● Facilitating foreign investment
● Asset acquisitions of raw materials
● Enhancing the domestic steel demand
● The policy projects crude steel capacity of 300 million tones (MT), production of 255 MT and a robust finished steel per capita consumption of 158 kg by 2030 – 31, as against the current consumption of 61 Kg.
The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
Question 3 of 20
3. Question
Consider the following statements regarding the participatory notes in the Indian economy:
1. It is a derivative instrument issued in foreign jurisdictions.
2. This instrument was introduced to curb the menace of black money.
3. They are regulated by SEBI.
How many of the above statements are correct?
Correct
Answer: B
Explanation:
Statement 1 is correct:
A Participatory Note (PN or P-Note) in the Indian context, in essence, is a derivative instrument issued in foreign jurisdictions, by a SEBI registered FII, against Indian securities—the Indian security instrument may be equity, debt, derivatives or may even be an index.
PNs are also known as Overseas Derivative Instruments, Equity Linked Notes, Capped Return Notes and Participating Return Notes.
Statement 2 is incorrect:
It is considered a highly ‘safe and lucrative route’ to invest the ‘unaccounted’, ‘even illegal’ money into the Indian security market for huge profits (during the booming period).
Experts even imagined that it may be allowing the ‘black money’ of India (stashed away from India through ‘hawala’ kind of illegal channels and deposited in the tax havens of the world in ‘Swiss Bank’ kind of financial institutions) to get invested back in the market. Again, ‘terrorist organizations’ might have been using this route, too.
Statement 3 is correct:
PNs are market instruments that are created and traded overseas. Hence, Indian regulators cannot ban the issue of PNs. However, they can regulated, as SEBI does—when a PN is traded on an overseas exchange, the regulator in that jurisdiction would be the authority to regulate that trade.
Incorrect
Answer: B
Explanation:
Statement 1 is correct:
A Participatory Note (PN or P-Note) in the Indian context, in essence, is a derivative instrument issued in foreign jurisdictions, by a SEBI registered FII, against Indian securities—the Indian security instrument may be equity, debt, derivatives or may even be an index.
PNs are also known as Overseas Derivative Instruments, Equity Linked Notes, Capped Return Notes and Participating Return Notes.
Statement 2 is incorrect:
It is considered a highly ‘safe and lucrative route’ to invest the ‘unaccounted’, ‘even illegal’ money into the Indian security market for huge profits (during the booming period).
Experts even imagined that it may be allowing the ‘black money’ of India (stashed away from India through ‘hawala’ kind of illegal channels and deposited in the tax havens of the world in ‘Swiss Bank’ kind of financial institutions) to get invested back in the market. Again, ‘terrorist organizations’ might have been using this route, too.
Statement 3 is correct:
PNs are market instruments that are created and traded overseas. Hence, Indian regulators cannot ban the issue of PNs. However, they can regulated, as SEBI does—when a PN is traded on an overseas exchange, the regulator in that jurisdiction would be the authority to regulate that trade.
Question 4 of 20
4. Question
The term ‘Jurisdictions under Increased Monitoring’ often seen in news, is related to which one of the following organistions?
Correct
Answer: C
Explanation: Option C is correct.
‘Jurisdictions under Increased Monitoring’ is a term used in proceedings of the Financial Action Task Force (FATF).
Additional Information
The Financial Action Task Force (FATF)
It is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
● In 2001, its mandate was expanded to include terrorism financing.
Objective: To set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
● FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
● FATF monitors progress in implementing its Recommendations through “peer reviews” (“mutual evaluations”) of member countries.
FATF Blacklists:
● Officially known as High-Risk Jurisdictions subject to a Call for Action, the FATF blacklist sets out the countries that are considered deficient in their anti-money laundering and counter financing of terrorism regulatory regimes.
● The list is intended to serve not only as a way of negatively highlighting these countries on the world stage, but as a warning of the high money laundering and terror financing risk that they present.
● It is extremely likely that blacklisted countries will be subject to economic sanctions and other prohibitive measures by FATF member states and other international organizations.
● North Korea, Myanmar and Iran are the only three blacklisted countries.
FATF Grey lists:
● In addition to its blacklist, the FATF also issues a grey list, officially referred to as ‘Jurisdictions
Under Increased Monitoring’.
● Like the blacklist, countries on the FATF grey list represent a much higher risk of money laundering and terrorism financing but have formally committed to working with the FATF to develop action plans that will address their AML/CFT deficiencies.
● Countries on the list may face economic sanctions from institutions like the IMF and the World Bank and experience adverse effects on trade.
Incorrect
Answer: C
Explanation: Option C is correct.
‘Jurisdictions under Increased Monitoring’ is a term used in proceedings of the Financial Action Task Force (FATF).
Additional Information
The Financial Action Task Force (FATF)
It is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
● In 2001, its mandate was expanded to include terrorism financing.
Objective: To set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
● FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
● FATF monitors progress in implementing its Recommendations through “peer reviews” (“mutual evaluations”) of member countries.
FATF Blacklists:
● Officially known as High-Risk Jurisdictions subject to a Call for Action, the FATF blacklist sets out the countries that are considered deficient in their anti-money laundering and counter financing of terrorism regulatory regimes.
● The list is intended to serve not only as a way of negatively highlighting these countries on the world stage, but as a warning of the high money laundering and terror financing risk that they present.
● It is extremely likely that blacklisted countries will be subject to economic sanctions and other prohibitive measures by FATF member states and other international organizations.
● North Korea, Myanmar and Iran are the only three blacklisted countries.
FATF Grey lists:
● In addition to its blacklist, the FATF also issues a grey list, officially referred to as ‘Jurisdictions
Under Increased Monitoring’.
● Like the blacklist, countries on the FATF grey list represent a much higher risk of money laundering and terrorism financing but have formally committed to working with the FATF to develop action plans that will address their AML/CFT deficiencies.
● Countries on the list may face economic sanctions from institutions like the IMF and the World Bank and experience adverse effects on trade.
Question 5 of 20
5. Question
Consider the following countries:
1. Saudi Arabia
2. The UAE
3. Argentina
4. Ethiopia
How many of the above countries are the new members to join BRICS group?
