Test: Poverty, Planning, Finance And Economic / Social Development - 1 - UPSC MCQ

• Money Multiplier directly improves with cut in legal reserve ratios (SLR, CRR: so A and D are wrong)
• Money Multiplier indirectly improves as economy develops, consumption/loan demand increases, banking penetration improves etc.

To control rupee weakening,

• A: will help by reducing the Current account deficit.
• B: will help by reducing the demand of dollars in loan-repayment.
• C: will help by increasing the inflow of dollars and other currencies.
• D: will backfire, because rupee currency supply will increase without corresponding increase in the supply of dollars and as a result: dollar will strengthen, Indian Rupee will weaken further.

• PPP: Hypothetical concept that tries to compare two currencies’ exchange rate through their  purchasing power in respective countries. So, #1 is right.
• 2014-April, Economic Times: India displaces Japan to become third-largest world economy in terms of PPP: World Bank. So #2 is wrong, we are left with answer A: 1 only.

As per the bare act:

• In case of a woman who has two or more children, the maternity benefit will continue to be 12 weeks. If less than two children then she’ll get 26 weeks paid leave.
• Every establishment with 50 or more employees to provide crèche facilities within a prescribed distance.
  The woman will be allowed four visits to the crèche in a day. So #2 is wrong. We are left with Answer C: only 3.

• 2nd FYP: rapid industrialization with particular emphasis on the development of basic and heavy industries so Statement1 is correct. This eliminates B and C. The correct answer could be A or D. In both these options, second statement is common so we should accept statement #2 to be correct without checking its validity.
• 5th FYP: Fifth Plan (1974-79) was formulated against the backdrop of severe inflationary pressures. objectives of the plan were to achieve self-reliance and adopt measures for raising the consumption standard of people living below the poverty line. This Plan also gave high priority to bring inflation under control and to achieve stability in the economic situation. It targeted an annual growth rate of 5.5 percent in the national income. There is no mention of Financial Sector here, so #3 is wrong. We are left with Answer A: only 1 and 2.

• Page 19, Asian Development Bank documen t on Understanding poverty in India.
• Poverty lines are estimated using th e origina l statespecific poverty lines identified by the Expert Group and updating them to 2004–2005 prices using the Consumer Price Index of Agricultural Laborers (CPIAL) for rural poverty lines and Consumer Price Index for Industrial Workers (CPIIW) for urban poverty lines.
• So, B: price levels is the most appropriate choice.

The Atal Innovation Mission (AIM) is a flagship initiative of the Prime Minister, set up by NITI Aayog to promote innovation and entrepreneurship across the length and breadth of the country.

Economic development includes not only economic growth but also various other economic changes that improve the quality of life or standard of living of people in a country. If with economic growth, a country experiences various economic changes such as reduction in poverty and unemployment, reduction in income and wealth inequality, increase in literacy rate, improvement in health and hygiene, etc, that improve the quality of life then that is economic development.

From the finite money available, Government could build a street light or a water tap. So, opportunity cost is involved in pursuing either one of the activity. Experts were divided over C or D-some interpreting that opportunity cost is borne by the Decision Maker, while others saying opportunity cost is borne by the person who eventually pays for it. UPSC has kept 'C' as the official answer.

• RBI is public debt manager for both state and union Governments, so #1 is wrong.
• According to Dept of Economic Affairs, Short-term debt of the Central Government on residual maturity basis includes 14-day intermediate treasury bills, regular treasury bills, dated securities maturing in the ensuing one year and external debt with remaining maturity of less than one year.
• Short-term debt of State Governments comprises internal debt that includes market loans maturing within next one year, and repayment of loans to Centre. Therefore, #2 is right.
• T-bills are sold at discount and re-purchased at par value (face value). So, #3 is right.

• Indian express June 2016: HRD Ministry has launched an initiative called 'Vidyanjali' to encourage youngsters to volunteer their services at any neighborhood government school. So accordingly "A" is the most appropriate choice.
• What about statement "3"? While the mygov.in portal guidelines mention that Vidyanjali will cover initiatives under CSR, PPP, PSU. But mobilization of voluntary monetary contribution is not the primary and explicit 'purpose' of the scheme.
• And the scheme is targeted at primary (Class 1 to 5) and upper primary classes (Class 6 to 8) so 'secondary schools' infrastructure facilities' are beyond its scope of work. HRD ministry's other schemes specifically count class 9 onwards as 'secondary education'
  Hence 3 is wrong. Therefore, Answer is "A".

