Economics Mock Test - 8

Concept:

• Fabrics are all around us.
• They are an important part of our lives.
• Fabrics give comfort and warmth, bring colour and decorative style, and add texture.
• Textile fibres can be classified on the basis of their origin, natural or man-made or manufactured.

• Spun means to twist and turn things around and around.
• When a cloth is spun by hand it is called a handspun.

Explanation:

Khadi:

• Khadi or khaddar simply means cotton, usually handspun.
• Khadi is an Indian handspun and hand-woven cloth.
• The raw materials may be cotton, silk, or wool, which are spun into threads on a spinning wheel called a charkha.
• Khadi is a versatile fabric, cool in summers and warm in winters.
• Being a cruder form of material, it crumples much faster than other preparations of cotton.
• In order to improve the look, Khadi is often starched to have a stiffer shape.
• It is widely accepted in fashion circles these days.
• Rajasthan is famous for its khadi industry. 
•  it was promoted by Mahatma Gandhi during the freedom struggle.
• the First Khadi fabric was originated when the Boycott movement started in India.​
• Khadi fabric feels rough to touch and comfortable to wear.

Thus, Handspun cloth is called Khadi.

Additional InformationCotton:

• Cotton fabrics are natural fibres made from cotton.
• The cotton cloth absorbs moisture quickly.

Muslin:

• Muslin is a brand name of pre-colonial Bengal textile, especially of Dhaka origins.
• Muslin was manufactured in the city of Dhaka and in some surrounding stations.
• It was done by the local skill with locally produced cotton and attained worldwide fame as the Dhaka Muslin.

​​Silk:​

• Silk is a natural animal fiber obtained from the Bombyx mori's cocoon.
• The method of raising silkworms and harvesting silk from them is known as sericulture.

Key Points

Important Points

Tata Iron and Steel Company or TISCO:

• Tata Iron and Steel Company or TISCO is the first iron and steel manufacturing plant in India which was founded and established by Jamsetji Tata and Dorabji Tata respectively on 26th August 1907 at Jamshedpur, Jharkhand.
• The industry is located on the banks of the Subarnarekha and Kharkai rivers.
• These rivers help in the industrial uses and water treatment for the industry. TISCO. It started in the year 1912.

Hence, TISCO is the oldest iron and steel company in India.

The correct answer is golden.

• Jute is also known as golden fibre.

Key Points

• A material that is composed of thin and continuous strands is known as fibre.
• Plant fibers are elongated most commonly sclerenchyma supportive plant cells with thick cellulose walls with a well-organized structure.
• Fibre can be of two types.
  • Natural fibre
  • Synthetic fibre
• The fibres which are obtained from plants and animals are known as natural fibres whereas synthetic fibres are man-made fibres; most of them are prepared from raw materials (petroleum) called petrochemicals.
• Examples of natural fibres are cotton and jute whereas examples of synthetic fibres are: nylon, polyester.
• Jute fibre
  • ​Jute fibre is obtained only from the stem of the jute plants.
  • It is mainly grown in the rainy season.
  • Jute mainly grows in regions having alluvial soil which is found in the delta regions of the Ganges and Brahmaputra rivers.
  • In India, jute is basically grown in the states of Bihar, West Bengal and Assam.
  • Jute is sometimes also called the golden fibre.
  • It is soft, shiny and long fibre with a silky texture.
  • The jute plant is about 3 meters in height and bears yellow flowers in a few months.
  • During this time, the liquid skin moves out to separate the fibre and this process is known as retting.

Additional Information

The correct answer is Indian.

Key Points

• The Suez Canal is a man-made waterway connecting the Mediterranean Sea to the Indian Ocean via the Red Sea.
• It enables a more direct route for shipping between Europe and Asia, effectively allowing for passage from the North Atlantic to the Indian Ocean without having to circumnavigate the African continent.
• The waterway is vital for international trade and, as a result, has been at the centre of conflict since it opened in 1869.
• The Suez Canal stretches 120 miles from Port Said on the Mediterranean Sea in Egypt southward to the city of Suez (located on the northern shores of the Gulf of Suez).
• The canal separates the bulk of Egypt from the Sinai Peninsula. It took 10 years to build and was officially opened on November 17, 1869.
• Owned and operated by the Suez Canal Authority, the Suez Canal’s use is intended to be open to ships of all countries, be it for purposes of commerce or war—though that hasn’t always been the case.

The correct answer is option 2 i.e 10 years.

