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Welcome to Insights IAS INSTA 75 Days Revision Plan for UPSC Civil Services Preliminary Exam – 2020.
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Question 1 of 30
1. Question
1 pointsConsider the following statements regarding Bank for International Settlements
- It is an international financial organisation owned by 60 member central banks.
- India is part of it.
- It is jointly established by World Bank and International Monetary Fund
Which of the statements given above is/are correct?
Correct
Solution: D
Bank for International Settlements (BIS)
BIS is an international financial organisation owned by 60 member central banks, representing countries from around the world including India. It fosters international monetary and financial cooperation and serves as a bank for central banks.
Headquarter is in Basel, Switzerland
It carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction.
Functions/Objectives
- fostering discussion and facilitating collaboration among central banks
- supporting dialogue with other authorities that are responsible for promoting financial stability
- carrying out research and policy analysis on issues of relevance for monetary and financial stability
- acting as a prime counterparty for central banks in their financial transactions serving as an agent or trustee in connection with international financial operations
Report: Global Financial System Report – Bank for International Settlement (BIS)
Incorrect
Solution: D
Bank for International Settlements (BIS)
BIS is an international financial organisation owned by 60 member central banks, representing countries from around the world including India. It fosters international monetary and financial cooperation and serves as a bank for central banks.
Headquarter is in Basel, Switzerland
It carries out its work through its meetings, programmes and through the Basel Process – hosting international groups pursuing global financial stability and facilitating their interaction.
Functions/Objectives
- fostering discussion and facilitating collaboration among central banks
- supporting dialogue with other authorities that are responsible for promoting financial stability
- carrying out research and policy analysis on issues of relevance for monetary and financial stability
- acting as a prime counterparty for central banks in their financial transactions serving as an agent or trustee in connection with international financial operations
Report: Global Financial System Report – Bank for International Settlement (BIS)
-
Question 2 of 30
2. Question
1 pointsConsider the following statements regarding Enterprise development centers
- It is an initiative under Ministry of Commerce and Industry.
- They are aimed at developing a cadre of indigenous entrepreneurs in the MSMEs and will be similar to incubators for start-ups.
- They shall be run by special purpose vehicles in partnership with the private sector, business management organisations, local industry associations.
Which of the statements given above is/are correct?
Correct
Solution: B
Enterprise development centres (EDCs)
- Union micro, small and medium enterprises sector (MSME) ministry is planning to launch enterprise development centres (EDCs) in every district.
- What are EDCs? o Aimed at developing a cadre of indigenous entrepreneurs in the MSMEs, the EDCs will be similar to incubators for start-ups.
- They shall be run by special purpose vehicles in partnership with the private sector, business management organisations, local industry associations.
Key features, roles and functions of EDCs:
- Offer “enterprise development courses, vocational guidance and skill development for budding entrepreneurs”.
- Have “enterprise clinics” for struggling firms, which the government hopes will reduce the number of small businesses falling into a debt trap financed by bank loans.
- Offer credit facilitation and syndication, export promotion and supplier inclusion.
- Incentives and loans by the government for the sector will also flow through the EDCs, after determining the capabilities of the firm through set parameters.
Incorrect
Solution: B
Enterprise development centres (EDCs)
- Union micro, small and medium enterprises sector (MSME) ministry is planning to launch enterprise development centres (EDCs) in every district.
- What are EDCs? o Aimed at developing a cadre of indigenous entrepreneurs in the MSMEs, the EDCs will be similar to incubators for start-ups.
- They shall be run by special purpose vehicles in partnership with the private sector, business management organisations, local industry associations.
Key features, roles and functions of EDCs:
- Offer “enterprise development courses, vocational guidance and skill development for budding entrepreneurs”.
- Have “enterprise clinics” for struggling firms, which the government hopes will reduce the number of small businesses falling into a debt trap financed by bank loans.
- Offer credit facilitation and syndication, export promotion and supplier inclusion.
- Incentives and loans by the government for the sector will also flow through the EDCs, after determining the capabilities of the firm through set parameters.
-
Question 3 of 30
3. Question
1 pointsConsider the following statements regarding Nirvik scheme
- The scheme was announced by Export Credit Guarantee Corporation of India (ECGC).
- It aims to ease the lending process and enhance loan availability for exporters.
- Insurance cover guaranteed will cover up to 100% of the principal and interest.
Which of the statements given above is/are correct?
Correct
Solution: A
Nirvik scheme
- Export Credit Guarantee Corporation of India (ECGC) announced this scheme to ease the lending process and enhance loan availability for exporters.
- Key features of the scheme:
- Insurance cover guaranteed will cover up to 90% of the principal and interest.
- The increased cover will ensure that foreign and rupee export credit interest rates are below 4 percent and 8 percent respectively for the exporters.
- The insurance cover will include both pre and post-shipment credit.
- The gems, jewellery and diamond (GJD) sector borrowers with limit of over Rs 80 crore will have a higher premium rate in comparison to the non-GJD sector borrowers of this category due to the higher loss ratio.
- For accounts with limits below Rs 80 crore, the premium rates will be moderated to 0.60 per annum and for those exceeding Rs80 crore, the rates will be 0.72 per annum for the same enhanced cover.
- It mandates inspection of bank documents and records by ECGC officials for losses exceeding Rs.10 crore as against the present Rs 1crore.
- The banks shall pay a premium to ECGC monthly on the principal and interest as the cover is offered for both outstandings.
- Benefits of the scheme:
- It will enhance accessibility and affordability of credit for exporters.
- It will help make Indian exports competitive.
- It will make ECGC procedures exporter friendly.
- The insurance cover is expected to bring down the cost of credit due to capital relief, less provision requirement and liquidity due to quick settlement of claims.
Incorrect
Solution: A
Nirvik scheme
- Export Credit Guarantee Corporation of India (ECGC) announced this scheme to ease the lending process and enhance loan availability for exporters.
- Key features of the scheme:
- Insurance cover guaranteed will cover up to 90% of the principal and interest.
- The increased cover will ensure that foreign and rupee export credit interest rates are below 4 percent and 8 percent respectively for the exporters.
- The insurance cover will include both pre and post-shipment credit.
- The gems, jewellery and diamond (GJD) sector borrowers with limit of over Rs 80 crore will have a higher premium rate in comparison to the non-GJD sector borrowers of this category due to the higher loss ratio.
- For accounts with limits below Rs 80 crore, the premium rates will be moderated to 0.60 per annum and for those exceeding Rs80 crore, the rates will be 0.72 per annum for the same enhanced cover.
- It mandates inspection of bank documents and records by ECGC officials for losses exceeding Rs.10 crore as against the present Rs 1crore.
- The banks shall pay a premium to ECGC monthly on the principal and interest as the cover is offered for both outstandings.
