Under the Ministry of Finance, which Department is responsible for giving advice on economic issues having a bearing on internal and external aspects of economy including foreign exchange management?
- A.Department of Economic Affairs
- B.Department of Expenditure
- C.Department of Investment and Public Asset Management
- D.Department of Financial Services
Correct answer
Explanation
The correct answer is A, Department of Economic Affairs. It is the Finance Ministry's nodal department for economic policy, at home and abroad, including the management of foreign exchange.
The Department of Economic Affairs (DEA) prepares the Union Budget and the Economic Survey, advises the government on the domestic and external economy, and deals with the balance of payments, foreign exchange management, external borrowing, the capital market and India's work with the IMF, the World Bank and other multilateral bodies. Its Chief Economic Adviser heads the economic division that writes the Survey.
Option B is wrong because the Department of Expenditure oversees spending, the pay commissions and transfers to states. Option C is wrong because DIPAM handles disinvestment and the government's shareholding in public sector companies. Option D is wrong because the Department of Financial Services looks after banks, insurance, pensions and financial inclusion.
Exam tip: Budget, Economic Survey and forex policy sit with Economic Affairs; disinvestment with DIPAM; banks and insurers with Financial Services.
Practice Questions
View allWith reference to India, consider the following pairs:
Organization : Union Ministry
I. The National Automotive Board : Ministry of Commerce and Industry
II. The Coir Board : Ministry of Heavy Industries
III. The National Centre for Trade Information : Ministry of Micro, Small and Medium Enterprises
How many of the above pairs are correctly matched?
- A.Only one
- B.Only two
- C.All the three
- D.None
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Each organisation is paired with the wrong ministry. The National Automotive Board works under the Ministry of Heavy Industries; it supports the automobile sector with testing and certification work and helps run schemes for the industry.
Read the full explanation →If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do?
1. Cut and optimize the Statutory Liquidity Ratio
2. Increase the Marginal Standing Facility Rate
3. Cut the Bank Rate and Repo Rate
Select the correct answer using the code given below:
- A.1 and 2 only
- B.2 only
- C.1 and 3 only
- D.1, 2 and 3
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An expansionist policy aims to make money cheaper and more plentiful, so the RBI would not raise the Marginal Standing Facility rate, which makes borrowing dearer.
Read the full explanation →Which of the following is/are the aim/aims of "Digital India" Plan of the Government of India?
1. Formation of India's own Internet companies like China did.
2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries.
3. Connect many of our villages to the Internet and bring Wi-Fi to many of our schools, public places and major tourist centres.
Select the correct answer using the code given below:
- A.1 and 2 only
- B.3 only
- C.2 and 3 only
- D.1, 2 and 3
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Connecting villages to the Internet and offering Wi-Fi in schools and public places is part of Digital India; the other two are not its stated aims.
Read the full explanation →With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?
- A.It is the investment through capital instruments essentially in a listed company.
- B.It is a largely non-debt creating capital flow.
- C.It is the investment which involves debt-servicing.
- D.It is the investment made by foreign institutional investors in the Government securities.
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FDI comes in as equity ownership, so India does not have to repay it with interest. Under Indian rules, FDI is investment by a person resident outside India in an unlisted company, or in ten per cent or more of the paid-up equity of a listed company.
Read the full explanation →PAHAL, an initiative to transfer the subsidy to direct bank account of the beneficiaries, is related to
- A.LPG consumers
- B.internet consumers
- C.farmers for fertilisers
- D.Central Government Employees for medical treatment
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PAHAL is the direct benefit transfer scheme for subsidy on cooking gas (LPG). PAHAL stands for Pratyaksh Hanstantrit Labh, meaning direct transferred benefit.
Read the full explanation →