• The Census of India is being held regularly every 10 years.
• The first complete census of an Indian city was conducted in Dacca by Henry Walter in 1830.
• As of 2011, the 15^th decennial Census of India has been conducted.
• The census in India was started in 1872 under Lord Mayo.
• The first complete census of the population was taken in 1881.
• Vivek Joshi is the census commissioner of India as of May, 2020. 

The demographic transition idea is based on current population patterns in advanced nations across the world. Every country, according to this notion, goes through three stages of population expansion. The birth and mortality rates are high in the first stage, and the population growth rate is slow. Important Points

First Phase: 

• When death rates began to decline in India in the late 1920s and early 1930s, the process of demographic transition was believed to have begun.
• Prior to it, India's population was in its infancy, with extremely high birth and death rates.
• The death rate varied from year to year, and as a result, the population size stayed nearly constant.
• The population of the country entered the second stage of transition when mortality rates began to drop.

Additional Information 

• Second Phase:  The fall in mortality rates, on the other hand, boosted the country's population growth rates, particularly between 1921 and 1951.
• Third Phase: Since 1971, India has been through the third stage of its demographic change. During the 1970s, the country's mortality rate fell at about the same pace as its birth rate, resulting in a population growth plateau in the 1960s and 1970s. During the 1980s and 1990s, the birth rate fell faster than the mortality rate, a trend that has continued to the current day.
• Fourth Phase: According to the Office of the Registrar General of India, India will reach the fourth stage of demographic change around 2026. 

Hence, post-1920 India reached the Second Stage of the demographic transition.

Option 1 is the correct answer.

Important Points

• Option 2 is known as Under 5 Mortality Rate (U5MR).
• Option 3 describes neo-natal mortality rate.
• Option 1 describes Infant Mortality Rate.
• Presently the IMR of India is around 42 per 1000 births which also nearly fulfils the MDG criteria for IMR.
• IMR is dependent on several factors such as institutional delivery, sanitation, water, health facilities, early disease prevention, malnutrition of mother and child, educational levels of the mother and family etc.

The correct answer is a - iii, b - i, c - iv, d - ii.

Key Points

List of some important books written by these famous writers:

The correct answer is Both 1 and 2.

• Sen Index is used for measuring the severity of poverty levels in a country.
• Amartya Sen in 1976 came up with the concept of the Sen Index.

Hence both the statements are true.

Important Points

•  Amritya Sen was awarded Nobel Prize in Economic Sciences in 1998.
• Amartya Sen presented a four-pronged scientific model known as the 'Raj-Sen Model' to remove the two-departmental personnel of Mahalanobis.
• Sen is opposed to neoliberal globalization and does not believe in 'trickle-down' theory.
• Emphasizing on social equality, Amartya Sen says that in order to be able to empower all, social inequalities must be emphasized and full development of human capabilities.

Poverty is the state of not having enough material possessions or income for a person's basic needs. Poverty may include social, economic, and political elements. Absolute poverty is the complete lack of the means necessary to meet basic personal needs, such as food, clothing, and shelter. 

Key Points

HeadCount Ratio

• The headcount ratio is the population proportion that exists, or lives, below the poverty threshold.
• One of the undesirable features of the headcount ratio is that it ignores the depth of poverty; if the poor become poorer, the headcount index does not change.
• The Headcount Index is calculated by taking the total number of people in a country who fall below a predetermined income level and dividing this figure by the total population.
• In other words, the Headcount Index is simply the percentage of the population that falls below the official poverty line.

Sen Index

• The Sen index (S) is defined by the combination of three distinct measures of poverty: the poverty rate; the poverty gap ratio; and the inequality of incomes among the poor as measured by the Gini index (Sen 1976).
• It is a sophisticated method of measuring the prevalence and severity of poverty in a society. The index was developed in 1976 by Amartya Sen.

Poverty Gap Index

• The poverty gap index (P1) measures the extent to which individuals fall below the poverty line (the poverty gaps) as a proportion of the poverty line.
• The sum of these poverty gaps gives the minimum cost of eliminating poverty if transfers were perfectly targeted.
• It is calculated by averaging the square of the poverty gap ratio.
• By squaring each poverty gap data, the measure puts more weight the further a poor person's observed income falls below the poverty line.

Since all the given options determine poverty, therefore the option 4 is the correct answer.

The correct answer is De-industrialisation.

