[Mission 2023] STATIC QUIZ, 03 March 2023 – Economy

Solution: d)

The Department of Financial Services (DFS) provides policy support to the Public Sector banks (PSBs), Public Sector Insurance Companies (PSICs) and Financial Institutions (FIs) like National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI),National Housing Bank (NHB), Export-Import Bank of India (EXIM Bank), National Bank for Financing Infrastructure and Development, India Infrastructure Finance Company Ltd. (IIFCL), Industrial Finance Corporation of India (IFCI),National Credit Guarantee Trustee Company Ltd. (NCGTC) etc.

It also monitors the performance of these PSBs, PSICs and DFIs and undertakes policy formulation in respect of the Banking and Insurance Sector in India.

This Department deals with legislative and policy issues pertaining to the concerned regulatory bodies i.e. the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA). DFS also deals with the legislative framework relating to debt recovery.

Source

Solution: c)

‘Hindu’ rate of growth was coined to refer to the phenomenon of sluggishness in growth rate of Indian economy (3.5 per cent observed persistently during 1950s through 1980s).

The term, which owes to Professor Raj Krishna, Member, Planning Commission, captured popular imagination and was used synonymously to describe inadequacy of India’s growth performance.

Solution: a)

The Constitution does permit the Centre to levy cess and surcharges beyond the basic taxes and duties in extraordinary situations. These additional taxes do not go to a divisible pool.

Divisible pool refers to the taxes of the central government that it should share with the sub national or state governments in accordance with the recommendations of the Finance Commission.

Solution: d)

• Formalisation of the economy means bringing companies under the regulatory regime of government and subject to laws related to manufacturing and income tax.
• Formalisation leads to more tax revenues with an increase in tax-to-GDP ratio.
• Formalisation provides a level-playing field for tax-compliant entities, expanding the tax base so that the burden falls more equitably on all the players rather than a select few.
• Transitioning economy towards formality brings benefits by establishing the rule of law and provide benefits of labour laws to entrepreneurs and workers.
• It enforces minimum wages and proper documentation of benefits by the employer. Formal jobs also end up ensuring the dignity of labour; enable productivity improvements, as well as access to formal training.

Solution: a)

Of the final goods, we can distinguish between consumption goods and capital goods. Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called consumption goods or consumer goods.

We may note here that some commodities like television sets, automobiles or home computers, although they are for ultimate consumption, have one characteristic in common with capital goods – they are also durable. That is, they are not extinguished by immediate or even short period consumption; they have a relatively long life as compared to articles such as food or even clothing. They also undergo wear and tear with gradual use and often need repairs and replacements of parts, i.e., like machines they also need to be preserved, maintained and renewed. That is why we call these goods consumer durables.