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All questions of Economic Reforms in India (Old Scheme) for CA Foundation Exam
FERA stands for : - a)Foreign exchange resources act
- b)Funds exchange resources act
- c)Foreign exchange regulation act
- d)Finance and export regulation association
Correct answer is 'C'. Can you explain this answer?
FERA stands for :
a)
Foreign exchange resources act
b)
Funds exchange resources act
c)
Foreign exchange regulation act
d)
Finance and export regulation association
|
Nandini Iyer answered |
The Foreign Exchange Regulation Act (FERA) was legislation passed in India in 1973 that imposed strict regulations on certain kinds of payments, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency. The bill was formulated with the aim of regulating payments and foreign exchange.
Franchising is one of the method of ________.- a)Liberalisation
- b)Globalisation
- c)Privatisation
- d)All of these
Correct answer is option 'C'. Can you explain this answer?
Franchising is one of the method of ________.
a)
Liberalisation
b)
Globalisation
c)
Privatisation
d)
All of these
|
Shweta Sharma answered |
Because after privatisation the govt removed all restrictions on trade and free all the private sectors to do trade in india
From 2005, FDI limit in certain services of telecom sector was increased from 49% to ________:- a)51%
- b)64%
- c)74%
- d)100%
Correct answer is option 'C'. Can you explain this answer?
From 2005, FDI limit in certain services of telecom sector was increased from 49% to ________:
a)
51%
b)
64%
c)
74%
d)
100%
|
Jayant Mishra answered |
He Union Cabinet today cleared a hike in foreign direct investment (FDI) ceiling for telecom services from 49% to 74%. This will enable Indian promoters of telecom services to sell more of their stake to foreign entities and spark off more competition and consolidation in the sector.
Since adoption of Economic liberalisation, the share of agriculture in India’s G.D.P. is- a)Constant
- b)Increasing
- c)Decreasing
- d)None of the above.
Correct answer is option 'C'. Can you explain this answer?
Since adoption of Economic liberalisation, the share of agriculture in India’s G.D.P. is
a)
Constant
b)
Increasing
c)
Decreasing
d)
None of the above.
|
Gayatri Khanna answered |
Decreasing share of agriculture in India's GDP since economic liberalization:
India's economy has undergone significant changes since the adoption of economic liberalization policies in the early 1990s. One of the notable trends has been the decreasing share of agriculture in the country's Gross Domestic Product (GDP).
Reasons for the decreasing share:
- **Shift towards services and industry:** Economic liberalization has led to the rapid growth of the services and industrial sectors in India. This growth has outpaced the agriculture sector, leading to a decline in its relative contribution to the GDP.
- **Technological advancements:** The adoption of modern technologies in the services and industrial sectors has increased productivity and profitability, making them more attractive for investment. In contrast, agriculture has been slower to modernize, leading to stagnant growth.
- **Changing consumer preferences:** As incomes rise and lifestyles change, there is a shift in consumer preferences towards manufactured goods and services. This change in demand has further boosted the growth of non-agricultural sectors.
- **Globalization:** Economic liberalization has opened up the Indian economy to global markets, leading to increased competition for agricultural products. This has put pressure on the sector, leading to a decline in its share of the GDP.
Impact of the decreasing share:
- **Income disparities:** The decreasing share of agriculture in the GDP has widened income disparities between rural and urban areas, as the non-agricultural sectors offer higher-paying opportunities.
- **Employment challenges:** The decline in the share of agriculture has posed challenges for employment generation in rural areas, where a large portion of the population is still dependent on agriculture for their livelihood.
- **Food security concerns:** Despite the decreasing share of agriculture in the GDP, the sector remains crucial for ensuring food security in the country. The decline in its importance raises concerns about the sustainability of food production in the long run.
In conclusion, the share of agriculture in India's GDP has been decreasing since the adoption of economic liberalization policies, driven by various factors such as the growth of non-agricultural sectors, technological advancements, changing consumer preferences, and globalization.
India's economy has undergone significant changes since the adoption of economic liberalization policies in the early 1990s. One of the notable trends has been the decreasing share of agriculture in the country's Gross Domestic Product (GDP).
Reasons for the decreasing share:
- **Shift towards services and industry:** Economic liberalization has led to the rapid growth of the services and industrial sectors in India. This growth has outpaced the agriculture sector, leading to a decline in its relative contribution to the GDP.
- **Technological advancements:** The adoption of modern technologies in the services and industrial sectors has increased productivity and profitability, making them more attractive for investment. In contrast, agriculture has been slower to modernize, leading to stagnant growth.
- **Changing consumer preferences:** As incomes rise and lifestyles change, there is a shift in consumer preferences towards manufactured goods and services. This change in demand has further boosted the growth of non-agricultural sectors.
- **Globalization:** Economic liberalization has opened up the Indian economy to global markets, leading to increased competition for agricultural products. This has put pressure on the sector, leading to a decline in its share of the GDP.
Impact of the decreasing share:
- **Income disparities:** The decreasing share of agriculture in the GDP has widened income disparities between rural and urban areas, as the non-agricultural sectors offer higher-paying opportunities.
- **Employment challenges:** The decline in the share of agriculture has posed challenges for employment generation in rural areas, where a large portion of the population is still dependent on agriculture for their livelihood.
- **Food security concerns:** Despite the decreasing share of agriculture in the GDP, the sector remains crucial for ensuring food security in the country. The decline in its importance raises concerns about the sustainability of food production in the long run.
In conclusion, the share of agriculture in India's GDP has been decreasing since the adoption of economic liberalization policies, driven by various factors such as the growth of non-agricultural sectors, technological advancements, changing consumer preferences, and globalization.
Cross Holding is a method of _______- a)Privitization
- b)Globalization
- c)Disinvestment
- d)Liberalization
Correct answer is option 'C'. Can you explain this answer?
Cross Holding is a method of _______
a)
Privitization
b)
Globalization
c)
Disinvestment
d)
Liberalization
|
Rajat Patel answered |
Cross holding is a situation in which a publicly traded corporation owns stock in another publicly traded company. ... Cross holding can lead to double counting, whereby the equity of each company is counted twice when determining value.
_________ Percent FDI was allowed in Private Bank :-- a)49
- b)74
- c)100
- d)80
Correct answer is 'A'. Can you explain this answer?
_________ Percent FDI was allowed in Private Bank :-
a)
49
b)
74
c)
100
d)
80
|
Kavita Joshi answered |
At present, FDI of up to 49 percent is allowed in private banks without the permission of the government, and upto 74 percent can be invested with the government's approval.
100 percent privatisation in India has taken place of : - a)CMC limited
- b)Maruti Udyog limited
- c)Centaur Hotel
- d)VSNL
Correct answer is option 'C'. Can you explain this answer?
100 percent privatisation in India has taken place of :
a)
CMC limited
b)
Maruti Udyog limited
c)
Centaur Hotel
d)
VSNL
|
|
Jayant Mishra answered |
Privatization generally refers to inducing private sector participation in the management and ownership of Public Sector Enterprises. it covered mostly hotels at many places.
Which of the following statements is correct with regard to external sector in the prereform period?- a)The foreign trade policy was very liberal; it allowed import of all types of goods.
- b)Import of foodgrains was strictly prohibited.
- c)The balance of payments situation was quite comfortable.
- d)None of the above.
Correct answer is option 'D'. Can you explain this answer?
Which of the following statements is correct with regard to external sector in the prereform period?
a)
The foreign trade policy was very liberal; it allowed import of all types of goods.
b)
Import of foodgrains was strictly prohibited.
c)
The balance of payments situation was quite comfortable.
d)
None of the above.
|
|
Akshat Choudhary answered |
External Sector in the Prereform Period:
Explanation:
- The foreign trade policy in the prereform period was not very liberal. It was characterized by high tariffs and restrictions on imports to protect domestic industries.
- Import of foodgrains was not strictly prohibited, but it was heavily regulated through quotas and restrictions to ensure food security.
- The balance of payments situation in the prereform period was not comfortable. India faced persistent deficits in its balance of payments, leading to a reliance on external borrowing and aid.
Therefore, the correct statement with regard to the external sector in the prereform period is option 'D' - None of the above.
Explanation:
- The foreign trade policy in the prereform period was not very liberal. It was characterized by high tariffs and restrictions on imports to protect domestic industries.
- Import of foodgrains was not strictly prohibited, but it was heavily regulated through quotas and restrictions to ensure food security.
- The balance of payments situation in the prereform period was not comfortable. India faced persistent deficits in its balance of payments, leading to a reliance on external borrowing and aid.