Key Points

• Britishers followed free trade policy in India.
• They exported raw materials from India and imported finished goods to India.
• This resulted in huge competition which local traders could not meet.
• The demand for Indian Handicrafts also fell drastically as European goods were cheaper.
• This resulted in drain of Indian Wealth - huge export surplus due to huge export volume.

Additional Information

• Primary items exported during colonial rule were as follows
  • Raw silk
  • Sugar
  • Jute
  • Indigo

The correct answer is Agriculture & Farmers' Welfare.

Key Points

• Minimum Support Price (MSP), the term often heard in the news, is related to Agriculture & Farmers' Welfare.
  • Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
  • The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

Additional Information

• MSP is price fixed by Government of India to protect the producer - farmers - against excessive fall in price during bumper production years.
  • The minimum support prices are a guaranteed price for their produce from the Government.
  • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
  • In case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced minimum price.

The correct answer is casual employment.

• Wage labour is usually referred to as paid work paid employment or paid labour.
• Refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a formal or informal employment contract.

Important Points

1. A casual worker is a worker on a temporary employment contract with generally limited entitlements to benefits and little or no security of employment.
2. Daily wage work is based on a daily and hourly basis. It is casual employment.

Additional Information

1. Regular employment means work regularly performed for remuneration in a trade, business, profession, or other occupation in this state.
2. A permanent job is expected to last as long as the employee wants it, given that business conditions permit. There is no pre-determined termination date.
3. Contractual employment is a form of employment that requires an employee to sign and agree to the terms' act before one starts working. 

Hence, Daily wage work is a kind of casual employment.

The correct answer is Education.

Education is one of the factors of subsistence used to measure the Poverty Line in India.

Additional Information

• The Poverty line on the basis of monthly spending on food, education, health, transport, and electricity.
• The right to children to free and compulsory education act or right to education act is an act of Parliament of India enacted on 4^th August 2009.
• The right to education act came into force on 1^st April 2010.
• The importance of free and compulsory education between the age of 6 and 14 in India under Article 21A of the Indian Constitution.
• The 86^th amendment act 2002 provided the Right to Education as a fundamental right in part III of the Indian Constitution.
• The same amendment inserted Article 21A which made the Right to Education a Fundamental right for children between 6-14 years.

The correct answer is More members in a nuclear family.

Key Points

• Social Indicators of Poverty
  • Illiteracy Level
  • Lack of general resistance due to malnutrition
  • Lack of access to healthcare
  • Lack of Opportunities
  • Lack of access to safe drinking water
  • Lack of access to safe sanitation facilities

Important Points

• Poverty
  • Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. 
  • Poverty means that the income level from employment is so low that basic human needs can't be met.
• According to World Bank 
  • Poverty is pronounced deprivation in well-being and comprises many dimensions. 
  • It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. 
  • Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one's life.
• In India, 21.9% of the population lives below the national poverty line in 2011.
• Causes of Poverty
  1. Population Explosion
  2. Low Agriculture Productivity
  3. Inefficient resource utilization
  4. Low rate of Economic Development
  5. Price Rise
  6. Unemployment
  7. Social Factors
  8. Climatic Factors

• The National Food for Work Programme (NFWP), 2004 was launched by the minister of rural development, the central government on 14 November 2004 in 150 of the most backward districts of India with the objective of generating supplementary wage employment.
• The programme is open for all Indian poor who are ready to do manual unskilled labour work and are in the need of wage employment. It is implemented as a centrally-sponsored scheme.
• Wages are to be paid partly in cash and partly in food grains. 
• About 20 lakh metric ton of food grains and Rs. 2020 crore were allocated for the programme during 2004-2005. The meal is provided at workplaces and also the wages are paid on daily basis.

Under the Food for Work programme, the wages to the workers can be paid Both partly in cash and partly in food form. Therefore Option 4 is the correct answer.

Additional Information

The programme has since been subsumed in the National Rural Employment Guarantee Act of 2005 which has come into force in 200 identified districts of the country including 150 NFFWP districts. MGNREGA is now the chief right based employment guarantee scheme.

The correct answer is 1993.

Key Points

• Prime Minister Rozgar Yojana (PMRY) was launched in 1993.
• It was launched to provide self-employment to India's educated youth and women.
• This scheme offers subsidised financial assistance to set up self-employment ventures in the manufacturing, trading and service sectors.
• The Central Government sponsors PMRY.

 Thus, we can say that Prime Minister Rozgar Yojana (PMRY) was started in the year 1993.

