UPSC Prelims Previous Year Questions 2019: Indian Economy | Indian Economy for UPSC CSE PDF Download

Ans: (b)

• The Land reform constitutes the most important measures to improve the economic condition of agricultural tenants.The Land reforms program in post-Independence India has evolved through different phases and these includes Abolition of Intermediaries, Tenancy reforms, consolidation of holdings and determination of holdings per family, imposition of ceilings with fewer exemptions, and to distribute surplus land among landless peoples.

Hence Option (b) is correct.

Ans: (b)
These poverty lines would vary from State to State because of inter-state price differentials

Ans: (b)
India has been the world’s top rice exporter since the beginning of this decade. India emerged the world’s largest rice exporter in 2011-12, displacing Thailand from its leadership position.

Ans: (a)

• Coal sector was nationalised in two phases under Indira Gandhi Government in 1972.
• The coal Blocks are allocated through Auctions not on lottery basis.
• The coal sector is the monopolistic sector in India. India holds 5th biggest coal reserves in the world but due to incapacity of coal production by monopolistic firms, it imports coals to meet the shortages of domestic supply. But, still the country is not self-sufficient of coal production.

Hence option (a) is correct.

Ans: (c)

• The protocol against the smuggling of Migrants by land, sea and air, it comes under the the United Nations Convention against Transnational Organized Crime (UNTOC). The main objective of this conventon is to fight against Transnational organized crime. Hence statement 1 is incorrect.
• The United Nations Convention Against Corruption (UNCAC) is the only legally binding universal anti-corruption instrument. The Convention covers many different forms of corruption, such as bribery, trading in influence, abuse of functions, and various acts of corruption in the private sector. Hence statement 2 is correct.
• "Returning Assets to their rightful owners from whom they they have been taken illicitly", is included under the United Nations Convention Against Corruption (UNCAC). Hence statement 3 is incorrect. Eliminating options containing statement 3 also gives us the answer, that is option C.
• The United Nations Office on Drugs and Crime (UNODC) is mandated by its Member States to assist in the implementation of both Conventions,such as UNCAC and UNTOC, along with the UN Drug Conventions of 1961, 1971 and 1988 underpin all the operational work of UNODC. Hence statement 4 is correct.

Therefore option (c) is correct.

Ans: (c)
The government has notified fixed term employment for all sectors through an amendment to the Industrial Employment (Standing Orders) Central Rules, 1946. Fixed-term employment for all sectors will make it easier for companies to hire-and-fire workers along with reducing the role of middlemen. Hence, statement 1 is correct. No notice of termination of employment shall be necessary in the case of temporary workman whether monthly rated, weekly rated or piece rated and probationers or badli workmen. Hence, statement 2 is correct.

Ans: (b)
Under the Lead bank Scheme, the service area approach was introduced in 1989 for planned and orderly development of rural and semi-urban areas. Each bank branch in rural and semi-urban area was designated to serve an area if 15 to 25 villages and the branch was responsible for meeting the needs of bank credit of its service area.

Ans: (d)
US dollar denominated debt is the largest component of India's External Debt, followed by Indian rupee, SDR, Yen and Euro. Hence statement 2 is not correct. Commercial Borrowings continue to be the largest component of India's external Debt followed by NRI deposit and short term credit. Hence statement 1 is not correct.

Ans: (b)
The deposit itself is a liability owed by the bank to the depositor. Bank deposits refer to this liability rather than to the actual funds that have been deposit. Hence option B is the correct answer.

• A currency crisis is brought on by a decline in the value of a country's currency. This decline in value negatively affects an economy by creating instabilities in exchange rates, meaning that one unit of a certain currency no longer buys as much as it used to in another currency.
• Foreign currency earnings and Remittances contribute to the strengthening of the rupee. Hence statement 1 and 3 is correct.
• Increasing government Expenditure will have no effect on the the value of currency. Hence statement 2 is not correct.

Ans: (d)
P-Notes or Participatory Notes are Overseas Derivative Instruments that have Indian stocks as their underlying assets. They allow foreign investors to buy stocks listed on Indian exchanges without being registered.

