In the context of labour market of an economy, consider the following statements : 1. Labour Force Participation Rate is defined as the share of employed and unemployed workers to the total working-age population. 2. Worker Population Ratio is defined as the share of unemployed workers to the total working-age population. 3. The usual activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period of the last 365 days preceding the date of survey. Which of the statements given above is/are correct?

The correct answer is C, 1, 2 and 4 only. Hilly terrain, economic backwardness and a sizeable tribal population are criteria; the strategic factor is location along international borders, not a coastal zone.

Special Category Status was introduced in 1969 on the recommendation of the Fifth Finance Commission, and the National Development Council decided which States qualified, with Jammu and Kashmir, Assam and Nagaland the first. The criteria were: hilly and difficult terrain; low population density or a sizeable share of tribal population; a strategic location along borders with neighbouring countries; economic and infrastructural backwardness; and non-viable State finances. Such States received central assistance on easier terms. The Fourteenth Finance Commission did away with the distinction for tax devolution, but the criteria remain the ones a paper setter tests.

A is wrong: it leaves out the tribal population criterion.

B is wrong: a strategic coastal zone was never a criterion.

D is wrong: it includes the coastal zone, which is not on the list.

Exam tip: the five criteria are hills, low density or tribal share, international border, backwardness and weak finances; border, not coast.

The correct answer is C, increase. A lower CRR means banks must park less money with the RBI, so they have more to lend, and lending creates more money.

The Cash Reserve Ratio is the share of a bank's net demand and time liabilities, broadly its deposits, that it must keep as cash balance with the Reserve Bank. Banks earn no interest on this amount, and it cannot be lent. When the RBI cuts the CRR, a part of these locked funds is released at once. Banks lend it out, the loans come back as fresh deposits, and the money multiplier, which is roughly the inverse of the reserve ratio, rises. The result is a larger money supply, which is why a CRR cut is an expansionary, easy-money step.

Option A is wrong because changing the CRR directly changes the funds banks can lend. Option B is wrong because money supply falls when the CRR is raised, not lowered. Option D is wrong because the direction of the effect is clear and is taught as a standard tool of monetary policy.

Exam tip: CRR down → lending and money supply up; CRR up → money supply down.

The correct answer is D. The G20 was formed in 1999, not 2001, as a forum of Finance Ministers and Central Bank Governors.

The Group of Twenty was set up in 1999 after the Asian financial crisis, so that finance ministers and central bank governors of major developed and emerging economies could meet regularly. It was raised to the level of heads of state and government in 2008, during the global financial crisis, with the first leaders' summit in Washington. India held the G20 presidency in 2023, when the New Delhi summit admitted the African Union as a permanent member.

Option A is a correct statement: the FSDC, chaired by the Union Finance Minister, was set up in December 2010 to watch over financial stability and coordinate the regulators. Option B is correct: the National Logistics Policy was launched in September 2022 to cut logistics costs. Option C is correct: the RIDF was created in NABARD in 1995-96 to lend to states for rural infrastructure.

Exam tip: G20 finance track 1999, leaders' summits from 2008; FSDC 2010; RIDF 1995-96.

The correct answer is B. Her return is earned outside India, so it is not in India's GDP, but it is earned by an Indian resident, so it counts in India's national income.

Gross Domestic Product measures everything produced within a country's borders, whoever produces it. National income, measured by GNP or GNI, measures what a country's normal residents earn, wherever they earn it. The link between them is net factor income from abroad: GNP = GDP + factor income received from abroad − factor income paid to foreigners. Interest, dividends and profits that an Indian earns on investments overseas are factor income received from abroad, so they enter national income but stay out of GDP.

Option A is wrong because it reverses the two concepts. Option C is wrong because GDP counts only production inside India's territory. Option D is wrong because income earned abroad by Indian residents is precisely what national income adds on top of GDP.

Exam tip: GDP = within borders; GNP = by residents; GNP = GDP + net factor income from abroad.

The correct answer is A, Pradhan Mantri Kisan Sampada Yojana (PMKSY). It is the umbrella scheme of the Ministry of Food Processing Industries for building modern infrastructure and an efficient supply chain from farm gate to retail outlet.

Approved in 2017 by renaming and widening the earlier SAMPADA scheme, PMKSY funds mega food parks, integrated cold chains and value addition, agro-processing clusters, food testing laboratories and backward and forward linkages. The aim is to cut post-harvest losses, raise the share of processed food and give farmers better prices.

Option B is wrong because the Rashtriya Krishi Vikas Yojana, started in 2007, gives states flexible funds to plan their own agriculture and allied-sector growth. Option C is wrong because the Kisan Maandhan Yojana of 2019 is a contributory pension scheme giving small and marginal farmers 3,000 rupees a month after the age of 60. Option D is wrong because the Paramparagat Krishi Vikas Yojana promotes organic farming through farmer clusters.

Exam tip: Kisan Sampada = food processing and cold chain; Maandhan = farmer pension; PKVY = organic farming.