All questions of Economic & Social Development for UPSC CSE Exam

The basic aim of the individual bank adopt particular district step towards the development of areas in district in financial and economical way option c is correct

The main objective of the 12th Five-Year Plan is Faster, sustainable and more inclusive growth.

The 12th Five-Year Plan (2012-2017) was formulated by the Government of India with the objective of achieving faster, sustainable, and more inclusive growth. This plan aimed to address the challenges faced by the country in various sectors and promote equitable development across different regions and sections of society.

Faster Growth:
- The 12th Five-Year Plan aimed to accelerate the pace of economic growth in India. It focused on increasing the rate of GDP growth and achieving a higher level of industrialization.
- The plan aimed to achieve an average annual growth rate of 8-9% in GDP, which was considered crucial for generating employment opportunities and reducing poverty.
- It emphasized the need for investment in infrastructure development, particularly in sectors such as power, transportation, and urban development, to support faster economic growth.

Sustainable Growth:
- The plan recognized the importance of sustainable development and aimed to promote environmentally sustainable practices in various sectors.
- It emphasized the need for resource conservation, energy efficiency, and reduction of carbon emissions to mitigate the adverse effects of climate change.
- The plan also focused on sustainable agriculture practices, water resource management, and conservation of biodiversity.

Inclusive Growth:
- The 12th Five-Year Plan aimed to ensure that the benefits of economic growth reach all sections of society, particularly the marginalized and disadvantaged groups.
- It emphasized the need for inclusive policies and programs to reduce poverty, inequality, and social exclusion.
- The plan aimed to provide equal opportunities for education, healthcare, and skill development to all citizens, regardless of their social and economic background.
- It also focused on promoting inclusive financial services, such as banking and insurance, to enable financial inclusion for all sections of society.

Conclusion:
The 12th Five-Year Plan had the main objective of achieving faster, sustainable, and more inclusive growth. It aimed to address the developmental challenges faced by India and promote equitable development across the country. The plan focused on accelerating economic growth, promoting sustainable practices, and ensuring inclusive development for all sections of society.

The International Development Association (IDA) is administered by the International Bank for Reconstruction and Development (IBRD). Here is an explanation of this relationship:
- **International Development Association (IDA)**:
- IDA is a part of the World Bank Group and is focused on providing financial and technical assistance to the world's poorest countries. It offers concessional loans and grants to help these countries implement projects and programs that promote economic development, reduce poverty, and improve living conditions.
- **International Bank for Reconstruction and Development (IBRD)**:
- IBRD is also part of the World Bank Group and is focused on providing loans and financial services to middle-income and creditworthy low-income countries. It works alongside IDA but with a different focus and terms of lending.
- **Administration of IDA**:
- While both IDA and IBRD are part of the World Bank Group, they have separate governance structures. The administration of IDA falls under the oversight of the IBRD Board of Governors. This board is responsible for approving IDA's financial resources, policies, and operational strategies.
- **Relationship between IDA and IBRD**:
- Despite being separate entities, IDA and IBRD work closely together to address global development challenges. They share resources, expertise, and knowledge to maximize their impact and reach. The IBRD's strong financial position allows it to support IDA's activities and ensure that the world's poorest countries receive the assistance they need.
In conclusion, the International Development Association is administered by the International Bank for Reconstruction and Development, reflecting a collaborative effort within the World Bank Group to support sustainable development and poverty reduction worldwide.

Explanation:

Deficit Financing in India:
- Deficit financing is a method used by the government to raise funds when its expenditures exceed its revenues.
- In India, deficit financing is primarily used for economic development.

Economic Development:
- The main objective of deficit financing in India is to promote economic development.
- The government uses the funds raised through deficit financing for various development projects such as infrastructure development, poverty alleviation programs, and social welfare schemes.

Investment in Key Sectors:
- The resources raised through deficit financing are invested in key sectors of the economy to stimulate growth and development.
- This investment helps in creating employment opportunities, boosting industrial growth, and improving the standard of living of the people.

Infrastructure Development:
- Deficit financing is crucial for funding infrastructure projects such as roads, railways, ports, and power plants.
- These projects are essential for economic growth and development as they help in improving connectivity, reducing transportation costs, and enhancing productivity.

Overall Impact:
- By using deficit financing for economic development, the government aims to achieve sustainable and inclusive growth.
- It plays a vital role in bridging the investment gap, promoting industrialization, and reducing poverty in the country.