The correct answer is Second

• Khadi and Village commission was set up by the Govt. of India under the Khadi and Village Industries Commission Act of 1956. Its headquarters is in Mumbai. It is a statutory body. It comes under the Ministry of Micro, Small and Medium enterprises.
• The success of the First Five-year plan enhanced the confidence of the leaders. The agriculture growth aim in the first plan was attained, so the government quickly started looking beyond agriculture. The second five-year plan targeted the industry, specifically heavy industry. The target of 25% enhancement in the national income was prescribed through instant industrialization.
• The second five-year plan was designed on the basis of the so-called Mahalanobis model. This was actually the USSR model Indianized by PC Mahalanobis, the father of the Indian Statistical Institute, and a close aide of Nehru.
• This model is considered to have set the statistical base for state-directed investments and established the intellectual underpinnings of the license-raj through a well explained input-output model. This Model recommended that there should be a focus on the heavy industries, which can take the Indian Economy to a long term greater growth path. The second five-year plan and Industrial policy Resolution 1956, which cleared the path for the improvement of the Public Sector and license raj; were based upon this model.

The correct answer is option 1, i.e. Swarnajayanti Gram Swarozgar Yojana.

• Swarnajayanti Gram Swarojgar Yojana (SGSY) is an initiative launched by the Government of India to provide sustainable income to poor people living in the rural areas of the country.
• The scheme was launched on April 1, 1999.
• This is a holistic program covering all aspects of self-employment such as the organisation of the poor into self-help groups, training, credit, technology, infrastructure and marketing.
• It is envisaged that every family assisted under SGSY will be brought above the poverty line within a period of three years.
• The program aims at establishing a large number of micro-enterprises in rural areas, based upon the potential of the rural poor.

The correct option is 1 i.e Swarnajayanti Gram Swarozgar Yojana (SGSY)

• SGSY was launched on 1^st April 1999 and is the first self-employment program.
• The objective of the SGSY was to bring the assisted Swarozgaris above the poverty line by providing them income-generating assets through bank credit and government subsidy.
• The scheme was being implemented on a 75:25 cost-sharing of the Centre and the States.
• It was later revamped into National Rural Livelihood Mission.

The correct answer is Only 1 and 2.

• National Rural Livelihood Mission (NRLM) -
  • The objective of the Ministry of Rural Development is to connect the rural poor families with the mainstream of the country and remove their poverty.
  • The Ministry had launched the 'National Rural Livelihoods Mission (NRLM) in June 2011.
  • The main objective of NRLM is to provide an efficient and effective institutional platform to the poor villagers.
  • Along with this, there is a need to continuously increase their livelihood, give them better and easier access to financial services and increase their family income.
  • NRLM has been renamed as DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihoods Mission) with effect from March 29, 2016.
  • It is a centrally sponsored scheme and the central and state governments jointly fund the projects.

In June 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with a focus on the poor.

• The targeted Public Distribution System is a type of public distribution system introduced by the Government of India in June 1997.

Additional Information

• The Public Distribution System (PDS) which evolved as a system of management for food and distribution of food grains was relaunched as Targeted Public Distribution System (TPDS) in June 1997.
• This program is controlled by the Ministry of Consumer Affairs, Government of India.
• Public Distribution System (PDS) This is a chain of fair price shops (ration shops) through which subsidized food, sugar, and kerosene are given to poor people.
• A family needs to have a ration card to avail themselves of the facility of PDS.

Concept:

The National Food Security Act (NFSA):

• The National Food Security Act is also known as 'The Right to Food Act'.
• This act was enacted into law on 12 September 2013.
• This Act provides for food and nutritional security life at affordable prices and enables people to live a life with dignity.
• Under this act, 75% of the rural population and 50% of the urban population have been categorized as eligible households for food security.
• This is enacted by the Manmohan Singh's government.

Explanation:

NFSA 2013 includes:

​​Midday Meal Scheme:

• ​In 1995 Mid-day-meal scheme was started throughout India.
• It was started by the ministry of education.
• It is a school meal program.
• This scheme benefits every eligible individual.
• Objectives:
  • ​This scheme helps to promote student attendance and boost their enrollment.
  • It has an implicit subside that serves both children and parents.
  • It attracts those students who do not want to come to school.

Integrated child development service scheme:

• This scheme is under the program of GOI.
• This program provides preschool education, primary health care, and food to children under six-year and also helps their mothers.
• Objectives:
  • This scheme promotes child development.
  • Look after the nutritional value and health of the mother.
  • Through this program mortality, malnutrition, morbidity, and school dropout can be reduced.
  • It provides proper health care and nutrition to children from 0 to 6 years old.
  • It also takes care of the psychological, physical, and social development of a child.

