Indian Economy Mixed Quiz: Set 35

The correct answer is A, the Human Development Index. It is the composite measure that puts health, education and income together in a single figure between 0 and 1, built as the geometric mean of one index for each of the three dimensions, and published by the UNDP since 1990. Option B, per capita income, is only one of the three components; taken alone it tells us what an economy produces for each person but nothing about how long people live or how long they stay in school, which was the very criticism that produced the HDI. Option C, life expectancy at birth, is likewise a single indicator, the one that stands for the health dimension. Option D, political stability, is not part of the index at all; it appears in governance ratings published by other bodies. The word to notice in the question is overall, which signals a composite index rather than a single indicator.

The correct answer is B, it is a price lower than the market price. Issue price is the subsidised rate at which grain from the government's buffer stock is sold through ration shops, and it is deliberately kept below the market price.

India's food security system works in three steps. The Food Corporation of India buys grain from farmers at the minimum support price, stores it as a buffer stock, and releases it to fair price shops under the public distribution system. The rate charged at those shops is the issue price, and the gap between what the government pays and what it charges is the food subsidy. Keeping the issue price low is exactly what makes grain affordable to poor households.

A is wrong: if it matched the market price there would be no subsidy and no reason for ration shops. C is wrong: the issue price is fixed by the government, not by the farmer. D is wrong: a price above the market rate would drive buyers away from ration shops altogether.

Exam tip: the farmer gets the MSP, the ration shop charges the issue price, and the difference between them is the food subsidy.

The correct answer is B, Bretton Woods. The United Nations Monetary and Financial Conference met at Bretton Woods in New Hampshire in the United States in July 1944 and agreed to set up the International Monetary Fund and the International Bank for Reconstruction and Development, which is why the two are called the Bretton Woods twins; both have their headquarters at Washington D.C. Option A is wrong because Geneva is associated with the GATT and later the WTO. Option C is wrong because the Havana Charter of 1948 was the attempt to create an International Trade Organization, which never came into being. Option D is wrong because the San Francisco Conference of 1945 drew up the Charter of the United Nations. India took part at Bretton Woods and is a founder member of both institutions.

The correct answer is D, Coal India Limited. Coal India, the largest coal producing company in the world, was granted Maharatna status in 2011 and remains on the list. Maharatna is the highest grade given to a central public sector enterprise, and the Department of Public Enterprises grants it only to a company that is already a Navratna, is listed on a stock exchange with the required public shareholding, and has a very large three-year average turnover, net worth and net profit. The grade matters because the board of a Maharatna can invest far larger sums in a single project on its own, without going back to the ministry for approval. Option A is wrong because Central Coalfields Limited is a subsidiary of Coal India and holds a much lower grade. Option B is wrong because Cochin Shipyard is a shipbuilder of a lower grade, not a Maharatna. Option C is wrong because the India Tourism Development Corporation is a small enterprise that has been shrinking through disinvestment. Exam tip: Maharatna status needs Navratna status plus stock market listing, and Coal India received it in 2011.

The correct answer is B, 25 square metres. PMAY-Gramin raised the minimum unit size to 25 square metres, which must include a dedicated area for hygienic cooking, an increase over the 20 square metres allowed under the Indira Awaas Yojana. Option A is wrong for that reason: 20 square metres was the old norm and is kept in the options to catch candidates who learnt the earlier scheme. Option C is wrong because 30 square metres is not a PMAY-G norm, though carpet area limits of that order appear in the urban scheme's affordable housing definitions. Option D is wrong because 40 square metres exceeds anything prescribed for rural assistance. Along with the size, remember the unit assistance of 1.20 lakh rupees in the plains and 1.30 lakh rupees in hilly states and difficult areas.

The correct answer is C, Mahila Samriddhi Yojna. It is the micro-finance scheme under which women borrow small sums at a concessional rate of interest, so the rebate in interest is built into the scheme itself. It is run by the National Backward Classes Finance and Development Corporation under the Ministry of Social Justice and Empowerment, and the money reaches women through State Channelising Agencies and self-help groups, mostly for petty trade and self-employment. A parallel scheme is run for Scheduled Caste women by the National Scheduled Castes Finance and Development Corporation. Option A is wrong because the National Maternity Benefit Scheme paid a one-time cash grant to poor pregnant women and was later merged into Janani Suraksha Yojana. Option B is wrong because it is a pilot for social security cover, not a credit scheme for women. Option D is wrong because Raj Rajeshwari Mahila Kalyan Yojana is a personal accident insurance cover for women, not a loan. Exam tip: Mahila Samriddhi Yojana means micro-credit for women at a concessional interest rate, run by NBCFDC.