Therefore, in India, deficit financing is primarily used for raising resources for economic development to foster growth and improve the overall well-being of its citizens.

A) Pyramids, camels, and Nile River

This group of items is not included in India. Pyramids and camels are associated with Egypt, and the Nile River runs through several African countries, but not India.

Purpose of Statutory Reserve Requirements
Statutory Reserve Requirements (SRR) are a crucial tool used by the Reserve Bank of India (RBI) to regulate the economy. Here’s a breakdown of the purposes they serve:
1. Control Over Bank Lending
- Advances Control: SRR helps the Central Bank regulate the amount of money that banks can lend. By adjusting the reserve ratio, the RBI can influence the liquidity available in the banking system, thereby controlling inflation and economic growth.
2. Safety and Liquidity of Deposits
- Deposit Security: While SRR does contribute to the safety of deposits, its primary focus is on ensuring banks maintain a minimum cash reserve. This measure increases the safety of deposits but isn't its primary purpose.
3. Profit Regulation of Commercial Banks
- Excessive Profits: Preventing banks from making excessive profits is not a direct purpose of SRR. The focus is more on ensuring stability and liquidity rather than limiting profitability.
4. Sufficient Vault Cash
- Day-to-Day Requirements: Although SRR ensures that banks maintain necessary cash reserves, the directive is not specifically about ensuring they have enough cash for daily operations. The reserves are more about overall liquidity and not just daily transactions.
Conclusion
Given these insights, the correct answer is option 'A' (1 only) because the primary purpose of SRR is to enable the Central Bank to control the amount of advances banks can create. While points 2, 3, and 4 may have some relevance, they do not represent the main objectives of SRR.

Statement Analysis:

Statement 1: Under the Pradhan Mantri Fasal Bima Yojana, farmers do not have to pay a uniform premium of two percent for any crop they cultivate in any season of the year. The premium rates are determined based on the type of crop and its risk level. Hence, this statement is incorrect.

Statement 2: The Pradhan Mantri Fasal Bima Yojana primarily covers yield losses due to natural calamities like drought, floods, pests, etc. It does not cover post-harvest losses arising out of cyclones and unseasonal rains. Therefore, this statement is also incorrect.

Therefore, the correct answer is:
Option B) 2 only

Explanation:

Purchase of government securities from the public by the Central Bank:
When the Central Bank purchases government securities from the public, it injects money into the economy, increasing the money supply.

Deposit of currency in commercial banks by the public:
When the public deposits currency in commercial banks, it increases the deposit base of the banks, allowing them to create more loans and increase the money supply through the money multiplier effect.

Borrowing by the government from the Central Bank:
When the government borrows from the Central Bank, it increases the reserves of the banking system, allowing them to create more loans and increase the money supply.

Sale of government securities to the public by the Central Bank:
When the Central Bank sells government securities to the public, it absorbs money from the economy, reducing the money supply.

Therefore, options 1 and 3 would result in an increase in the money supply in the economy.

Banking Operations

Marginal Standing Facility Rate:
- The Marginal Standing Facility (MSF) Rate is the rate at which scheduled commercial banks can borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities.
- It is a penal rate that is higher than the repo rate and is used by banks when they exhaust all other avenues for borrowing.

Net Demand and Time Liabilities:
- Net Demand and Time Liabilities (NDTL) is a measure used by the RBI to determine the reserve requirements of banks.
- It refers to the difference between a bank's demand and time liabilities (deposits) and its demand and time assets (loans).
- The NDTL is crucial in assessing a bank's liquidity and solvency position, as it helps in determining the amount of cash reserves that a bank needs to maintain with the RBI.

Relation to Banking Operations:
- The Marginal Standing Facility Rate and Net Demand and Time Liabilities are closely related to banking operations as they impact the liquidity and borrowing abilities of banks.
- The MSF Rate influences the cost of borrowing for banks, while NDTL determines the reserve requirements and liquidity positions of banks.
- Understanding these terms is essential for banks to manage their funds effectively and comply with regulatory requirements set by the RBI.

Explanation:

1. Introduction of Equalization Tax:
- The equalization tax of 6% on online advertisement services offered by non-resident entities was introduced by India as a part of the Finance Act, not the Income Tax Act.
- This tax is aimed at ensuring that non-resident entities offering digital services in India pay their fair share of taxes.

