Test: Indian Economy -5 - NDA MCQ

• Launched under the Aatmanirbhar Bharat Abhiyan, the Pradhan Mantri Formalisation of Micro food processing Enterprises (PM-FME) Scheme is a centrally sponsored scheme that aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector and provide support to Farmer Producer Organizations. Hence statements 1 and 2 are correct.
• Its objectives are:
  1. Increase in access to finance by micro food processing units,
  2. Increase in revenues of target enterprises,
  3. Enhanced compliance with food quality and safety standards,
  4. Strengthening capacities of support systems,
  5. Transition from the unorganized sector to the formal sector,
  6. Special focus on women entrepreneurs and Aspirational districts,
  7. Encourage Waste to Wealth activities and focus on minor forest produce in Tribal Districts.

Hence statement 3 is correct.

• Soil Health Card is a printed report that a farmer will be handed over for each of his holdings. It is provided to all farmers in the country at an interval of 2 years to enable to apply recommended doses of nutrients based on soil test values to realise improved and sustainable soil health and fertility, low costs and high profits. Hence statement 1 is correct.
• Soil samples are tested with respect to 12 parameters: o Macro Nutrients - Nitrogen(N), Phosphorus(P), Potassium(K). o Secondary Nutrients- Sulphur(S). o Micro Nutrients- Zinc (Zn), Iron(Fe), Copper(Cu), Mangnese(Mn), Boron(B). o Physical parameters- pH (potential of hydrogen), EC (electrical conductivity),OC (organic Carbon). Hence statement 2 is not correct.
• The recent study conducted by the National Productivity Council concluded that use of soil health card has helped farmers substantially reduce the cost of production and achieve higher production, thereby increasing farm income.
• Application of fertilisers as per the recommendation of soil health cards led to savings in nitrogen fertilisers such as urea, which resulted in reduction in the cost of cultivation. Hence statement 3 is correct.

• In the eighth 5 year plan (1992 - 97) Target Growth was 5.6 % while the Actual Growth 6.8%. In the Ninth Plan (1997- 2002) Target Growth was 6.5% while the Actual Growth: 5.4% In the Tenth Plan (2002 - 2007) the Target Growth was 8 % while the Actual Growth 7.6 % In the Eleventh Plan (2007 - 2012) the Target Growth was 9 % while the Actual Growth is 8%. Hence it is seen that the growth rate fluctuated many times, and it was not steadily increased. Hence statement 1 is not correct.
• After the economic reforms, during the eighth plan period, high growth of agriculture and allied sector, and the manufacturing sector was seen. Hence statement 2 is correct.
• The share of the public sector in total investment had declined considerably to about 34 %. So it decreased.
• Hence statement 3 is not correct.

• In 1991, India met with an economic crisis relating to its external debt — the government was not able to make repayments on its borrowings from abroad; foreign exchange reserves, which we generally maintain to import petrol and other important items, dropped to levels that were not sufficient for even a fortnight. The crisis was further compounded by rising prices of essential goods. India approached the International Bank for Reconstruction and Development (IBRD), popularly known as World Bank and the International Monetary Fund (IMF), and received $7 billion as a loan to manage the crisis. For availing the loan, these international agencies expected India to liberalise and open up the economy by removing restrictions on the private sector, reduce the role of the government in many areas and remove trade restrictions. This led to Liberalization, Privatization and Globalization, popularly known as LPG reforms.
• Outcomes of reforms: The growth of GDP increased from 5.6 per cent during 1980-91 to 6.4 per cent during 1992-2001. This shows that there has been an increase in the overall GDP growth in the reform period. Hence statement 2 is correct.
• The opening up of the economy has led to rapid increase in foreign direct investment and foreign exchange reserves. The foreign investment, which includes foreign direct investment and foreign institutional investment, increased from about US $ 100 million in 1990-91 to US $ 150 billion in 2003-04. There has been an increase in the foreign exchange reserves from about US $ 6 billion in 1990- 91 to US $ 125 billion in 2004-05. Hence statement 1 is correct.

