DAY – 2(InstaTest-2): Insta 70 Days Revision Plan-2021: Topic – ECONOMY, Subject-wise Test 13, Textbook-wise Test 2 and June 2020 CA

Solution: C

Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.

Increasing SLR and Increasing repo rate leads to lessened money supply in the market, thus leading to decreased inflation in the market. Hence Statement 2 and 3 is incorrect.

https://www.imf.org/external/pubs/ft/fandd/basics/30-inflation.htm

Solution: B

Cash Management Bills (CMBs) are short term bills issued by central government to meet its immediate cash needs. Hence, statement 1 is incorrect.

The bills are issued by the RBI on behalf of the government. Hence the CMBs are short-term money market instruments that help the government to meet its temporary cash flow mismatches. Hence, statement 2 is correct.

CMBs are eligible as SLR securities. Investment in CMBs is also recognized as an eligible investment in Government securities by banks for SLR purpose under Section 24 of the Banking Regulation Act, 1949. Hence, statement 3 is correct.

https://www.indianeconomy.net/splclassroom/what-are-cash-management-bills-cmbs/

Solution: C

Quantitative methods aim at controlling the cost and quantity of credit. It does not discriminate between different sectors and end use of credit.

Quantitative methods are:

• Discount Rate Policy
• Open market operations
• Variable Reserve Ratio
• Liquidity Adjustment Facility (LAF)
• Marginal Standing Facility.
• Regulation of Consumer Credit and Rationing of Credit are Qualitative credit control method.

https://www.economicsdiscussion.net/banks/central-bank/methods-of-credit-control-by-central-banks-quantitative-and-qualitative/31345

Solution: A

Wholesale Price Index (WPI) measures the average change in the prices of commodities for bulk sale at the level of early stage of transactions. The index basket of the WPI covers commodities falling under the three major groups namely Primary Articles, Fuel and Power and Manufactured products.

(The index basket of the present 2011-12 series has a total of 697 items including 117 items for Primary Articles, 16 items for Fuel & Power and 564 items for Manufactured Products.) The prices tracked are ex- factory price for manufactured products, mandi price for agricultural commodities and ex-mines prices for minerals. Hence, statement 1 is correct.

Weights given to each commodity covered in the WPI basket is based on the value of production adjusted for net imports. WPI basket does not cover services. Hence, statement 2 is incorrect.

http://www.arthapedia.in/index.php?title=Wholesale_Price_Index_(WPI)

Solution: A

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. Hence Statement 1 is correct.

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. Hence Statement 2 is correct.

Like Consumer Price Index (CPI), the CFPI is also calculated on a monthly basis and methodology remains the same as CPI. Hence Statement 3 is incorrect.

http://www.arthapedia.in/index.php?title=Consumer_Food_Price_Index_(CFPI)

Solution: A

Core Inflation is also known as underlying inflation, is a measure of inflation which excludes items that face volatile price movement, notably food and energy. In other words, Core Inflation is nothing but Headline Inflation minus inflation that is contributed by food and energy commodities.

Solution: B

What will be the constitution of the National Appellate Tribunal?

National Appellate Tribunal will be formed as follows-

• The National Bench (at Delhi) will be headed by a National President with 1 Technical member from Centre and from State (National Bench)
• Regional Benches (a Judicial Member, one Technical Centre Member and one Technical Member from State)
• One Bench for each State (State Benches) headed by State President
• Area Benches under State Benches
• Every State & Area Bench will consist of  judicial and technical persons (CGST and SGST) as prescribed
• The qualifications, eligibility and appointment of the National President, Judicial and CGST Members will be as per the Act and the recommendations of the Council.

Will all appeals be accepted?