2. Tax Credit under Double Taxation Avoidance Agreements:
- Non-resident entities that offer advertisement services in India cannot claim a tax credit in their home country under the "Double Taxation Avoidance Agreements" for the equalization tax levied by India.
- This is because the tax credit provisions under such agreements generally apply to income taxes and not specific taxes like the equalization tax.

Therefore, the correct answer is option 'D' - Neither 1 nor 2.

Capital Account includes Foreign Loans, Foreign Direct Investment, and Portfolio Investment. Private Remittances come under Current Account. Therefore, the correct answer is option 'B': 1, 2, and 4.

Capital Account:
Foreign Loans:
Foreign Loans refer to the borrowing of funds by a country from foreign sources. These loans can be in the form of commercial loans, government-to-government loans, or loans from international financial organizations like the World Bank, IMF, etc.

Foreign Direct Investment:
Foreign Direct Investment (FDI) means investing in a foreign country by a company or an individual. It involves establishing a new business or acquiring an existing one in the foreign country.

Portfolio Investment:
Portfolio Investment refers to investments made in the financial markets of a foreign country. For instance, buying stocks, bonds, or other securities issued by companies in a foreign country.

Private Remittances:
Private Remittances are the funds transferred by individuals living in a foreign country to their home country. These funds are sent to support their families or for investment purposes. Private Remittances come under the Current Account.

In conclusion, Foreign Loans, Foreign Direct Investment, and Portfolio Investment constitute the Capital Account, while Private Remittances come under the Current Account.

The Fair and Remunerative Price (FRP) of sugarcane is approved by the Cabinet Committee on Economic Affairs.
Explanation:
**Approval Authority:**
- The Cabinet Committee on Economic Affairs (CCEA) is the authority responsible for approving the Fair and Remunerative Price (FRP) of sugarcane in India.
**Significance of FRP:**
- The Fair and Remunerative Price (FRP) is the minimum price that sugar mills are required to pay to sugarcane farmers for their produce. It is aimed at ensuring fair compensation to farmers for their efforts and investments in sugarcane cultivation.
**Factors Considered:**
- The CCEA takes into account various factors such as production costs, market conditions, and the interests of both farmers and sugar mills while determining the FRP of sugarcane.
**Role of CCEA:**
- The CCEA plays a crucial role in setting the FRP as it impacts the livelihoods of millions of sugarcane farmers across the country. By approving a fair price, the CCEA ensures that farmers receive a reasonable income for their hard work.
**Implementation:**
- Once the FRP is approved by the CCEA, it becomes mandatory for sugar mills to adhere to this price and make timely payments to sugarcane farmers. Any deviation from the approved FRP can lead to legal consequences for the sugar mills.
In conclusion, the approval of the Fair and Remunerative Price (FRP) of sugarcane by the Cabinet Committee on Economic Affairs is a critical step in safeguarding the interests of sugarcane farmers and ensuring a fair compensation for their produce.

Explanation:

1. Biological process to create a seed can be patented in India:
According to the Indian Patents Act, a biological process to create a seed can be patented in India. This means that innovative methods of creating seeds through biological processes can be protected under patent laws in the country.

2. Intellectual Property Appellate Board in India:
In India, there is no Intellectual Property Appellate Board. The Intellectual Property Appellate Board (IPAB) was established under the Trade Marks Act, 1999, and the Patents Act, 1970 to hear appeals against the decisions of the Indian Patent Office and the Registrar of Trademarks. However, the IPAB was dissolved in 2020, and as of now, there is no separate appellate board for intellectual property matters in India.

3. Plant Varieties cannot be patented in India:
Plant varieties are not eligible to be patented in India. Instead, plant varieties can be protected under the Protection of Plant Varieties and Farmers' Rights Act, 2001 (PPVFR Act). This Act provides for the protection of plant varieties and the rights of farmers in relation to their traditional knowledge.

Therefore, the correct statement among the given options is option 'C', which states that plant varieties are not eligible to be patented in India.

Explanation:

1. Standard Mark of Bureau of Indian Standards (BIS) for automotive tyres and tubes:
- The first statement is correct. The Standard Mark of Bureau of Indian Standards (BIS) is indeed mandatory for automotive tyres and tubes in India.
- BIS is the national body in India for the harmonious development of the activities of standardization, marking, and quality certification of goods.
- The BIS Standard Mark on a product is an assurance of conformity to the specifications as per the Indian Standards.
- It is essential for automotive tyres and tubes to have the BIS Standard Mark to ensure that they meet the necessary quality and safety standards.