- Benefits of the scheme:
- It will enhance accessibility and affordability of credit for exporters.
- It will help make Indian exports competitive.
- It will make ECGC procedures exporter friendly.
- The insurance cover is expected to bring down the cost of credit due to capital relief, less provision requirement and liquidity due to quick settlement of claims.
-
Question 4 of 30
4. Question
1 pointsConsider the following statements
- Abdur Razzaq’s Rihla explains the dynasty of Muhammad-bin-Tughlaq
- Ibn Batuta visited India during the rule of Devaraya II of Vijayanagar Empire
Which of the statements given above is/are correct?
Correct
Solution: D
Ibn Batuta (1333-1347 AD)
Ibn Batuta was a Morracan traveller, he wrote the book ‘Rihla’ (The Travelogue). In his book he explained the dynasty of Muhammad-bin-Tughlaq and also the economic, social and geographical situation of his time.
Abdur Razzaq (1442-1445 AD)
Ambassador of Shahrukh of Timurid Dynasty. He came during the rule of Devaraya II of Vijaynagar Empire and is known for his description of Vijayanagar Empire.
Incorrect
Solution: D
Ibn Batuta (1333-1347 AD)
Ibn Batuta was a Morracan traveller, he wrote the book ‘Rihla’ (The Travelogue). In his book he explained the dynasty of Muhammad-bin-Tughlaq and also the economic, social and geographical situation of his time.
Abdur Razzaq (1442-1445 AD)
Ambassador of Shahrukh of Timurid Dynasty. He came during the rule of Devaraya II of Vijaynagar Empire and is known for his description of Vijayanagar Empire.
-
Question 5 of 30
5. Question
1 pointsConsider the following statements regarding Bharat Bond ETF
- It is India’s first corporate bond exchange traded fund, comprising debt of state-run companies.
- Retail investors can invest in bond markets, with smaller amount as low as ₹1,000.
Which of the statements given above is/are correct?
Correct
Solution: C
Bharat Bond ETF
- Government launched Bharat Bond ETF, India’s first corporate bond exchange traded fund, comprising debt of state-run companies.
- This move will allow retail investors to buy government debt.
- Retail investors can invest in bond markets, with smaller amount as low as ₹1,000.
- They will provide tax efficiency as compared to bonds, as coupons (interest) from the bonds are taxed depending on the investor’s tax slab.
- Key features of Bharat Bond ETF:
- It is a basket of bonds issued by central public sector enterprises/undertakings or any other government organization bonds.
- It will have a fixed maturity of three and ten years and will trade on the stock exchanges.
- It will invest in a portfolio of bonds of state-run companies and other government entities.
- Investors can put in a minimum Rs 1,000 in Bharat Bond ETF and in multiples of Rs 1,000 thereafter.
Incorrect
Solution: C
Bharat Bond ETF
- Government launched Bharat Bond ETF, India’s first corporate bond exchange traded fund, comprising debt of state-run companies.
- This move will allow retail investors to buy government debt.
- Retail investors can invest in bond markets, with smaller amount as low as ₹1,000.
- They will provide tax efficiency as compared to bonds, as coupons (interest) from the bonds are taxed depending on the investor’s tax slab.
- Key features of Bharat Bond ETF:
- It is a basket of bonds issued by central public sector enterprises/undertakings or any other government organization bonds.
- It will have a fixed maturity of three and ten years and will trade on the stock exchanges.
- It will invest in a portfolio of bonds of state-run companies and other government entities.
- Investors can put in a minimum Rs 1,000 in Bharat Bond ETF and in multiples of Rs 1,000 thereafter.
-
Question 6 of 30
6. Question
1 pointsConsider the following statements regarding Certificate of Deposit (CD)
- Certificate of Deposit (CD) is a negotiable capital market instrument and issued in dematerialized form.
- CD is used by banks and issued to the depositors for a specified period.
Which of the statements given above is/are correct?
Correct
Solution: B
Certificate of Deposit (CD)
Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note, for funds deposited at a bank or other eligible financial institution for a specified time period. Banks can issue CDs for maturities from 7 days to one year whereas eligible FIs can issue for maturities from 1 year to 3 years.
Certificate of Deposit (CD): Organised in 1989, the CD is used by banks and issued to the depositors for a specified period ranging less than one year—they are negotiable and tradable in the money market. Since 1993 the RBI allowed the financial institutions to operate in it IFCI, IDBI, IRBI (IIBI since 1997) and the Exim Bank—they can issue CDs for the maturity periods above one year and upto three years.
Incorrect
Solution: B
Certificate of Deposit (CD)
Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note, for funds deposited at a bank or other eligible financial institution for a specified time period. Banks can issue CDs for maturities from 7 days to one year whereas eligible FIs can issue for maturities from 1 year to 3 years.
Certificate of Deposit (CD): Organised in 1989, the CD is used by banks and issued to the depositors for a specified period ranging less than one year—they are negotiable and tradable in the money market. Since 1993 the RBI allowed the financial institutions to operate in it IFCI, IDBI, IRBI (IIBI since 1997) and the Exim Bank—they can issue CDs for the maturity periods above one year and upto three years.
-
Question 7 of 30
7. Question
1 pointsKuril Island, sometime seen in the news is the bone of contention between which of the following countries?
Correct
Solution: D
Russian President Dmitry Medvedev made history on Monday becoming the first Russian leader to visit the Kuril archipelago in the Pacific Ocean and reassert Russia’s sovereignty over the islands claimed by Japan.
Mr. Medvedev flew to Kunashir, one of four islands that Japan calls its Northern Territories, on the way back from Vietnam. He toured the island, telling its residents that Russia would invest heavily to develop the islands.
Incorrect
Solution: D
Russian President Dmitry Medvedev made history on Monday becoming the first Russian leader to visit the Kuril archipelago in the Pacific Ocean and reassert Russia’s sovereignty over the islands claimed by Japan.
Mr. Medvedev flew to Kunashir, one of four islands that Japan calls its Northern Territories, on the way back from Vietnam. He toured the island, telling its residents that Russia would invest heavily to develop the islands.
-
Question 8 of 30
8. Question
1 pointsConsider the following statements regarding Alternative Investment Fund (AIF)
- AIFs refer to any privately pooled investment fund in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP).
- They are not regulated by any regulatory agency in India.
Which of the statements given above is/are correct?
Correct
Solution: A
Alternative Investment Fund (AIF)
- As defined in Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, AIFs refer to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP). o AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities.
o Hence, in India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India.
- Categories: o As per SEBI (AIF) Regulations, 2012, AIFs shall seek registration in one of the three categories:
- Category I: Mainly invests in start- ups, SME’s or any other sector which Govt. considers economically and socially viable.