The correct answer is B, gross national income per head at purchasing power parity. The switch was made in the 2010 Human Development Report. Gross national income was preferred to gross domestic product because it includes incomes earned abroad and sent home and excludes incomes earned in the country by foreigners, so it is closer to what residents can actually spend; and purchasing power parity is used so that the same basket of goods counts the same in every country. Option A describes the earlier practice of using GDP per head, and is the planted answer for candidates working from an older textbook. Option C, net national product at factor cost, is a national-accounts aggregate used in domestic statistics but not in the index. Option D, household final consumption expenditure, measures spending by households and is used in poverty estimation and in the national accounts, not in the HDI.

The correct answer is A, Marginal product curve. The marginal product of a variable factor first rises, reaches a peak and then falls, so the curve traced out is an inverted U. This is the law of variable proportions at work. In the first stage the extra units of labour get plenty of the fixed factor to work with and each one adds more to output than the last; at the peak the fixed factor is being used best; after that each extra worker has too little of the fixed factor, so the addition to output keeps shrinking and can even turn negative. B is wrong because the short run marginal cost curve is U-shaped, falling and then rising, as cost moves opposite to product. C is wrong because the average variable cost curve is U-shaped for the same reason. D is wrong because the long run average cost curve is a flatter U-shaped envelope of the short run curves. Exam tip: product curves are inverted U, cost curves are U.

The correct answer is B, Kathmandu. The South Asian Association for Regional Cooperation was founded in 1985 at Dhaka, where its charter was signed, and its permanent secretariat was set up at Kathmandu in Nepal in 1987. Option A is wrong, and it is the usual error, because Dhaka is where SAARC was founded and where the secretariat of BIMSTEC is now located, not that of SAARC. Option C is wrong because Colombo hosts no SAARC secretariat, although Sri Lanka is a founder member. Option D is wrong because Islamabad has hosted SAARC summits but not the secretariat. Keep the pair in mind: founded at Dhaka in 1985, secretariat at Kathmandu, and Afghanistan admitted as the eighth member in 2007. Bhutan, Maldives, Nepal, Pakistan, Sri Lanka, India and Bangladesh were the seven founder members, and the charter was signed on 8 December 1985.

The correct answer is A, 2 October 2014. The mission was launched on the 145th birth anniversary of Mahatma Gandhi, with the target of an open defecation free India by 2 October 2019, his 150th birth anniversary, and its logo is a pair of spectacles recalling him. Option B is wrong because 15 August 2014 is the date of the Independence Day speech in which the Jan Dhan Yojana was announced; the Jal Jeevan Mission was announced from the same rampart five years later. Option C is wrong because 25 June 2015 is the launch date of PMAY-Urban, AMRUT and the Smart Cities Mission together. Option D is wrong because 2 October 2019 is the date on which rural India was declared open defecation free, that is, the target date rather than the launch date, which is exactly the confusion the question is built on.

The correct answer is B, 55 litres. The mission promises a functional household tap connection giving at least 55 litres of potable water per person per day of prescribed quality, a norm raised from the earlier rural standard. Option A is wrong because 40 litres per capita per day was the service level of the earlier National Rural Drinking Water Programme, and that is the figure the question hopes you will pick. Option C is wrong because 70 litres is not a prescribed norm in either the rural or the urban mission. Option D is wrong because 135 litres per capita per day is the planning norm often used for piped supply in cities with sewerage, not for the rural mission. Remember the slogan Har Ghar Jal and the implementing ministry, Jal Shakti, with the 55 litre figure.

The correct answer is D, 100. The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 promises every rural household at least 100 days of unskilled manual wage work in a financial year. The scheme began in 200 districts in February 2006, covered the whole country by 2008, and was renamed after Mahatma Gandhi in 2009. Any adult member of a rural household can demand work; the job must be given within fifteen days of the demand and within five kilometres of the village, and if it is not given the state must pay an unemployment allowance. At least one third of the workers are to be women, wages are paid into bank or post office accounts, and the works taken up are mostly water conservation, ponds, roads and land development. A is wrong because 45 days is not the guarantee. B is wrong because 365 days would mean work all year, which the Act never promised. C is wrong because 250 days is not the figure in the law. Exam tip: MGNREGA 2005, 100 days a year, work within 15 days or an unemployment allowance.

The correct answer is B, the geometric mean. Until 2010 the health, education and income indices were averaged arithmetically, which allowed a country to offset a very poor score in one dimension with high scores in the other two. The geometric mean removes that offset: because the three values are multiplied and the cube root taken, a low figure in any one dimension pulls the whole index down, which better reflects the idea that the three are not substitutes for one another. Option A is what the index used before 2010 and is the most common wrong answer. Option C, a weighted median, is not used in the HDI or in any of the companion indices. Option D, the harmonic mean, is used in statistics for averaging rates and ratios, and in the Human Development Report it appears in the Gender Inequality Index, but not in the HDI itself, which makes it a careful distractor.