Therefore, the correct statement with regard to the external sector in the prereform period is option 'D' - None of the above.
At present, the responsibility for the provision of finance for Agriculture trade and small scale industries has been handed over to_____.- a)SBI
- b)NABARD
- c)NABARD and SIDBI
- d)NABARD, EXIM BANK & SIDBI
Correct answer is 'D'. Can you explain this answer?
At present, the responsibility for the provision of finance for Agriculture trade and small scale industries has been handed over to_____.
a)
SBI
b)
NABARD
c)
NABARD and SIDBI
d)
NABARD, EXIM BANK & SIDBI
|
Poonam Reddy answered |
a) National Bank for Agriculture and Rural Development (NABARD)
The National Bank for Agriculture and Rural Development (NABARD) was established on July 12, 1982 by a special Act of parliament. It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas. The following are some of the functions of NABARD:-
It takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc.
It co-ordinates the rural financing activities of all institutions engaged in developmental work at the field level and maintains liaison with Government of India, state governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation
It undertakes monitoring and evaluation of projects refinanced by it and also refinances the financial institutions which finance the rural sector.
It regulates the institutions which provide financial help to the rural economy.
It provides training facilities to the institutions working in the field of rural upliftment and regulates the cooperative banks and the RRB’s.
b) Export-Import Bank of India (EXIM Bank)
The Export-Import Bank of India (EXIM Bank) is a specialized financial institution, wholly owned by the Government of India (GoI), for financing, facilitating and promoting foreign trade of India. It was set up in 1982 by an Act of the Parliament “THE EXPORT-IMPORT BANK OF INDIA ACT, 1981” at Mumbai, Maharashtra. It provide financial assistance to exporters and importers and co-ordinate the working of institutions engaged in financing export and import of goods and services with a view to promote the India’s international trade and for matters connected therewith or incidental thereto.
c) Small Industries Development Bank of India (SIDBI)
The Small Industries Development Bank of India (SIDBI) is the principal financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector and also co-ordinates the functions of the institutions engaged in similar activities. It was set up on April 2, 1990 under the Small Industries Development Bank of India Act, 1989. It has headquarters in Lucknow, Uttar Pradesh.
100-% FDI was allowed in:- a)Banking
- b)Insurance
- c)Defence
- d)None of these
Correct answer is option 'D'. Can you explain this answer?
100-% FDI was allowed in:
a)
Banking
b)
Insurance
c)
Defence
d)
None of these
|
Arun Khanna answered |
The government's current liberalization policy means that foreign companies can now own up to 100 percent equity in the country's defence manufacturing sector through the automatic government approval route.
Government of India has replaced FERA by:- a)The competition Act
- b)FEBMA
- c)MRTP Act
- d)FEMA
Correct answer is 'D'. Can you explain this answer?
Government of India has replaced FERA by:
a)
The competition Act
b)
FEBMA
c)
MRTP Act
d)
FEMA
|
|
Jayant Mishra answered |
In the budget of 1997-98, the government had proposed to replace FERA-1973, by FEMA (Foreign Exchange management act). FEMA was proposed by the both house of the parliament in Dec. 1999. After the approval of president, FEMA 1999 has come into force w.e.f. June, 2000. Under the FEMA, provisions related to foreign exchange have been modified and liberalized so as to simplify foreign trade. Government hopes that the FEMA will make favourable development in the foreign money market.
Which of the following industries are not reserved for public sector presently?- a)Atomic energy
- b)Railways
- c)Defense
- d)Substances specified in the schedule to the notification of the government of India in the department of atomic energy
Correct answer is option 'C'. Can you explain this answer?
Which of the following industries are not reserved for public sector presently?
a)
Atomic energy
b)
Railways
c)
Defense
d)
Substances specified in the schedule to the notification of the government of India in the department of atomic energy
|
|
Priya Patel answered |
At present the number of industries kept reserved for governament sector is three:
They are:
1.Atomic energy,
2.Railway transport and
3.The substances specified in the schedule to the notification of the governament of India in the Department of the Atomic Energy dated 15th march, 1995.
so, defence option is correct.
so, defence option is correct.
Exports now finance over ________ of imports :- a)50%
- b)60%
- c)70%
- d)80%
Correct answer is option 'D'. Can you explain this answer?
Exports now finance over ________ of imports :
a)
50%
b)
60%
c)
70%
d)
80%
|
|
Srestha Shah answered |
Exports financing imports
Exports and imports are two important components of a country's economy. Exports refer to goods and services produced domestically and sold to other countries, while imports refer to goods and services produced in other countries and purchased domestically.
The balance of trade is a measure of the difference between a country's exports and imports. If a country exports more than it imports, it has a trade surplus, while if it imports more than it exports, it has a trade deficit.
In recent years, many countries have been experiencing trade deficits, meaning they are importing more than they are exporting. However, despite this, exports are still playing a significant role in financing imports.
Percentage of exports financing imports
According to the given question, exports now finance over 80% of imports. This means that the revenue generated from exports is being used to pay for a significant portion of the goods and services that a country is importing.
This statistic highlights the importance of exports in the global economy. Even countries with trade deficits are able to finance a large portion of their imports through exports. It also shows that countries are dependent on each other for goods and services, and that trade is a vital component of economic growth.
Conclusion
In conclusion, exports play a crucial role in financing imports, with recent data indicating that exports now finance over 80% of imports. This highlights the importance of trade in the global economy and the interdependence of countries on each other for goods and services.
Exports and imports are two important components of a country's economy. Exports refer to goods and services produced domestically and sold to other countries, while imports refer to goods and services produced in other countries and purchased domestically.
The balance of trade is a measure of the difference between a country's exports and imports. If a country exports more than it imports, it has a trade surplus, while if it imports more than it exports, it has a trade deficit.
In recent years, many countries have been experiencing trade deficits, meaning they are importing more than they are exporting. However, despite this, exports are still playing a significant role in financing imports.
Percentage of exports financing imports
According to the given question, exports now finance over 80% of imports. This means that the revenue generated from exports is being used to pay for a significant portion of the goods and services that a country is importing.
This statistic highlights the importance of exports in the global economy. Even countries with trade deficits are able to finance a large portion of their imports through exports. It also shows that countries are dependent on each other for goods and services, and that trade is a vital component of economic growth.
Conclusion
In conclusion, exports play a crucial role in financing imports, with recent data indicating that exports now finance over 80% of imports. This highlights the importance of trade in the global economy and the interdependence of countries on each other for goods and services.
__________ is known as privatisation- a)Divestment
- b)Making a Private sector as a public
- c)Liberalisation
- d)All of the above
Correct answer is option 'A'. Can you explain this answer?
__________ is known as privatisation
a)
Divestment
b)
Making a Private sector as a public
c)
Liberalisation
d)
All of the above
|
|
Nilanjan Saha answered |
Privatisation as Divestment
Divestment is the process of selling or transferring ownership of a government-owned or controlled corporation or asset to the private sector. This process is also known as privatisation, and it has become a common practice in many countries around the world.
Divestment can take several forms, including selling shares of stock to the public, selling the entire entity to a private company, or leasing the asset to a private company for a fixed period. The goal of divestment is to reduce the role of the government in the economy, increase efficiency and competitiveness, and generate revenue for the government.
Examples of Divestment
Many countries have implemented divestment programs to privatise state-owned enterprises in various sectors, including:
- Telecommunications: The UK government privatised British Telecom in 1984, and many other countries have followed suit by divesting their state-owned telecom companies.
- Banking: In the 1990s, several European countries privatised their state-owned banks, including France, Spain, and Italy.
- Energy: Many countries have privatised their state-owned energy companies, including Russia, India, and Argentina.
- Transportation: The UK government privatised British Airways in 1987, and many other countries have divested their state-owned airlines and railways.
Benefits of Divestment
Divestment can have several benefits, including:
- Increased efficiency and competitiveness: Private companies are often more efficient and innovative than government-owned enterprises.
- Reduced government debt: Divestment generates revenue for the government, which can be used to reduce public debt.
- Improved service quality: Private companies often have a greater incentive to provide high-quality services to customers.
- Increased investment: Privatisation can attract new investors to the economy, which can lead to increased economic growth.
Conclusion
In conclusion, divestment is the process of selling or transferring ownership of a government-owned or controlled corporation or asset to the private sector. This process is also known as privatisation, and it has become a common practice in many countries around the world. Divestment can have several benefits, including increased efficiency and competitiveness, reduced government debt, improved service quality, and increased investment.