- Category II: These include Alternative Investment Funds such as private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other Regulator.
- Category III: Alternative Investment Funds such as hedge funds or funds which trade with a view to make short term returns or such other funds which are open ended and for which no specific incentives or concessions are given by the government or any other Regulator.
Incorrect
Solution: A
Alternative Investment Fund (AIF)
- As defined in Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, AIFs refer to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP). o AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities.
o Hence, in India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India.
- Categories: o As per SEBI (AIF) Regulations, 2012, AIFs shall seek registration in one of the three categories:
- Category I: Mainly invests in start- ups, SME’s or any other sector which Govt. considers economically and socially viable.
- Category II: These include Alternative Investment Funds such as private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other Regulator.
- Category III: Alternative Investment Funds such as hedge funds or funds which trade with a view to make short term returns or such other funds which are open ended and for which no specific incentives or concessions are given by the government or any other Regulator.
-
Question 9 of 30
9. Question
1 pointsConsider the following statements regarding Small Finance Banks (SFBs)
- They lend 75% of their total adjusted net bank credit to priority sector.
- The minimum paid-up capital would be Rs 1000 cr.
- Capital adequacy ratio should be 15% of risk weighted assets.
- They can distribute mutual funds, insurance products and other simple third-party financial products.
Which of the statements given above is/are correct?
Correct
Solution: C
Small Finance Banks (SFBs)
- The Reserve Bank of India (RBI) granted ‘in-principle’ approval to Saharanpur-based Shivalik Mercantile Cooperative Bank to convert into a Small Finance Bank (SFB), making it the first such lender to have opted for the transition.
- On being satisfied that the applicant has complied with the requisite conditions laid down by it as part of “in-principle” approval, the RBI would consider granting it a licence for the commencement of banking business under Section 22 (1) of the Banking Regulation Act, 1949 as an SFB.
- What are small finance banks? o The small finance bank will primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.
What they can do?
- Take small deposits and disburse loans.
- Distribute mutual funds, insurance products and other simple third-party financial products.
- Lend 75% of their total adjusted net bank credit to priority sector.
- Maximum loan size would be 10% of capital funds to single borrower, 15% to a group.
- Minimum 50% of loans should be up to 25 lakhs.
What they cannot do?
- Lend to big corporates and groups.
- Cannot open branches with prior RBI approval for first five years.
- Other financial activities of the promoter must not mingle with the bank.
- It cannot set up subsidiaries to undertake non-banking financial services activities.
- Cannot be a business correspondent of any bank.
The guidelines they need to follow:
- Promoter must contribute minimum 40% equity capital and should be brought down to 30% in 10 years.
- Minimum paid-up capital would be Rs 100 cr.
- Capital adequacy ratio should be 15% of risk weighted assets, Tier-I should be 7.5%.
- Foreign shareholding capped at 74% of paid capital, FPIs cannot hold more than 24%.
- Priority sector lending requirement of 75% of total adjusted net bank credit.
- 50% of loans must be up to Rs 25 lakh.
Incorrect
Solution: C
Small Finance Banks (SFBs)
- The Reserve Bank of India (RBI) granted ‘in-principle’ approval to Saharanpur-based Shivalik Mercantile Cooperative Bank to convert into a Small Finance Bank (SFB), making it the first such lender to have opted for the transition.
- On being satisfied that the applicant has complied with the requisite conditions laid down by it as part of “in-principle” approval, the RBI would consider granting it a licence for the commencement of banking business under Section 22 (1) of the Banking Regulation Act, 1949 as an SFB.
- What are small finance banks? o The small finance bank will primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.
What they can do?
- Take small deposits and disburse loans.
- Distribute mutual funds, insurance products and other simple third-party financial products.
- Lend 75% of their total adjusted net bank credit to priority sector.
- Maximum loan size would be 10% of capital funds to single borrower, 15% to a group.
- Minimum 50% of loans should be up to 25 lakhs.
What they cannot do?
- Lend to big corporates and groups.
- Cannot open branches with prior RBI approval for first five years.
- Other financial activities of the promoter must not mingle with the bank.
- It cannot set up subsidiaries to undertake non-banking financial services activities.
- Cannot be a business correspondent of any bank.
The guidelines they need to follow:
- Promoter must contribute minimum 40% equity capital and should be brought down to 30% in 10 years.
- Minimum paid-up capital would be Rs 100 cr.
- Capital adequacy ratio should be 15% of risk weighted assets, Tier-I should be 7.5%.
- Foreign shareholding capped at 74% of paid capital, FPIs cannot hold more than 24%.
- Priority sector lending requirement of 75% of total adjusted net bank credit.
- 50% of loans must be up to Rs 25 lakh.
-
Question 10 of 30
10. Question
1 pointsWhich of the following countries is/are the member countries of Gulf Co-operation Council?
- Iran
- Syria
- Iraq
- Kuwait
Select the correct answer using the code given below
Correct
Solution: A
The GCC is a political and economic alliance of countries in the Arabian Peninsula. It was established in 1981 to foster socioeconomic, security, and cultural cooperation.
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE are its members.
Incorrect
Solution: A
The GCC is a political and economic alliance of countries in the Arabian Peninsula. It was established in 1981 to foster socioeconomic, security, and cultural cooperation.
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE are its members.
-
Question 11 of 30
11. Question
1 pointsConsider the following statements regarding Cess
- A cess is levied on the tax payable.
- A cess can be levied on both direct and indirect taxes.
- A cess is levied to meet a specific purpose.
- The proceeds of cess are credited in the Consolidated Fund of India (CFI).
Which of the statements given above is/are correct?
Correct
Solution: D
Cess
- What is a cess? o A cess is levied on the tax payable and not on the taxable income. In a sense, for the taxpayer, it is equivalent to a surcharge on tax.
o A cess can be levied on both direct and indirect taxes. The revenue obtained from income tax, corporation tax, and indirect taxes can be allocated for various purposes.
o The proceeds of all taxes and cesses are credited in the Consolidated Fund of India (CFI), an account of the Government of India.
- Difference between tax and cess? o Unlike a tax, a cess is levied to meet a specific purpose; its proceeds cannot be spent on any kind of government expenditure. While the tax proceeds are shared with the States and Union Territories according to the guidelines by the Finance Commission, the cess proceeds need not be shared with them.
o Recent examples of cess are: infrastructure cess on motor vehicles, clean environment cess, Krishi Kalyan cess (for the improvement of agriculture and welfare of farmers), and education cess.
Incorrect
Solution: D
Cess
- What is a cess? o A cess is levied on the tax payable and not on the taxable income. In a sense, for the taxpayer, it is equivalent to a surcharge on tax.
o A cess can be levied on both direct and indirect taxes. The revenue obtained from income tax, corporation tax, and indirect taxes can be allocated for various purposes.
o The proceeds of all taxes and cesses are credited in the Consolidated Fund of India (CFI), an account of the Government of India.
