Insights Static Quiz -356, 2019
Economy
INSIGHTS STATIC QUIZ 2019
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Question 1 of 5
1. Question
Consider the following statements about Unified Payments Interface (UPI).
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- It converts multiple bank accounts into a single mobile application of any participating bank, merging several banking features, seamless fund routing & merchant payments into one hood.
- It was launched by RBI.
- Money can be transferred through mobile devices round the clock 24*7 except on public holidays.
- It may also be used for Utility Bill Payments, Over the Counter Payments and Barcode based payments.
Which of the above statements is/are correct?
Correct
Solution: b)
Unified Payments Interface (UPI) is a payment system launched by National Payments Corporation of India (NPCI). It facilitates the fund transfer between two bank accounts through a smartphone. It converts multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
The unique feature of UPI is that it is immediate money transfer through mobile devices round the clock 24*7 and 365 days. Also, a single mobile application may be used for accessing different bank accounts. It may also be used for Utility Bill Payments, Over the Counter Payments and Barcode (Scan and Pay) based payments.
Incorrect
Solution: b)
Unified Payments Interface (UPI) is a payment system launched by National Payments Corporation of India (NPCI). It facilitates the fund transfer between two bank accounts through a smartphone. It converts multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
The unique feature of UPI is that it is immediate money transfer through mobile devices round the clock 24*7 and 365 days. Also, a single mobile application may be used for accessing different bank accounts. It may also be used for Utility Bill Payments, Over the Counter Payments and Barcode (Scan and Pay) based payments.
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Question 2 of 5
2. Question
Consider the following statements about Advance Pricing Agreement (APA).
- It is an ahead-of-time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology.
- It is only Unilateral in nature, that involves only the taxpayer and the tax authority of the country where the taxpayer is located.
- In India, Central Board of Indirect Taxes and Customs (CBIC) signs the APA with the tax payer.
Which of the above statements is/are correct?
Correct
Solution: a)
An advance pricing agreement (APA) is an ahead-of-time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology. An APA provides certainty with respect to the tax outcome of the tax payer’s international transactions.
An APA can be one of the three types – unilateral, bilateral and multilateral.
- A Unilateral APA is an APA that involves only the taxpayer and the tax authority of the country where the taxpayer is located.
- Bilateral APA (BAPA) is an APA that involves the tax payer, associated enterprise (AE) of the taxpayer in the foreign country, tax authority of the country where the taxpayer is located and the foreign tax authority.
- Multilateral APA (MAPA) is an APA that involves the taxpayer, two or more AEs of the tax payer in different foreign countries, tax authority of the country where the taxpayer is located and the tax authorities of AEs.
The Central Board of Direct Taxes (CBDT) entered into 14 Unilateral Advance Pricing Agreements (UAPA) and 2 Bilateral Advance Pricing Agreements (BAPA) during the month of March, 2018.
Incorrect
Solution: a)
An advance pricing agreement (APA) is an ahead-of-time agreement between a taxpayer and a tax authority on an appropriate transfer pricing methodology. An APA provides certainty with respect to the tax outcome of the tax payer’s international transactions.
An APA can be one of the three types – unilateral, bilateral and multilateral.
- A Unilateral APA is an APA that involves only the taxpayer and the tax authority of the country where the taxpayer is located.
- Bilateral APA (BAPA) is an APA that involves the tax payer, associated enterprise (AE) of the taxpayer in the foreign country, tax authority of the country where the taxpayer is located and the foreign tax authority.
- Multilateral APA (MAPA) is an APA that involves the taxpayer, two or more AEs of the tax payer in different foreign countries, tax authority of the country where the taxpayer is located and the tax authorities of AEs.
The Central Board of Direct Taxes (CBDT) entered into 14 Unilateral Advance Pricing Agreements (UAPA) and 2 Bilateral Advance Pricing Agreements (BAPA) during the month of March, 2018.
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Question 3 of 5
3. Question
Consider the following statements regarding Consumer Food Price Index (CFPI).
- Ministry of Statistics and Programme Implementation (MOSPI) releases Consumer Food Price Indices (CFPI) for three categories -rural, urban and combined.
- Cereals and products has more than 50% weightage in the Sub-groups within Consumer Food Price Index.
- The base year presently used is 2012.
Which of the above statements is/are correct?
Correct
Solution: c)
Consumer Food Price Index (CFPI) is a measure of change in retail prices of food products consumed by a defined population group in a given area with reference to a base year.