• India’s Polar Satellite Launch Vehicle, in its fifty-first flight (PSLV-C49), successfully launched EOS-01 along with nine international customer satellites from Satish Dhawan Space Centre (SDSC) SHAR, Sriharikota on November 07, 2020. Hence statements 1 and 3 are not correct.
• It will operate in Low-earth orbit. A low Earth orbit (LEO) is relatively close to Earth's surface. It is normally at an altitude of less than 1000 km but could be as low as 160 km above Earth – which is low compared to other orbits, but still very far above Earth's surface. Hence statement 2 is correct.
• EOS-01 is another Radar Imaging Satellite (RISAT) an earth observation satellite that will work together with RISAT-2B and RISAT-2BR1 launched last year, intended for several applications covering agriculture, water resources, urban planning, rural development, mineral prospecting, environment, forestry, ocean resources and disaster management.

1. Sugar Industry is an important agro-based industry that impacts livelihood of 50 million farmers and 5 lakh mill workers. Besides, India is the second largest producer (15% of global production) and the industry has strong linkages with other industries like bio-electricity, chemicals etc.
2. Currently, the central government announces Fair and Remunerative Price (FRP) at the recommendations of the Commission for Agricultural Costs and Prices (CACP). Besides this, some states declare state specific sugarcane prices called State Advised Prices (SAP), usually higher than the FRP.
3. Before answering the question, one must understand the concept of sugar balance sheet. At the starting of each sugar season (usually Oct-Nov), sugar industry prepares its balance sheet which reads as:
   • Expected production for current year + carry forward stock from previous year – domestic consumption (including ethanol production) – Exports.

Hence option (b) is the correct answer.

• Public debt management plays an important role in the macro-economic policy of a country. Productive use of public debt contributes to the economic growth and welfare of society at large. At the same time, public debt because of its size, if not managed well, could become a source of financial instability.
• Thus, establishing and executing a strategy for managing the Government's debt in order to raise the required amount of funds at low cost over the medium to long-run, consistent with a prudent degree of risk is essential.
• Objectives of the Debt Management Strategy (DMS):
  1. To mobilize borrowings at low cost over the medium to long-term subject to prudent levels of risk in debt portfolio. Hence, statement 1 is correct.
  2. To maintain a stable and sustainable debt structure so as to ensure financial stability across time periods. Hence, statement 2 is correct.
  3. To support the development of a well-functioning, vibrant, deep and liquid domestic bond market which helps in pricing the Government debt efficiently.

Hence, statement 3 is correct.

• Investor Education and Protection Fund (IEPF) has been set up under the Companies Act, 2013. Investor Education and Protection Fund Authority created under the act aims to administer the Investor Education and Protection Fund with the objective of promoting Investor’s Education, Awareness and Protection. The Authority takes various initiatives to fulfil its objectives through Investor Awareness Programs and various other mediums like Print, Electronic, Social Media, and Community Radio etc. Hence statement 1 is correct.
• The IEPF consists of not only the amounts such as dividends, applications money, matured deposits, etc. which have remained unpaid or unclaimed for a period of 7 years but also amounts given by Central Government by way of grants, donations by Central Government, State Governments or companies etc. Hence statement 2 is not correct.

• The capital account, on a national level, represents the balance of payments for a country. The capital account keeps track of the net change in a nation's assets and liabilities during a year. The capital account's balance will inform economists whether the country is a net importer or net exporter of capital.
• Under the Capital Account of India, both equity and debt flows are covered.
• Debt flows comprise:
  1. commercial borrowings,
  2. external assistance,
  3. short-term trade credits
  4. Non-Resident Indian (NRI) deposits,
• Equity flows comprise:
  1. Foreign Direct Investment (FDI)
  2. Portfolio Investment.
• Hence all the options are correct.