2. AGMARK quality Certification Mark:
- The second statement is incorrect. AGMARK is not issued by the Food and Agriculture Organisation (FAO).
- AGMARK is a quality Certification Mark issued by the Directorate of Marketing and Inspection (DMI), an attached office of the Department of Agriculture, Cooperation & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India.
- AGMARK is used on agricultural products to ensure that they are of a certain standard and quality as specified by the government.
Therefore, only statement 1 is correct, making option 'A' the correct answer.

Merchant Discount Rate

The Merchant Discount Rate refers to the charge that a merchant has to pay to a bank for accepting payments from customers using debit cards issued by that bank. It is essentially a fee that the merchant has to bear for facilitating electronic transactions.

Importance

- The Merchant Discount Rate plays a crucial role in the digital payment ecosystem as it incentivizes merchants to accept card payments and move towards a cashless economy.

Calculation

- The Merchant Discount Rate is usually calculated as a percentage of the transaction value. This rate is agreed upon between the bank and the merchant, and it may vary depending on various factors such as the type of card used, the transaction volume, and the industry in which the merchant operates.

Impact

- The Merchant Discount Rate can have a significant impact on the profitability of a business, especially for small merchants with low margins. High discount rates may discourage merchants from accepting card payments and hinder the growth of digital transactions.

In conclusion, understanding the Merchant Discount Rate is essential for both merchants and customers as it affects the cost of transactions and influences the adoption of digital payment methods in the economy.

Assets of a Commercial Bank in India

A commercial bank in India has several assets that contribute to its overall financial strength. These assets include:

Advances: This refers to the loans and credit facilities that the bank extends to its customers. These can be in the form of business loans, personal loans, home loans, and so on.

Investments: A commercial bank can invest its funds in a variety of financial instruments such as government securities, corporate bonds, and equity shares of companies.

Money at call and short notice: This refers to the funds that the bank has invested in other financial institutions which can be called back on short notice.

Not included in the assets of a commercial bank in India

Deposits: Although deposits are a crucial source of funds for a commercial bank, they are not included in the bank's assets. This is because deposits represent liabilities for the bank as it has to repay the depositors on demand or at a predetermined date. Thus, deposits are recorded under the liabilities section of the bank's balance sheet.

Conclusion

In conclusion, a commercial bank in India has several assets that contribute to its overall financial strength. These include advances, investments, and money at call and short notice. However, deposits are not included in the bank's assets as they are liabilities that the bank owes to its depositors.

Priority Sector Lending in India

Priority Sector Lending by banks in India includes lending to various sectors that are deemed crucial for the overall development of the economy. The key sectors that fall under Priority Sector Lending are:

Agriculture
- One of the primary sectors under Priority Sector Lending is agriculture. This includes providing financial support to farmers for crop cultivation, purchase of agricultural equipment, and other farming-related activities.

Micro and Small Enterprises
- Another important sector that banks focus on for Priority Sector Lending is micro and small enterprises. These enterprises play a significant role in generating employment opportunities and contributing to economic growth.

Weaker Sections
- Priority Sector Lending also encompasses lending to weaker sections of society, such as low-income households, scheduled castes, scheduled tribes, and other marginalized groups. This ensures that financial support reaches those who need it the most.

All of the Above
- Therefore, the correct answer to the question is "All of the above" as Priority Sector Lending by banks in India includes lending to agriculture, micro and small enterprises, as well as weaker sections of society. By focusing on these priority sectors, banks contribute to inclusive growth and sustainable development in the country.

Reducing the deficit in the budget requires the government to take certain actions to manage its finances effectively. Let's break down the options provided and analyze which ones can help in reducing the deficit:

Reducing revenue expenditure:
- By cutting down on unnecessary expenses and optimizing resources, the government can reduce its revenue expenditure.
- This can involve streamlining processes, reducing administrative costs, and eliminating inefficiencies in government operations.

Rationalizing subsidies:
- Subsidies are a significant portion of government spending, and by rationalizing them, the government can save a substantial amount of money.
- This can involve targeting subsidies to those who need them the most, eliminating subsidies that are no longer effective, and ensuring that subsidies are not misused.