Divestment is the process of selling or transferring ownership of a government-owned or controlled corporation or asset to the private sector. This process is also known as privatisation, and it has become a common practice in many countries around the world.
Divestment can take several forms, including selling shares of stock to the public, selling the entire entity to a private company, or leasing the asset to a private company for a fixed period. The goal of divestment is to reduce the role of the government in the economy, increase efficiency and competitiveness, and generate revenue for the government.
Examples of Divestment
Many countries have implemented divestment programs to privatise state-owned enterprises in various sectors, including:
- Telecommunications: The UK government privatised British Telecom in 1984, and many other countries have followed suit by divesting their state-owned telecom companies.
- Banking: In the 1990s, several European countries privatised their state-owned banks, including France, Spain, and Italy.
- Energy: Many countries have privatised their state-owned energy companies, including Russia, India, and Argentina.
- Transportation: The UK government privatised British Airways in 1987, and many other countries have divested their state-owned airlines and railways.
Benefits of Divestment
Divestment can have several benefits, including:
- Increased efficiency and competitiveness: Private companies are often more efficient and innovative than government-owned enterprises.
- Reduced government debt: Divestment generates revenue for the government, which can be used to reduce public debt.
- Improved service quality: Private companies often have a greater incentive to provide high-quality services to customers.
- Increased investment: Privatisation can attract new investors to the economy, which can lead to increased economic growth.
Conclusion
In conclusion, divestment is the process of selling or transferring ownership of a government-owned or controlled corporation or asset to the private sector. This process is also known as privatisation, and it has become a common practice in many countries around the world. Divestment can have several benefits, including increased efficiency and competitiveness, reduced government debt, improved service quality, and increased investment.
Foreign Direct Investment upto ____ is being allowed in defence.
- a)74%
- b)49%
- c)26%
- d)51%
Correct answer is option 'A'. Can you explain this answer?
Foreign Direct Investment upto ____ is being allowed in defence.
a)
74%
b)
49%
c)
26%
d)
51%
|
|
Nandini Iyer answered |
The correct answer is 74%. The Government vide Press Note dated 17.09. 2020 liberalised and allowed FDI in Defence Sector under automatic route up to 74%. It has been allowed up to 100% through Government route.
At present, licensing is compulsory for how many industries?
- a)5
- b)8
- c)20
- d)23
Correct answer is option 'A'. Can you explain this answer?
At present, licensing is compulsory for how many industries?
a)
5
b)
8
c)
20
d)
23
|
|
Jayant Mishra answered |
- At present, only five industries are under compulsory licensing mainly on account of environmental, safety, and strategic considerations.
- They are:
- Distillation and brewing of alcoholic drinks
- Cigars and cigarettes of tobacco and manufactured tobacco substitutes.
- Electronic Aerospace and defense equipment
- Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose, and matches.
- Specified Hazardous chemicals i.e. (i) Hydrocyanic acid and its derivatives, (ii) Phosgene and its derivatives, and (iii) Isocyanates & diisocyanates of hydrocarbon, not elsewhere specified (example Methyl isocyanate).
SEZ Act was introduced in which year?- a)2000
- b)2005
- c)2008
- d)2012
Correct answer is option 'B'. Can you explain this answer?
SEZ Act was introduced in which year?
a)
2000
b)
2005
c)
2008
d)
2012
|
|
Priya Patel answered |
The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005.
SEBI is a ________.- a)Statutory Body
- b)Advisory Body
- c)Constitution Body
- d)None of the above
Correct answer is 'A'. Can you explain this answer?
SEBI is a ________.
a)
Statutory Body
b)
Advisory Body
c)
Constitution Body
d)
None of the above
|
|
Rajat Patel answered |
Initially SEBI was a non statutory body without any statutory power. However, in 1992, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992.
The Foreign trade Policy has _______ - a)Identified certain thrust areas for growth
- b)Started served from India brand
- c)Started duty free export credit
- d)All of above
Correct answer is option 'D'. Can you explain this answer?
The Foreign trade Policy has _______
a)
Identified certain thrust areas for growth
b)
Started served from India brand
c)
Started duty free export credit
d)
All of above
|
Varun Kapoor answered |
Foreign Trade Policy. The Foreign Trade Policy (FTP) was introduced by the Government to grow the Indian export of goods and services, generating employment and increasing value addition in the country. The Government, through the implementation of the policy, seeks to develop the manufacturing and service sectors.
SO OPTION D IS CORRCT.
Which of the following statements is against globalization. - a)It will improve allocative efficiency of resources
- b)It will redistribute economic power
- c)It will impose tariff barriers among nations
- d)It will provide updated technology
Correct answer is option 'B'. Can you explain this answer?
Which of the following statements is against globalization.
a)
It will improve allocative efficiency of resources
b)
It will redistribute economic power
c)
It will impose tariff barriers among nations
d)
It will provide updated technology
|
Sanskriti Devanshee answered |
Globalisation has nothing to do with power redistribution. It just brings the world closer
Privatisation in India has taken place in all of the cases except- a)CMC.
- b)BALCO.
- c)VSNL.
- d)None of the above.
Correct answer is option 'D'. Can you explain this answer?
Privatisation in India has taken place in all of the cases except
a)
CMC.
b)
BALCO.
c)
VSNL.
d)
None of the above.
|
|
Arun Khanna answered |
It is argued that privatised firms would be more responsive to consumers’ needs. Since profits accrue to the owners—and sometimes to the managers in the form of incentive bonuses—the people who run private sector firms have a direct incentive to provide the goods and services which consumers want. This means that privatised firms would be more innovative in producing new products in response to changes in public taste and be more concerned to ensure that the goods which they produced were of a high quality.
Can you explain the answer of this question below:As a consequence of economic reforms, the MRTP Act, 1969 was replaced by the Competition Act in the year ______.
- A:
2001
- B:
2002
- C:
2003
- D:
2004
The answer is b.
As a consequence of economic reforms, the MRTP Act, 1969 was replaced by the Competition Act in the year ______.
2001
2002
2003
2004
|
|
Simran Pillai answered |
The Replacement of MRTP Act, 1969 by the Competition Act in 2002
The MRTP Act, 1969 (Monopolies and Restrictive Trade Practices Act) was enacted in India with the aim of preventing monopolistic and restrictive trade practices, and promoting competition in the market. However, with the onset of economic reforms in the 1990s, there was a need for a more comprehensive and modern competition law to address the changing dynamics of the Indian economy.
Introduction of Economic Reforms
The economic reforms in India were initiated in 1991 with the objective of liberalizing and opening up the economy, stimulating growth, attracting foreign investment, and integrating the Indian market with the global economy. These reforms included liberalization of trade and investment policies, deregulation of industries, privatization of state-owned enterprises, and removal of barriers to competition.
The Need for a New Competition Law
The MRTP Act, 1969, although aimed at promoting competition, had several limitations and shortcomings. It focused primarily on preventing monopolistic practices and did not adequately address issues related to anti-competitive agreements, abuse of dominant position, and regulation of mergers and acquisitions. Additionally, the MRTP Act had a cumbersome and slow adjudication process, which hindered effective enforcement of the law.
The Competition Act, 2002
To address these shortcomings and align the Indian competition law with international best practices, the Competition Act, 2002 was enacted. The Competition Act repealed the MRTP Act, 1969 and established the Competition Commission of India (CCI) as the regulatory authority responsible for enforcing the provisions of the Act.
Key Features of the Competition Act
1. Prohibition of anti-competitive agreements: The Competition Act prohibits agreements that cause or are likely to cause an appreciable adverse effect on competition in India.
2. Prohibition of abuse of dominant position: The Act prohibits entities from abusing their dominant position in the market to eliminate competition or exploit consumers.
3. Regulation of combinations: The Act regulates mergers, acquisitions, and amalgamations that may have an appreciable adverse effect on competition in the Indian market.
4. Establishment of the Competition Commission of India: The CCI was established as an independent statutory body with the authority to investigate and penalize anti-competitive practices.
Conclusion
The replacement of the MRTP Act, 1969 by the Competition Act, 2002 was a significant step in aligning India's competition law with global standards and promoting a competitive market environment. The Competition Act provides a comprehensive framework for addressing anti-competitive practices, promoting fair competition, and ensuring consumer welfare in the Indian market.
The MRTP Act, 1969 (Monopolies and Restrictive Trade Practices Act) was enacted in India with the aim of preventing monopolistic and restrictive trade practices, and promoting competition in the market. However, with the onset of economic reforms in the 1990s, there was a need for a more comprehensive and modern competition law to address the changing dynamics of the Indian economy.
