Indian Economy

The World Trade Organization (WTO) has an agreement called the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS requires member countries to protect Geographical Indications (GIs). GIs identify a product as originating from a specific geographical location where its qualities or reputation are essentially due to that origin.

India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 to comply with its obligations under the TRIPS agreement of the WTO.

The National Payments Corporation of India (NPCI)

The NPCI operates the National Financial Switch (NFS), which is the largest network connecting ATMs across various banks in India. This network facilitates inter-bank transactions and allows users to withdraw cash from ATMs even if they don't belong to the bank that owns the ATM.

Statement 1 is Correct: Cereal grains that are hulled (meaning the outer husk is removed, such as shelled or rolled grains) are exempted from GST under HSN code 1104, provided they are not sold in branded unit containers. This exemption ensures that basic food staples remain affordable.

Statement 2 is Correct: According to GST Council notifications (HSN 0407), birds' eggs in shell, whether fresh, preserved, or cooked, are specifically exempted from GST. This classification keeps basic protein sources outside the tax net.

Statement 3 is Incorrect: While fresh, chilled, or frozen fish is exempt from GST, fish that has been processed and canned (HSN 1604) is considered a value-added product. Such processed items are subject to GST (typically at a rate of 5%).

Statement 4 is Correct: Newspapers, journals, and periodicals (HSN 4902) are exempt from GST. The law explicitly states that this exemption applies whether or not they contain advertising material, ensuring the free and affordable flow of information.

Statement 1 is incorrect: In 2013, NFSA was enacted to provide food security to 67% of the population in the form of highly subsidized food grains at Rs. 2 and 3 per Kg for wheat and rice respectively. Beneficiaries are identified using Socio-economic Caste Census (SECC) methodology so even non-BPL will also benefit.

Statement 2 is correct: Under the NFSA, to issue ration cards the eldest woman of a household aged 18 years or above would be considered as head. Hence, this statement is correct.

Statement 3 is incorrect: Pregnant women and lactating mothers are entitled to a nutritious take home ration of 600 Calories and a maternity benefit of at least Rs 6,000 for six months, says the official act.

The correct chronological sequence is determined by the following historical events:

1. Air India Nationalisation (1953): Air India was nationalised following the enactment of the Air Corporations Act, 1953. The Government of India acquired a majority stake in the airline from the Tata Group, establishing it as the national carrier.

2. Renaming of Imperial Bank to SBI (1955): Based on the recommendations of the All India Rural Credit Survey Committee (Gorewala Committee), the State Bank of India Act was passed. On July 1, 1955, the Imperial Bank of India was renamed the State Bank of India (SBI).

3. First Communist Government in a State (1957): In the 1957 Kerala Legislative Assembly elections, the Communist Party of India (CPI) won a majority. E.M.S. Namboodiripad formed the government, marking the first time a Communist party was democratically elected to power in an Indian state.

4. Goa becoming part of India (1961): Goa was liberated from Portuguese rule on December 19, 1961, through 'Operation Vijay'. Following its liberation, Goa (along with Daman and Diu) was incorporated into India as a Union Territory by the 12th Constitutional Amendment Act, 1962. It attained full statehood much later, on May 30, 1987.

Chronological Order: 3 (1953) - 2 (1955) - 1 (1957) - 4 (1961).

Statement 1 is Correct: The Bureau of Indian Standards (BIS) is the National Standards Body of India working under the aegis of Ministry of Consumer Affairs, Food & Public Distribution, Government of India. The Bureau of Indian Standards (BIS) Standard Mark is indeed mandatory for automotive tyres and tubes.

Statement 2 is Incorrect: AGMARK is a quality Certification Mark issued by the Directorate of Marketing and Inspection (DMI), an agency of the Government of India, and not by the Food and Agriculture Organization (FAO). The FAO is an international organisation that promotes food security and agricultural development.

Hence, option A is the correct answer.

Statement 1 is Incorrect: National Investment and Infrastructure Fund (NIIF) is India's first sovereign wealth fund that was set up by the Government of India in February 2015. The objective behind creating this fund was to maximise economic impact mainly through infrastructure investment in commercially viable projects, both Greenfield and Brownfield.