Correct
Answer: D
Explanation:
New members to join BRICS group:
Iran
Saudi Arabia
Egypt
the UAE
Argentina
Ethiopia
Additional Information
BRICS Group and new members:
● 15th BRICS Summit- Johannesburg
● Group decided to expand the grouping and admit six new members.
● BRICS Expansion: Argentina, Ethiopia, Iran, Saudi Arabia, Egypt and the United Arab Emirates are included as a new member in BRICS grouping.
● Six new candidates will formally become members on Jan. 1, 2024.
● Aim: Increasing BRICS influence in advocating for the interests of the “Global South.”
● Adding new members strengthens the group’s heft as a spokesperson of the developing world.
● BRICS currently represents around 40% of the world’s population and more than a quarter of the world’s GDP. With the additions, it will represent almost half the world’s population, and will include three of the world’s biggest oil producers, Saudi Arabia, the UAE and Iran.
Incorrect
Answer: D
Explanation:
New members to join BRICS group:
Iran
Saudi Arabia
Egypt
the UAE
Argentina
Ethiopia
Additional Information
BRICS Group and new members:
● 15th BRICS Summit- Johannesburg
● Group decided to expand the grouping and admit six new members.
● BRICS Expansion: Argentina, Ethiopia, Iran, Saudi Arabia, Egypt and the United Arab Emirates are included as a new member in BRICS grouping.
● Six new candidates will formally become members on Jan. 1, 2024.
● Aim: Increasing BRICS influence in advocating for the interests of the “Global South.”
● Adding new members strengthens the group’s heft as a spokesperson of the developing world.
● BRICS currently represents around 40% of the world’s population and more than a quarter of the world’s GDP. With the additions, it will represent almost half the world’s population, and will include three of the world’s biggest oil producers, Saudi Arabia, the UAE and Iran.
Question 6 of 20
6. Question
Immediately after a nation’s currency is devalued, imports get more expensive, and exports get cheaper, worsening trade deficit. Shortly thereafter, the sales volume of the nation’s exports begins to rise steadily and at the same time, consumers at home begin to buy more locally-produced goods because they are relatively affordable compared to imports leading to better trade balance if not trade surplus.
Which of the following best described in the above paragraph?
Correct
Answer: A
Explanation: The above description is about J-curve effect.
In economics, the J-curve shows how currency depreciation causes a severe worsening of a trade imbalance followed by a substantial improvement.
Additional Information
● A J-curve is a trend line that shows an initial loss immediately followed by a dramatic gain.
● In a chart, this pattern of activity would follow the shape of a capital “J”.
● The J-curve effect is often cited in economics to describe, for instance, the way that a country’s balance of trade initially worsens following a devaluation of its currency, then quickly recovers and finally surpasses its previous performance.
● In economics, the J-curve shows how currency depreciation causes a severe worsening of a trade imbalance followed by a substantial improvement.
● The pattern is as follows:
⮚ Immediately after a nation’s currency is devalued, imports get more expensive and exports get cheaper, creating a worsening trade deficit (or at least a smaller trade surplus).
⮚ Shortly thereafter, the sales volume of the nation’s exports begins to rise steadily, thanks to their relatively cheap prices.
⮚ At the same time, consumers at home begin to buy more locally-produced goods because they are relatively affordable compared to imports.
⮚ Over time, the trade balance between the nation and its partners bounces back and even exceeds pre- devaluation times.
Incorrect
Answer: A
Explanation: The above description is about J-curve effect.
In economics, the J-curve shows how currency depreciation causes a severe worsening of a trade imbalance followed by a substantial improvement.
Additional Information
● A J-curve is a trend line that shows an initial loss immediately followed by a dramatic gain.
● In a chart, this pattern of activity would follow the shape of a capital “J”.
● The J-curve effect is often cited in economics to describe, for instance, the way that a country’s balance of trade initially worsens following a devaluation of its currency, then quickly recovers and finally surpasses its previous performance.
● In economics, the J-curve shows how currency depreciation causes a severe worsening of a trade imbalance followed by a substantial improvement.
● The pattern is as follows:
⮚ Immediately after a nation’s currency is devalued, imports get more expensive and exports get cheaper, creating a worsening trade deficit (or at least a smaller trade surplus).
⮚ Shortly thereafter, the sales volume of the nation’s exports begins to rise steadily, thanks to their relatively cheap prices.
⮚ At the same time, consumers at home begin to buy more locally-produced goods because they are relatively affordable compared to imports.
⮚ Over time, the trade balance between the nation and its partners bounces back and even exceeds pre- devaluation times.
Question 7 of 20
7. Question
Consider the following pairs with reference to various initiatives by Ministry of Agriculture & Farmer’s Welfare:
Mobile Apps/Portal Use
1. Kisan Rath – Facilitates transportation of food grains and perishables during COVID lockdown
2. Meghdoot – Provides crop and livestock-specific weather-based agro advisories to farmers
3. Krishi Megh – A Data recovery centre of Indian Council of Agricultural Research to integrate agriculture and disaster related data
How many of the above pairs are correctly matched?
Correct
Answer: C
Explanation:
Pair 1 is matched correctly:
Kisan Rath: App which facilitates transportation of food grains and perishables during COVID lockdown. The app intends to facilitate farmers, FPOs and Cooperatives in the country to have the choice to find a suitable transport facility to transfer their agriculture produce from farm gate to markets.
Pair 2 is matched correctly:
Meghdoot: It is a joint initiative by India Meteorological Department (IMD), Indian Institute of Tropical Meteorology (IITM) and Indian Council of Agricultural Research (ICAR). The app provides forecast to farmers relating to temperature, rainfall, humidity, and wind speed and direction, which play critical roles in agricultural operations and how to take care of the crops and livestock.
Pair 3 is matched correctly:
Krishi Megh integrates the ICAR-Data Centre at ICAR-Indian Agricultural Statistics Research Institute, New Delhi with the Disaster Recovery Centre at the ICAR-National Academy of Agricultural Research Management, Hyderabad.