Introduction of Economic Reforms
The economic reforms in India were initiated in 1991 with the objective of liberalizing and opening up the economy, stimulating growth, attracting foreign investment, and integrating the Indian market with the global economy. These reforms included liberalization of trade and investment policies, deregulation of industries, privatization of state-owned enterprises, and removal of barriers to competition.
The Need for a New Competition Law
The MRTP Act, 1969, although aimed at promoting competition, had several limitations and shortcomings. It focused primarily on preventing monopolistic practices and did not adequately address issues related to anti-competitive agreements, abuse of dominant position, and regulation of mergers and acquisitions. Additionally, the MRTP Act had a cumbersome and slow adjudication process, which hindered effective enforcement of the law.
The Competition Act, 2002
To address these shortcomings and align the Indian competition law with international best practices, the Competition Act, 2002 was enacted. The Competition Act repealed the MRTP Act, 1969 and established the Competition Commission of India (CCI) as the regulatory authority responsible for enforcing the provisions of the Act.
Key Features of the Competition Act
1. Prohibition of anti-competitive agreements: The Competition Act prohibits agreements that cause or are likely to cause an appreciable adverse effect on competition in India.
2. Prohibition of abuse of dominant position: The Act prohibits entities from abusing their dominant position in the market to eliminate competition or exploit consumers.
3. Regulation of combinations: The Act regulates mergers, acquisitions, and amalgamations that may have an appreciable adverse effect on competition in the Indian market.
4. Establishment of the Competition Commission of India: The CCI was established as an independent statutory body with the authority to investigate and penalize anti-competitive practices.
Conclusion
The replacement of the MRTP Act, 1969 by the Competition Act, 2002 was a significant step in aligning India's competition law with global standards and promoting a competitive market environment. The Competition Act provides a comprehensive framework for addressing anti-competitive practices, promoting fair competition, and ensuring consumer welfare in the Indian market.
DFEC stands for :- a)Direct foreign exchange control
- b)Direct finance exchange control
- c)Duty free export credit
- d)Duty free exchange credit
Correct answer is option 'C'. Can you explain this answer?
DFEC stands for :
a)
Direct foreign exchange control
b)
Direct finance exchange control
c)
Duty free export credit
d)
Duty free exchange credit
|
|
Rithika Nair answered |
DFEC stands for Duty Free Export Credit. It is a type of financial support provided by the government to exporters. DFEC aims to reduce the cost of production and encourage the export of goods. The credit is granted for a specific period and is repayable in the currency of the country of export.
Benefits of DFEC:
1. Lowers the cost of production: DFEC reduces the cost of production by providing credit at lower interest rates. This makes the goods cheaper and more competitive in the global market.
2. Encourages export: DFEC encourages export by providing financial support to exporters. This helps in increasing the country's foreign exchange earnings and improving the balance of payments.
3. Improves competitiveness: DFEC helps in improving the competitiveness of the exporter by providing credit at a lower cost. This enables the exporter to produce goods at a lower cost, making them more competitive in the global market.
4. Enables exporters to expand their business: DFEC provides financial support to exporters, which enables them to expand their business and explore new markets.
Conclusion:
DFEC is a financial support provided by the government to exporters. It aims to reduce the cost of production and encourage the export of goods. DFEC provides credit at a lower cost, which improves the competitiveness of the exporter and enables them to expand their business.
Benefits of DFEC:
1. Lowers the cost of production: DFEC reduces the cost of production by providing credit at lower interest rates. This makes the goods cheaper and more competitive in the global market.
2. Encourages export: DFEC encourages export by providing financial support to exporters. This helps in increasing the country's foreign exchange earnings and improving the balance of payments.
3. Improves competitiveness: DFEC helps in improving the competitiveness of the exporter by providing credit at a lower cost. This enables the exporter to produce goods at a lower cost, making them more competitive in the global market.
4. Enables exporters to expand their business: DFEC provides financial support to exporters, which enables them to expand their business and explore new markets.
Conclusion:
DFEC is a financial support provided by the government to exporters. It aims to reduce the cost of production and encourage the export of goods. DFEC provides credit at a lower cost, which improves the competitiveness of the exporter and enables them to expand their business.
Deregulation of the economy and to introduce the policy of laissez-faire is: - a)Liberalization
- b)Globalization
- c)Privatization
- d)None
Correct answer is option 'A'. Can you explain this answer?
Deregulation of the economy and to introduce the policy of laissez-faire is:
a)
Liberalization
b)
Globalization
c)
Privatization
d)
None
|
|
Sameer Sharma answered |
Liberalization
Liberalization is the process of reducing government regulations in an economy to promote free market competition. It involves the removal of restrictions on private sector businesses and the opening up of markets to foreign competition. One of the key elements of liberalization is the adoption of the policy of laissez-faire, which means letting the market operate without interference from the government.
Deregulation of the Economy
Deregulation is a form of liberalization that involves the removal of government regulations on various sectors of the economy, such as telecommunications, energy, and transportation. Deregulation aims to promote competition, increase efficiency and reduce costs. By deregulating, the government allows private sector businesses to operate with fewer restrictions, leading to increased innovation and growth in the economy.
Policy of Laissez-Faire
The policy of laissez-faire is a French term that means "let it be." It is a philosophy that advocates for minimal government intervention in the economy. The policy promotes the idea that markets are best left to operate on their own, without government interference. Laissez-faire policies involve the removal of regulations, subsidies, and tariffs, and the promotion of free trade and competition.
Conclusion
In conclusion, the correct answer to the question is option A, Liberalization. Deregulation of the economy and the policy of laissez-faire are both elements of liberalization, which involves the reduction of government regulations in the economy to promote free market competition. By promoting liberalization, governments seek to increase efficiency, innovation, and economic growth.
Liberalization is the process of reducing government regulations in an economy to promote free market competition. It involves the removal of restrictions on private sector businesses and the opening up of markets to foreign competition. One of the key elements of liberalization is the adoption of the policy of laissez-faire, which means letting the market operate without interference from the government.
Deregulation of the Economy
Deregulation is a form of liberalization that involves the removal of government regulations on various sectors of the economy, such as telecommunications, energy, and transportation. Deregulation aims to promote competition, increase efficiency and reduce costs. By deregulating, the government allows private sector businesses to operate with fewer restrictions, leading to increased innovation and growth in the economy.
Policy of Laissez-Faire
The policy of laissez-faire is a French term that means "let it be." It is a philosophy that advocates for minimal government intervention in the economy. The policy promotes the idea that markets are best left to operate on their own, without government interference. Laissez-faire policies involve the removal of regulations, subsidies, and tariffs, and the promotion of free trade and competition.
Conclusion
In conclusion, the correct answer to the question is option A, Liberalization. Deregulation of the economy and the policy of laissez-faire are both elements of liberalization, which involves the reduction of government regulations in the economy to promote free market competition. By promoting liberalization, governments seek to increase efficiency, innovation, and economic growth.
Can you explain the answer of this question below:Which of the following is the soft lending arm of the World Bank?
- A:
IFC
- B:
IDA
- C:
IMF
- D:
WTO
The answer is b.
Which of the following is the soft lending arm of the World Bank?
IFC
IDA
IMF
WTO
|
|
Pinky Maurya answered |
The International Development Association (IDA) is the part of the world bank that helps the world's poorest countries. Established in 1960 , IDA aims to reduce poverty by providing interest free credit and grants for programs that boost economic growth , reduce inequalities and improve people's living conditions . IDA is also called as soft lending arm of the world bank since it gives free loans to poor countries.
Present membership of WTO is around __________ countries: (updated)- a)135
- b)164
- c)180
- d)184
Correct answer is option 'B'. Can you explain this answer?
Present membership of WTO is around __________ countries: (updated)
a)
135
b)
164
c)
180
d)
184
|
Renu Sharma answered |
It's just an information..that currwnt members are 164..nothing else..
CRR in India in 2007 was:- a)5%
- b)4%
- c)6%
- d)7%
Correct answer is option 'B'. Can you explain this answer?
CRR in India in 2007 was:
a)
5%
b)
4%
c)
6%
d)
7%
|
|
Alok Mehta answered |
After the RBI Act, 2006 there is no such base rate or ceiling rate for CRR . However prior to this there was a maximum and minimum limit of 20% and 3% respectively.
IMF has a membership of : (updated)- a)149 countries
- b)155 countries
- c)189 countries
- d)34 countries
Correct answer is option 'C'. Can you explain this answer?
