Test: Structure Of The Indian Economy & Demographics - 2 - UPSC MCQ

Priority sector lending constitutes the lending to agriculture, micro and small enterprises, micro credit, education, housing and weaker sections.

Deficit financing refers to the difference between expenditure and receipts. In public finance, it means the govt. is spending more than what it is earning. Deficit financing is a necessary evil in a welfare state as the states often fail to generate tax revenue which is sufficient enough to take care of the expenditure of the state. The basic intention behind deficit financing is to provide the necessary impetus to economic growth by artificial means.

All the statements are correct.

1. Placing Annual Financial Statement before the Parliament
2. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill
3. Provisions of supplementary grants and vote-on-account
4. Introducing Finance Bill in the Parliament

Commercial Banks – 60%
Co-operative Banks – 30%
RRB and others – 10%

The Base effect refers to the tendency of a small change from a low initial amount to the current amount which is translated into a large percentage and appears as large. It is usually used in context of inflation. It indicates the change in the inflation rate in the current period with respect to the base period.

Under Article 266 (1) of the Constitution of India, all revenues ( example tax revenue from personal income tax, corporate income tax, customs and excise duties as well as non-tax revenue such as licence fees, dividends and profits from public sector undertakings etc.) received by the Union government as well as all loans raised by issue of treasury bills, internal and external loans and all moneys received by the Union Government in repayment of loans shall form a consolidated fund.

Darwin’s “struggle for existence” in natural history is analogous to the class struggle in “human History”. So option (c) stands incorrect. The sketch of dialectical materialism given by Karl Marx explains that Dialectical principle is of universal application and all the development is “struggle of opposites” or “conflict of opposites”. Thus option d stands correct in this question.

VAT, being a ' tax on sale or purchase of goods within a State' is a State Subject by virtue of Entry 54 of State List of the Seventh Schedule of the Constitution of India. Since VAT/Sales tax is a State subject, the Central Government has been playing the role of a facilitator for successful implementation of VAT.

The demographic dividend is a rise in the rate of economic growth due to a rising share of working age people in a population. This usually occurs late in the demographic transition when the fertility rate falls and the youth dependency rate declines.

Over the past few decades, it has been the private sector that has really driven capacity-creation in Indian higher education. Serious thinking on downsizing bureaucracy had begun in the early 1990s. A sub-group set up by the Planning Commission had suggested in 1993 that the Union government should weed out at least 2,000 senior level positions in various ministries.

Recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
Slow down is a period of slow economic growth, especially one that follows a period of robust growth Melt down follows normally a black swan event and quickly results is financial assets loosing in value, often resulting in liquidity crisis. The stock market in India suffered melt down from Sensex 20,000 in mid 2008 to 10,000 in mid 2009.

Alter the Abhijit Sen committee’s proposals in 2004-05, the government had approved the proposal to release or wholesale price based inflation data on a monthly basis, instead of every week. The base year was changed to 2004-05 from 1993-94. However data on primary and fuel items was continued to release on a weekly basis. Consumer Price Index food group has a weight of 39.1 percent as compared to the combined weight of 24.4 percent (food articles and Manufactured food products) in wholesale Price Index food basket.