Public Distribution System (PDS):

• The food procured by the FCI is distributed through government-regulated ration shops among the poorer section of the society.
• This is called the Public Distribution System (PDS). 
• The public Distribution System (PDS) is the most important step taken by the Government of India (GOI) toward ensuring food security.

• This program only reaches two-thirds of the population (50% urban area, 75% rural area).
• Through this program, individual beneficiaries can get five kilograms of cereals per month (prize of rice 3 Rs/kg, wheat  2 Rs/kg).

Recognizes maternity entitlements:

• According to NFSA 2013 eligible, lactating mothers and pregnant women were provided with daily free cereals.

Thus, the National Food Security Act, 2013 includes both Midday Meal Scheme and Integrated Child Development Services.

Additional InformationAntyodaya Anna Yojna:

• AAY was launched in December 2000 by the prime ministership of Atal Bihari Vajpayee.
• Under this scheme, one crore of the poorest among the BPL families covered under the targeted public distribution system was identified.
• Poor families were identified by the respective state rural development departments through a Below Poverty Line (BPL) survey.
• Twenty-five kilograms of foodgrains were made available to each eligible family at a highly subsidized rate of  2 per kg for wheat and 3 per kg for rice.
• This quantity has been enhanced from 25 to 35 kg with effect from April 2002.
• The scheme has been further expanded twice by an additional 50 lakh BPL families in June 2003 and in August 2004.
• With this increase, 2 crore families have been covered under the AAY.

The correct answer is Korwa.

Key Points

• Korwa people
  • ​The Korwa people are a Munda ethnic group of India and it is a primitive tribe.
    • They live mainly on the border between Chhattisgarh and Jharkhand.
    • A small number of Korwa are also found in the Mirzapur district of Uttar Pradesh.
  • The Indian Government has implemented several facilities for them, such as roads to their settlements, boys hostels for education, providing agricultural aid, etc.
  • The tribe is divided into several subdivisions: the Agaria, Dandh, Dil and Pahadi Korwas.

Additional Information

• The Great Andamanese are among the oldest tribes in the world and along with the Sentinelese, the Jarawa and the Onge tribes of the Andaman are of a rare race called the Negrito, and are originally thought to have migrated from Africa.

Adam Smith, a Scottish economist and philosopher, was a forerunner in the field of political economics. He was also recognised as "The Father of Economics" or "The Father of Capitalism" since he produced The Wealth of Nations, the first modern treatise of economics. Important Points

• Adam Smith, a Scottish Enlightenment theorist, created the notion of the "invisible hand." It refers to the unseen market force that, through the activities of self-interested individuals, brings a free market to equilibrium with levels of supply and demand.  

• The invisible hand is an economic concept that describes the unintended greater social benefits and public good brought about by individuals acting in their own self-interests. 
• The invisible hand is a metaphor for the unseen forces that move the free market economy.

Additional Information

• In 1890, Alfred Marshall (1842-1924) published Principles of Economics. He described economics as "the study of men engaged in the daily business of life" in it.
• An English classical economist named David Ricardo proposed a hypothesis to explain the genesis and nature of economic rent. He defined rent as "that share of the earth's output that is paid to the landlord in exchange for the use of the soil's inherent and indestructible qualities."
• Bentham developed the theory of utility, which asserts that utility is defined as the presence of enjoyment and the absence of suffering.

Hence the concept of 'Invisible Hand' was introduced by Adam Smith.

Public Health:

• There are also important differences between countries in what types of programmes and services are included within the broad categories of public health.
• Public health is the science and art of preventing disease, prolonging life, and promoting health through the organized efforts and informed choices of society, organizations, public and private communities, and individuals.
• Public health includes the following dimensions:

1. Preventive medicine: Immunization/Vaccination clinics, control of communicable diseases, distribution of medicine in public. E.g. medicine filarial, albendazole tablet for intestine worms
2. Community health: Fluoridation of public water supplies, Nutrition and health education, Mid-day meal programmes, Distribution of treated water by Municipal Corporation
3. Community Medicine: Outpatient therapy services, Mohalla Clinics by the Delhi Government
4. Social Medicine: Environmental sanitation, hygiene monitoring, etc.

Workplace safety inspections are not part of public health it comes under labour welfare management.

The correct answer is Marriage.