1. Maize ranks third in terms of cereal output next to paddy and wheat in India. Maize is an appropriate crop that can meet these new agriculture sector environments.
2. It has multiple advantages such aso Fitting as a climate resilient crop
   • Feasibility in poultry, dairy and industrial sector
   • It helps in increasing the income of farmers help in generating on farm and off farm employment opportunities
   • Maize has C4 plant mechanism and appropriate for dryland farming as well as highly suited for conditions of drought , high temperature and CO₂ limitation
   • Yield of the plant is higher per hectare compared to other crops. With climate change implications and anticipated temperature rise maize can replace wheat and paddy where assured and sufficient irrigation facilities are not available.
   • Being a day neutral crop it can be grown in any season. Maize in India can be taken under less endowned environment of rainfed system.

Hence option (b) is the correct answer

• The Ministry of New and Renewable Energy (MNRE) launched the Atal Jyoti Yojana (AJAY) to illuminate dark regions across five states through solar power.
  1. It is a sub scheme under off –grid and decentralized solar application scheme of Ministry of New and Renewable Energy (MNRE), Govt. of India.
  2. The scheme covers 5 states only namely - Uttar Pradesh, Assam, Bihar, Jharkhand, and Odisha.
  3. The objective of the Atal Jyoti Scheme in India is to install solar energy-based street lights in those areas where there is a shortage of electricity. Hence option (a) is the correct answer.
  4. The Phase I was implemented during September 2016- March 2018. The Phase II is being implemented during 2018-19 and 2019-20.

• Knowledge Based Resources Information Systems in agriculture are being strengthened by Ministry of Agriculture to streamline research data management in through organizations such as Indian Council of Agricultural Research (ICAR). Some of the significant initiatives include:
  1. Kisan Rath: App which facilitates transportation of food grains and perishables during COVID lockdown. The app intends to facilitate farmers, FPOs and Cooperatives in the country to have the choice to find a suitable transport facility to transfer their agriculture produce from farm gate to markets.
  2. Meghdoot: It is a joint initiative by Ministries of Earth Sciences and Agriculture. The app provides forecast to farmers relating to temperature, rainfall, humidity, and wind speed and direction, which play critical roles in agricultural operations and how to take care of the crops and livestock
  3. Krishi Megh has been set up under the National Agricultural Higher Education Project (NAHEP), funded by both the government and World Bank. Hence all the pairs are correctly matched.

• Global Talent Competitiveness Index is an annual benchmarking report prepared by the INSEAD Business school that measures and ranks countries based on their ability to grow, attract and retain talent. Launched for the first time in 2014. Hence pair 1 is not correctly matched.
• World Competitiveness Ranking is prepared by IMD (Institute for Management and Development). The World Competitiveness Yearbook is an annual report published by the Swiss-based International Institute for Management Development (IMD) on the competitiveness of nations and has been published since 1989. Hence pair 3 is not correctly matched.
• Global Competitiveness Index is prepared by the World Economic Forum. The index is an annual yardstick for policy-makers to look beyond short-term and reactionary measures and to instead assess their progress against the full set of factors that determine productivity. Hence pair 2 is correctly matched.

• Recently, to initiate the process of taking the country towards nutritional security, the Department of Food & Public Distribution (DFPD) has been running a “Centrally Sponsored Pilot Scheme on Fortification of Rice & its distribution through Public Distribution System”. Hence statement 1 is correct.
• The Pilot Scheme has been approved for a period of three years beginning 2019-2020 with a total budget outlay of Rs.174.6 Crore. Fifteen State Governments have identified their respective districts (1 district per state) for implementing the Pilot Scheme.
• Already 5 states of Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Chhattisgarh have started the distribution of fortified rice in their respective identified districts. Special focus would be placed on supplying fortified rice to the 112 specially identified Aspirational Districts of the country.
• The Food Safety and Standards Authority of India (FSSAI) has revealed plans to make fortification mandatory for edible oil and milk but has not made it mandatory yet. The Food Safety and Standards Authority (FSSAI) is mulling over making fortification in edible oil with Vitamin A and D mandatory, in a bid to combat the malnutrition challenges including micronutrient deficiencies in India. In 2018, the regulator had set standards for fortification for five category of staples which includes wheat flour and rice (with iron, vitamin B12 and folic acid), milk and edible oil (with Vitamins A and D) and double fortified salt (with iodine and iron). The fortification norms are currently voluntary. In addition, it is intensifying its focus on local staples such as rice, wheat and salt. Hence statement 2 is not correct.
• The Food Safety and Standards Authority of India (FSSAI) releases the STATE FOOD FORTIFICATION INDEX for different states and union territories of India. As per the recently released report Andhra Pradesh ranks first. Hence statement 3 is correct.

