Indian Economy Mixed Quiz: Set 8

The correct answer is B, milk. Operation Flood, launched in 1970 and led by Verghese Kurien, linked village dairy cooperatives to city markets and made India one of the world's great milk producers. It is remembered as the White Revolution.

Option A, foodgrains, belongs to the Green Revolution, which raised wheat and rice output through high yielding varieties, irrigation and fertiliser. Option C, fish, belongs to the Blue Revolution, which promoted fisheries and aquaculture. Option D, oilseeds, belongs to the Yellow Revolution, aimed at edible oil production. These coloured revolutions are all improvements within the primary sector, and papers ask them as a matching set, so learn the four together with the two names that go with the White Revolution, Operation Flood and Verghese Kurien.

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, M. Visvesvaraya. The engineer and statesman set out a ten year programme to move labour from agriculture into industry, and his book of 1934 is treated as the first systematic proposal for planning in India.

Option A, M. N. Roy, drafted the People Plan of 1945 on socialist lines, with agriculture and consumer goods at its centre. Option C, Jayaprakash Narayan, gave the Sarvodaya Plan of 1950, which drew on Gandhian and Bhoodan ideas. Option D, S. N. Agarwal, gave the Gandhian Plan of 1944, based on villages and cottage industry. Along with the Bombay Plan of 1944, prepared by eight industrialists, these make a list of five proposals and four authors that examiners shuffle freely, so learn them together.

The correct answer is A, M1 and M2. The Reserve Bank of India measures money supply in four grades, M1 to M4, in decreasing order of liquidity. M1 is currency with the public plus demand deposits of banks plus other deposits with the RBI, and M2 is M1 plus savings deposits with post offices. Both consist of money that can be spent at once, so they are called narrow money. M3 adds the time deposits of banks to M1, and M4 adds all post office deposits to M3; these two are broad money because they include savings locked for a period. M3 is the measure the RBI usually quotes as "money supply". B, M2 and M4, mixes a narrow and a broad measure. C, M3 and M2, does the same in the other order. D, M1 and M4, pairs the narrowest with the broadest. Exam tip: M1, M2 narrow; M3, M4 broad; M3 is the headline figure.

The correct answer is B. Gross domestic product is the money value of all final goods and services produced within the boundaries of a country during a year, counted sector by sector.

Option A is the classic trap, because including intermediate goods would mean double counting: the value of the flour is already inside the price of the bread, so adding both inflates the total. Option C confuses GDP with exports, which are only one part of demand. Option D describes a measure based on nationals rather than territory, which is the idea behind gross national product; the difference between the two is the net factor income earned from abroad. In India these estimates are prepared and published by the Ministry of Statistics and Programme Implementation.

The correct answer is D, Progressive. In a progressive tax the rate rises as income rises, so each extra rupee is taxed at a higher rate than the rupees before it. The marginal rate is the tax on the last rupee earned, and the average rate is total tax divided by total income. When every new slab carries a higher rate, the marginal rate stays above the average. India's income tax, with slabs rising from nil to 30 percent, is the everyday example. A is wrong because a digressive tax is only mildly progressive: its rate rises slowly and then levels off at a flat rate, so it is treated as a diluted form, not the standard case. B is wrong because a proportional tax charges the same rate at every income, so the marginal and average rates are equal. C is wrong because in a regressive tax the rate falls as income rises, so the marginal rate is below the average. Exam tip: marginal above average means progressive, equal means proportional, below means regressive.

The correct answer is C, 1952. The National Development Council was set up on 6 August 1952 by an executive resolution so that the states could take part in national planning; chaired by the Prime Minister, it included the chief ministers and the members of the Planning Commission, and it gave a plan its final approval before implementation.

Option A, 1950, is the year the Planning Commission itself was created. Option B, 1951, is the year the First Five Year Plan began. Option D, 1954, has no place in this sequence and is filler. Keep the three dates in order: the commission in 1950, the first plan in 1951 and the council in 1952. Note also that like the commission the council was never given constitutional or statutory status.

The correct answer is B, Shri K. C. Neogy. Article 280 of the Constitution requires the President to set up a Finance Commission every five years, or earlier if needed, to recommend how the taxes collected by the Union should be shared with the states and how grants-in-aid should be given. The first Finance Commission was set up in 1951 with Kshitish Chandra Neogy, a former member of Nehru’s first cabinet, as chairman, and its recommendations covered the five years from 1952 to 1957. Commissions are numbered in order, which is how setters frame questions on their chairmen. Option A is wrong because K. Santhanam chaired the second Finance Commission, appointed in 1956; he is also known for the Santhanam Committee on corruption. Option C is wrong because P. V. Rajamannar chaired the fourth Finance Commission, appointed in 1964. Option D is wrong because A. K. Chanda chaired the third Finance Commission, appointed in 1960. Exam tip: the first four chairmen in order are Neogy, Santhanam, Chanda and Rajamannar.