Krishi Megh has been set up under the National Agricultural Higher Education Project (NAHEP), funded by both the government and World Bank.
The data recovery centre has been set up at National Academy of Agricultural Research Management (NAARM), Hyderabad.
National Agricultural Higher Education Project (NAHEP):
The project is funded by both the government of India and the World Bank.
The overall objective of the project is to provide more relevant and high-quality education to the agricultural university students that are in tune with the New Education Policy – 2020.
Incorrect
Answer: C
Explanation:
Pair 1 is matched correctly:
Kisan Rath: App which facilitates transportation of food grains and perishables during COVID lockdown. The app intends to facilitate farmers, FPOs and Cooperatives in the country to have the choice to find a suitable transport facility to transfer their agriculture produce from farm gate to markets.
Pair 2 is matched correctly:
Meghdoot: It is a joint initiative by India Meteorological Department (IMD), Indian Institute of Tropical Meteorology (IITM) and Indian Council of Agricultural Research (ICAR). The app provides forecast to farmers relating to temperature, rainfall, humidity, and wind speed and direction, which play critical roles in agricultural operations and how to take care of the crops and livestock.
Pair 3 is matched correctly:
Krishi Megh integrates the ICAR-Data Centre at ICAR-Indian Agricultural Statistics Research Institute, New Delhi with the Disaster Recovery Centre at the ICAR-National Academy of Agricultural Research Management, Hyderabad.
Krishi Megh has been set up under the National Agricultural Higher Education Project (NAHEP), funded by both the government and World Bank.
The data recovery centre has been set up at National Academy of Agricultural Research Management (NAARM), Hyderabad.
National Agricultural Higher Education Project (NAHEP):
The project is funded by both the government of India and the World Bank.
The overall objective of the project is to provide more relevant and high-quality education to the agricultural university students that are in tune with the New Education Policy – 2020.
Question 8 of 20
8. Question
Consider the following statements about the fisheries sector in India:
1. Inland fish production accounts for the majority of fish production in India.
2. Andhra Pradesh is the leading fish producer in the country.
3. The fisheries sector is classified as a priority sector for bank loans.
How many of the above statements are correct?
Correct
Answer: C
Explanation:
Statement 1 is correct:
Till 2000, marine fish production dominated India’s total fish production. However due to practice of science-based fisheries, inland fisheries in India have seen a turnaround and presently contribute 70 % of total fish production.
Statement 2 is correct:
Andhra Pradesh is the leading fish producer in India followed by West Bengal. (As per Handbook of Fisheries Statistics – 2023).
Statement 3 is correct:
Agricultural loans to corporate farmers, farmers’ producer organizations/companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in agriculture and allied activities like dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture are classified as priority sector loans.
Incorrect
Answer: C
Explanation:
Statement 1 is correct:
Till 2000, marine fish production dominated India’s total fish production. However due to practice of science-based fisheries, inland fisheries in India have seen a turnaround and presently contribute 70 % of total fish production.
Statement 2 is correct:
Andhra Pradesh is the leading fish producer in India followed by West Bengal. (As per Handbook of Fisheries Statistics – 2023).
Statement 3 is correct:
Agricultural loans to corporate farmers, farmers’ producer organizations/companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in agriculture and allied activities like dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture are classified as priority sector loans.
Question 9 of 20
9. Question
Consider the following statements about Open Market Sale Scheme (OMSS):
1. The Food Corporation of India conducts a monthly auction under this scheme using the platform of National Commodity and Derivatives Exchange Limited (NCDEX).
2. This mechanism is only for the private traders to buy the food grains and the state governments are not allowed to avail this scheme.
3. At present, all crops which receive MSP are auctioned under this scheme for the open market sales.
How many of the above statements are correct?
Correct
Answer: D
Explanation:
Statement 1 is incorrect:
The FCI conducts a weekly auction to conduct this scheme in the open market using the platform of commodity exchange NCDEX (National Commodity and Derivatives Exchange Limited).
Statement 2 is incorrect:
The State Governments/ Union Territory Administrations are also allowed to participate in the e-auction, if they require wheat and rice outside TPDS.
Statement 3 is incorrect:
The present form of OMSS comprises 3 schemes (only for wheat and rice) as under:
Sale of wheat to bulk consumers/private traders through e-auction.
Sale of wheat to bulk consumers/private traders through e-auction by dedicated movement.
Sale of raw rice grade ‘A’ to bulk consumers/private traders through e-auction.
Additional Information:
● Open Market Sale Scheme (OMSS) refers to selling of food grains by Government / Government agencies at predetermined prices in the open market from time to time to enhance the supply of grains especially during the lean season and thereby to moderate the general open market prices especially in the deficit regions.
● In addition to maintaining buffer stocks and making a provision for meeting the requirement of the Targeted Public Distribution Scheme and Other Welfare Schemes (OWS), Food Corporation of India (FCI) on the instructions from the Government, sells wheat and rice in the open market from time to time to enhance the supply of wheat and rice especially during the lean season and to moderate the open market prices especially in the deficit regions.
● For transparency in operations, the Corporation has switched over to e- auction for sale under Open Market Sale Scheme (Domestic).
● The FCI conducts a weekly auction to conduct this scheme in the open market using the platform of commodity exchange NCDEX (National Commodity and Derivatives Exchange Limited).
Incorrect
Answer: D
Explanation:
Statement 1 is incorrect:
The FCI conducts a weekly auction to conduct this scheme in the open market using the platform of commodity exchange NCDEX (National Commodity and Derivatives Exchange Limited).
Statement 2 is incorrect:
The State Governments/ Union Territory Administrations are also allowed to participate in the e-auction, if they require wheat and rice outside TPDS.
Statement 3 is incorrect:
The present form of OMSS comprises 3 schemes (only for wheat and rice) as under:
Sale of wheat to bulk consumers/private traders through e-auction.
Sale of wheat to bulk consumers/private traders through e-auction by dedicated movement.
Sale of raw rice grade ‘A’ to bulk consumers/private traders through e-auction.