IMF has a membership of : (updated)
a)
149 countries
b)
155 countries
c)
189 countries
d)
34 countries
|
|
Arun Khanna answered |
List of Members. The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Which of the following is correct in relation to banks in the post-reform period?- a)Bank rate has been increased to 10 per cent.
- b)CRR has been increased to 20 per cent.
- c)CRR has been reduced in stages.
- d)Public sector banks have been asked to raise their funds from their private resources only.
Correct answer is option 'C'. Can you explain this answer?
Which of the following is correct in relation to banks in the post-reform period?
a)
Bank rate has been increased to 10 per cent.
b)
CRR has been increased to 20 per cent.
c)
CRR has been reduced in stages.
d)
Public sector banks have been asked to raise their funds from their private resources only.
|
|
Gopal Sen answered |
CRR (Cash Reserve Ratio) refers to the percentage of net demand and time liabilities (NDTL) that banks are required to maintain with the central bank (Reserve Bank of India in this case) in the form of cash reserves. It is a tool used by the central bank to control and regulate the liquidity in the banking system.
The correct option in relation to banks in the post-reform period is option 'C', which states that CRR has been reduced in stages. Let's understand why this is the correct answer in detail.
Explanation:
1. Importance of CRR:
- CRR is an important monetary policy tool used by the central bank to control inflation, manage liquidity, and stabilize the economy.
- By changing the CRR, the central bank can influence the amount of money available for lending by banks and thus impact the overall money supply in the economy.
2. Post-reform period:
- The post-reform period refers to the period after the economic reforms initiated in India during the early 1990s.
- These reforms aimed to liberalize and open up the Indian economy, promote competition, and attract foreign investments.
- As part of these reforms, several changes were made in the banking sector to enhance its efficiency, promote financial inclusion, and strengthen the overall financial system.
3. CRR in the post-reform period:
- In the post-reform period, there was a gradual reduction in the CRR.
- The reduction in CRR was aimed at increasing the liquidity available with banks, thereby enabling them to lend more to businesses and individuals.
- This reduction in CRR helped in stimulating credit growth, promoting investments, and supporting economic growth.
- The reduction in CRR also aligned with the broader objective of financial sector reforms to enhance the efficiency and competitiveness of the banking system.
4. Other options:
- Option 'A' is incorrect as it states that the bank rate has been increased to 10 percent. The bank rate refers to the rate at which the central bank lends money to commercial banks. There is no information provided regarding an increase in the bank rate.
- Option 'B' is incorrect as it states that the CRR has been increased to 20 percent. There is no information provided regarding an increase in the CRR.
- Option 'D' is incorrect as it states that public sector banks have been asked to raise their funds from their private resources only. There is no information provided regarding such a directive to public sector banks.
In conclusion, the correct option is 'C' as there was a reduction in the CRR in the post-reform period, which aimed at increasing liquidity in the banking system and supporting economic growth.
The correct option in relation to banks in the post-reform period is option 'C', which states that CRR has been reduced in stages. Let's understand why this is the correct answer in detail.
Explanation:
1. Importance of CRR:
- CRR is an important monetary policy tool used by the central bank to control inflation, manage liquidity, and stabilize the economy.
- By changing the CRR, the central bank can influence the amount of money available for lending by banks and thus impact the overall money supply in the economy.
2. Post-reform period:
- The post-reform period refers to the period after the economic reforms initiated in India during the early 1990s.
- These reforms aimed to liberalize and open up the Indian economy, promote competition, and attract foreign investments.
- As part of these reforms, several changes were made in the banking sector to enhance its efficiency, promote financial inclusion, and strengthen the overall financial system.
3. CRR in the post-reform period:
- In the post-reform period, there was a gradual reduction in the CRR.
- The reduction in CRR was aimed at increasing the liquidity available with banks, thereby enabling them to lend more to businesses and individuals.
- This reduction in CRR helped in stimulating credit growth, promoting investments, and supporting economic growth.
- The reduction in CRR also aligned with the broader objective of financial sector reforms to enhance the efficiency and competitiveness of the banking system.
4. Other options:
- Option 'A' is incorrect as it states that the bank rate has been increased to 10 percent. The bank rate refers to the rate at which the central bank lends money to commercial banks. There is no information provided regarding an increase in the bank rate.
- Option 'B' is incorrect as it states that the CRR has been increased to 20 percent. There is no information provided regarding an increase in the CRR.
- Option 'D' is incorrect as it states that public sector banks have been asked to raise their funds from their private resources only. There is no information provided regarding such a directive to public sector banks.
In conclusion, the correct option is 'C' as there was a reduction in the CRR in the post-reform period, which aimed at increasing liquidity in the banking system and supporting economic growth.
In 1991 the foreign exchange resources available were just sufficient to finance import of : - a)Two weeks
- b)Three weeks
- c)Three months
- d)Three days
Correct answer is option 'B'. Can you explain this answer?
In 1991 the foreign exchange resources available were just sufficient to finance import of :
a)
Two weeks
b)
Three weeks
c)
Three months
d)
Three days
|
|
Maheshwar Datta answered |
Foreign exchange resources refer to the amount of currency, such as US dollars or euros, that a country has available to use for international trade and transactions. These resources are crucial for a country to finance its imports, which are goods and services purchased from other countries.
In 1991, the foreign exchange resources available were just sufficient to finance imports for three weeks. This means that the country had enough currency to pay for its imports for a period of three weeks before running out of foreign exchange reserves.
The correct answer is option 'B' - Three weeks.
Explanation:
1. Definition of foreign exchange resources:
- Foreign exchange resources refer to the amount of currency a country has available for international trade and transactions.
- These resources are usually held by the central bank of a country and consist of foreign currency reserves, such as US dollars, euros, or yen.
2. Importance of foreign exchange resources for imports:
- Foreign exchange resources are essential for a country to finance its imports.
- When a country imports goods and services from other countries, it needs to pay for them in the currency of the exporting country.
- Without sufficient foreign exchange resources, a country would not be able to pay for its imports, leading to a trade deficit and potentially harming its economy.
3. Calculation of sufficient resources for import financing:
- The question states that the available foreign exchange resources were just sufficient to finance imports for three weeks.
- This means that the country had enough currency to pay for its imports for a period of three weeks.
- After three weeks, the country would have run out of foreign exchange reserves and would need to find alternative ways to finance its imports.
4. Other options and their explanations:
- Option 'A' - Two weeks: This option suggests that the foreign exchange resources were sufficient for only two weeks of imports, which is incorrect.
- Option 'C' - Three months: This option suggests that the foreign exchange resources were sufficient for three months of imports, which is incorrect.
- Option 'D' - Three days: This option suggests that the foreign exchange resources were sufficient for only three days of imports, which is incorrect.
In conclusion, in 1991, the foreign exchange resources available were just sufficient to finance imports for three weeks. This means that the country had enough currency to pay for its imports for a period of three weeks before running out of foreign exchange reserves.
In 1991, the foreign exchange resources available were just sufficient to finance imports for three weeks. This means that the country had enough currency to pay for its imports for a period of three weeks before running out of foreign exchange reserves.
The correct answer is option 'B' - Three weeks.
Explanation:
1. Definition of foreign exchange resources:
- Foreign exchange resources refer to the amount of currency a country has available for international trade and transactions.
- These resources are usually held by the central bank of a country and consist of foreign currency reserves, such as US dollars, euros, or yen.
2. Importance of foreign exchange resources for imports:
- Foreign exchange resources are essential for a country to finance its imports.
- When a country imports goods and services from other countries, it needs to pay for them in the currency of the exporting country.
- Without sufficient foreign exchange resources, a country would not be able to pay for its imports, leading to a trade deficit and potentially harming its economy.
3. Calculation of sufficient resources for import financing:
- The question states that the available foreign exchange resources were just sufficient to finance imports for three weeks.
- This means that the country had enough currency to pay for its imports for a period of three weeks.
- After three weeks, the country would have run out of foreign exchange reserves and would need to find alternative ways to finance its imports.
4. Other options and their explanations:
- Option 'A' - Two weeks: This option suggests that the foreign exchange resources were sufficient for only two weeks of imports, which is incorrect.
- Option 'C' - Three months: This option suggests that the foreign exchange resources were sufficient for three months of imports, which is incorrect.
- Option 'D' - Three days: This option suggests that the foreign exchange resources were sufficient for only three days of imports, which is incorrect.
In conclusion, in 1991, the foreign exchange resources available were just sufficient to finance imports for three weeks. This means that the country had enough currency to pay for its imports for a period of three weeks before running out of foreign exchange reserves.
Exports now finance over ________ of imports :- a)50%
- b)60%
- c)70%
- d)80%
Correct answer is option 'D'. Can you explain this answer?