• Recently, several European nations like France and Italy have asked tech giants like Google, Apple, Facebook, and Amazon (GAFA) to pay Digital service tax.
• Digital service tax covers online sales of goods and services. It includes policies that specifically target businesses that provide products or services through digital means. Hence statement 1 is correct.
• India was the first country to introduce a digital tax called ‘Equalisation Levy’ in 2016 at the rate of 6%. EL 1.0 was payable by Indian residents on online advertisement services purchased from nonresident companies.
• From 1 April 2020, the scope of equalization levy has been expanded to include a 2% levy on all online sales of goods or services into India by non-resident e-commerce operators (‘EL 2.0’). Hence statement 2 is correct.
• Recognizing the need to reform international tax rules for taxing digital companies such that countries get their fair share of taxes, the OECD has been working on proposals for new rules but so far has not arrived at a consensus on the final scope and manner of taxation.
• Meanwhile, many countries such as France (3% levy), Italy, Turkey, Austria, UK, Malaysia, Spain etc. have either proposed or implemented a unilateral digital tax applicable to digital companies, called as the ‘Digital Services Tax’ (‘DST’). Hence statement 3 is not correct.

• An open sky air service agreement allows for airlines from the two countries to have an unlimited number of flights as well as seats to each other’s jurisdictions. The National Civil Aviation Policy, 2016, allows the government to enter into an ‘open sky’ air services agreement on a reciprocal basis with SAARC nations as well as countries beyond a 5,000-kilometer radius from New Delhi.
• India entered into a complete open sky service agreement with the USA, Greece, Jamaica, Guyana, Finland, Spain and Sri Lanka.
  1. A nearly open sky service agreement has also been signed with the UK.
  2. A partial open sky was adopted for SAARC and ASEAN countries under which the designated airlines of these countries have been permitted to operate the unlimited number of services with third/fourth freedom traffic rights to 18 destinations in India. Hence options 1 and 2 are not correct.
• India has not entered any open sky agreement with G20 and BRICS group.
• Hence options 3 and 4 are not correct.

• National Industrial Corridor Development Programme is India's most ambitious infrastructure programme aiming to develop new industrial cities as "Smart Cities" and converging next generation technologies across infrastructure sectors.
• Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) Limited, a special purpose company, was incorporated to establish, promote and facilitate development of Delhi Mumbai Industrial Corridor Project.
• Further, after announcement of other Industrial Corridor Projects, the mandate of DMICDC Ltd. has been expanded to develop and implement all Industrial Corridor Projects in the country and accordingly, the name has been changed to National Industrial Corridor Development Corporation (NICDC) Limited. Hence statement 1 and statement 3 are correct.
• NICDC is mandated to undertake project development activities for Investment Regions/Industrial Areas/ Economic Regions / Industrial Nodes and Township etc.
• The shareholding of NICDC is as follows:
  1. Govt of India – 49% o Japan Bank for International Cooperation – 26%
  2. Housing and Urban Development Corporation Ltd – 19.9%
  3. India Infrastructure Finance Company Ltd – 4.1%
  4. LIC – 1%

Hence statement 2 is correct.

• Fixed-term employment is a contract in which a company or an enterprise hires an employee for a specific period of time. In most cases, it is for a year but can be renewed after the term expires depending on the requirement. In fixed-term employment, the employee is not on the payroll of the company. Hence statement 2 is correct.
• Under the fixed-term employment contract, the payout or the payment is fixed in advance and is not altered till the term expires. Hence statement 1 is not correct.