Additional Information:
● Open Market Sale Scheme (OMSS) refers to selling of food grains by Government / Government agencies at predetermined prices in the open market from time to time to enhance the supply of grains especially during the lean season and thereby to moderate the general open market prices especially in the deficit regions.
● In addition to maintaining buffer stocks and making a provision for meeting the requirement of the Targeted Public Distribution Scheme and Other Welfare Schemes (OWS), Food Corporation of India (FCI) on the instructions from the Government, sells wheat and rice in the open market from time to time to enhance the supply of wheat and rice especially during the lean season and to moderate the open market prices especially in the deficit regions.
● For transparency in operations, the Corporation has switched over to e- auction for sale under Open Market Sale Scheme (Domestic).
● The FCI conducts a weekly auction to conduct this scheme in the open market using the platform of commodity exchange NCDEX (National Commodity and Derivatives Exchange Limited).
Question 10 of 20
10. Question
In India, the Amended Technology Upgradation Fund Scheme (ATUFS) is related to which of the following sector of the economy?
Correct
Answer: B
Explanation: Amended Technology Upgradation Fund Scheme (ATUFS) scheme is related to textile sector.
About Amended Technology Upgradation Fund Scheme (ATUFS) scheme-
● Technology Upgradation Fund Scheme (TUFS) was introduced in 1999 for providing credit linked capital investment subsidy for making the Indian textile industry globally competitive and reduce the capital cost for the textile industry.
● In 2015, Amended Technology Upgradation Fund Scheme (ATUFS) was launched with an aim of ‘Make in India’ and ‘Zero Defect and Zero Effect’ in manufacturing, the government provides credit linked capital investment subsidy.
● This scheme would facilitate the augmenting of investment, productivity, quality, employment, exports and import substitution in the textile industry. It will also indirectly promote investment in textile machinery manufacturing.
● Eligibility: Only those entities that fall under the following sectors are eligible to apply- weaving, weaving preparatory and knitting processing of fibres, yarns, fabrics, garments and made up handloom sector silk sector, jute sector, Garment/Made up manufacturing, Technical textiles.
Incorrect
Answer: B
Explanation: Amended Technology Upgradation Fund Scheme (ATUFS) scheme is related to textile sector.
About Amended Technology Upgradation Fund Scheme (ATUFS) scheme-
● Technology Upgradation Fund Scheme (TUFS) was introduced in 1999 for providing credit linked capital investment subsidy for making the Indian textile industry globally competitive and reduce the capital cost for the textile industry.
● In 2015, Amended Technology Upgradation Fund Scheme (ATUFS) was launched with an aim of ‘Make in India’ and ‘Zero Defect and Zero Effect’ in manufacturing, the government provides credit linked capital investment subsidy.
● This scheme would facilitate the augmenting of investment, productivity, quality, employment, exports and import substitution in the textile industry. It will also indirectly promote investment in textile machinery manufacturing.
● Eligibility: Only those entities that fall under the following sectors are eligible to apply- weaving, weaving preparatory and knitting processing of fibres, yarns, fabrics, garments and made up handloom sector silk sector, jute sector, Garment/Made up manufacturing, Technical textiles.
Question 11 of 20
11. Question
Consider the following:
1. Supply of goods to software technology parks
2. Supply to projects funded by UN agencies
3. Supply of goods to nuclear power projects
How many of the above are categorised as deemed exports?
Correct
Answer: C
Explanation:
Deemed Exports refers to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in foreign exchange.
Few of Its categories are:
Supply of goods to Software Technology Parks
Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme
Supply of capital goods, including in unassembled/ disassembled condition as well as plants, machinery, accessories, tools, dies
Supply to projects funded by UN agencies.
Incorrect
Answer: C
Explanation:
Deemed Exports refers to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in foreign exchange.
Few of Its categories are:
Supply of goods to Software Technology Parks
Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme
Supply of capital goods, including in unassembled/ disassembled condition as well as plants, machinery, accessories, tools, dies
Supply to projects funded by UN agencies.
Question 12 of 20
12. Question
Consider the following statements regarding the green revolution:
1. It was introduced during the fifth five- year plan.
2. It has increased productivity of maize and bajra.
3. It has widened the variety of crops with unique genotypes.
How many of the above statements are correct?
Correct
Answer: D
Explanation:
Statement 1 is incorrect:
The three years of the ‘Plan Holiday’ viz. 1966-67 to 1968-69 witnessed the adoption of the new agricultural strategy, which has come to be commonly known as the Green Revolution.
It composed of a package namely-: improved varieties increased use of fertilizers, improved water supplies and better agricultural practices, increasing mechanisation of agricultural operations and measures of plant protection from pests and diseases.
Statement 2 and 3 are incorrect:
As per Ministry of Agriculture data, yearly rice production increased from 35 mt (in million tones) to 105 mt and that of wheat increased from 11 mt to 89 mt between 1960 and 2014.
Maize and Bajra like of crops were not emphasized much in green revolution.
Farmers have traditionally planted a wide variety of crops with unique genotypes. The planting of fewer crop varieties for producing high yields reduced genetic diversity among crop species in the country. This has also led to the loss of distinct indigenous crops from cultivation and also caused extinction.
Incorrect
Answer: D
Explanation:
Statement 1 is incorrect:
The three years of the ‘Plan Holiday’ viz. 1966-67 to 1968-69 witnessed the adoption of the new agricultural strategy, which has come to be commonly known as the Green Revolution.
It composed of a package namely-: improved varieties increased use of fertilizers, improved water supplies and better agricultural practices, increasing mechanisation of agricultural operations and measures of plant protection from pests and diseases.
Statement 2 and 3 are incorrect:
As per Ministry of Agriculture data, yearly rice production increased from 35 mt (in million tones) to 105 mt and that of wheat increased from 11 mt to 89 mt between 1960 and 2014.
Maize and Bajra like of crops were not emphasized much in green revolution.
Farmers have traditionally planted a wide variety of crops with unique genotypes. The planting of fewer crop varieties for producing high yields reduced genetic diversity among crop species in the country. This has also led to the loss of distinct indigenous crops from cultivation and also caused extinction.
