What is/are the purpose/purposes of Government's 'Sovereign Gold Bond Scheme' and 'Gold Monetization Scheme'? 1. To bring the idle gold lying with Indian households into the economy 2. To promote FDI in the gold and jewellery sector 3. To reduce India's dependence on gold imports Select the correct answer using the code given below.
- A.1 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Correct answer
Explanation
The correct answer is C, 1 and 3 only. Both schemes, launched in November 2015, aimed to put idle household gold to work and to cut the demand for imported gold; neither was about foreign investment. Under the Gold Monetization Scheme, households and institutions could deposit their idle gold with banks and earn interest on it, so that the gold could be lent to jewellers instead of being imported. Sovereign Gold Bonds, issued by the RBI on behalf of the Government, are denominated in grams of gold and pay a fixed interest, giving investors the benefit of gold prices without buying physical metal. Less demand for physical gold means fewer imports and a smaller current account deficit, so statements 1 and 3 are correct. Statement 2 is wrong because the schemes deal with domestic savers and banks, not FDI in the jewellery sector. Option A is wrong because it misses statement 3. Option B is wrong because it includes statement 2 and leaves out statement 1. Option D is wrong because statement 2 is false. Exam tip: SGB and GMS, both 2015, target idle gold and gold imports, not FDI.
Practice Questions
View allThe Fourteenth Finance Commission assigned different weights to the following parameters for distribution of tax proceeds to the States :
1. Income distance
2. Population
3. Demographic changes
4. Area
Arrange the aforesaid parameters in descending order in terms of their weights.
- A.1-2-3-4
- B.1-2-4-3
- C.1-3-2-4
- D.4-3-2-1
Show answer
Income distance had the highest weight, followed by population, area and demographic change. The Fourteenth Finance Commission, chaired by Y.V.
Read the full explanation →Which one of the following statements for a firm's equilibrium in Perfect Competition is not correct ?
- A.The market price must be greater or equal to average variable cost in the short run.
- B.The market price must be equal to marginal cost.
- C.The market price must be equal to average cost in the long run.
- D.The marginal cost decreases at the equilibrium output.
Show answer
This statement is not correct, because at the equilibrium of a competitive firm marginal cost must be rising. A firm in perfect competition is a price taker, so the price it gets equals its marginal revenue.
Read the full explanation →Plan allocation in agriculture and irrigation as percentage of total plan outlay was highest in :
- A.Seventh Five-Year Plan
- B.Third Five-Year Plan
- C.First Five-Year Plan
- D.Second Five-Year Plan
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The First Plan (1951 to 1956) gave agriculture, community development and irrigation about a third of its outlay, the highest share in any Indian plan.
Read the full explanation →Which of the following is not included in the Capital Account of the Balance of Payments of a country?
- A.Foreign Direct Investment
- B.Commercial Borrowing
- C.Invisibles
- D.External Assistance
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Invisibles are part of the current account of the balance of payments, not the capital account. The balance of payments records all of a country's transactions with the rest of the world and has two main parts.
Read the full explanation →Which one among the following was the focus of the Twelfth Five-Year Plan?
- A.Sustainable and Inclusive Growth
- B.Social Justice and Equality
- C.Food, Work and Productivity
- D.Attainment of Self-reliance
Show answer
The Twelfth Five-Year Plan (2012-17) had the theme "Faster, More Inclusive and Sustainable Growth". It continued the inclusive-growth idea of the Eleventh Plan (2007-12), whose theme was "Towards Faster and More Inclusive Growth", and added sustainability as a stated goal.
Read the full explanation →