- Difference between tax and cess? o Unlike a tax, a cess is levied to meet a specific purpose; its proceeds cannot be spent on any kind of government expenditure. While the tax proceeds are shared with the States and Union Territories according to the guidelines by the Finance Commission, the cess proceeds need not be shared with them.
o Recent examples of cess are: infrastructure cess on motor vehicles, clean environment cess, Krishi Kalyan cess (for the improvement of agriculture and welfare of farmers), and education cess.
-
Question 12 of 30
12. Question
1 pointsConsider the following statements regarding Consumer Price Index (CPI)
- It is a measure that examines the weighted average of prices of a basket of consumer goods and services.
- CPI(Urban) and CPI(Rural) are compiled by Central Statistical Organization.
- The Reserve Bank of India (RBI) has started using CPI-combined as the sole inflation measure for the purpose of monetary policy.
Which of the statements given above is/are correct?
Correct
Solution: D
CPI Inflation
- The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
- Changes in the CPI are used to assess price changes associated with the cost of living; the CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
- CPI is calculated for a fixed list of items including food, housing, apparel, transportation, electronics, medical care, education, etc.
- Understanding Consumer Price Index (CPI): o The CPI measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation. Essentially it attempts to quantify the aggregate price level in an economy and thus measure the purchasing power of a country’s unit of currency.
o The weighted average of the prices of goods and services that approximates an individual’s consumption patterns is used to calculate CPI.
- Who maintains Consumer Price Index in India? o Presently the consumer price indices compiled in India are CPI for Industrial workers CPI(IW), CPI for Agricultural Labourers CPI(AL) and; Rural Labourers CPI(RL) and (Urban) and CPI(Rural).
o Consumer Price Index for Urban Non Manual Employees was earlier computed by Central Statistical Organisation. However this index has been discontinued since April 2008.
o The CPI(IW) and CPI (AL& RL) are compiled by Labour Bureau.
o CPI(Urban) and CPI(Rural) are compiled by Central Statistical Organisation.
o In addition to this, Consumer Food Price Indices (CFPI) for all India for rural, urban and combined separately are also released w.e.f May, 2014.
o The Reserve Bank of India (RBI) has started using CPI-combined as the sole inflation measure for the purpose of monetary policy.
Incorrect
Solution: D
CPI Inflation
- The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
- Changes in the CPI are used to assess price changes associated with the cost of living; the CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
- CPI is calculated for a fixed list of items including food, housing, apparel, transportation, electronics, medical care, education, etc.
- Understanding Consumer Price Index (CPI): o The CPI measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation. Essentially it attempts to quantify the aggregate price level in an economy and thus measure the purchasing power of a country’s unit of currency.
o The weighted average of the prices of goods and services that approximates an individual’s consumption patterns is used to calculate CPI.
- Who maintains Consumer Price Index in India? o Presently the consumer price indices compiled in India are CPI for Industrial workers CPI(IW), CPI for Agricultural Labourers CPI(AL) and; Rural Labourers CPI(RL) and (Urban) and CPI(Rural).
o Consumer Price Index for Urban Non Manual Employees was earlier computed by Central Statistical Organisation. However this index has been discontinued since April 2008.
o The CPI(IW) and CPI (AL& RL) are compiled by Labour Bureau.
o CPI(Urban) and CPI(Rural) are compiled by Central Statistical Organisation.
o In addition to this, Consumer Food Price Indices (CFPI) for all India for rural, urban and combined separately are also released w.e.f May, 2014.
o The Reserve Bank of India (RBI) has started using CPI-combined as the sole inflation measure for the purpose of monetary policy.
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Question 13 of 30
13. Question
1 pointsConsider the following pairs
Tiger Reserves States
- Sariska Rajasthan
- Orang Arunachal Pradesh
- Satkosia Odisha
Which of the pairs given above is/are matched correctly?
Correct
Solution: B
Sariska Tiger Reserve is a tiger reserve in Alwar district, Rajasthan, India. It stretches over an area of 881 km² comprising scrub-thorn arid forests, dry deciduous forests, grasslands, and rocky hills. This area was a hunting preserve of the Alwar state and was declared a wildlife reserve in 1955.
The Orang National Park is a national park in India located on the northern bank of the Brahmaputra River in the Darrang and Sonitpur districts of Assam. It covers an area of 78.81 km². It was established as a sanctuary in 1985 and declared a national park on 13 April 1999. It has a rich flora and fauna, including great Indian rhinoceros, pygmy hog, Asian elephant, wild water buffalo and Bengal tiger. It is the only stronghold of rhinoceros on the north bank of the Brahmaputra river
Satkosia Tiger Reserve is a tiger reserve located in the Angul district of Odisha, India covering an area of 988.30 km². Satkosia Gorge Wildlife Sanctuary was created in 1976, with an area of 796 km². Saktosia Tiger Reserve was designated in 2007, and comprises the Satkosia Gorge Wildlife Sanctuary and the adjacent Baisipalli Wildlife Sanctuary.
Incorrect
Solution: B
Sariska Tiger Reserve is a tiger reserve in Alwar district, Rajasthan, India. It stretches over an area of 881 km² comprising scrub-thorn arid forests, dry deciduous forests, grasslands, and rocky hills. This area was a hunting preserve of the Alwar state and was declared a wildlife reserve in 1955.
The Orang National Park is a national park in India located on the northern bank of the Brahmaputra River in the Darrang and Sonitpur districts of Assam. It covers an area of 78.81 km². It was established as a sanctuary in 1985 and declared a national park on 13 April 1999. It has a rich flora and fauna, including great Indian rhinoceros, pygmy hog, Asian elephant, wild water buffalo and Bengal tiger. It is the only stronghold of rhinoceros on the north bank of the Brahmaputra river
Satkosia Tiger Reserve is a tiger reserve located in the Angul district of Odisha, India covering an area of 988.30 km². Satkosia Gorge Wildlife Sanctuary was created in 1976, with an area of 796 km². Saktosia Tiger Reserve was designated in 2007, and comprises the Satkosia Gorge Wildlife Sanctuary and the adjacent Baisipalli Wildlife Sanctuary.
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Question 14 of 30
14. Question
1 pointsConsider the following statements regarding Inflation Indexed Bonds (IIBs)
- IIBs are bonds wherein both coupon flows and Principal amounts are protected against inflation.
- IIBs were first issued in UK.
- In India, Government of India through RBI issued IIBs (linked to WPI) in 2013.
Which of the statements given above is/are correct?