The Appellate Tribunal can refuse to admit any appeal where the amount involved (tax/input tax credit/fine/fee/penalty) is lower than Rs. 50,000. If this committee is of the opinion that the order was not legal or not properly passed then it can direct any officer to apply to the Appellate Tribunal within 6 months from the appeal date (extendable by 3 months).

http://www.arthapedia.in/index.php?title=Banking_Correspondent_(BC)

http://www.arthapedia.in/index.php?title=Cabinet_Committee_on_Economic_Affairs_(CCEA)

http://www.arthapedia.in/index.php?title=Insolvency_and_Bankruptcy_Code,_2016

Solution: B

The Global Innovation Index (GII) is co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations. Hence, statement 1 is incorrect.

Theme of GII 2020: Who Will Finance Innovation? is timely given the human and global economic damage wreaked by the COVID-19 global pandemic.

In GII 2020, India climbed four spots and is now at 48th position in the list.

India Innovation Index:

Second edition of the NITI Aayog’s India Innovation Index has been released in January 2021. Hence, statement 2 is correct.

Performance of various states:

1. Karnataka is the most innovative state for the second year in a row.
2. Maharashtra pipped Tamil Nadu to the second spot.

Source: Yojana Feb 2020

Solution: A

The National Policy on Education was framed in 1986 and modified in 1992. Since then several changes have taken place that calls for a revision of the Policy.

The NEP 2020 is the first education policy of the 21st century and replaces the thirty-four year old National Policy on Education (NPE), 1986. Built on the foundational pillars of Access, Equity, Quality, Affordability and Accountability, this policy is aligned to the 2030 Agenda for Sustainable Development and aims to transform India into a vibrant knowledge society and global knowledge superpower by making both school and college education more holistic, flexible, multidisciplinary, suited to 21st century needs and aimed at bringing out the unique capabilities of each student

Recognizing Foundational Literacy and Numeracy as an urgent and necessary prerequisite to learning, NEP 2020 calls for setting up of a National Mission on Foundational Literacy and Numeracy by MHRD. States will prepare an implementation plan for attaining universal foundational literacy and numeracy in all primary schools for all learners by grade 3 by 2025.A National Book Promotion Policy is to be formulated. Hence, statement 1 is correct.

The policy has emphasized mother tongue/local language/regional language as the medium of instruction at least till Grade 5, but preferably till Grade 8 and beyond. Hence, statement 2 is incorrect. Sanskrit to be offered at all levels of school and higher education as an option for students, including in the three-language formula. Other classical languages and literatures of India also to be available as options.  Indian Sign Language (ISL) will be standardized across the country, and National and State curriculum materials developed, for use by students with hearing impairment

NEP 2020 aims to increase the Gross Enrolment Ratio in higher education including vocational education from 26.3% (2018) to 50% by 2035. 3.5 Crore new seats will be added to Higher education institutions. Hence, statement 3 is incorrect.

https://vikaspedia.in/education/policies-and-schemes/national-education-policy-2020

Source: Yojana Feb 2020

Solution: D

Varāhamihira was an astronomer, mathematician, and astrologer who lived in Ujjain. He is considered to be one of the nine jewels (Navaratnas) of the court of legendary ruler Vikramaditya thought to be the Gupta emperor Chandragupta II Vikramaditya.

The most famous work by Varahamihira is the treatise on mathematical astronomy called the Pancha-siddhantika (“Five Astronomical Treatises“) and dated 575 AD. It is a summary of five earlier astronomical systems, namely the Surya, Romaka, Paulisa, Vasistha and Paitamaha siddhantas. (
The Pancha Siddhantika are:
1. Surya-Siddhanta, ie. the Siddhānta of the Sun, composed by Lāṭa,
2. Vasishṭa-siddhanta, so called from one of the stars of the Great Bear, composed by Vishnucandra,
3. Pulisa-siddhanta, so called from Paulisa, the Greek, from the city of Saintra, which I suppose to be Alexandria, composed by Pulisa.
4. Romaka-siddhanta, so called from the Rūm, ie. the subjects of the Roman Empire, composed by Śrīsheṇa.
5. Brahma-siddhanta, so called from Brahman, composed by Brahmagupta.