The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MOSPI) started releasing Consumer Food Price Indices (CFPI) for three categories -rural, urban and combined – separately on an all India basis with effect from May, 2014.
Like Consumer Price Index (CPI), the CFPI is also calculated on a monthly basis and methodology remains the same as CPI. The base year presently used is 2012.
Weights of Cereals and products within Consumer Food Price Index:
Rural: 36.71
Urban: 28.51
Combined: 34.16
Incorrect
Solution: c)
Consumer Food Price Index (CFPI) is a measure of change in retail prices of food products consumed by a defined population group in a given area with reference to a base year.
The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MOSPI) started releasing Consumer Food Price Indices (CFPI) for three categories -rural, urban and combined – separately on an all India basis with effect from May, 2014.
Like Consumer Price Index (CPI), the CFPI is also calculated on a monthly basis and methodology remains the same as CPI. The base year presently used is 2012.
Weights of Cereals and products within Consumer Food Price Index:
Rural: 36.71
Urban: 28.51
Combined: 34.16
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Question 4 of 5
4. Question
With reference to Indian economy, consider the following statements:
- GDP growth rate of India at constant prices is steadily increasing from last decade.
- Present base year for GDP calculation is 2011-2012.
Which of the statements given above is/are correct?
Correct
Solution: b)
- GDP growth rate of India at constant prices is not steadily increasing from last decade.
- The GDP growth rate declined to 6.72% in 2008-09 largely due to global financial meltdown following the collapse of Lehman brothers (investment bank) of US in September, 2008. GDP growth rate improved to 8.59% in 2009-10 and 8.91% in 2010- 11 due to high capital inflows attributed to the massive Quantitative Easing (QE) undertaken by the US to combat economic slowdown of global level.
- The GDP growth rate slumped to 6.69% in 2011-12, 4.47% in 2012-13 and 4.74% in 2013-14 (P). This was due largely to domestic policy logjam, tax disputes and shaken investor confidence in Indian economy with attendant lower Gross Domestic Savings Rate (GDSR) and Gross Fixed Capital Formation (GFCF).
- Present base year for calculation of GDP is 2011-2012.
Incorrect
Solution: b)
- GDP growth rate of India at constant prices is not steadily increasing from last decade.
- The GDP growth rate declined to 6.72% in 2008-09 largely due to global financial meltdown following the collapse of Lehman brothers (investment bank) of US in September, 2008. GDP growth rate improved to 8.59% in 2009-10 and 8.91% in 2010- 11 due to high capital inflows attributed to the massive Quantitative Easing (QE) undertaken by the US to combat economic slowdown of global level.
- The GDP growth rate slumped to 6.69% in 2011-12, 4.47% in 2012-13 and 4.74% in 2013-14 (P). This was due largely to domestic policy logjam, tax disputes and shaken investor confidence in Indian economy with attendant lower Gross Domestic Savings Rate (GDSR) and Gross Fixed Capital Formation (GFCF).
- Present base year for calculation of GDP is 2011-2012.
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Question 5 of 5
5. Question
Consider the following statements about Inflation Indexed Bond (IIB).
- It is a bond issued by the Government and the Corporate sector.
- There are no special tax concessions for these bonds.
- They are eligible to be kept as part of Statutory Liquidity Ratio requirements of banks.
Which of the above statements is/are correct?
Correct
Solution: b)
Inflation Indexed Bond (IIB) is a bond issued by the Sovereign, which provides the investor a constant return irrespective of the level of inflation in the economy. The main objective of Inflation Indexed Bonds is to provide a hedge and to safeguard the investor against macroeconomic risks in an economy.
There are no special tax concessions for these bonds. IIBs are treated as government securities (G-Sec) and therefore, would be eligible for short-sale and repo transactions and gets SLR status (i.e., they are eligible to be kept as part of Statutory Liquidity Ratio requirements of banks).
Incorrect
Solution: b)
Inflation Indexed Bond (IIB) is a bond issued by the Sovereign, which provides the investor a constant return irrespective of the level of inflation in the economy. The main objective of Inflation Indexed Bonds is to provide a hedge and to safeguard the investor against macroeconomic risks in an economy.
There are no special tax concessions for these bonds. IIBs are treated as government securities (G-Sec) and therefore, would be eligible for short-sale and repo transactions and gets SLR status (i.e., they are eligible to be kept as part of Statutory Liquidity Ratio requirements of banks).