Question 13 of 20
13. Question
Consider the following statements with reference to electronic National Agriculture Market (e NAM):
1. It provides one license for a trader valid across all markets in the country.
2. All warehouses are eligible to provide the trading services.
3. National Agricultural Cooperative Marketing Federation of India (NAFED) is the implementing agency for the e- NAM platform.
How many of the statements given above are correct?
Correct
Answer: D
Explanation:
Statement 1 is incorrect: A single license is valid across the state, not across the country.
Statement 2 is incorrect:
e-NAM will also enable small and marginal farmers to directly trade their produce from selected Warehousing Development & Regulatory Authority (WDRA) registered warehouses which are declared deemed market by the state.
Statement 3 is incorrect:
Small Farmers Agribusiness Consortium (SFAC) is the lead agency to implement e-NAM.
Additional Information
About e-NAM:
● It is a pan India electronic leading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.
● NAM will be implemented as a Central Sector Scheme through Agri-Tech Infrastructure Fund (ATIF). The Department of Agriculture & Cooperation (DAC), Ministry of Agriculture will set it up through the Small Farmers Agribusiness Consortium (SFAC) which will act as lead agency for implementation.
● For integration with the e-platform the States/UTs will need to undertake prior reforms in respect of:
✔ A single license to be valid across the State.
✔ Single point levy of market fee and provision for electronic auction as a mode for price discovery.
✔ It will also enable small and marginal farmers to directly trade their produce from selected Warehousing Development & Regulatory Authority (WDRA) registered warehouses which are declared deemed market by the state.
About National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED):
⮚ It was established on 2nd October 1958.
⮚ Nafed is registered under the Multi State Co-operative Societies Act.
⮚ Nafed was setup with the object to promote Co-operative marketing of agricultural produce to benefit the farmers.
⮚ Agricultural farmers are the main members of Nafed, who have the authority to say in the form of members of the General Body in the working of Nafed.
Incorrect
Answer: D
Explanation:
Statement 1 is incorrect: A single license is valid across the state, not across the country.
Statement 2 is incorrect:
e-NAM will also enable small and marginal farmers to directly trade their produce from selected Warehousing Development & Regulatory Authority (WDRA) registered warehouses which are declared deemed market by the state.
Statement 3 is incorrect:
Small Farmers Agribusiness Consortium (SFAC) is the lead agency to implement e-NAM.
Additional Information
About e-NAM:
● It is a pan India electronic leading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.
● NAM will be implemented as a Central Sector Scheme through Agri-Tech Infrastructure Fund (ATIF). The Department of Agriculture & Cooperation (DAC), Ministry of Agriculture will set it up through the Small Farmers Agribusiness Consortium (SFAC) which will act as lead agency for implementation.
● For integration with the e-platform the States/UTs will need to undertake prior reforms in respect of:
✔ A single license to be valid across the State.
✔ Single point levy of market fee and provision for electronic auction as a mode for price discovery.
✔ It will also enable small and marginal farmers to directly trade their produce from selected Warehousing Development & Regulatory Authority (WDRA) registered warehouses which are declared deemed market by the state.
About National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED):
⮚ It was established on 2nd October 1958.
⮚ Nafed is registered under the Multi State Co-operative Societies Act.
⮚ Nafed was setup with the object to promote Co-operative marketing of agricultural produce to benefit the farmers.
⮚ Agricultural farmers are the main members of Nafed, who have the authority to say in the form of members of the General Body in the working of Nafed.
Question 14 of 20
14. Question
Consider the following statements with reference to Farmer Producer Organisation (FPOs):
1. It can be formed for either farm activities or non-farm activities.
2. It is a legal entity formed under Companies Act, 1956.
Which of the statements given above is/are correct?
Correct
Answer: C
Explanation:
Statement 1 is correct: It is formed by a group of producers for either farm or non-farm activities.
Statement 2 is correct:
It is a registered body and a legal entity. FPOs are registered under the special provisions of the Companies Act 1956 as the most appropriate institutional form around which to mobilize farmers and build their capacity to collectively leverage their production and marketing strength.
Additional information
Farmers Producer Organisation-
It is one type of PO (a legal entity) where the members are farmers. Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs.
The essential features of a PO are:
▪ It is formed by a group of producers for either farm or non-farm activities.
▪ It is a registered body and a legal entity. FPOs are registered under the special provisions of the Companies Act 1956 as the most appropriate institutional form around which to mobilize farmers and build their capacity to collectively leverage their production and marketing strength.
▪ Producers are shareholders in the organization,
▪ It deals with business activities related to the primary produce/product.
▪ It works for the benefit of the member producers.
▪ A part of the profit is shared amongst the producers. Rest of the surplus is added to its owned funds for business expansion. FPOs help in increasing the bargaining power of the farmer producers through collective farming and marketing.
▪ A producer organization (PO) is a legal entity formed by primary producers viz fanners , milk producers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/ benefits among the members.
Incorrect
Answer: C
Explanation:
Statement 1 is correct: It is formed by a group of producers for either farm or non-farm activities.
Statement 2 is correct:
It is a registered body and a legal entity. FPOs are registered under the special provisions of the Companies Act 1956 as the most appropriate institutional form around which to mobilize farmers and build their capacity to collectively leverage their production and marketing strength.
Additional information
Farmers Producer Organisation-
It is one type of PO (a legal entity) where the members are farmers. Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs.
The essential features of a PO are:
▪ It is formed by a group of producers for either farm or non-farm activities.
▪ It is a registered body and a legal entity. FPOs are registered under the special provisions of the Companies Act 1956 as the most appropriate institutional form around which to mobilize farmers and build their capacity to collectively leverage their production and marketing strength.
▪ Producers are shareholders in the organization,
▪ It deals with business activities related to the primary produce/product.
▪ It works for the benefit of the member producers.
▪ A part of the profit is shared amongst the producers. Rest of the surplus is added to its owned funds for business expansion. FPOs help in increasing the bargaining power of the farmer producers through collective farming and marketing.
▪ A producer organization (PO) is a legal entity formed by primary producers viz fanners , milk producers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/ benefits among the members.