1. Recently, the Union minister of Petroleum and Natural Gas & Steel has called upon the various stakeholders in the LNG sector to mount a campaign to make people aware about the benefits of LNG fuel.
2. Liquefied Natural Gas (LNG) which is largely composed of (85 to 99%) is odourless, colourless, non-toxic and non-corrosive. Hence statement 1 is correct.
3. LNG is formed when natural gas is cooled down to transform the gas into liquid form.
4. Advantages:
   • LNG is far simpler and more economical to produce than any other fossil fuel. It is a more economical source of energy when compared to black products (fuel oil and diesel) and LPG. Its price is more stable compared to other fuels, enabling businesses to forecast energy costs more accurately. Hence statement 2 is correct. 
5. India has been the world’s fourth-largest importer of liquefied natural gas (LNG) since 2011, gradually increasing LNG imports as the country’s domestic natural gas production declined and domestic consumption increased.
6. Although India has expanded the number of countries it imports LNG from since 2016, Qatar remains the main LNG supplier to India because of a relatively short transportation distance: an LNG tanker can leave Qatar and reach India in three days. Hence statement 3 is not correct.

• Cropping pattern means the proportion of area under different crops at a point of time. Factors that affect cropping pattern are:
  1. Physical characteristics of a region like soil, climate, rainfall etc.
  2. Availability of irrigation facilities determine not only which crops can be grown but also whether double or triple cropping will be possible of not.
  3. Price incentives (like MSP) and other income maximization schemes.
• Indian experience:
  1. A shift in crops from food grains to non-foodgrains reflects a change from subsistence cropping to commercial cropping. In India, area under foodgrains came down from 75%in 1950 to almost 66% in 2010. This trend clearly shows that the shift was not substantial.
  2. Shifting little area from staple to high value in the suitable region lead to a sizable increase in the returns for farmers. High value crops offer comparatively better growth in terms of value of output contribution as compared to the staple crops. Yet some key challenges exists like:
  3. Water intensive crops like sugarcane and paddy are mostly grown in the naturally water starved areas of the country for example paddy in Punjab and sugarcane in Maharashtra because of policy measures like Input subsidies (power, water, fertilizer) and MSP. Hence statements 1 and 2 are correct.
  4. Over extraction of water than recharge led to decline in groundwater table, availability of groundwater cannot be the stimulating factor for a skewed cropping pattern. Hence statement 3 is not correct.
  5. The demand of commodity plays an important role but without appropriate infrastructure and logistic support, without favorable government policies, it does not act as a stimulating factor. Hence statement 4 is not correct.

• Livestock and fisheries play an important role in Indian economy. About 15 million people depend upon both livestock and fisheries each for their livelihood.
• Livestock:
  1. Department of Animal Husbandry & Dairying, Ministry of Fisheries, Animal Husbandry and Dairying has released the 20th Livestock Census report.
  2. It has been conducted periodically since 1919-20 which covers all domesticated animals and its headcounts both in rural and urban areas.
  3. The last livestock census was conducted in 2012.
  4. India has a total Livestock population is 535.78 million as per the 20th Livestock Census.
  5. Various species of animals (Cattle, Buffalo, Yak, Sheep, Goat, Pig, Donkey Camel, Dog, Rabbit, Elephant etc.), poultry birds possessed by the households, household enterprises/non-household enterprises and institutions are counted at their site. Hence statement 1 is correct. o State-wise Uttar Pradesh (UP) has recorded highest livestock population in 2019 followed by Rajasthan, MP, West Bengal, Bihar, Andhra Pradesh, Maharashtra, Telangana, Karnataka and Gujarat.
• Fisheries:
  1. To promote fisheries sector was envisaged under the Neel Kranti Mission/ Blue Revolution during 7th five year plan (1985-90).
  2. However a separate ministry for fisheries came into existence recently and the announcement for the same was made in interim budget of FY 2020. Hence statement 3 is not correct.
  3. About Merchandise Exports from India Scheme (MEIS):
     (i) It is one of the two schemes introduced in Foreign Trade Policy of India 2015-20, as a part of Exports from India Scheme. (The other scheme is Service Exports from India Scheme).
     (ii) It seeks to promote export of notified goods manufactured/ produced in India. MEIS is a major export promotion scheme implemented by the Ministry of Commerce and Industry.
     (iii)  The scheme provides incentive in the form of duty credit scrip to the exporter to compensate for his loss on payment of duties. The scrip can be transferred or used for payment of a number of duties/taxes like customs, excise etc.
     (iv) Later in 2018, government extended the benefits under the scheme to dairy sector including skimmed milk, dairy spreads, fresh cheese etc.