Statement 2 is Incorrect: In the Union Budget 2015-16, India's Finance Minister, Arun Jaitley announced the creation of the National Investment and Infrastructure Fund. It was proposed to be established as an Alternative Investment Fund to provide long-term capital for infrastructure projects with an inflow of Rs. 20,000 crore from the Government of India. NIIF was approved in August 2015 by the Department of Economic Affairs. The first meeting of its governing council was held in December 2015 further to which it was registered with SEBI as Category II Alternative Investment Fund.

Hence, option D is the correct answer.

Domestic Content Requirement (DCR) is a policy tool used by governments to encourage local industries to grow and reduce dependence on imports. In the context of solar power production, DCR mandates that a certain percentage of solar equipment used in the production process must be domestically produced. This policy is aimed at promoting indigenous manufacturing and reducing dependence on imports.

Statement 1 is Correct: The National IPR Policy does reiterate India's commitment to the Doha Development Agenda and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The Doha Development Agenda aimed to clarify and improve specific aspects of the TRIPS Agreement, particularly focusing on flexibilities for developing countries. India, as a developing nation, is entitled to certain flexibilities in implementing the TRIPS Agreement, such as using compulsory licensing to ensure access to affordable medicines.

Statement 2 is Correct: The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry is the nodal agency for the development and implementation of IPR policy in India, earlier its name was the Department of Industrial Policy and Promotion.

Hence, option C is the correct answer.

Out of the listed statements about the Soil Health Card Scheme :

Statement 1 is Incorrect: Expanding the cultivable area under irrigation is not a primary objective of the scheme.

Statement 2 is Incorrect: Banks don't directly use soil cards to assess loan quantum. Loan approvals depend on various factors like land ownership, crop type, and credit history.

Statement 3 is Correct: A key objective of the scheme is to promote the judicious use of fertilisers. By informing farmers about their soil's nutrient status, the scheme encourages them to apply only the required amount of fertilisers, reducing overuse and potential environmental damage.

Therefore, the correct answer is 3 only (checking the overuse of fertilisers in farmlands).Hence, option B is the correct answer.

The Digital Single Market Strategy refers to an initiative by the European Union (EU) that aims to create a unified digital market across all member states.

Overall, the Digital Single Market Strategy aims to stimulate growth in the European digital economy by fostering innovation, competition, and consumer confidence in the online marketplace.

Statement 1 is Correct: The Quality Council of India (QCI) is a pioneering experiment of the Government of India in setting up organisations in partnership with the Indian industry.

Quality Council of India (QCI) was set up in 1997 jointly by the Government of India and the Indian Industry represented by the three premier industry associations i.e. Associated Chambers of Commerce and Industry of India (ASSOCHAM), Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI), to establish and operate national accreditation structure and promote quality through National Quality Campaign.

The Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, is the nodal ministry for QCI.QCI is governed by a Council of 38 members including the Chairman and Secretary General.

Statement 2 is Correct: The chairman is appointed by the Prime Minister on the recommendation of the industry to the government.

Therefore, both statement 1 and statement 2 are correct.Hence, option C is the correct answer.

Statement (a) is correct: UPI enables direct bank-to-bank transfers through mobile apps, removing the need for intermediate mobile wallets.

Statement (b) is incorrect: UPI promotes digital transactions, but it will not completely replace physical currency in the near future.

Statement (c) is incorrect: UPI deals with domestic payment systems and has no direct impact on FDI inflows.

Statement (d) is incorrect: Direct Benefit Transfer (DBT) uses Aadhaar-linked bank accounts, not UPI, as the main mechanism for subsidy distribution.

Statement 1 is Correct. Mobile telephone companies and supermarket chains owned and controlled by residents can be promoters of Payment Banks. This allows entities with a wide reach to expand financial services to unbanked populations.

Statement 2 is Incorrect. Payment Banks cannot issue credit cards. They can only issue debit cards linked to a pre-existing bank account.

Statement 3 is Correct. Payment Banks are not allowed to undertake lending activities. Their focus is on facilitating basic banking services like deposits, payments, and money transfers.

The term "Base Erosion and Profit Shifting (BEPS)" refers to tax planning strategies used by multinational companies to artificially shift profits from higher-tax jurisdictions to lower-tax jurisdictions, thereby reducing their overall tax liabilities.

This practice often involves exploiting gaps and mismatches in tax rules between different countries. BEPS has been a major concern for governments worldwide as it can lead to significant revenue losses and erode the tax base of countries where economic activity occurs.

Efforts to address BEPS involve cooperation among countries to develop common standards and guidelines to prevent tax avoidance by multinational corporations.

