Indian Economy GK Questions with Answers – Page 29

The Export-Import Bank of India was set up in 1982 under the Export-Import Bank of India Act of 1981, as the country's apex institution for financing and promoting foreign trade; it lends to exporters, finances overseas buyers of Indian goods and operates the lines of credit extended by the Government…

The Directorate General of Foreign Trade works under the Department of Commerce in that ministry; it issues the importer-exporter code without which no one can trade across the border, administers the Foreign Trade Policy, and exercises powers under the Foreign Trade (Development and Regulation) Act of 1992.

The earlier merchandise exports scheme was held to be inconsistent with world trade rules because it gave an incentive directly on exports, so it was replaced by a scheme that only refunds the duties and taxes embedded in an exported product which no other scheme refunds.

The law deems a special economic zone to be outside the customs territory of India for trade operations, duties and tariffs, which is why a supply from the rest of the country into the zone is an export and a sale from the zone into the rest of the country…

The Special Economic Zones Act was passed by Parliament in 2005 and was brought into force in February 2006 together with the Special Economic Zones Rules, giving the zones a single law of their own in place of a chapter of the trade policy.

The Kandla export processing zone, set up in 1965 beside the port of Kandla, was the first such zone in Asia, and it was later converted into a special economic zone under the Act of 2005.

The correct answer is B, greenfield investment, the building of a new unit from the ground up, which adds fresh capacity and employment to the host economy.

The correct answer is B, the capital account, more precisely the capital and financial account, which records transactions that change a country's assets and liabilities abroad; investment flows, loans and banking capital all sit here.

Hot money is the name given to short-term portfolio capital that chases returns from one market to another and can be withdrawn within days, pushing up share prices and the rupee while it comes in and pulling both down when it goes.

An entity of such a country, or an investor who is a citizen of or situated in one, may invest only through the government route whatever the sector, and the rule also covers a transfer of ownership that results in such beneficial ownership.

Participatory notes are offshore derivative instruments issued by foreign portfolio investors registered with SEBI to clients abroad who want exposure to Indian shares without registering in India themselves; the underlying shares are held by the issuing investor.

The correct answer is C, 2014, when the SEBI Foreign Portfolio Investors Regulations came into force and the three older categories, namely foreign institutional investors, their sub-accounts and qualified foreign investors, were merged into one class registered in risk-based tiers.

The FDI policy lists a small set of prohibited activities: the lottery business, gambling and betting including casinos, chit funds, Nidhi companies, trading in transferable development rights, real estate business and the construction of farm houses, the manufacture of cigars, cheroots and cigarettes, and activities closed to private investment such…

Under the automatic route the foreign investor needs no prior permission from either the government or the Reserve Bank of India; the Indian company simply reports the inflow and the issue of shares to the Reserve Bank within the prescribed time.

The Foreign Investment Promotion Board was wound up and its work handed to the administrative ministries concerned, which now receive applications through the Foreign Investment Facilitation Portal.

The correct answer is C, the Department for Promotion of Industry and Internal Trade, a department of the Ministry of Commerce and Industry, which was known as the Department of Industrial Policy and Promotion until it was renamed in 2019.

The correct answer is B, the Foreign Exchange Management Act, 1999, which came into force in 2000 and governs all dealings in foreign exchange, including inward and outward investment.

Foreign direct investment is made to acquire a lasting interest in an enterprise abroad, conventionally measured as ten per cent or more of the voting power, and with it comes a say in how the company is run; portfolio investment buys shares and bonds without any such control.

Besides a free meal through the local anganwadi during pregnancy and for six months after childbirth, the Act entitles every pregnant woman and lactating mother to a maternity benefit of not less than six thousand rupees, paid in instalments; women already receiving a similar benefit as government employees are excluded.

The High Level Committee on restructuring the Food Corporation of India, chaired by Shanta Kumar, reported in 2015.