The correct answer is A, running a sugar mill. A mill turns sugarcane into sugar, that is, it changes the form of a natural product, and every such transformation belongs to the secondary or industrial sector.

Option B, transporting goods by rail, option C, teaching, and option D, retail trade are all services: none of them produces a good, and each either supports production or meets a need directly, which places them in the tertiary sector. Questions of this kind are set in both directions, asking for the odd one out or for the sector of a listed activity, and the safest method is to follow the product. Growing sugarcane is primary, milling it into sugar is secondary, and carrying, storing, financing and selling that sugar is tertiary, so the same commodity passes through all three sectors.

The correct answer is B, Only two. The government bond market and the stock market deal in long-term funds, so they are capital markets; call money and treasury bills belong to the money market. The dividing line is maturity: the capital market handles funds for more than one year, and the money market handles funds for up to one year. Government bonds, or dated securities, run for 5 to 40 years, and shares have no maturity at all. Call money is overnight lending between banks, with notice money for 2 to 14 days, and treasury bills are short-term government borrowing for 91, 182 or 364 days. The capital market is regulated by SEBI, while the money market is regulated mainly by the RBI. Option A is wrong because both bonds and shares are capital market segments. Option C is wrong because it would add one short-term market. Option D is wrong because call money and treasury bills are money market segments. Exam tip: over one year is capital market, up to one year is money market; T-bills are 91, 182 and 364 days.

The correct answer is C, the Twelfth Plan. It ran from 2012 to 2017 with the aim of faster, more inclusive and sustainable growth, and when it ended no thirteenth plan followed, because NITI Aayog had replaced the Planning Commission and put a long-term vision with a shorter action agenda in place of five year plans.

Option A, the Tenth Plan, ran from 2002 to 2007 and set the target of doubling per capita income within a decade. Option B, the Eleventh Plan, ran from 2007 to 2012 under the theme of faster and more inclusive growth, a phrase easily confused with the twelfth. Option D, a thirteenth plan, was never made. The similar wording of the last two plan themes is the trap here, so attach the word sustainable to the Twelfth Plan alone.

The correct answer is B, Tendulkar Committee. The expert group headed by Suresh Tendulkar, which reported in 2009, recommended measuring poverty through MPCE on the Mixed Reference Period. Under this method, spending on five rarely bought items, namely clothing, footwear, durable goods, education and institutional medical care, is recorded over the last 365 days, and all other items over the last 30 days. Tendulkar also moved away from the old calorie norm and used one poverty line basket for rural and urban India, covering spending on health and education. By this method, India's poverty ratio came to 21.9 per cent in 2011-12. A is wrong, because the Lakdawala group of 1993 used the Uniform Reference Period and state-wise poverty lines. C is wrong, because the Dandekar and Rath study of 1971 based poverty on an intake of 2,250 calories a day. D is wrong, because the Alagh task force of 1979 fixed calorie norms of 2,400 rural and 2,100 urban. Exam tip: Alagh 1979 calories, Lakdawala 1993 URP, Tendulkar 2009 MRP, Rangarajan 2014.

The correct answer is B, fifteen days. The Act requires that employment be given within fifteen days of an application for work, and if the administration fails to do so, the state government becomes liable to pay an unemployment allowance to the applicant.

Options A, C and D are ordinary administrative periods offered to confuse the candidate; none of them appears in this provision. This fifteen day rule is what converts the promise into a legal entitlement, because a failure to provide work carries a cost for the government rather than simply going unmet. Along with it, remember the guarantee of one hundred days in a financial year, the household as the unit of the guarantee, the year of the Act, 2005, and the requirement that the work be unskilled manual work that the adults of the household volunteer to do.

The correct answer is B, NABARD. The National Bank for Agriculture and Rural Development was set up on 12 July 1982 by an Act of Parliament, on the recommendation of the Sivaraman Committee (CRAFICARD), as the apex body for rural and farm credit. It took over the agricultural credit work of the Reserve Bank and the whole of the Agricultural Refinance and Development Corporation. Its headquarters is in Mumbai, it refinances cooperative banks and regional rural banks, and it runs the Rural Infrastructure Development Fund. The year 1982 and the words "farmers" and "national level" together point only to NABARD. A, NEDFI, the North Eastern Development Finance Corporation, was set up in 1995 to fund projects in the North-East. C, IFCI, the Industrial Finance Corporation of India, was India's first development bank, founded in 1948 for industry, not farmers. D, SIDBI, the Small Industries Development Bank of India, began in 1990 at Lucknow for small and medium enterprises. Exam tip: IFCI 1948, NABARD 1982, SIDBI 1990, NEDFI 1995.