• The stated objective of the Second five year plan was rapid industrialisation with particular emphasis on the development of basic and heavy industries - aimed at establishing the Socialistic Pattern of Society.
• Fourth five year plan emphasised on reduction of concentration of incomes, wealth and economic power to achieve social equality and justice.
• Fifth five year plan aims at removal of poverty and achievement of self-reliance. The Eighth Plan focussed on Financial sector reforms.

Ans: (d)
The inter-creditor agreement is aimed at the resolution of loan accounts with a size of ₹50 crore and above that are under the control of a group of lenders. It is part of the “Sashakt” plan approved by the government to address the problem of resolving bad loans. The Intercreditor Agreement, a recommendation of the Sunil Mehta committee, aims to deal with bad loans as an attempt to speed up the Resolution of stressed Assets.

Ans: (a)
Bank Board Bureau is responsible for selection and appointment of Board of Directors in Public Sector Banks and Financial Institutions.

Ans: (b)
The Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under The Petroleum and Natural Gas Regulatory Board Act, 2006. The independent regulator TRAI is the first independent regulator in India.

Ans: (a)
Sub Index of Ease of Doing Business Index comprises starting a business, Getting a location (labour market regulation, construction permits, getting electrictiy, registering property), Accessing finance (Getting credit, Protecting Minority investor), Dealing with day to day operation (Paying taxes, enforcing contracts).

Ans: (c)
The E-waste Rules place main responsibility of e-waste management on the producers of the electrical and electronic equipment by introducing the concept of “extended producer responsibility” (EPR). The producers are given a significant responsibility—financial or physical—for the treatment or disposal of post-consumer products. The e-waste (Management & Handling) Rules, 2011 have been notified in May 2011 and are effective from 01-05-2012.

Ans: (c)
The economic cost of foodgrains consists of three components, namely the MSP including central bonus, if applicable, as the price paid to farmers, procurement incidentals, and the cost of distribution.

Ans: (a)
PPPs measure the total amount of goods and services that a single unit of a country’s currency can buy in another country. The PPP between countries A and B measures the amount of country A’s currency required to purchase a basket of goods and services in country A as compared to the amount of country B’s currency to purchase a similar basket of goods and services in country B.

Ans: (d)
The import of vegetable oils in India is highest in last five years due to a cut in duty as mandatory under the Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA). Signed in October 2010 with South East Asian countries,

Ans: (d)

• Curbing imports of non essential goods will lessen the demand for dollars and promoting export will help in increasing the flow of dollars into the country - helping control rupee depriciation.
• The Masala bond is directly pegged to the Indian Currency. If Indian borrowers issues more rupee-denominated Masala bonds, this would increase liquidity in the market or increase in the rupee stock against few currencies in the market and this would help in supporting the rupee.
• ECB- it is a type of loan in foreign currencies, made by non-resident lenders. Thus easing conditions of ECB's helps in receiving more loans in foreign currencies that would in increase of forex inflow - leading to rupee appreciation.
• Expansionary Monetary Policy- A set of policy measures such as increase in money supply by the RBI to stimulate economy. It cannot influence the variations of rupee value.

Ans: (a)
The Storage of Payment System Data directive issued by RBI requires all System Providers to ensure that the entire data relating to payment systems operated by them are stored in a system in India only. Also, System Providers shall provide a System Audit Report (SAR) and the audit should be conducted by CERT-IN empaneled auditors.

Ans: (b)

• The money-multiplier is the maximum amount of broad money (M3 Money) that could be created by the commercial banks for a given fixed amount of base money or reserve ratios. Or, simply it can be stated that the maximum amount of money that the banking system generates with each rupees of reserves.
• So, more the people will be linked with the banking system or have the habit of banking more will be the money in use in the form of loans, credits etc. that results an increase in economic activity. This will directly help in increase money multiplier in an economy. The money multiplier goes up because of the reduction in the cash reserve ratio (CRR).