Varahamihira’s other most important contribution is the encyclopedic Brihat-Samhita. It covers wide ranging subjects of human interest, including astrology, planetary movements, eclipses, rainfall, clouds, architecture, growth of crops, manufacture of perfume, matrimony, domestic relations, gems, pearls, and rituals.

Hence, statement 1 is incorrect.

Kanada proposes that paramanu (atom) is an indestructible particle of matter. The atom is indivisible because it is a state at which no measurement can be attributed. Kanada also put forward the idea that atoms could be combined in various ways to produce chemical changes in presence of other factors such as heat. Hence, statement 2 is incorrect.

Q Source: Yojana Feb 2020

Solution: C

Both the statements given above are correct.

The Pradhan Mantri Innovative Learning Programme: DHRUV has been started by Ministry of Human Resource Development, Government of India to identify and encourage talented children to enrich their skills and knowledge. In centres of excellence across the country, gifted children will be mentored and nurtured by renowned experts in different areas, so that they can reach their full potential.

Young Scientist Programme, otherwise known as YUVIKA in an annual space education and training programme by ISRO with funding from Department of Space, India. The programme was initiated by govt. of India “to create an early interest in Space Technologies among youngsters”.

Source: Yojana Feb, 2020

Solution: D

Source: Yojana Feb 2020.

Solution: D

A Trojan horse or Trojan is a type of malware that is often disguised as legitimate software. Trojans can be employed by cyber-thieves and hackers trying to gain access to users’ systems. Users are typically tricked by some form of social engineering into loading and executing Trojans on their systems. Hence, option (d) is correct.

The term is derived from the Ancient Greek story of the deceptive Trojan Horse that led to the fall of the city of Troy.

Source: Yojana Feb 2020

Solution: B

Reserve Bank of India has launched a Digital Payments Index (DPI) to capture the extent of digitization of digital/electronic payments across the country. This RBI-Digital Payments Index (DPI) has 5 broad parameters that will be used for the measurement of deepening and penetration of digital payments

Base year: 2018

Solution: C

Financial Action Task Force (FATF), which is the global body fighting money laundering and terrorist financing has defined Virtual currency as a digital representation of value that can be digitally traded and functions as (1) a medium of exchange; and/or (2) a unit of account; and/or (3) a store of value, but does not generally have legal tender status (i.e., when tendered to a creditor, is a valid and legal offer of payment) in any jurisdiction. As on date, it is not issued nor guaranteed by any jurisdiction, and fulfils the above functions only by agreement within the community of users of the virtual currency. Hence, statement 3 is correct.

Virtual currency is distinguished from fiat currency (a.k.a. “real currency,” “real money,” or “national currency”), which is the coin and paper money of a country that is designated as its legal tender; circulates; and is customarily used and accepted as a medium of exchange in the issuing country. It is distinct from e-money, which is a digital representation of fiat currency used to electronically transfer value denominated in fiat currency. E-money is a digital transfer mechanism for fiat currency – i.e., it electronically transfers value that has legal tender status.

Digital currency can mean a digital representation of either virtual currency (non-fiat) or e-money (fiat) and thus is often used interchangeably with the term “virtual currency”.

Cryptocurrency is a digital currency which makes use of encryption techniques to regulate the generation of units of currency and to verify the transfer of funds, operating independently of a central bank.

Hence, statement 1 is correct and statement 2 is incorrect.

This is a math-based, decentralised convertible virtual currency that is protected by cryptography.

Solution: D

Peer to peer (P2P) lending is a form of crowdfunding used to raise unsecured loans which are re-paid with interest. Crowdfunding refers to financing of projects with small amounts of money raised from a large number of people, with a portal serving as an intermediary. It utilises an online platform which serves as a link between borrowers and lenders.

RBI vide a Notification on 24th August, 2017, enabled P2P entities as Non-Banking Financial Company (NBFC). However, an existing NBFC will not be able to operate as an NBFC-P2P. As per this Notification P2P lending platform shall mean the business of providing under a contract, the service of loan facilitation, via online medium or otherwise, to the participants who have entered into an arrangement with that platform to lend on it or to avail of loan facilitation services provided by it.