Exports now finance over ________ of imports :
a)
50%
b)
60%
c)
70%
d)
80%
|
|
Lekshmi Mehta answered |
Understanding the Relationship Between Exports and Imports
In the context of international trade, the statement that "exports now finance over 80% of imports" highlights the increasing interdependence of economies through trade. This assertion emphasizes how a country's exports can significantly impact its ability to finance imports.
Key Reasons for the 80% Financing Ratio:
- Trade Balance: A healthy trade balance enables countries to import goods and services without incurring excessive debt. If exports cover 80% of imports, it indicates a relatively balanced trade scenario.
- Economic Growth: Countries that export more are often in a favorable economic position. A robust export sector contributes to GDP growth, which can lead to increased imports of goods and services.
- Foreign Exchange Reserves: The revenues generated from exports increase foreign exchange reserves, allowing countries to pay for imports more comfortably.
Global Trends Influencing Exports and Imports:
- Globalization: The interconnectedness of global markets means that countries increasingly rely on each other for goods. This reliance fosters trade relationships where exports finance a significant portion of imports.
- Value Addition: Modern economies focus on high-value exports (such as technology and services) that can finance a broader range of imports, including essential commodities and luxury items.
- Trade Agreements: Bilateral and multilateral trade agreements encourage nations to increase their exports, enhancing their ability to import goods.
Conclusion:
The assertion that exports finance over 80% of imports is a reflection of the evolving dynamics of global trade. It underscores the importance of a strong export sector in maintaining a healthy economy and facilitating international trade.
In the context of international trade, the statement that "exports now finance over 80% of imports" highlights the increasing interdependence of economies through trade. This assertion emphasizes how a country's exports can significantly impact its ability to finance imports.
Key Reasons for the 80% Financing Ratio:
- Trade Balance: A healthy trade balance enables countries to import goods and services without incurring excessive debt. If exports cover 80% of imports, it indicates a relatively balanced trade scenario.
- Economic Growth: Countries that export more are often in a favorable economic position. A robust export sector contributes to GDP growth, which can lead to increased imports of goods and services.
- Foreign Exchange Reserves: The revenues generated from exports increase foreign exchange reserves, allowing countries to pay for imports more comfortably.
Global Trends Influencing Exports and Imports:
- Globalization: The interconnectedness of global markets means that countries increasingly rely on each other for goods. This reliance fosters trade relationships where exports finance a significant portion of imports.
- Value Addition: Modern economies focus on high-value exports (such as technology and services) that can finance a broader range of imports, including essential commodities and luxury items.
- Trade Agreements: Bilateral and multilateral trade agreements encourage nations to increase their exports, enhancing their ability to import goods.
Conclusion:
The assertion that exports finance over 80% of imports is a reflection of the evolving dynamics of global trade. It underscores the importance of a strong export sector in maintaining a healthy economy and facilitating international trade.
SEBI is a ________.- a)Statutory Body
- b)Advisory Body
- c)Constitution Body
- d)None of the above
Correct answer is 'A'. Can you explain this answer?
SEBI is a ________.
a)
Statutory Body
b)
Advisory Body
c)
Constitution Body
d)
None of the above
|
|
Nandini Iyer answered |
SEBI was a non statutory body without any statutory power. However, in 1992, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992.
Which of the following organisation was replaced by World Trade Organisation in 1995.- a)General Agreement on Trade and Tariff
- b)International Monetary Fund
- c)World Bank
- d)OPEC
Correct answer is option 'A'. Can you explain this answer?
Which of the following organisation was replaced by World Trade Organisation in 1995.
a)
General Agreement on Trade and Tariff
b)
International Monetary Fund
c)
World Bank
d)
OPEC
|
|
Raghav Ghoshal answered |
The correct answer is option A) General Agreement on Trade and Tariff (GATT).
Explanation:
The General Agreement on Trade and Tariffs (GATT) was an international organization that was established after World War II to promote international trade and reduce trade barriers. It was signed by 23 countries in 1947 and came into effect in 1948. GATT was created to provide a framework for negotiating and implementing trade agreements among its member countries.
GATT played a crucial role in promoting trade liberalization and reducing tariffs and other trade barriers. It operated on the principles of non-discrimination, most-favored-nation treatment, and the elimination of quantitative restrictions on trade. GATT provided a platform for negotiations and dispute settlement mechanisms to resolve trade disputes among its member countries.
However, over time, there was a need for a more comprehensive and effective international trade organization to address the evolving challenges of global trade. As a result, the World Trade Organization (WTO) was established in 1995 to replace GATT.
The WTO is a global international organization that deals with the rules of trade between nations. It has a wider scope and covers not only trade in goods but also trade in services and intellectual property rights. The WTO has a more robust dispute settlement mechanism and a stronger institutional framework compared to GATT.
The decision to replace GATT with the WTO was made through the Uruguay Round of negotiations, which lasted from 1986 to 1994. The Uruguay Round resulted in the creation of the WTO and the signing of the Marrakesh Agreement, which established the legal framework for the WTO.
In conclusion, the General Agreement on Trade and Tariffs (GATT) was replaced by the World Trade Organization (WTO) in 1995. The WTO provides a more comprehensive and effective framework for international trade, with a broader scope and stronger institutional mechanisms compared to GATT.
Explanation:
The General Agreement on Trade and Tariffs (GATT) was an international organization that was established after World War II to promote international trade and reduce trade barriers. It was signed by 23 countries in 1947 and came into effect in 1948. GATT was created to provide a framework for negotiating and implementing trade agreements among its member countries.
GATT played a crucial role in promoting trade liberalization and reducing tariffs and other trade barriers. It operated on the principles of non-discrimination, most-favored-nation treatment, and the elimination of quantitative restrictions on trade. GATT provided a platform for negotiations and dispute settlement mechanisms to resolve trade disputes among its member countries.
However, over time, there was a need for a more comprehensive and effective international trade organization to address the evolving challenges of global trade. As a result, the World Trade Organization (WTO) was established in 1995 to replace GATT.
The WTO is a global international organization that deals with the rules of trade between nations. It has a wider scope and covers not only trade in goods but also trade in services and intellectual property rights. The WTO has a more robust dispute settlement mechanism and a stronger institutional framework compared to GATT.
The decision to replace GATT with the WTO was made through the Uruguay Round of negotiations, which lasted from 1986 to 1994. The Uruguay Round resulted in the creation of the WTO and the signing of the Marrakesh Agreement, which established the legal framework for the WTO.
In conclusion, the General Agreement on Trade and Tariffs (GATT) was replaced by the World Trade Organization (WTO) in 1995. The WTO provides a more comprehensive and effective framework for international trade, with a broader scope and stronger institutional mechanisms compared to GATT.
In the pre-reform period, the banking sector:- a)Functioned in a highly regulated environment.
- b)Functioned in a manner detrimental to the general public.
- c)Concentrated on making huge profits.
- d)None of the above.
Correct answer is option 'A'. Can you explain this answer?
In the pre-reform period, the banking sector:
a)
Functioned in a highly regulated environment.
b)
Functioned in a manner detrimental to the general public.
c)
Concentrated on making huge profits.
d)
None of the above.
|
|
Rutuja Dasgupta answered |
In the pre-reform period, the banking sector in many countries, especially those with centrally planned economies, functioned in a highly regulated environment. This means that the government imposed strict regulations and control over the banking sector's operations and activities.
The highly regulated environment can be understood through the following points:
1. Government control: The pre-reform banking sector was predominantly state-owned, and the government exercised significant control over the banking institutions. The government set interest rates, determined lending and investment priorities, and regulated the overall functioning of banks.
2. Limited competition: In a regulated environment, the number of banks was limited, and there were restrictions on new entrants into the banking industry. This lack of competition reduced the efficiency and innovation in the sector.
3. Credit allocation: The government played a central role in determining the allocation of credit to different sectors of the economy. It directed banks to lend to specific industries or projects based on government priorities. This allocation of credit was often influenced by political considerations rather than market demand and efficiency.
4. Interest rate controls: The government set interest rates, including deposit and lending rates, which constrained the ability of banks to respond to market forces. This resulted in inefficient allocation of capital and distorted credit markets.
5. Lack of autonomy: Banks operated under the direct supervision and control of the government, limiting their autonomy in decision-making. This led to a slower response to market changes and inhibited the development of a competitive and dynamic banking sector.
Overall, the highly regulated environment in the pre-reform period aimed to prioritize the government's objectives over market forces. While this approach may have provided stability and control, it often stifled innovation, efficiency, and competition in the banking sector. The regulatory environment also limited the sector's ability to serve the general public effectively and cater to the diverse financial needs of the economy.