Question 15 of 20
15. Question
Consider the following statements regarding Mahila Samman Saving Certificate Scheme:
1. The scheme aims to provide financial security to young girls and women in India.
2. The maturity period of the investment under this scheme is two years.
Which of the above statements is/are correct?
Correct
Answer: C
Explanation:
Statement 1 is correct:
MSSC aims to provide financial security to young girls and women in India enabling financial inclusion and empowerment.
Statement 2 is correct:
Maturity date: The maturity of the investment under this scheme is two years.
Withdrawal: 40% withdrawal of eligible balance can be taken after one year from the date of account opening.
Additional Information
About Mahila Samman Saving Certificate Scheme-
▪ Government permitted all Public Sector Banks and eligible Private Sector Banks to implement and operationalise the Mahila Samman Savings Certificate (MSSC), 2023.
▪ MSSC aims to provide financial security to young girls and women in India enabling financial inclusion and empowerment.
Key features:
▪ MSSC is a small savings scheme.
▪ It is available for subscription in Post Offices, and eligible Scheduled Banks.
▪ An account can be opened under MSSC scheme on or before the March 31, 2025, for a tenure of two years.
▪ Eligibility: Opening an account under the MSSC scheme can be made by a woman for herself or by the guardian on behalf of a minor girl.
▪ Interest rate: The deposit made under MSSC will bear interest at the rate of 7.5% per annum which will be compounded quarterly.
▪ Investment limit: A minimum of ₹1000 and any sum in multiple of 100 may be deposited within the maximum limit of ₹200,000.
▪ Maturity date: The maturity of the investment under this scheme is two years.
▪ Withdrawal: 40% withdrawal of eligible balance can be taken after one year from the date of account opening.
▪ Taxation: All earnings under the Mahila Samman Savings Certificate will be taxable as per existing income tax provisions. However, TDS (Tax Deducted at Source) will not be deducted under the scheme.
Incorrect
Answer: C
Explanation:
Statement 1 is correct:
MSSC aims to provide financial security to young girls and women in India enabling financial inclusion and empowerment.
Statement 2 is correct:
Maturity date: The maturity of the investment under this scheme is two years.
Withdrawal: 40% withdrawal of eligible balance can be taken after one year from the date of account opening.
Additional Information
About Mahila Samman Saving Certificate Scheme-
▪ Government permitted all Public Sector Banks and eligible Private Sector Banks to implement and operationalise the Mahila Samman Savings Certificate (MSSC), 2023.
▪ MSSC aims to provide financial security to young girls and women in India enabling financial inclusion and empowerment.
Key features:
▪ MSSC is a small savings scheme.
▪ It is available for subscription in Post Offices, and eligible Scheduled Banks.
▪ An account can be opened under MSSC scheme on or before the March 31, 2025, for a tenure of two years.
▪ Eligibility: Opening an account under the MSSC scheme can be made by a woman for herself or by the guardian on behalf of a minor girl.
▪ Interest rate: The deposit made under MSSC will bear interest at the rate of 7.5% per annum which will be compounded quarterly.
▪ Investment limit: A minimum of ₹1000 and any sum in multiple of 100 may be deposited within the maximum limit of ₹200,000.
▪ Maturity date: The maturity of the investment under this scheme is two years.
▪ Withdrawal: 40% withdrawal of eligible balance can be taken after one year from the date of account opening.
▪ Taxation: All earnings under the Mahila Samman Savings Certificate will be taxable as per existing income tax provisions. However, TDS (Tax Deducted at Source) will not be deducted under the scheme.
Question 16 of 20
16. Question
Consider the following statements:
1. The Long-Term Repo Operations (LTRO) is a monetary policy tool used by the Reserve Bank of India to lend money to banks for a period ranging between three to ten years.
2. Collateral of government security is not required while taking loans in LTRO.
3. In LTRO the interest rate is decided by the Reserve Bank of India.
4. In LTRO the interest rate is generally higher than the repo rate.
How many of the above statements are correct?
Correct
Answer. A
Explanation:
Statement 1 is incorrect: The Long-Term Repo Operations (LTRO) is a monetary policy tool used by the Reserve Bank of India (RBI) to lend money to banks for a period ranging between one to three years.
Statement 2 is incorrect: LTRO is performed at the current repo rate in exchange for government securities of equal or greater maturity. Or it will accept government securities with matching or higher tenure as the collateral.
Statement 3 is correct: In Long Term Repo Operations (LTRO) the interest rate is decided through auction by RBI.
Statement 4 is incorrect: The interest rate in case of LTRO is same as that of Repo rate. The LTRO is a tool under which the central bank provides one-year to three-year money to banks at the prevailing repo rate, accepting government securities with matching or higher tenure as the collateral.
RBI introduced LTRO with a view to ensuring banks about the availability of durable liquidity at reasonable cost relative to prevailing market conditions, and to further encourage banks to undertake maturity transformation smoothly and seamlessly so as to augment credit flows to productive sectors.
It is a measure that market participants expect will bring down short-term rates and also boost investment in corporate bonds. These new measures coupled with RBI’s earlier introduced ‘Operation Twist’ are an attempt by the central bank to manage bond yields and push transmission of earlier rate cuts.
Shorter duration government bond yields plunged after the Reserve Bank of India announced Long Term Repo Operation.
Under the LAF, banks could only bid up to a maximum of 0.75 per cent of their net demand and time liabilities. The LTRO bidding system, taken with the removal of the 0.75 per cent limit on LAF borrowings, is expected to remove these constraints. The RBI believes that offering banks durable longer-term liquidity at the repo rate (5.15 per cent), can help them lower the rates they charge on retail and industrial loans, while maintaining their margins.
Incorrect
Answer. A
Explanation:
Statement 1 is incorrect: The Long-Term Repo Operations (LTRO) is a monetary policy tool used by the Reserve Bank of India (RBI) to lend money to banks for a period ranging between one to three years.
Statement 2 is incorrect: LTRO is performed at the current repo rate in exchange for government securities of equal or greater maturity. Or it will accept government securities with matching or higher tenure as the collateral.
Statement 3 is correct: In Long Term Repo Operations (LTRO) the interest rate is decided through auction by RBI.