As per RBI’s Directions, these P2P platforms are to act as intermediaries providing an online platform to the participants. However, they are not allowed to raise deposits, provide loans, provide any credit enhancement or credit guarantee or facilitate or permit any secured lending. Further, the platforms are also not permitted to hold, on their balance sheet, funds received from lenders for lending, or funds received from borrowers for servicing loans. In addition, the platforms are also prohibited from permitting any international flow of funds.

http://www.arthapedia.in/index.php?title=Peer_to_peer_(P2P)_lending

Solution: A

The Department of Commerce approved a pilot scheme in the name of Revenue Insurance Scheme for Plantation Crops (RISPC) to protect small growers of tea, coffee, rubber & cardamom from the twin risks of weather and prices for implementing in nine districts of seven States by the commodity boards through selected insurance companies.

Solution: B

The Economic Survey, 2019-20 Volume-I put forth a novel concept of a thali in the Chapter titled “Thalinomics”: The Economics of a Plate of Food in India. Using the methodology prescribed in the chapter and using the recommended dietary allowances of cereal, pulses/ meat, vegetable, spices, edible oil and fuel based on the dietary guidelines prescribed for an Indian adult male heavy worker (NIN, 2011), the NSO has compiled the Thali index using the data collected by NSO for CPI-C

Solution: B

Recently, Government of India has amended the Essential Commodities Act of 1955 and inserted a new sub-section (1A) in Section 3 of the Essential Commodities (EC) Act, 1955.

Section 3(IA) (a) now provides that foodstuffs, including cereals, pulses, potato, onions, edible oil seeds and oils shall only be regulated under extra ordinary circumstances which may include war, famine, extra ordinary price rise and natural calamity of grave nature. Hence, statement 1 is incorrect.

Section 3(IA)(b) provides that any action on imposing stock limit would be based on price trigger such as hundred per cent increase in retail price of horticultural produce and fifty percent increase in retail price of non-perishable agricultural foodstuff over the immediately preceding twelve months or average retail price of last five years whichever is lower; there is suitable exemption for exporters, processors and value chain participants of any agricultural produce as well as the Public Distribution System.

The Amendment includes a definition of value chain participants covering all the entities who add value to each stage from production to consumption. It is a visionary step, one which would radically alter the incomes and growth prospects of farmers and incentivize investment in the entire agri-sector. Hence, statement 2 is correct.

Solution: B

The Dibang Wildlife Sanctuary is one of the eight wildlife sanctuaries of Arunachal Pradesh. It is located in the Upper Dibang Valley district.

https://www.insightsonindia.com/2020/11/23/frontier-highway-project/

Solution: A

Delimitation Commission:

• Delimitation is carried out by an independent Delimitation Commission.
• The Delimitation Commission is appointed by the President of India and works in collaboration with the Election Commission of India.

• The Constitution mandates that its orders are final and cannot be questioned before any court as it would hold up an election indefinitely.
• Under Article 82, the Parliament enacts a Delimitation Act after every Census.
• Once the Act is in force, the Union government sets up a Delimitation Commission.
• Composition: The commission is made up of a retired Supreme Court judge, the Chief Election Commissioner and the respective State Election Commissioners.
• Functions: The Commission is supposed to determine the number and boundaries of constituencies in a way that the population of all seats, so far as practicable, is the same. The Commission is also tasked with identifying seats reserved for Scheduled Castes and Scheduled Tribes; these are where their population is relatively large.
• All this is done on the basis of the latest Census and, in case of difference of opinion among members of the Commission, the opinion of the majority prevails.
• The draft proposals of the Delimitation Commission are published in the Gazette of India, official gazettes of the states concerned and at least two vernacular papers for public feedback.
• The Commission also holds public sittings. After hearing the public, it considers objections and suggestions, received in writing or orally during public sittings, and carries out changes, if any, in the draft proposal.
• The final order is published in the Gazette of India and the State Gazette and comes into force on a date specified by the President.