The highly regulated environment can be understood through the following points:
1. Government control: The pre-reform banking sector was predominantly state-owned, and the government exercised significant control over the banking institutions. The government set interest rates, determined lending and investment priorities, and regulated the overall functioning of banks.
2. Limited competition: In a regulated environment, the number of banks was limited, and there were restrictions on new entrants into the banking industry. This lack of competition reduced the efficiency and innovation in the sector.
3. Credit allocation: The government played a central role in determining the allocation of credit to different sectors of the economy. It directed banks to lend to specific industries or projects based on government priorities. This allocation of credit was often influenced by political considerations rather than market demand and efficiency.
4. Interest rate controls: The government set interest rates, including deposit and lending rates, which constrained the ability of banks to respond to market forces. This resulted in inefficient allocation of capital and distorted credit markets.
5. Lack of autonomy: Banks operated under the direct supervision and control of the government, limiting their autonomy in decision-making. This led to a slower response to market changes and inhibited the development of a competitive and dynamic banking sector.
Overall, the highly regulated environment in the pre-reform period aimed to prioritize the government's objectives over market forces. While this approach may have provided stability and control, it often stifled innovation, efficiency, and competition in the banking sector. The regulatory environment also limited the sector's ability to serve the general public effectively and cater to the diverse financial needs of the economy.
What proportionate of foreign investment is allowed in telecom sector?- a)74%
- b)51%
- c)49%
- d)100%
Correct answer is 'A'. Can you explain this answer?
What proportionate of foreign investment is allowed in telecom sector?
a)
74%
b)
51%
c)
49%
d)
100%
|
|
Arjun Singhania answered |
Though foreign telecom players have been present in India for almost more than a decade with tremendous growth, the sector is yet to witness the expected vibrancy and infusion of innovative technologies. FDI in the telecom sector was initially allowed at 74%. It was subject to the condition that Companies bringing in FDI shall obtain necessary license from the Telecom Regulatory Authority of India (TRAI) for undertaking telecom activities. By recent decision government of India did hike FDI ceiling from 74% to 100% through the Foreign Investment Promotion Board (FIPB) and Government’s consolidated FDI Policy.
At present, the responsibility for the provision of finance for Agriculture trade and small scale industries has been handed over to_____.- a)SBI
- b)NABARD
- c)NABARD and SIDBI
- d)NABARD, EXIM BANK & SIDBI
Correct answer is option 'D'. Can you explain this answer?
At present, the responsibility for the provision of finance for Agriculture trade and small scale industries has been handed over to_____.
a)
SBI
b)
NABARD
c)
NABARD and SIDBI
d)
NABARD, EXIM BANK & SIDBI
|
|
Syed Abdul Majeed answered |
NABARD, EXIM BANK AND SIDBI HELP AGRICULTURAL FARMERS IN PROVIDING THEM LOANS AND ALSO FOR SMALL SCALE INDUSTRIES.
Iron and steel industry started in India in the year?- a)1855
- b)1860
- c)1865
- d)1870
Correct answer is option 'D'. Can you explain this answer?
Iron and steel industry started in India in the year?
a)
1855
b)
1860
c)
1865
d)
1870
|
|
Anu Sen answered |
Iron and steel industry started in India in the year 1870, when Bengal Iron Works company established its plant in Kulti, West Bengal.
Before financial reforms, the banking sector was characterized by all of the following features except.- a)High revenue requirements
- b)Quantitative credit restrictions
- c)Administered interest rate structure
- d)Keeping very less lendable resources for the priority sector
Correct answer is option 'D'. Can you explain this answer?
Before financial reforms, the banking sector was characterized by all of the following features except.
a)
High revenue requirements
b)
Quantitative credit restrictions
c)
Administered interest rate structure
d)
Keeping very less lendable resources for the priority sector
|
|
Saumya Khanna answered |
Quantitative credit restrictions:
Before financial reforms, the banking sector was characterized by quantitative credit restrictions imposed by the government. These restrictions limited the amount of credit that banks could extend to borrowers, leading to a lack of access to financing for many individuals and businesses.
Administered interest rate structure:
Another feature of the banking sector before financial reforms was an administered interest rate structure. This means that interest rates on loans and deposits were set by the government or central bank, rather than being determined by market forces. This often led to inefficiencies in the allocation of credit and resources.
High revenue requirements:
Banks were required to meet high revenue targets set by the government before financial reforms. This put pressure on banks to generate profits through traditional banking activities, rather than focusing on meeting the needs of customers or improving efficiency.
Keeping very less lendable resources for the priority sector:
One feature that was not characteristic of the banking sector before financial reforms was keeping very less lendable resources for the priority sector. In fact, banks were often required to allocate a certain percentage of their funds towards priority sectors such as agriculture, small-scale industries, and exports. This was done to ensure that these sectors received adequate credit to support their growth and development.
Before financial reforms, the banking sector was characterized by quantitative credit restrictions imposed by the government. These restrictions limited the amount of credit that banks could extend to borrowers, leading to a lack of access to financing for many individuals and businesses.
Administered interest rate structure:
Another feature of the banking sector before financial reforms was an administered interest rate structure. This means that interest rates on loans and deposits were set by the government or central bank, rather than being determined by market forces. This often led to inefficiencies in the allocation of credit and resources.
High revenue requirements:
Banks were required to meet high revenue targets set by the government before financial reforms. This put pressure on banks to generate profits through traditional banking activities, rather than focusing on meeting the needs of customers or improving efficiency.
Keeping very less lendable resources for the priority sector:
One feature that was not characteristic of the banking sector before financial reforms was keeping very less lendable resources for the priority sector. In fact, banks were often required to allocate a certain percentage of their funds towards priority sectors such as agriculture, small-scale industries, and exports. This was done to ensure that these sectors received adequate credit to support their growth and development.
As a part of Globalisation process tariff rate is _______.- a)Raised
- b)Lowered
- c)Not Changed
- d)Abolished.
Correct answer is option 'B'. Can you explain this answer?
As a part of Globalisation process tariff rate is _______.
a)
Raised
b)
Lowered
c)
Not Changed
d)
Abolished.
|
|
Simran Pillai answered |
Answer:
Globalization refers to the increasing interconnectedness and integration of economies, cultures, and societies worldwide. One of the key elements of this process is the reduction of barriers to international trade, including tariffs. Tariffs are taxes imposed on imported goods, and changes in tariff rates can have significant effects on global trade flows and economic growth.
In the context of globalization, the correct answer to the question is option 'B' - lowered. This is because one of the main objectives of globalization is to promote free trade and reduce barriers to international commerce. Lowering tariff rates is a key policy tool used to achieve this objective.
Benefits of Lowering Tariff Rates
Lowering tariff rates has several benefits, including:
1. Promotion of international trade: Lowering tariff rates encourages businesses to engage in international trade by reducing the costs of importing and exporting goods. This leads to increased trade volumes, which can stimulate economic growth and create employment opportunities.
2. Increased consumer choice: Lower tariffs enable consumers to access a wider range of goods at lower prices. This increases consumer choice and improves living standards.
3. Competitiveness: Lowering tariff rates can make domestic industries more competitive by exposing them to international competition. This can lead to increased efficiency, innovation, and productivity.
4. Foreign direct investment: Lowering tariff rates can attract foreign direct investment (FDI) by making a country's market more accessible and attractive to foreign companies. FDI can bring in new capital, technology, and expertise, which can contribute to economic development.
As part of the globalization process, tariff rates are generally lowered to promote free trade, increase consumer choice, enhance competitiveness, and attract foreign direct investment. Lowering tariffs has numerous benefits and is a key policy tool used to foster economic growth and development in an increasingly interconnected world.
Introduction
Globalization refers to the increasing interconnectedness and integration of economies, cultures, and societies worldwide. One of the key elements of this process is the reduction of barriers to international trade, including tariffs. Tariffs are taxes imposed on imported goods, and changes in tariff rates can have significant effects on global trade flows and economic growth.
Explanation
In the context of globalization, the correct answer to the question is option 'B' - lowered. This is because one of the main objectives of globalization is to promote free trade and reduce barriers to international commerce. Lowering tariff rates is a key policy tool used to achieve this objective.
Benefits of Lowering Tariff Rates
Lowering tariff rates has several benefits, including:
1. Promotion of international trade: Lowering tariff rates encourages businesses to engage in international trade by reducing the costs of importing and exporting goods. This leads to increased trade volumes, which can stimulate economic growth and create employment opportunities.