The correct answer is A, NITI Aayog. The mission promotes a culture of innovation and enterprise, chiefly through tinkering laboratories in schools and incubation centres in colleges and institutions, and it is run under NITI Aayog as part of its role as the government think tank.

Option B, the Reserve Bank of India, is the central bank and deals with monetary policy, currency and the regulation of banks. Option C, the Finance Commission, is a constitutional body appointed every five years to recommend the distribution of taxes between the Union and the states. Option D, the Securities and Exchange Board of India, regulates the stock market and protects investors. NITI Aayog also publishes indices on health, school education, water management and the Sustainable Development Goals, and runs the Aspirational Districts Programme.

The correct answer is C, 1948. India's first Industrial Policy Resolution was announced on 6 April 1948 by Shyama Prasad Mukherjee, the first Industry Minister. It accepted a mixed economy for the new nation and sorted industries into four groups: those kept solely with the State, such as arms and ammunition, atomic energy and railways; those in which the State would start all new units; those under State regulation; and the rest left to private enterprise. A is wrong because 1952 is remembered for India's first general election, not for an industrial policy. B is wrong because the second Industrial Policy Resolution came in 1956, not 1955. D is wrong because no resolution was issued in 1960; the next important statements came in 1977, 1980 and 1991. Exam tip: IPR 1948 was the first, IPR 1956 is called the economic constitution of India and built on the Mahalanobis model, and the 1991 policy opened the economy up.

The correct answer is C, Public. The public sector is owned and run by the government, and its guiding aim is social welfare rather than profit. Services such as railways, electricity, drinking water, schools and hospitals need heavy spending and return money slowly, so private firms often keep away from them; the state supplies them at prices ordinary people can pay. The public sector is also used to reduce regional imbalance and to create employment, and in India it expanded after the Industrial Policy Resolution of 1956 gave the state the leading role in basic industries. Option A is wrong because the foreign sector covers trade and investment across borders and follows returns. Option B is wrong because the co-operative sector is owned by its own members and works chiefly for their benefit, not for society at large. Option D is wrong because the private sector is owned by individuals and companies whose main aim is profit. Exam tip: public sector equals government ownership plus welfare motive; private sector equals private ownership plus profit motive.

The correct answer is D, Tariff barriers. Globalisation means the growing integration of countries through trade, investment, technology and the movement of people, and it works by lowering barriers to trade, not by raising them. A tariff barrier is a tax placed on imports to shield domestic producers from foreign competition, so it restricts trade instead of opening it. In India, the 1991 reforms, known by the letters LPG for liberalisation, privatisation and globalisation, cut import duties sharply and opened the economy to foreign companies. Option A is wrong because foreign direct investment, in which a company sets up or buys businesses abroad, grows as countries open up. Option B is wrong because multilateral trade agreements, such as those under the World Trade Organization, are a main vehicle of globalisation. Option C is wrong because outsourcing, like Indian IT and call-centre work done for foreign firms, grew directly out of globalisation and cheap communication. Exam tip: globalisation lowers tariffs and quotas and raises FDI, trade and outsourcing; the WTO replaced GATT on 1 January 1995.

The correct answer is C. NITI Aayog advises the Union and the state governments, prepares strategy, monitors programmes and acts as a forum for the states, but no money passes through it; that is the sharpest difference from the Planning Commission it replaced.

Option A describes the old Planning Commission, which approved state plans and released plan assistance, a power that gave it great leverage over the states. Option B is wrong because the institution was created by a cabinet resolution on 1 January 2015, so it is neither constitutional nor statutory. Option D is wrong because the Finance Commission is a constitutional body under Article 280 and continues to recommend the sharing of central taxes with the states; NITI Aayog replaced the Planning Commission alone. Statement questions from this chapter almost always turn on these two distinctions.

The correct answer is A, 2nd Oct 2014. Prime Minister Narendra Modi launched the Swachh Bharat Mission on 2 October 2014, Mahatma Gandhi's 145th birth anniversary, at Rajpath in New Delhi. Its target was a clean and open defecation free (ODF) India by 2 October 2019, Gandhiji's 150th birth anniversary, mainly by building household and community toilets and improving waste management. The mission has two parts, Swachh Bharat Mission (Gramin) for villages and Swachh Bharat Mission (Urban) for towns and cities. Its logo is Gandhiji's round spectacles with the words "Swachh Bharat". B is wrong because 14 November is Children's Day, Jawaharlal Nehru's birthday, and 2015 is also the wrong year. C is wrong because 14 November 2014 was Children's Day, not the launch date. D is wrong because by 2 October 2015 the mission had already completed its first year. Exam tip: Swachh Bharat = 2 October 2014, target ODF India by 2 October 2019, logo = Gandhiji's spectacles; the Swachh Survekshan ranks cities on cleanliness.