Statement 4 is incorrect: The interest rate in case of LTRO is same as that of Repo rate. The LTRO is a tool under which the central bank provides one-year to three-year money to banks at the prevailing repo rate, accepting government securities with matching or higher tenure as the collateral.
RBI introduced LTRO with a view to ensuring banks about the availability of durable liquidity at reasonable cost relative to prevailing market conditions, and to further encourage banks to undertake maturity transformation smoothly and seamlessly so as to augment credit flows to productive sectors.
It is a measure that market participants expect will bring down short-term rates and also boost investment in corporate bonds. These new measures coupled with RBI’s earlier introduced ‘Operation Twist’ are an attempt by the central bank to manage bond yields and push transmission of earlier rate cuts.
Shorter duration government bond yields plunged after the Reserve Bank of India announced Long Term Repo Operation.
Under the LAF, banks could only bid up to a maximum of 0.75 per cent of their net demand and time liabilities. The LTRO bidding system, taken with the removal of the 0.75 per cent limit on LAF borrowings, is expected to remove these constraints. The RBI believes that offering banks durable longer-term liquidity at the repo rate (5.15 per cent), can help them lower the rates they charge on retail and industrial loans, while maintaining their margins.
Question 17 of 20
17. Question
Consider the following statements:
1. Tax revenue is charged on income earned by an individual whereas non-tax revenue is charged against services provided by the government.
2. Interest paid on loans, dividends and profits from PSEs are the components of non-tax revenue of the government.
3. Non-tax revenue of the central government is higher than the net tax revenue.
How many of the above statements are correct?
Correct
Answer. B
Explanation:
Statement 1 is correct: Tax revenue is charged on income earned by an individual or an entity (direct tax) and on the value of transaction of goods and services (indirect tax). On the other hand, non-tax revenue is charged against services provided by the government. It also includes interest charged on loans advanced by the government for various purposes. Note that it is compulsory to pay a part of the income earned/generated and amount of goods and services consumed as tax. However, non-tax revenue becomes payable only when services offered by the government are availed.
Statement 2 is correct: Non-tax revenue of the central government mainly consists of interest receipts on account of loans by the central government, dividends and profits on investments made by the government or Public Sector Enterprises (PSEs), fees and other receipts for services rendered by the government. Cash grants-in-aid from foreign countries and international organizations are also included.
Statement 3 is incorrect: Net Tax Revenue of the central government is much higher (23,30,631 crore) than the non-tax revenue (3,01,650 crore) in 2023-2024 budget.
Components of Non-Tax Revenue:
Interest
Dividends and profits
Petroleum license
Power supply fees
Fees for Communication Services Broadcasting fees
Receipts relating to Defence Services
Sale of stationery, gazettes etc
Incorrect
Answer. B
Explanation:
Statement 1 is correct: Tax revenue is charged on income earned by an individual or an entity (direct tax) and on the value of transaction of goods and services (indirect tax). On the other hand, non-tax revenue is charged against services provided by the government. It also includes interest charged on loans advanced by the government for various purposes. Note that it is compulsory to pay a part of the income earned/generated and amount of goods and services consumed as tax. However, non-tax revenue becomes payable only when services offered by the government are availed.
Statement 2 is correct: Non-tax revenue of the central government mainly consists of interest receipts on account of loans by the central government, dividends and profits on investments made by the government or Public Sector Enterprises (PSEs), fees and other receipts for services rendered by the government. Cash grants-in-aid from foreign countries and international organizations are also included.
Statement 3 is incorrect: Net Tax Revenue of the central government is much higher (23,30,631 crore) than the non-tax revenue (3,01,650 crore) in 2023-2024 budget.
Components of Non-Tax Revenue:
Interest
Dividends and profits
Petroleum license
Power supply fees
Fees for Communication Services Broadcasting fees
Receipts relating to Defence Services
Sale of stationery, gazettes etc
Question 18 of 20
18. Question
Consider the following statements regarding the “Kisan Credit Card (KCC)” scheme:
1. It helps the farmers to meet their short- term credit requirements that includes post-harvest expenses and consumption requirements of farmer households.
2. The Kisan Credit Card Scheme is implemented by all Indian banks.
3. The Kisan Credit Card Scheme is not applicable to Animal Husbandry, Dairying and Fisheries sectors.
How many of the above statements are correct?
Correct
Answer. B
Explanation:
The Kisan Credit Card (KCC) scheme was introduced in 1998 for the issue of Kisan Credit Cards to farmers on the basis of their holdings for uniform adoption by the banks so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs.
Statement 1 is correct: The Kisan Credit Card Scheme helps the farmers to meet their short- term credit requirements that includes post-harvest expenses and consumption requirements of farmer households.
Statement 2 is correct: The model of KCC scheme was prepared by NABARD (National Bank for Agriculture and Rural Development) that met the recommendations of RV Gupta Committee. The KCC is available at all Indian banks, regional rural banks and the co-operative banks. The KCC scheme has short-term credit limits for crops and term loans.
Statement 3 is incorrect: The government in 2018-19 extended the Kisan Credit Card (KCC) facility to fisheries and animal husbandry farmers to help them meet their working capital requirements.
Purpose / Objective:
To meet the short-term credit requirements for cultivation of Crops, Post-harvest expenses.
Consumption requirements of Farmer Household.
Produce Marketing loan.
Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery etc.
Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.
Eligibility:
All Farmers- Individuals/ Joint Borrowers who are owner cultivators.
Tenant Farmers, Oral Lessees and Sharecroppers.
Self Help Groups or Joint Liability Groups of Farmers including tenant farmers, Sharecroppers etc.
Salient Features:
Scale of finance for the crop (as decided by District Level Technical Committee) x Extent of area cultivated + 10% of limit towards post-harvest / household / consumption requirements + 20% of limit towards repairs and maintenance expenses of farm assets.
An additional 10% of the Crop Loan Component increase in Scale of Finance for every successive year
Validity of KCC is for 5 years.
No Margin.
No processing fee up to Rs. 3.00 lakh.
Interest subvention /incentive for prompt repayment to be available as per the Government of India and / or State Government norms.