The correct answer is D, Gujarat. Amul grew out of the Kaira District Co-operative Milk Producers' Union, started at Anand in Gujarat in 1946 when the farmers of Kheda district organised against the low prices paid to them by middlemen. Tribhuvandas Patel led the farmers and Verghese Kurien built the dairy into a modern enterprise, so that milk from lakhs of small producers could be collected, chilled, processed and sold under one brand. The Anand pattern was carried across the country through Operation Flood from 1970, which made India the largest milk producer in the world, and Kurien is remembered as the father of the White Revolution. A is wrong because Delhi is a market for milk, not the home of the cooperative. B is wrong because Karnataka's cooperative brand is Nandini. C is wrong because Uttar Pradesh produces a great deal of milk but Amul did not begin there. Exam tip: Amul — Anand in Gujarat, 1946; Operation Flood 1970 under Verghese Kurien.

The correct answer is B, Vienna. OPEC was founded in 1960 at a conference in Baghdad by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, and its secretariat was first at Geneva before moving to Vienna in 1965, where it remains. Option A is wrong because Riyadh, although the capital of the largest oil exporter among the members, is not the seat of the organisation. Option C is wrong because Baghdad is the city of its founding conference, which makes it the most tempting distractor in this question. Option D is wrong because Tehran has hosted ministerial meetings but not the secretariat. Note that India is not a member of OPEC, being an importer of oil, and that the group now works with other producers in a wider arrangement.

The correct answer is D, the average number of live births a woman would have by the end of her child-bearing age. Total fertility rate (TFR) adds up the age-specific fertility rates of women aged 15 to 49 to show how many children a woman would have if she lived through these years at current rates. A TFR of about 2.1 is called the replacement level, because at that rate each generation just replaces itself; the extra 0.1 allows for deaths in childhood. TFR guides India's population policy and is measured by surveys such as the National Family Health Survey and the Sample Registration System. Option A is wrong because the number of births per 1,000 people in a year is the crude birth rate. Option B is wrong because TFR is counted per woman, not per couple, and uses current age-wise rates. Option C is wrong because birth rate minus death rate gives the natural growth rate of population. Exam tip: TFR is per woman, ages 15 to 49, with replacement level 2.1.

The correct answer is B, Ministry of Jal Shakti. The mission is run by the Department of Drinking Water and Sanitation in that ministry, which was itself created in 2019 by merging the Ministry of Water Resources, River Development and Ganga Rejuvenation with drinking water and sanitation. Option A is wrong because the Ministry of Rural Development runs PMAY-Gramin, MGNREGA and the rural livelihoods mission. Option C is wrong because the Ministry of Housing and Urban Affairs runs the urban schemes, including PMAY-Urban, AMRUT, the Smart Cities Mission and Jal Jeevan Mission-Urban. Option D is wrong because the environment ministry handles forests, wildlife and pollution control. The quickest rule to remember is that rural water and rural sanitation are with Jal Shakti, rural housing with Rural Development. Village water and sanitation committees, often called Paani Samitis, run the schemes on the ground under this ministry.

The correct answer is D, very high human development. The Human Development Report groups countries in four bands: very high at an HDI of 0.800 and above, high from 0.700 to 0.799, medium from 0.550 to 0.699 and low below 0.550. A value of 0.820 clears the 0.800 threshold and so falls in the topmost band. Option A is wrong because low human development means a value below 0.550. Option B is wrong because the medium band ends at 0.699. Option C, high human development, is the band immediately below, running from 0.700 to 0.799, and it is the answer candidates give when they remember that 0.8 is a boundary but forget which side of it the figure falls on. Note that the four thresholds are fixed numbers and do not move from year to year, so a country's band changes only when its own value changes.

The correct answer is B, Ministry of Housing and Urban Affairs. The urban half of the mission, including the construction of community and public toilets, solid waste management and the Swachh Survekshan ranking of cities, is with that ministry, and its second phase, SBM-Urban 2.0, was launched on 1 October 2021 for garbage free cities. Option A is wrong because the Ministry of Jal Shakti runs the rural half of the mission through the Department of Drinking Water and Sanitation. Option C is wrong because the Ministry of Panchayati Raj supports the institutions of local self government but does not implement the mission. Option D is wrong because the health ministry has no implementing role here, although sanitation improves health outcomes. The division of the same mission between two ministries is itself a common question.

The correct answer is A, the Oxford Poverty and Human Development Initiative. The index was introduced in the 2010 Human Development Report and is produced jointly with that initiative at the University of Oxford, whose Alkire-Foster method identifies households deprived at the same time in several of ten indicators grouped under health, education and standard of living. It replaced the Human Poverty Index of 1997. Option B, the International Labour Organization, publishes work on employment, wages and social protection but not this index. Option C, the OECD, produces the Better Life Index and a large body of comparative statistics on its member countries, which is why it looks plausible here. Option D, the Food and Agriculture Organization, reports on undernourishment and food security, work often confused with the Global Hunger Index, which is in fact published by Concern Worldwide with Welthungerhilfe.