Correct
Solution: D
Inflation Indexed Bonds (IIBs) – IIBs are bonds wherein both coupon flows and Principal amounts are protected against inflation. The inflation index used in IIBs may be Whole Sale Price Index (WPI) or Consumer Price Index (CPI). Globally, IIBs were first issued in 1981 in UK. In India, Government of India through RBI issued IIBs (linked to WPI) in June 2013. Since then, they were issued on monthly basis (on last Tuesday of each month) till December 2013. Based on the success of these IIBs, Government of India in consultation with RBI issued the IIBs (CPI based) exclusively for the retail customers in December 2013.
Incorrect
Solution: D
Inflation Indexed Bonds (IIBs) – IIBs are bonds wherein both coupon flows and Principal amounts are protected against inflation. The inflation index used in IIBs may be Whole Sale Price Index (WPI) or Consumer Price Index (CPI). Globally, IIBs were first issued in 1981 in UK. In India, Government of India through RBI issued IIBs (linked to WPI) in June 2013. Since then, they were issued on monthly basis (on last Tuesday of each month) till December 2013. Based on the success of these IIBs, Government of India in consultation with RBI issued the IIBs (CPI based) exclusively for the retail customers in December 2013.
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Question 15 of 30
15. Question
1 pointsConsider the following statements regarding GST
- It is a destination-based consumption tax.
- The GST would apply to all goods and services.
- Import of goods and services would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties.
Which of the statements given above is/are correct?
Correct
Solution: C
Salient Features of GST
The salient features of GST are as under:
(i) The GST would be applicable on the supply of goods or services as against the present concept of tax on the manufacture or sale of goods or provision of services. It would be a destination-based consumption tax. This means that tax would accrue to the State or the Union Territory where the consumption takes place.
(ii) The GST would apply to all goods other than alcoholic liquor for human consumption and five petroleum products, viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel.
The GST would replace the following taxes currently levied and collected by the Centre:
- Central Excise Duty
- Duties of Excise (Medicinal and Toilet Preparations)
- Additional Duties of Excise (Goods of Special Importance)
- Additional Duties of Excise (Textiles and Textile Products)
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
- Central Surcharges and Cesses so far as they relate to supply of goods and services
(iii) State taxes that would be subsumed under the GST are:
- State VAT
- Central Sales Tax
- Luxury Tax
- Entry Tax (all forms)
- Entertainment and Amusement Tax (except when levied by the local bodies)
- Taxes on advertisements
- Purchase Tax
- Taxes on lotteries, betting and gambling
- State Surcharges and Cesses so far as they relate to supply of goods and services.
Import of goods and services would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties. The IGST paid shall be available as ITC for further transactions.
Incorrect
Solution: C
Salient Features of GST
The salient features of GST are as under:
(i) The GST would be applicable on the supply of goods or services as against the present concept of tax on the manufacture or sale of goods or provision of services. It would be a destination-based consumption tax. This means that tax would accrue to the State or the Union Territory where the consumption takes place.
(ii) The GST would apply to all goods other than alcoholic liquor for human consumption and five petroleum products, viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel.
The GST would replace the following taxes currently levied and collected by the Centre:
- Central Excise Duty
- Duties of Excise (Medicinal and Toilet Preparations)
- Additional Duties of Excise (Goods of Special Importance)
- Additional Duties of Excise (Textiles and Textile Products)
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
- Central Surcharges and Cesses so far as they relate to supply of goods and services
(iii) State taxes that would be subsumed under the GST are:
- State VAT
- Central Sales Tax
- Luxury Tax
- Entry Tax (all forms)
- Entertainment and Amusement Tax (except when levied by the local bodies)
- Taxes on advertisements
- Purchase Tax
- Taxes on lotteries, betting and gambling
- State Surcharges and Cesses so far as they relate to supply of goods and services.
Import of goods and services would be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties. The IGST paid shall be available as ITC for further transactions.
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Question 16 of 30
16. Question
1 pointsConsider the following statements regarding International Solar Alliance
- There are no targets or legal obligations imposed on member-countries.
- The countries located between the tropic of Cancer and the tropic of Capricorn can only join this alliance.
- It aims to collectively work for efficient exploitation of solar energy to reduce dependence on fossil based fuels.
Which of the statements given above is/are correct?
Correct
Solution: A
International Solar Alliance
- The International Solar Alliance (ISA) is an alliance of more than 122 countries initiated by India, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn, now extended to all members of UN.
- The Paris Declaration establishes ISA as an alliance dedicated to the promotion of solar energy among its member countries.
- The primary objective is to collectively work for efficient exploitation of solar energy to reduce dependence on fossil based fuels.
- Objectives: The ISA’s major objectives include global deployment of over 1,000GW of solar generation capacity and mobilisation of investment of over US$ 1000 billion into solar energy by 2030.
- As an action-oriented organisation, the ISA brings together countries with rich solar potential to aggregate global demand, thereby reducing prices through bulk purchase, facilitating the deployment of existing solar technologies at scale, and promoting collaborative solar R&D and capacity building.
- When the ISA Framework Agreement entered into force on December 6th, 2017, ISA formally became a de-jure treaty based International Intergovernmental Organization, headquartered at Gurugram, India.
- The ISA Framework Agreement has a total of 14 articles. There are no targets or legal obligations imposed on member-countries.
Incorrect
Solution: A
International Solar Alliance
- The International Solar Alliance (ISA) is an alliance of more than 122 countries initiated by India, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn, now extended to all members of UN.
- The Paris Declaration establishes ISA as an alliance dedicated to the promotion of solar energy among its member countries.
- The primary objective is to collectively work for efficient exploitation of solar energy to reduce dependence on fossil based fuels.
- Objectives: The ISA’s major objectives include global deployment of over 1,000GW of solar generation capacity and mobilisation of investment of over US$ 1000 billion into solar energy by 2030.
- As an action-oriented organisation, the ISA brings together countries with rich solar potential to aggregate global demand, thereby reducing prices through bulk purchase, facilitating the deployment of existing solar technologies at scale, and promoting collaborative solar R&D and capacity building.
- When the ISA Framework Agreement entered into force on December 6th, 2017, ISA formally became a de-jure treaty based International Intergovernmental Organization, headquartered at Gurugram, India.
- The ISA Framework Agreement has a total of 14 articles. There are no targets or legal obligations imposed on member-countries.
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Question 17 of 30
17. Question
1 pointsWhich of the following are the major traits of Boom in terms of economic activity?
- An accelerated and prolonged increase in the demand.
- A demand and supply lag are visible.
- The economy might face structural problems like shortage of investible capital and lower savings.