Solution: C

About Khadi & Village Industries Commission (KVIC):

• The Khadi and Village Industries Commission (KVIC) is a statutory body established by an Act of Parliament (Khadi and Village Industries Commission Act of 1956). In April 1957, it took over the work of former All India Khadi and Village Industries Board.
• Functions: It is an apex organization under the Ministry of Micro, Small and Medium Enterprises, with regard to khadi and village industries within India, which seeks to – “plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.”
  • It aims to promote &development of khadi and village industries

The Commission has three main objectives which guide its functioning. These are:

1. The Social Objective – Providing employment in rural areas.
2. The Economic Objective – Providing salable articles.
3. The Wider Objective – Creating self-reliance amongst people and building up a strong rural community spirit.

Solution: D

Bimal Julka Committee Recommendations on Rationalization of Film Media Units has been submitted to Union Minister for Information and Broadcasting. The Expert Committees was appointed under Chairmanship of Shri Bimal Julka for rationalisation and professionalisation of institutes related to film activities.

Solution: A

National Common Mobility Card (NCMC)

• NCMC is an automatic fare collection system. It will turn smartphones into an inter-operable transport card that commuters can use eventually to pay for Metro, bus and suburban railways services.
• This card runs on RuPay card.
• The stored value on card supports offline transaction across all travel needs with minimal financial risk to involved stakeholders.
• Ministry of housing & urban affairs brought to the fore the National Common Mobility Card (NCMC) to enable seamless travel by different metros and other transport systems across the country besides retail shopping and purchases
  • The cards can be issued by all public and private banks the same way credit, debit, and prepaid cards are issued.

Solution: B

Context:

The alleged torture of a father-son duo in Sattankulam town in Tamil Nadu has once again given rise to the demand for a separate law against torture.

India does not have an anti-torture legislation and is yet to criminalise custodial violence

India had signed the U.N. Convention against Torture in 1997 but it is yet to ratify it.

Solution: D

Rakesh takes 25 days to complete work.

Vijay takes 50 days and Abhay takes 100 days.

Now 70% work is left

They can complete whole work in = 1/ 1/25+1/50+1/100 = 100/7 days Then 70% work will be completed in 10 days.

Hence, option (d) is correct.

Solution: A

Arjun’s 5 days work = 50%

Bharat’s 5 days work = 33.33%

Chandan’s 2 days work = 16.66%[100- (50+33.33)]

Ratio of contribution of work of Arjun, Bharat and Chandan = 3 : 2 : 1

Arjun’s total share = Rs. 3000

Bharat’s total share = Rs. 2000

Chandan’s  total share = Rs. 1000

Therefore, Arjun’s one day earning = Rs.600

Bharat’s one day earning = Rs.400

Chandan’s one day earning = Rs.500

Hence, option (a) is correct.

Solution: A

Let cistern will be full in x min. Then part filled by A in x min + part filled by
B in (x-2) min + part filled by C in (x-4) min = 1
⇒ x/12 + (x-2)/16 + (x-4)/20 = 1

⇒ 47x – 78 = 240

⇒ x = 162/47 = 3 21/47 min

Hence, option (a) is correct.

Solution: B

(A+B)’s 1 hour’s work = (1/10 +1/20) = 3/20
(A+C)’s 1 hour’s work = (1/10 +1/30) = 2/15
Part filled in 2 hrs = (3/20 +2/15) = 17/60
Part filled in 6 hrs = (3 × 17/60) = 17/20
Remaining Part = (1-17/20) = 3/20
Now, it is the turn of A and B and 3/20 part is filled by A and B in 1 hour.
Therefore, Total time taken to fill the tank = (6+1) hrs = 7 hrs

Hence, option (b) is correct.

Ans. C.

The passage talks about the need for sustainably growing the footfalls on account of tourism to prevent the damages caused by influx of people which is more than the carrying capacity of a place. This is best captured by option C.