The Department for Promotion of Industry and Internal Trade (DPIIT) has revised the base year index of Eight Core Industries having a combined weight of about 40.27 percent in the Index of Industrial Production. Which one of the following is not one of the Eight Core Industries ?

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.

The correct answer is D, It is the number of months of imports that could be paid for by a country's international reserves. Import cover is the number of months of imports a country could pay for with its foreign exchange reserves.

It is worked out by dividing a country's total international reserves by its average monthly import bill. The figure shows how long a country could keep buying essential goods such as oil if its export earnings and capital inflows suddenly stopped, so it is a key measure of external safety. As a rule of thumb, at least three months of cover is seen as the minimum. India's reserves fell to about three weeks of imports in the 1991 balance of payments crisis.

A is wrong: the ratio of imports to GDP measures openness to imports, not import cover.

B is wrong: the total import bill for a year is just the value of imports.

C is wrong: the ratio of exports to imports between two countries describes bilateral trade, not reserve adequacy.

Exam tip: import cover = forex reserves ÷ monthly imports; 1991 crisis = about three weeks of cover.