Select the correct answer using the code given below:
Correct
Solution: D
Boom
A strong upward fluctuation in the economic activities is called boom. As economies try to recover out of the phases of slowdown, recession and depression at times the measures taken by the governments as well as the private sector might put economic activities as such which the economic systems fail to digest. This is the phase of the boom. The major economic traits of boom may be listed as given below:
(i) an accelerated and prolonged increase in the demand;
(ii) demand peaks up to such a high level that it exceeds sustainable output/production levels;
(iii) the economy heats up and a demand and supply lag are visible;
(iv) the market forces mismatch (i.e., demand and supply disequilibrium) and tend to create a situation where inflation starts going upward;
(v) the economy might face structural problems like shortage of investible capital, lower savings, falling standard of living, creation of a sellers’ market.
Incorrect
Solution: D
Boom
A strong upward fluctuation in the economic activities is called boom. As economies try to recover out of the phases of slowdown, recession and depression at times the measures taken by the governments as well as the private sector might put economic activities as such which the economic systems fail to digest. This is the phase of the boom. The major economic traits of boom may be listed as given below:
(i) an accelerated and prolonged increase in the demand;
(ii) demand peaks up to such a high level that it exceeds sustainable output/production levels;
(iii) the economy heats up and a demand and supply lag are visible;
(iv) the market forces mismatch (i.e., demand and supply disequilibrium) and tend to create a situation where inflation starts going upward;
(v) the economy might face structural problems like shortage of investible capital, lower savings, falling standard of living, creation of a sellers’ market.
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Question 18 of 30
18. Question
1 pointsConsider the following statements regarding Housing Price Index
- National Housing Bank releases the index, named NHB Residex.
- Currently, it is published for 50 cities on quarterly basis with 2012-13 as base year.
Which of the statements given above is/are correct?
Correct
Solution: C
Housing Price Index
India’s official Housing Price Index (HPI) was launched in July 2007 in Mumbai. Basically, developed by the Indian home loans regulator, the National Housing Bank (NHB) the index is named NHB Residex.
Currently, it is published for 50 cities on quarterly basis with 2012-13 as base year. Among 50 cities covered are 18 State/UT capitals and 37 Smart Cities. NHB is not computing the composite all India housing price index as of now.
Using population proportion as weights, an all India index as weighted average of city indices has been computed in-house—the figure shows that
the rate of growth in housing prices at All India level has started to decline from the quarter ending December, 2016. It has decreased to around 4 per
cent in the first quarter of 2017-18 from over 8 per cent in the third quarter of 2016-17.
Incorrect
Solution: C
Housing Price Index
India’s official Housing Price Index (HPI) was launched in July 2007 in Mumbai. Basically, developed by the Indian home loans regulator, the National Housing Bank (NHB) the index is named NHB Residex.
Currently, it is published for 50 cities on quarterly basis with 2012-13 as base year. Among 50 cities covered are 18 State/UT capitals and 37 Smart Cities. NHB is not computing the composite all India housing price index as of now.
Using population proportion as weights, an all India index as weighted average of city indices has been computed in-house—the figure shows that
the rate of growth in housing prices at All India level has started to decline from the quarter ending December, 2016. It has decreased to around 4 per
cent in the first quarter of 2017-18 from over 8 per cent in the third quarter of 2016-17.
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Question 19 of 30
19. Question
1 pointsConsider the following statements regarding Galos tribe:
- They are found mainly in the states of Rajasthan and Gujarat.
- Mopin is the main festival of the Galos community.
- Motoris the Galo equivalent of lockdown imposed by consensus for 48 hours whenever an epidemic strikes.
Which of the statements given above is/are correct?
Correct
Solution: B
The Galos belong to the Tani group inhabiting Assam and Arunachal Pradesh, besides Tibet.
Mopin is the main festival of the Galos and celebrated in April for prosperity and wealth.
Arr-Rinam is the Galo (tribal) equivalent of lockdown imposed by consensus for 48 hours whenever an epidemic strikes.
The Galo tribe performed Ali-Ternam, a customary lockdown, to avoid the spread of the pandemic. The Adi tribe observed a ritual called Motor. The Nyishi tribe too observed a ritual called Arrue that involved the concept of self-quarantine. Almost all Tani tribe groups and the Shertukpen too performed customary quarantine rituals.
The Galos, one of the 26 major tribes of Arunachal Pradesh, dominate West Siang district
Ali-Ternam and Arr-Rinam were last performed almost four decades ago when a water-borne disease had affected many members of the community.
Incorrect
Solution: B
The Galos belong to the Tani group inhabiting Assam and Arunachal Pradesh, besides Tibet.
Mopin is the main festival of the Galos and celebrated in April for prosperity and wealth.
Arr-Rinam is the Galo (tribal) equivalent of lockdown imposed by consensus for 48 hours whenever an epidemic strikes.
The Galo tribe performed Ali-Ternam, a customary lockdown, to avoid the spread of the pandemic. The Adi tribe observed a ritual called Motor. The Nyishi tribe too observed a ritual called Arrue that involved the concept of self-quarantine. Almost all Tani tribe groups and the Shertukpen too performed customary quarantine rituals.
The Galos, one of the 26 major tribes of Arunachal Pradesh, dominate West Siang district
Ali-Ternam and Arr-Rinam were last performed almost four decades ago when a water-borne disease had affected many members of the community.
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Question 20 of 30
20. Question
1 pointsConsider the following statements regarding mutual fund
- It is a fund that is created when a large number of investors put in their money, and is managed by professionally qualified persons.
- Mutual funds are compulsorily registered with the Reserve Bank of India.
Which of the statements given above is/are correct?
Correct
Solution: A
As the name suggests, a mutual fund is a fund that is created when a large number of investors put in their money, and is managed by professionally qualified persons with experience in investing in different asset classes—shares, bonds, money market instruments like call money, and other assets such as gold and property. Their names usually give a good idea about what type of asset class a fund, also called a scheme, will invest in. For example, a diversified equity fund will invest in a large number of stocks, while a gilt fund will invest in government securities, while a pharma fund will mainly invest in stocks of companies from the pharmaceutical and related industries.
Mutual funds, first of all came in the money market (regulated by the RBI), but they have the freedom to operate in the capital market, too. This is why they have provision of dual regulator—the RBI and SEBI.
Mutual funds are compulsorily registered with the Securities and Exchange Board of India (SEBI), which also acts as the first wall of defense for all investors in these funds.
Incorrect
Solution: A
As the name suggests, a mutual fund is a fund that is created when a large number of investors put in their money, and is managed by professionally qualified persons with experience in investing in different asset classes—shares, bonds, money market instruments like call money, and other assets such as gold and property. Their names usually give a good idea about what type of asset class a fund, also called a scheme, will invest in. For example, a diversified equity fund will invest in a large number of stocks, while a gilt fund will invest in government securities, while a pharma fund will mainly invest in stocks of companies from the pharmaceutical and related industries.