Hence statement 2 is not correct

• As per Section 15 (1) (a) of the SEBI FII Regulations, 1995, a Foreign Institutional Investor (FII) could invest in the securities in the primary and secondary markets including shares, debentures and warrants of companies unlisted, listed or to be listed on a recognized stock exchange in India. However, subsequent to SEBI (FPI) regulations, FIIs are allowed to invest only in listed or to-be listed entities and only through stock exchanges. Hence statement 1 is not correct.
• Foreign investors investing in initial allotment of shares (say IPOs or when a group of entities come together to float a company) are categorized as FDIs, this is a myth. In fact FIIs are very active in the over the counter (OTC) markets and in the Initial Public Offering market in India. Hence statement 2 is correct.
• Consolidated FDI Policy of Department of Industrial Policy and Promotion (DIPP) states that “foreign Direct Investment, as distinguished from portfolio investment (FII), has the connotation of establishing a ‘lasting interest’ in an enterprise that is resident in an economy other than that of the investor”. FII cannot involve in the direct management of the enterprise. Hence statement 3 is not correct.
   

• To cash the profit of the liberalisation and globalisation; the numbers of industries reserved for public sector have also been reduced. During the 2014; private investment in rail infrastructure has also been permitted. Consequently at present just 2 industrial sectors are reserved for the public sector and rest are opened for the private players.
• List of Industries Reserved for the Public Sector:
  • Atomic energy.

Hence option (b) is correct answer.

• Secretary Department for Promotion of Industry and Internal Trade (DPIIT), launched the website and mobile application [Learn to Protect, Secure and Maximize Your Innovation] on Intellectual Property Rights (IPRs) today in New Delhi. The website and app have been developed by Cell for IPR Promotion and Management (CIPAM)-DPIIT in collaboration with Qualcomm and National Law University (NLU), Delhi.
• The L2Pro India IP e-learning platform will have 11 modules for three different levels: Basic, Intermediate, and Advanced. Each module comprises of e-text for understanding concepts, short animated videos of the concepts, links to additional resources on the subject, and quizzes for assessment and grading the learner’s knowledge and understanding of the subject. Learners will access the L2Pro IP elearning platform through their desktop, laptop, mobile browser, and mobile application (available on Android & iOS), and will be provided e-certificates by CIPAM-DPIIT and NLU Delhi, and Qualcomm on successful completion of the e-learning modules. Hence pair 2 is correctly matched.
• Minister of State(I/c) for Housing & Urban Affairs launching the mobile app, “mHariyali,”. The app is aimed to encourage Public engagement in planting trees and other such Green drives. People can now upload information/photos of any plantation done by them, which is linked to the app and will be displayed on the website www.epgc.gov.in. The App provides for automatic geotagging of plants. This app will also enable nodal officers to periodically monitor the plantation. The App is user friendly and works on any android mobile phone. Hence pair 1 is correctly matched.
• UMANG (Unified Mobile Application for New-age Governance) is developed by the Ministry of Electronics and Information Technology (MeitY) and the National e-Governance Division (NeGD) to drive Mobile Governance in India. It provides a single platform for all Indian Citizens to access pan India e-Gov services ranging from Central to Local Government bodies and other citizen-centric services. Hence pair 3 is correctly matched.
• In a bid to assist visually impaired people to easily determine the denomination of currency notes, the Indian Institute of Technology at Ropar in Punjab has developed an Android App “Roshni”, using image processing and analytics. Hence pair 4 is not correctly matched.

• The Extended Fund Facility (EFF) is a service provided by the International Monetary Fund (IMF) to its member countries which authorizes them to raise any amount of foreign exchange from it to fulfill their BoP crisis but on the conditions of structural reforms in the economy put by the body.
• It is the first agreement of its kind. India had signed this agreement with the IMF in the financial year 1981–82.