Statement 1 is correct: This is the primary objective of the Gold Monetization Scheme (GMS). The scheme encourages individuals and institutions to deposit their idle physical gold (jewellery, coins, bars) with banks. This gold is then melted, assayed, and added to the country's gold reserves, which can be lent to jewellers, thereby bringing it into the formal economy.

Statement 2 is incorrect: These schemes are focused on managing domestic gold supply and demand. They are not designed to attract Foreign Direct Investment (FDI). Policies related to FDI in the jewellery sector are separate from these schemes.

Statement 3 is correct: This is a core objective of both schemes. * The Sovereign Gold Bond (SGB) Scheme provides a financial alternative to buying physical gold. By shifting demand from physical gold to paper gold, it helps reduce the demand for gold imports. * The Gold Monetization Scheme (GMS) increases the domestic supply of recycled gold available to jewellers, thus reducing their reliance on imported gold. Both schemes aim to curb gold imports, which are a major component of India's import bill and contribute significantly to the Current Account Deficit (CAD).

The terms "amber box," "blue box," and "green box" are often associated with the agriculture sector and are commonly used in discussions related to international trade negotiations, particularly within the framework of the World Trade Organization (WTO) Agreement on Agriculture.

* Amber Box: This refers to domestic support measures considered to distort agricultural production and trade. These measures typically include price supports, production subsidies, and other forms of support that are considered trade-distorting.

* Blue Box: This category includes domestic support measures that are considered less trade-distorting compared to those in the amber box. However, they still involve certain constraints or conditions aimed at limiting their trade-distorting effects.

* Green Box: These are domestic support measures that are considered minimally or non-trade-distorting. They typically include subsidies that are tied to environmental or rural development objectives, as well as certain types of direct income support that do not distort trade significantly.

Statement 1 is Correct: Core Banking Solution (CBS) is a networking of a bank's branches that allows customers to manage their accounts and perform transactions from any branch on the network, regardless of where the account was originally opened. Statement 2 is Incorrect: CBS is a back-end system used by individual banks to improve internal efficiency and customer service; it is not a tool designed for the RBI to increase its regulatory control over commercial banks. Statement 3 is Incorrect: CBS refers to the centralized software platform used for day-to-day banking operations; it is not a procedure for the takeover of banks or the resolution of Non-Performing Assets (NPAs).

Statement 1 is Correct. The International Finance Corporation (IFC) is indeed an arm of the World Bank Group, a group of five international organizations that work together to fight poverty and promote sustainable development. The IFC specifically focuses on encouraging growth in the private sector of developing countries.

Statement 2 is Correct. Masala bonds are rupee-denominated bonds issued by foreign entities (public or private sector) outside of India. These bonds raise capital for the issuer in Indian rupees, providing an alternative funding source.

Therefore, the correct answer is 1 and 2 both are correct.

The 'Global Financial Stability Report' is prepared by the International Monetary Fund (IMF).

The Global Financial Stability Report is a semiannual report published by the IMF that assesses the stability of the global financial system and emerging market financing. It highlights potential risks and vulnerabilities in the financial system and provides policy recommendations to promote financial stability.

Statement 1 is Correct: Reducing revenue expenditure (spending that does not create assets or reduce liabilities, such as interest payments, salaries, and administrative costs) lowers the total government outgo, thereby reducing the budget deficit. Statement 2 is Incorrect: Introducing new welfare schemes increases government spending (typically revenue expenditure), which would widen the budget deficit rather than reduce it. Statement 3 is Correct: Rationalizing subsidies involves making them more targeted (e.g., through Direct Benefit Transfer) to eliminate leakages and reduce wasteful revenue expenditure, which helps in narrowing the deficit. Statement 4 is Incorrect: Reducing import duties decreases the government's tax revenue (receipts). A decrease in revenue, assuming expenditure remains constant, leads to an increase in the budget deficit.

Import cover is a critical economic indicator that measures the number of months of imports a country can afford using its foreign exchange reserves. It is calculated using the formula: Import Cover = (Total Foreign Exchange Reserves) / (Average Monthly Imports). This metric assesses a country's external stability and its ability to withstand shocks to the balance of payments or sudden stops in foreign currency inflows. While other options describe the import-to-GDP ratio (Option A), total import volume (Option B), or trade balance/terms of trade (Option C), only Option D correctly identifies the relationship between reserves and import duration.