While this mission will certainly increase consumption of millets, coarse cereals and eggs once people become aware of their nutritional benefits, but promoting their 'consumption' is not the explicit objective of this mission.
Explicitly stated objectives are only 1 and 2. So, experts were divided between A and B and C- because in the 2016's UN-REDD+ question, UPSC official even kept 'indirect benefit' of poverty removal as one of the objective.
But in official answer key of 2017, they have gone only by literal interpretation of explicitly mentioned 'direct benefits, and they chose 'A' as the official answer.

NIIF is under Department of Economic Affairs. So first statement is wrong. It was setup in Budget 2015, with Rs.40k crores, but even if counting the recent allotments till Budget 2017, the 4 lakh amount is unrealistic. So, second statement is also wrong.

Answer is "b" as per the Press Information Bureau.

From the official Economic Survey 2014-15, we get following data

If we go only by the strict interpretation of above graph then answer should be "D"

Act provides is an appellate tribunal, and they're required to finish case within one year. So #3 is wrong, by elimination, we are left with A and B. So, B is most appropriate because IT dept (=therefore Government) can seize the benami properties.

Exports will become ZERO RATED under GST, so statements 2 and 3 would have been correct If examiner had used moderate words "GST will help". But he has used 'extreme' words. GST is unlikely to 'drastically' reduce CAD Because of crude oil import and OPEC cartel that manipulates its prices. Similarly, GST is unlikely to enormously increase size of oureconomy (IMF projection ~1-1.5% addition in growth rate.) and we can't overtake China in near future, because unlike China we are keeping our currency undervalued against dollar. Hence statement 2 and 3 are wrong. We are left with Answer A.

NPS was compulsory for new central govt recruits (except armed forces) WEF 1/1/2004. so "D" is wrong.
Any Indian between 18 to 55 can join NPS. So "B" is wrong. NRIs are allowed to open NPS account as per PFRDA norms.
So we are left with answer "C".

While directly or indirectly all three will be encouraged because of Small Finance banks. But when RBI invited applications, the specific purpose were 1 and 2 only.

MPC has 6 members, not 12; and it's headed by RBI governor and not Finance Minister. So statement 2 and 3 are wrong, hence by elimination, we reach answer (A) only 1 correct.

"A" is the most appropriate choice. Mobile wallets will not be necessary, because your mobile number is directly linked with the bank account using bank's 'customized app' which is built on the UPI platform.

NPCI is a not-for-profit company formed by various banks, with primary objective of providing cost-effective payment solutions to the banks. NPCI's solutions such as IMPS, BHIM, RuPay, AEPS etc. have indeed helped in financial inclusion. So first is correct. And second is correct- NPCI launched Rupay card in 2012, as 7th payment gateway in the world.

(i) The Government of India launched Mission Indradhanush in December 2014 with the ultimate goal to ensure that all children under the age of two years and pregnant women are fully immunized with all available vaccines.
(ii) This mission aims to achieve 100% vaccination of children and pregnant women by 2020.

DigiLocker is a “digital locker” service launched by the Government of India in February 2015 to provide a secure dedicated personal electronic space for storing the documents of resident Indian citizens.

SWAYAM or Study Webs of Active–Learning for Young Aspiring Minds programme of Ministry of Human Resource Development, Government of India. Professors of centrally funded institutions like IITs, IIMs, central universities will offer online courses to citizens of India. All courses would be offered free of cost under this.

District Mineral Foundation (DMF) is a trust set up as a non-profit body, in those districts affected by the mining works, to work for the interest and benefit of persons and areas affected by mining related operations. It is funded through the contributions from miners. Its manner of operation comes under the jurisdiction of the relevant State Government.

Ujwal DISCOM Assurance Yojana (UDAY) is the financial turnaround and revival package for electricity distribution companies of India (DISCOMs) initiated by the Government of India with the intent to find a permanent solution to the financial mess that the power distribution is in.

Pradhan Mantri Mudra Yojana under the Micro Units Development and Refinance Agency (MUDRA) Bank is a new institution being set up by Government of India for development and refinancing activities relating to micro units.
It was announced by the Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide funding to the non corporate small business sector.

(i) Prime Minister launched the ‘Stand up India Scheme’ aimed at promoting entrepreneurship among Scheduled Castes/Scheduled Tribes and women by giving loans in the range of ₹10 lakh to ₹1 crore for setting up a new enterprise. There would be a ₹10,000 crore refinance window through Small Industries Development Bank of India (SIDBI) and the National Credit Guarantee Trustee Company Ltd (NCGTC) will create a corpus of ₹5,000 crore.
(ii) Both statements are correct as per : Press Information Bureau (PIB) Government of India Ministry of Finance/03-April-2016.

There is no restriction as such that only one member of a family can join the scheme.