2. Increased consumer choice: Lower tariffs enable consumers to access a wider range of goods at lower prices. This increases consumer choice and improves living standards.
3. Competitiveness: Lowering tariff rates can make domestic industries more competitive by exposing them to international competition. This can lead to increased efficiency, innovation, and productivity.
4. Foreign direct investment: Lowering tariff rates can attract foreign direct investment (FDI) by making a country's market more accessible and attractive to foreign companies. FDI can bring in new capital, technology, and expertise, which can contribute to economic development.
Conclusion
As part of the globalization process, tariff rates are generally lowered to promote free trade, increase consumer choice, enhance competitiveness, and attract foreign direct investment. Lowering tariffs has numerous benefits and is a key policy tool used to foster economic growth and development in an increasingly interconnected world.
The reason behind implementing economic reforms in India are:- a)Directions from World Bank
- b)Failure of the economic policies of the existing government
- c)Declining foreign reserves
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
The reason behind implementing economic reforms in India are:
a)
Directions from World Bank
b)
Failure of the economic policies of the existing government
c)
Declining foreign reserves
d)
None of the above
|
Tarun Chaudhary answered |
Us time india ne world bank se loan le rkha tha aur hmare pass forex nhi tha isiliye
IIFT stands for : - a)International institute for financial transactions
- b)Indian institute of foreign trade
- c)Indian institute for free trade
- d)International institute for free trade
Correct answer is 'B'. Can you explain this answer?
IIFT stands for :
a)
International institute for financial transactions
b)
Indian institute of foreign trade
c)
Indian institute for free trade
d)
International institute for free trade
|
|
Rajat Patel answered |
The Indian Institute of Foreign Trade (IIFT) is an autonomous public business school established in 1963 by the Government of India (Ministry of Commerce and Industry) to help professionalize the country's foreign trade management and increase exports by developing human resources; generating, analysing and disseminating data; and conducting research. Its flagship program is the Master of Business Administration in International Business.
The FERA has been replaced by ________.- a)MRTP Act
- b)FEMA
- c)IRDA
- d)None of the above.
Correct answer is option 'B'. Can you explain this answer?
The FERA has been replaced by ________.
a)
MRTP Act
b)
FEMA
c)
IRDA
d)
None of the above.
|
|
Lipika Kumari answered |
Finally, in 1999 the FEMA was passed which replaced the FERA, though certain provisions of FERA 1973 still exist under FEMA 1999. To promote of an orderly maintenance of the foreign exchange market In India.
Disinvestment means selling of a public investment to a ___________:- a)Private enterprises
- b)Public enterprises
- c)Capital market
- d)Departmental enterprises
Correct answer is option 'A'. Can you explain this answer?
Disinvestment means selling of a public investment to a ___________:
a)
Private enterprises
b)
Public enterprises
c)
Capital market
d)
Departmental enterprises
|
|
Dipika Kaur answered |
The Government can sell its enterprises completely to the private sector or disinvest a part of its equity capital held by it to the private sector companies or in the open market. Distinction may be drawn between disinvestment and privatisation. Strictly speaking, disinvestment means the dilution of stake of the Government in a public enterprise. This can be done in two ways. When the Government sells a part of its equity of a public enterprise less than 50 per cent of its total stock, it is called merely disinvestment and in this case control and management of the business enterprise remains in the hands of Government.
All of the following statements except one are correct about the Foreign Trade Policy, 2004-09. Identify the incorrect statement:- a)Certain thrust areas like agriculture, handlooms, handicrafts etc. have been identified.
- b)Vishesh Krishiupaj Yojana has been started.
- c)‘Served from India’ scheme has been started.
- d)The entry of FDI in India has been restricted.
Correct answer is option 'D'. Can you explain this answer?
All of the following statements except one are correct about the Foreign Trade Policy, 2004-09. Identify the incorrect statement:
a)
Certain thrust areas like agriculture, handlooms, handicrafts etc. have been identified.
b)
Vishesh Krishiupaj Yojana has been started.
c)
‘Served from India’ scheme has been started.
d)
The entry of FDI in India has been restricted.
|
|
Gopal Sen answered |
Foreign Trade Policy, 2004-09
Introduction:
The Foreign Trade Policy (FTP) for the period 2004-09 was formulated by the Government of India to promote and regulate foreign trade activities. It aimed to boost exports, improve the competitiveness of Indian industries, and attract foreign direct investment (FDI). Several initiatives were undertaken during this period to achieve these objectives.
Correct Statements:
a) Certain thrust areas like agriculture, handlooms, handicrafts, etc. have been identified.
During the period of 2004-09, the FTP identified certain sectors such as agriculture, handlooms, handicrafts, etc., as thrust areas. These sectors were given special attention and support to promote their growth and enhance their contribution to export earnings.
b) Vishesh Krishiupaj Yojana has been started.
The Vishesh Krishi Udyog Yojana (VKUY) was indeed introduced during the 2004-09 FTP. Under this scheme, exporters of specified agricultural products were provided with duty credit scrips. These scrips could be used to offset various duties and taxes on import of inputs, capital goods, or other products.
c) Served from India scheme has been started.
The Served from India Scheme (SFIS) was also launched as part of the 2004-09 FTP. It aimed to provide incentives to Indian service providers who were exporting their services. Eligible service providers were given duty credit scrips based on a percentage of their net foreign exchange earnings.
Incorrect Statement:
d) The entry of FDI in India has been restricted.
This statement is incorrect. The FTP for the period 2004-09 aimed to attract FDI and create a favorable environment for foreign investors. Several measures were taken to liberalize the FDI policy and encourage foreign companies to invest in India. The government introduced various reforms and initiatives to ease restrictions, simplify procedures, and provide incentives for FDI inflows.
Key Points:
- The 2004-09 FTP aimed to boost exports, improve competitiveness, and attract FDI.
- Certain sectors like agriculture, handlooms, handicrafts were identified as thrust areas.
- The VKUY and SFIS schemes were introduced during this period.
- The FTP aimed to attract FDI and liberalize the FDI policy.
In conclusion, the incorrect statement is option 'd' which claims that the entry of FDI in India was restricted during the 2004-09 FTP. In reality, the policy aimed to attract FDI and implemented measures to promote foreign investment.
Introduction:
The Foreign Trade Policy (FTP) for the period 2004-09 was formulated by the Government of India to promote and regulate foreign trade activities. It aimed to boost exports, improve the competitiveness of Indian industries, and attract foreign direct investment (FDI). Several initiatives were undertaken during this period to achieve these objectives.
Correct Statements:
a) Certain thrust areas like agriculture, handlooms, handicrafts, etc. have been identified.
During the period of 2004-09, the FTP identified certain sectors such as agriculture, handlooms, handicrafts, etc., as thrust areas. These sectors were given special attention and support to promote their growth and enhance their contribution to export earnings.
b) Vishesh Krishiupaj Yojana has been started.
The Vishesh Krishi Udyog Yojana (VKUY) was indeed introduced during the 2004-09 FTP. Under this scheme, exporters of specified agricultural products were provided with duty credit scrips. These scrips could be used to offset various duties and taxes on import of inputs, capital goods, or other products.
c) Served from India scheme has been started.
The Served from India Scheme (SFIS) was also launched as part of the 2004-09 FTP. It aimed to provide incentives to Indian service providers who were exporting their services. Eligible service providers were given duty credit scrips based on a percentage of their net foreign exchange earnings.
Incorrect Statement:
d) The entry of FDI in India has been restricted.
This statement is incorrect. The FTP for the period 2004-09 aimed to attract FDI and create a favorable environment for foreign investors. Several measures were taken to liberalize the FDI policy and encourage foreign companies to invest in India. The government introduced various reforms and initiatives to ease restrictions, simplify procedures, and provide incentives for FDI inflows.
Key Points:
- The 2004-09 FTP aimed to boost exports, improve competitiveness, and attract FDI.
- Certain sectors like agriculture, handlooms, handicrafts were identified as thrust areas.
- The VKUY and SFIS schemes were introduced during this period.
- The FTP aimed to attract FDI and liberalize the FDI policy.
In conclusion, the incorrect statement is option 'd' which claims that the entry of FDI in India was restricted during the 2004-09 FTP. In reality, the policy aimed to attract FDI and implemented measures to promote foreign investment.
Chapter doubts & questions for Economic Reforms in India (Old Scheme) - Business Economics for CA Foundation 2025 is part of CA Foundation exam preparation. The chapters have been prepared according to the CA Foundation exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for CA Foundation 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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