Introducing new welfare schemes:
- Introducing new welfare schemes can increase government spending, which may not be conducive to reducing the deficit.
- While welfare schemes are important for social development, the government needs to prioritize existing schemes and ensure their efficient implementation before introducing new ones.

Expanding industries:
- Expanding industries can lead to economic growth and increased revenue for the government through taxes.
- However, this may not directly reduce the deficit in the short term as it takes time for industries to grow and contribute significantly to government revenue.

Based on the above analysis, options 1 and 3 are the most effective actions that the government can take to reduce the deficit. By reducing revenue expenditure and rationalizing subsidies, the government can effectively manage its finances and work towards balancing the budget.

Statement Analysis:

Statement 1:
The Wholesale Price Index (WPI) in India is available on a monthly basis only.
- This statement is correct. The Wholesale Price Index (WPI) is released by the Office of Economic Adviser, Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India on a monthly basis.

Statement 2:
As compared to Consumer Price Index for Industrial Workers (CPIIW), the WPI gives less weight to food articles.
- This statement is also correct. The Wholesale Price Index (WPI) gives less weight to food articles compared to the Consumer Price Index for Industrial Workers (CPIIW). The WPI focuses more on the prices of goods at the wholesale level, including manufactured products, fuel, and non-food articles.

Therefore, the correct answer is option 'B' - 2 only.

Parliamentary Control over Public Finance in India:

Placing Annual Financial Statement before the Parliament:
- This is a key method where the government presents the Annual Financial Statement (Budget) before the Parliament for approval. It outlines the government's revenue and expenditure plans for the upcoming financial year.

Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill:
- The government cannot withdraw funds from the Consolidated Fund of India without the approval of the Parliament through the Appropriation Bill. This ensures that government spending is authorized by the Parliament.

Provisions of supplementary grants and vote-on-account:
- In case of unforeseen expenses or delays in passing the budget, supplementary grants can be provided by the Parliament. A vote-on-account allows the government to withdraw funds for a limited period before the budget is approved.

A periodic or mid-year review of the programme of the Government:
- A Parliamentary Budget Office conducts a review of the government's programmes against macroeconomic forecasts and expenditures. This helps in assessing the effectiveness of government spending and ensures transparency in financial management.

Introducing Finance Bill in the Parliament:
- The Finance Bill is introduced in the Parliament to give effect to the government's taxation proposals. It is an important tool for controlling public finance as it determines how revenue will be generated to meet government expenditure.

Overall, these methods of Parliamentary control over public finance in India ensure transparency, accountability, and effective management of government finances.

The Reserve Bank of India (RBI) is the central banking institution of India and is responsible for regulating the monetary policy of the country. It was established on April 1, 1935, under the Reserve Bank of India Act, 1934, as a private entity with a capital of Rs. 5 crores.

The RBI is headed by a Governor who is appointed by the Government of India and is responsible for the overall functioning of the bank. It also has a Deputy Governor and four Executive Directors who assist the Governor in the day-to-day functioning of the bank.

The primary functions of the RBI include:

1. Regulating and supervising the banking system in India

2. Issuing and managing currency notes and coins

3. Formulating and implementing monetary policy

4. Managing foreign exchange reserves

5. Acting as a lender of last resort

6. Conducting research and analysis on economic and financial issues

7. Advising the Government of India on economic and financial matters

The RBI also plays an important role in promoting financial inclusion, ensuring the stability of the financial system, and regulating payment and settlement systems in the country. It is one of the most important institutions in India and its policies have a significant impact on the economy of the country.

Selection of Chairman of Public Sector Banks

Banks Board Bureau (BBB)

- Banks Board Bureau (BBB) is a government body that was set up in 2016 to improve the governance of Public Sector Banks (PSBs) and help them in developing strategies and capital-raising plans.
- It is responsible for recommending the appointment of the chairman and non-executive directors of PSBs.
- The BBB is chaired by the former Department of Personnel and Training Secretary and consists of three ex-officio members and three expert members.

Selection Process

- The selection of the chairman of a public sector bank is done by the BBB based on the recommendations of the bank's board.
- The BBB evaluates the performance of the bank and the suitability of the candidates before making the recommendation.
- The appointment of the chairman is subject to the approval of the Appointments Committee of the Cabinet (ACC), headed by the Prime Minister of India.
- The appointment is typically for a period of three years, which can be extended for a further two years.