One time documentation at the time of first availment and thereafter simple declaration (about crops raised/ proposed) by the farmer.
KCC account holders can operate the KCC account through Branch, ATM, BC Points, PoS machines with input dealers/ merchants/ mandies.
Incorrect
Answer. B
Explanation:
The Kisan Credit Card (KCC) scheme was introduced in 1998 for the issue of Kisan Credit Cards to farmers on the basis of their holdings for uniform adoption by the banks so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs.
Statement 1 is correct: The Kisan Credit Card Scheme helps the farmers to meet their short- term credit requirements that includes post-harvest expenses and consumption requirements of farmer households.
Statement 2 is correct: The model of KCC scheme was prepared by NABARD (National Bank for Agriculture and Rural Development) that met the recommendations of RV Gupta Committee. The KCC is available at all Indian banks, regional rural banks and the co-operative banks. The KCC scheme has short-term credit limits for crops and term loans.
Statement 3 is incorrect: The government in 2018-19 extended the Kisan Credit Card (KCC) facility to fisheries and animal husbandry farmers to help them meet their working capital requirements.
Purpose / Objective:
To meet the short-term credit requirements for cultivation of Crops, Post-harvest expenses.
Consumption requirements of Farmer Household.
Produce Marketing loan.
Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery etc.
Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.
Eligibility:
All Farmers- Individuals/ Joint Borrowers who are owner cultivators.
Tenant Farmers, Oral Lessees and Sharecroppers.
Self Help Groups or Joint Liability Groups of Farmers including tenant farmers, Sharecroppers etc.
Salient Features:
Scale of finance for the crop (as decided by District Level Technical Committee) x Extent of area cultivated + 10% of limit towards post-harvest / household / consumption requirements + 20% of limit towards repairs and maintenance expenses of farm assets.
An additional 10% of the Crop Loan Component increase in Scale of Finance for every successive year
Validity of KCC is for 5 years.
No Margin.
No processing fee up to Rs. 3.00 lakh.
Interest subvention /incentive for prompt repayment to be available as per the Government of India and / or State Government norms.
One time documentation at the time of first availment and thereafter simple declaration (about crops raised/ proposed) by the farmer.
KCC account holders can operate the KCC account through Branch, ATM, BC Points, PoS machines with input dealers/ merchants/ mandies.
Question 19 of 20
19. Question
Consider the following:
1. Increase in Inflation
2. Increase in aggregate demand
3. Crowding in private borrowers
How many of the above can be the effects of an increase in the public debt through domestic borrowings?
Correct
Answer. B
Explanation:
Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. It has to be paid from the Consolidated Fund of India. The term is also used to refer to overall liabilities of central and state governments, but the Union government clearly distinguishes its debt liabilities from the states’.
Statements 1 and 2 are correct: Government deficits are inflationary. This is because when the government increases spending or cuts taxes, aggregate demand increases. Firms may not be able to produce higher quantities that are being demanded at the ongoing prices. Prices will, therefore, have to rise. However, if there are unutilised resources, output is held back by lack of demand. A high fiscal deficit is accompanied by higher demand and greater output and, therefore, need not be inflationary.
Statement 3 is incorrect: It has been argued that there is a decrease in investment due to a reduction in the amount of savings available to the private sector. This is because if the government decides to borrow from private citizens by issuing bonds to finance its deficits, these bonds will compete with corporate bonds and other financial instruments for the available supply of funds. If some private savers decide to buy bonds, the funds remaining to be invested in private hands will be smaller. Thus, some private borrowers will get crowded out of the financial markets as the government claims an increasing share of the economy’s total savings. However, one must note that the economy ‘s flow of savings is not really fixed unless we assume that income cannot be augmented.
If government deficits succeed in their goal of raising production, there will be more income and, therefore, more saving. In this case, both the government and industry can borrow more. Also, if the government invests in infrastructure, future generations may be better off, provided the return on such investments is greater than the rate of interest. The actual debt could be paid off by the growth in output. The debt should not then be considered burdensome. The growth in debt will have to be judged by the growth of the economy as a whole.
Incorrect
Answer. B
Explanation:
Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. It has to be paid from the Consolidated Fund of India. The term is also used to refer to overall liabilities of central and state governments, but the Union government clearly distinguishes its debt liabilities from the states’.
Statements 1 and 2 are correct: Government deficits are inflationary. This is because when the government increases spending or cuts taxes, aggregate demand increases. Firms may not be able to produce higher quantities that are being demanded at the ongoing prices. Prices will, therefore, have to rise. However, if there are unutilised resources, output is held back by lack of demand. A high fiscal deficit is accompanied by higher demand and greater output and, therefore, need not be inflationary.
Statement 3 is incorrect: It has been argued that there is a decrease in investment due to a reduction in the amount of savings available to the private sector. This is because if the government decides to borrow from private citizens by issuing bonds to finance its deficits, these bonds will compete with corporate bonds and other financial instruments for the available supply of funds. If some private savers decide to buy bonds, the funds remaining to be invested in private hands will be smaller. Thus, some private borrowers will get crowded out of the financial markets as the government claims an increasing share of the economy’s total savings. However, one must note that the economy ‘s flow of savings is not really fixed unless we assume that income cannot be augmented.
If government deficits succeed in their goal of raising production, there will be more income and, therefore, more saving. In this case, both the government and industry can borrow more. Also, if the government invests in infrastructure, future generations may be better off, provided the return on such investments is greater than the rate of interest. The actual debt could be paid off by the growth in output. The debt should not then be considered burdensome. The growth in debt will have to be judged by the growth of the economy as a whole.
Question 20 of 20
20. Question
What do you understand by the term transfer payment?
Correct
Answer. C
Explanation:
Statement C is correct: Transfer payments are the receipts which the residents of a country get for ‘free’, without having to provide any goods or services in return. They consist of gifts, remittances and grants. They could be given by the government or by private citizens living abroad.
Incorrect
Answer. C
Explanation:
Statement C is correct: Transfer payments are the receipts which the residents of a country get for ‘free’, without having to provide any goods or services in return. They consist of gifts, remittances and grants. They could be given by the government or by private citizens living abroad.