Every package of food shall carry the following information on the label, namely, - The name of the food shall include trade name or description of food contained in the package.

- List of Ingredients except for single-ingredient foods, a list of ingredients shall be declared on the label.

- Nutritional Information or nutritional facts per 100 gm or 100ml or per serving of the product shall be given on the label.

- Vegetarian/non-vegetarian shall be mentioned.

- There is no provision for recommendations of any medical professional regarding allergies.

Therefore, 1,2, and 4 are correct statements.

The Ujwal DISCOM Assurance Yojana (UDAY) was launched by the Ministry of Power in 2015 to provide a permanent solution for the financial turnaround and revival of power distribution companies (DISCOMs). The scheme's primary mechanism involved state governments taking over 75% of the DISCOM debt (as of September 2015) and issuing low-interest sovereign bonds to lenders, which significantly reduced the interest burden on these companies. It also aimed at operational improvements, such as reducing Aggregate Technical and Commercial (AT&C) losses and improving energy efficiency. Option B refers to the Saubhagya Scheme (Pradhan Mantri Sahaj Bijli Har Ghar Yojana), which was launched in 2017 to achieve universal household electrification.

MCLR (Marginal Cost of Funds-based Lending Rate) This is a benchmark interest rate set by banks in India, below which they cannot lend. It represents the minimum cost of funds for the bank, considering factors like their own borrowing costs, operating expenses, and a profit margin. The purposes of MCLR as outlined by the RBI include

- Statement 1 is correct. Improved Transparency: MCLR standardizes the method for calculating the minimum lending rate. This transparency allows borrowers to better understand how banks arrive at their interest rates and facilitates comparison between different banks.

- Statement 2 is correct. Fairness for Borrowers and Banks: MCLR ensures a certain level of fairness. It prevents banks from setting arbitrarily high minimum lending rates, potentially benefiting borrowers. At the same time, it allows banks to cover their basic costs and earn a reasonable profit margin.

Therefore, both options 1 and 2 accurately reflect the purposes of the MCLR system.

Andhra Pradesh is set to house India's first national investment and manufacturing zone after the state assured the Centre of the availability of 2500 acres (10 sq km) of land in one place in Prakasam district.

The imminent final approval for the NIMZ, which is expected to give a fillip to the Prime Ministers Make in India campaign, comes four years after the concept was mooted to boost manufacturing in the country and two years after the Department of Industrial Policy and Promotion gave an in-principle nod to Andhra Pradesh in this regard.

The SDR is an international reserve asset created by the International Monetary Fund (IMF) and not a single currency. Its value is based on a basket of five major world currencies

- US Dollar (USD) - Euro (EUR) - Japanese Yen (JPY) - British Pound Sterling (GBP) - Chinese Renminbi (RMB) (added in 2016)

The IMF reviews the composition of the SDR basket every five years to ensure it reflects the relative importance of currencies in the global trading and financial system. The inclusion of the RMB in 2016 signified the growing importance of the Chinese economy in the world.

It is published by the World Bank.

Ease of Doing Business Index: This index was a global ranking that assessed the regulatory environment for business startups and operations in different economies. It measured regulations in areas like starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

Note: The World Bank discontinued the Ease of Doing Business Index in 2021 due to concerns about data irregularities in some past reports.

Statement 1 is Incorrect: The FSDC is not an organ of NITI Aayog. It's a separate apex-level body under the Ministry of Finance.

Statement 2 is Correct: The FSDC is headed by the Union Finance Minister.

Statement 3 is Correct: The FSDC plays a crucial role in monitoring macro-prudential supervision of the economy. Macro-prudential supervision focuses on preventing systemic risks within the financial system that could destabilize the entire economy.

Therefore, the correct answer is 2 and 3 only.

Statement 1 is correct: This is a classic example of Capital Expenditure. This type of spending creates physical assets for the country and is long-term in nature. Therefore, it is included in the capital budget.

Statement 2 is correct: This is a Capital Receipt. When the government receives a loan, it creates a liability (it has to be repaid in the future). Since it affects the government's liabilities, it is part of the capital budget.

Statement 3 is correct: This is also a form of Capital Expenditure. When the central government grants a loan, it creates a financial asset for itself (the loan is an asset that will earn interest and be repaid). As this spending creates an asset, it is included in the capital budget.

Since all three items are either capital expenditures or capital receipts, they are all part of the Capital Budget of the Government of India.