Role of the Chairman

- The chairman of a public sector bank is responsible for the overall management and direction of the bank.
- They are responsible for formulating and implementing policies and strategies to achieve the bank's objectives.
- The chairman is also responsible for maintaining the relationships with the government, regulators, and other stakeholders.
- They are accountable to the board of directors and the shareholders of the bank.

Conclusion

In conclusion, the chairman of public sector banks is selected by the Banks Board Bureau (BBB) based on the recommendations of the bank's board. The BBB evaluates the performance of the bank and the suitability of the candidates before making the recommendation. The appointment is subject to the approval of the Appointments Committee of the Cabinet (ACC), headed by the Prime Minister of India. The role of the chairman is to manage and direct the bank and maintain relationships with stakeholders.

Productivity and efficiency of agriculture is crucial. India is the second most populous country in the world, and ensuring sufficient food supply for its growing population is a major challenge.

To enhance the productivity and efficiency of agriculture, several measures can be taken:

1. Promoting modern farming techniques: Encouraging farmers to adopt modern farming techniques such as precision agriculture, organic farming, and hydroponics can help increase productivity. Providing training and education on these techniques can empower farmers to make informed decisions regarding their agricultural practices.

2. Improving irrigation facilities: India is heavily dependent on monsoon rains, which are often unpredictable. Developing and improving irrigation facilities, including the construction of irrigation canals, water reservoirs, and rainwater harvesting systems, can ensure a stable water supply for agriculture throughout the year.

3. Access to high-quality seeds and fertilizers: Providing farmers with access to high-quality seeds and fertilizers can significantly improve crop yields. This can be achieved through government subsidy programs, promoting public-private partnerships, and establishing seed banks for small-scale farmers.

4. Enhancing research and development in agriculture: Investing in research and development to develop high-yielding crop varieties, drought-resistant crops, and pest-resistant crops can help increase agricultural productivity. Collaborations between research institutions, universities, and farmers can facilitate the transfer of knowledge and innovative technologies to the field.

5. Strengthening agricultural extension services: Strengthening agricultural extension services can help disseminate information, provide technical assistance, and promote best practices among farmers. This can be achieved through establishing local agricultural centers, training extension workers, and organizing farmer field schools.

6. Encouraging crop diversification: Promoting crop diversification can reduce the dependency on a few major crops and mitigate the risks associated with climate change and pest outbreaks. Introducing cash crops, horticulture, and livestock farming can provide additional income opportunities for farmers.

7. Implementing effective agricultural policies: The government should implement policies that support sustainable agriculture, including land reforms, price stabilization mechanisms, and crop insurance schemes. These policies should aim to address the needs of smallholder farmers and protect them from market fluctuations and natural disasters.

By focusing on enhancing the productivity and efficiency of agriculture, India can improve food and nutritional security, reduce poverty, and promote sustainable development in rural areas.

Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) is an inter-governmental organization established in 1997 to promote economic and technical cooperation among the Indian Ocean Rim countries. The organization aims to strengthen trade and investment ties, promote sustainable development, and improve maritime safety and security in the region.

Statements:

1. It was established very recently in response to incidents of piracy and accidents of oil spills.

False. IOR-ARC was established in 1997, which is not recent considering the current year is 2021. The organization was not established in response to incidents of piracy and accidents of oil spills.

2. It is an alliance meant for maritime security only.

False. While maritime safety and security are important objectives of IOR-ARC, the organization has a broader mandate that includes economic and technical cooperation as well. The member countries of IOR-ARC work together on various issues such as trade and investment, tourism, fisheries management, disaster risk management, academic and cultural exchange, and more.

Conclusion:

Neither statement 1 nor statement 2 is correct. IOR-ARC is an inter-governmental organization that aims to promote economic and technical cooperation among the Indian Ocean Rim countries. While maritime safety and security are important objectives, the organization's mandate is broader and covers various other areas of cooperation.

's population lives in rural areas.
2. India's literacy rate has been steadily increasing over the past few decades.

Both of these statements are true. According to the 2011 Census of India, approximately 68% of the population lives in rural areas. Additionally, India's literacy rate has been steadily increasing from 52.21% in 1991 to 74.04% in 2011, according to the same census. It is expected that the literacy rate has continued to increase since then.