Mutual funds, first of all came in the money market (regulated by the RBI), but they have the freedom to operate in the capital market, too. This is why they have provision of dual regulator—the RBI and SEBI.
Mutual funds are compulsorily registered with the Securities and Exchange Board of India (SEBI), which also acts as the first wall of defense for all investors in these funds.
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Question 21 of 30
21. Question
1 pointsConsider the following statements regarding Maternity Benefit Amendment Act, 2017
- The law is applicable to all institutions irrespective of number of working employees.
- It has increased the duration of paid maternity leave available for women employees from the existing 12 weeks to 26 weeks for the first two children
- Under this act, Women employees would be permitted to visit the crèche 4 times during the day.
Which of the statements given above is/are correct?
Correct
Solution: C
Maternity Benefit Amendment Act, 2017
- It extends the period of maternity benefit from 12 weeks to 26 weeks of which not more than eight weeks can precede the date of the expected delivery. This exceeds the International Labour Organisation’s minimum standard of 14 weeks and is a positive development. However, a woman who has two or more surviving children will be entitled to 12 weeks of which not more than six weeks can precede the date of the expected delivery.
- Women who legally adopt a child below the age of three months or a “commissioning mother” will be entitled to maternity benefit for 12 weeks from the date on which the child is handed over to her. A commissioning mother is defined as a biological mother who uses her egg to create an embryo implanted in another woman.
- It gives discretion to employers to allow women to work from home after the period of maternity benefit on mutually agreeable conditions. This would apply if the nature of work assigned to the woman permits her to work from home
- It requires establishments having 50 or more employees to have a crèche facility, either separately or along with common facilities. Further, employers should allow the woman to visit the crèche four times a day, which “shall also include the interval for rest allowed to her.”
- It introduces a provision which requires every establishment to intimate a woman at the time of her appointment of the maternity benefits available to her. Such communication must be in writing and electronically.
- The law is applicable to all institutions with 10 or more employees; it also makes it mandatory for every organization with 50 or more employees to have a crèche.
Incorrect
Solution: C
Maternity Benefit Amendment Act, 2017
- It extends the period of maternity benefit from 12 weeks to 26 weeks of which not more than eight weeks can precede the date of the expected delivery. This exceeds the International Labour Organisation’s minimum standard of 14 weeks and is a positive development. However, a woman who has two or more surviving children will be entitled to 12 weeks of which not more than six weeks can precede the date of the expected delivery.
- Women who legally adopt a child below the age of three months or a “commissioning mother” will be entitled to maternity benefit for 12 weeks from the date on which the child is handed over to her. A commissioning mother is defined as a biological mother who uses her egg to create an embryo implanted in another woman.
- It gives discretion to employers to allow women to work from home after the period of maternity benefit on mutually agreeable conditions. This would apply if the nature of work assigned to the woman permits her to work from home
- It requires establishments having 50 or more employees to have a crèche facility, either separately or along with common facilities. Further, employers should allow the woman to visit the crèche four times a day, which “shall also include the interval for rest allowed to her.”
- It introduces a provision which requires every establishment to intimate a woman at the time of her appointment of the maternity benefits available to her. Such communication must be in writing and electronically.
- The law is applicable to all institutions with 10 or more employees; it also makes it mandatory for every organization with 50 or more employees to have a crèche.
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Question 22 of 30
22. Question
1 pointsConsider the following statements regarding Adjusted Gross Revenue (AGR)
- Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
- According to Supreme Court, AGR should comprise only the revenues generated from telecom services.
Which of the statements given above is/are correct?
Correct
Solution: A
Adjusted Gross Revenue (AGR)
- The Supreme Court has upheld the definition of Adjusted Gross Revenue (AGR) calculation as stipulated by the Department of Telecommunications. This means that telecom companies will have to pay up as much as Rs 92,642 crore to the government.
What is AGR?
- Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.
How is it calculated and what’s the contention?
- As per DoT, the charges are calculated based on all revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales. Telcos, on their part, insist that AGR should comprise only the revenues generated from telecom services.
Incorrect
Solution: A
Adjusted Gross Revenue (AGR)
- The Supreme Court has upheld the definition of Adjusted Gross Revenue (AGR) calculation as stipulated by the Department of Telecommunications. This means that telecom companies will have to pay up as much as Rs 92,642 crore to the government.
What is AGR?
- Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.
How is it calculated and what’s the contention?
- As per DoT, the charges are calculated based on all revenues earned by a telco – including non-telecom related sources such as deposit interests and asset sales. Telcos, on their part, insist that AGR should comprise only the revenues generated from telecom services.
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Question 23 of 30
23. Question
1 pointsConsider the following statements regarding Rashtriya Gokul Mission (RGM)
- It has been launched under National Programme for Bovine Breeding and Dairy Development.
- It aims to conservation and development of indigenous breeds in a focused and scientific manner.
- The Scheme is implemented on 100% grant-in-aid basis.
Which of the statements given above is/are correct?
Correct
Solution: D
About Rashtriya Gokul Mission:
- Rashtriya Gokul Mission is launched for conservation and development of indigenous breeds in a focused and scientific manner.
- It is a project under National Programme for Bovine Breeding and Dairy Development.
- Rashtriya Gokul Mission will be implemented through the “State Implementing Agency (SIA viz Livestock Development Boards).
- State Gauseva Ayogs will be given the mandate to sponsor proposals to the SIA’s (LDB’s) and monitor implementation of the sponsored proposal.
- All Agencies having a role in indigenous cattle development will be the “Participating Agencies” like CFSPTI, CCBFs, ICAR, Universities, Colleges, NGO’s, Cooperative Societies and Gaushalas with best germplasm.
- Funding Pattern: Scheme is implemented on 100% grant-in-aid basis throughout the country.
Incorrect
Solution: D
About Rashtriya Gokul Mission:
- Rashtriya Gokul Mission is launched for conservation and development of indigenous breeds in a focused and scientific manner.
- It is a project under National Programme for Bovine Breeding and Dairy Development.
- Rashtriya Gokul Mission will be implemented through the “State Implementing Agency (SIA viz Livestock Development Boards).
- State Gauseva Ayogs will be given the mandate to sponsor proposals to the SIA’s (LDB’s) and monitor implementation of the sponsored proposal.
- All Agencies having a role in indigenous cattle development will be the “Participating Agencies” like CFSPTI, CCBFs, ICAR, Universities, Colleges, NGO’s, Cooperative Societies and Gaushalas with best germplasm.
- Funding Pattern: Scheme is implemented on 100% grant-in-aid basis throughout the country.
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Question 24 of 30
24. Question
1 pointsConsider the following statements regarding Security Transaction Tax (STT)
- Security Transaction Tax (STT) was first introduced in the Union Budget 2014.
- It is imposed on the investor/trader directly.
Which of the statements given above is/are correct?
Correct
Solution: D
Security Transaction Tax (STT) was first introduced in the Union Budget 2004. The idea of STT was born after it was found that there were cases of capital gains taxes evasion through real and fictitious losses. Thus, STT came into being as a way of realizing the actual potential of taxing the stock markets. So, while long-term capital gains (LTCG) tax was exempted, STT was introduced to make sure there was no tax evasion. And then, LTCG too made a comeback in 2019.
In essence, STT is an indirect tax and is imposed on a broker rather than the investor/trader directly. The broker, in turn, collects it from its clients and deposits it with the government. An investor or trader has to pay the tax no matter whether she makes a profit or not.
STT is currently imposed on equity and derivative transactions. Futures and options transactions come under the purview of STT on the sell side. Understandably, the rates on futures and options transactions are comparatively lower than on direct equities since such contracts are valued notionally.
Incorrect
Solution: D
Security Transaction Tax (STT) was first introduced in the Union Budget 2004. The idea of STT was born after it was found that there were cases of capital gains taxes evasion through real and fictitious losses. Thus, STT came into being as a way of realizing the actual potential of taxing the stock markets. So, while long-term capital gains (LTCG) tax was exempted, STT was introduced to make sure there was no tax evasion. And then, LTCG too made a comeback in 2019.
In essence, STT is an indirect tax and is imposed on a broker rather than the investor/trader directly. The broker, in turn, collects it from its clients and deposits it with the government. An investor or trader has to pay the tax no matter whether she makes a profit or not.
STT is currently imposed on equity and derivative transactions. Futures and options transactions come under the purview of STT on the sell side. Understandably, the rates on futures and options transactions are comparatively lower than on direct equities since such contracts are valued notionally.
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Question 25 of 30
25. Question
1 pointsConsider the following statements regarding Controller General of Accounts
- It is a constitutional body
- It ensures a sound and effective internal audit and pre-check system in the Civil Ministries.
Which of the statements given above is/are correct?
Correct
Solution: B
The Controller General of Accounts is the apex Accounting Authority of the Central Government. It is not a constitutional body, its statutory mandate {duties and functions} have been defined in the Allocation of Business Rules, 1961.
It exercises the powers of the President under Article 150 of the constitution for prescribing the forms of Accounts of the Union and State Governments on the advice of the Comptroller & Auditor General of India.
Functions of CGA:
- The preparation and consolidation of the non-government Monthly Accounts.
- A detailed analytical review of the Union Government Accounts is presented to the Finance Minister every month within 4 weeks from the close of the month.
- It ensures a sound and effective internal audit and pre-check system in the Civil Ministries.
- The organization of the Controller General of accounts is also responsible for government disbursements and banking arrangements of various Ministries/ Departments of the Government of India.
Incorrect
Solution: B
The Controller General of Accounts is the apex Accounting Authority of the Central Government. It is not a constitutional body, its statutory mandate {duties and functions} have been defined in the Allocation of Business Rules, 1961.
It exercises the powers of the President under Article 150 of the constitution for prescribing the forms of Accounts of the Union and State Governments on the advice of the Comptroller & Auditor General of India.
Functions of CGA:
- The preparation and consolidation of the non-government Monthly Accounts.
- A detailed analytical review of the Union Government Accounts is presented to the Finance Minister every month within 4 weeks from the close of the month.
- It ensures a sound and effective internal audit and pre-check system in the Civil Ministries.
- The organization of the Controller General of accounts is also responsible for government disbursements and banking arrangements of various Ministries/ Departments of the Government of India.
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Question 26 of 30
26. Question
1 pointsIf ‘L’ stands for ‘+’ , ‘M’ stands for ‘-‘ , N stands for ‘x’ , P stands for ‘÷’ then
14 N 10 L 42 P 2 M 8 = ?
Correct
Solution: A
14 N 10 L 42 P 2 M 8 can be written as 14*10+42/2-8
Applying BODMAS rule, we get 140+21-8
= 161-8 = 153
Incorrect
Solution: A
14 N 10 L 42 P 2 M 8 can be written as 14*10+42/2-8
Applying BODMAS rule, we get 140+21-8
= 161-8 = 153
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Question 27 of 30
27. Question
1 pointsIf in a certain language FASHION is coded as FOIHSAN, how is PROBLEM coded in that code?
Correct
Solution: D
The first and the last letters of the word remain as such and the remaining letters are written in a reverse order, to obtain the code.
Therefore, required code = PELBORM
Incorrect
Solution: D
The first and the last letters of the word remain as such and the remaining letters are written in a reverse order, to obtain the code.
Therefore, required code = PELBORM
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Question 28 of 30
28. Question
1 pointsIf in a certain language CHARCOAL is coded as 45164913 and MORALE is coded as 296137, how are the following words REAL coded in that language ?
Correct
Solution: A
With the given details, we get C=4, H =5, A=1, R=6, O=9, L= 3, M=2 and E=7
Thus, REAL = 6713
Incorrect
Solution: A
With the given details, we get C=4, H =5, A=1, R=6, O=9, L= 3, M=2 and E=7
Thus, REAL = 6713
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Question 29 of 30
29. Question
1 pointsIf in a certain code language, ‘oka peru’ means ‘fine cloth’ ; ‘meta lisa’ means ‘clear water’ and ‘dona lisa peru’ means ‘fine clear weather’ , which word in that language means ‘weather’ ?
Correct
Solution: C
In the first and third statements, the common code word is ‘peru’ and the common word is ‘fine’.
Therefore, peru = fine
In the second and third statements, clear will be coded as lisa.
Therefore, weather has code word ‘dona’.
Incorrect
Solution: C
In the first and third statements, the common code word is ‘peru’ and the common word is ‘fine’.
Therefore, peru = fine
In the second and third statements, clear will be coded as lisa.
Therefore, weather has code word ‘dona’.
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Question 30 of 30
30. Question
1 pointsDirections for the following (one) item:
Read the following passage and answer the item that follow. Your answer to this item should be based on the passage only.
Fortunately, the modern trend in today’s world is towards less secrecy and more information. The International Covenant on Civil and Political Rights (ICCPR), adopted by the General Assembly of the United Nations way back in 1966, specifically includes the right to freedom of expression, defined as “the freedom to seek, receive and impart the information and ideas of all kinds”.
Which among the following option is in sync with the central theme of the passage?
Correct
Answer. A.
The passage highlights the importance of freedom of speech in general and the freedom to seek information in particular which is at odds with Official Secrets Act. Hence A.
Incorrect
Answer. A.
The passage highlights the importance of freedom of speech in general and the freedom to seek information in particular which is at odds with Official Secrets Act. Hence A.