Key Points

• Migration in India
  • One important facet of study on population is the study of migration arising out of various social, economic, or political reasons.
  • For a large country like India, the study of the movement of population in different parts of the country helps in understanding the dynamics of the society better.
  • At this junction in the economic development, in the country, especially when many states are undergoing faster economic development, particularly in areas, such as manufacturing, information technology, or service sectors, the data migration profile of the population has become more important.
  • When a person is enumerated in the census at a different place than his/her place of birth, she/he is considered a migrant.
  • Work and employment have remained the main cause for male migration (38 percent) while it is only three percent for females.
  • Contrary to this, about 65% of females move out from their parental houses following their marriage.
  • This is the most important cause in the rural areas of India. Hence, Option 4 is correct.
  • It also happens that many return to their place of birth after staying out.
  • To capture such movements of population census collect information on migration by last helps to understand the current migration scenario better.
  • In India, as per census 2001, about 307 million people have been reported as migration by place of birth.
  • Out of them about 259 million (84.2%), migrated from one part of the state to another, i.e., from one village or town to another village or town.
  • 42 million (2%) from outside the country.
  • The data on migration by the last residence in India as per Census 2001 shows that the total number of migrants has been 314 million.
  • Out of these migrants by last residence, 268 million (85%) have been intra-state migrants, those who migrated from one area of the state to another.
  • 41 million (13%) were interstate migrants and 5.1 million (1.6%) migrated from outside of the country.

Concept:

Migration:

• When people move from one place to another, the place they move from is called the Place of Origin and the place they move to is called the Place of Destination.
• The place of origin shows a decrease in population while the population increases in the place of destination.
• Migration may be permanent, temporary or seasonal.
• It may take place from rural to rural areas, rural to urban areas, urban to urban areas and urban to rural areas.
• Migrants who move into a new place are called immigrants.
• Migrants who move out of a place are called emigrants
• People migrate for a better economic and social life. 

Explanation:

Thus, the correct answer is (a) - (iii), (b) - (i), (c) -(iv), (d) - (ii).

The correct answer is Per capita income.

Important Points 

•  Per capita income: It is a measure of the amount of money earned per person in a nation or geographic region.
• Per capita income can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population.

           Example: This stands in contrast to other common measurements of an area's prosperity, such as household income, which counts all people residing under one roof as a household,             and family income, which counts as a family those related by birth, marriage, or adoption who live under the same roof.

Key Points

• Growth Rate:- 
• ​Growth rates are used to express the annual change in a variable as a percentage.
• Growth rates can be beneficial in assessing a company’s performance and predicting future performance.
• Growth rates are computed by dividing the difference between the ending and starting values for the period being analyzed and dividing that by the starting value.
• The compound annual growth rate (CAGR) is a variation in the growth rate often used to assess an investment or company’s performance.
• Real per capita income: Real per capita is a measurement of the total economic output of a country divided by the number of people and adjusted for inflation. It's used to compare the standard of living between countries and over time.
• The formula for real per capita depends on what data you have available. Let's start with the simplest. If you already know real GDP (R), then you divide it by the population (C):

• R / C = Real per capita.
• Poverty index: The Human Poverty Index (HPI), which was introduced in 1997, is a composite index that assesses three elements of deprivation in a country – longevity, knowledge, and a decent standard of living.​

Additional Information

• There are two indices: the HPI – 1, which measures poverty in developing countries, and the HPI-2, which measures poverty in OCED developed economies.​
• The HPI-1​
  • The first element is longevity, which is defined as the probability of not surviving to the age of 40.
  • The second element is knowledge, which is assessed by looking at the adult literacy rate.
  • The third element is to have a ‘decent standard of living. Failure to achieve this is identified by the percentage of the population not using an improved water source and the percentage of children under-weight for their age.
  • As a region of the world, Sub-Saharan Africa has the highest level of poverty as a proportion of the total population, at over 60%. The second poorest region is Latin America, with 35% of its population living in poverty.
• The HPI-2
  • ​Longevity, which for developed countries is considered as the probability at birth of not surviving to the age of 60.
  • Knowledge is assessed in terms of the percentage of adults lacking functional literacy skills.

  • A decent standard of living is measured by the percentage of the population living below the poverty line, which is defined as those below 50% of median household disposable income, and social exclusion, which is indicated by the long-term unemployment rate.​​

The Correct Answer is Option 3 i.e Technology driven governance.

• e-Governance:
  • The “e” in e-Governance stands for ‘electronic’.
  • It is simply technology-driven governance.
  • It is the use of Information and Communication Technology (ICT) at all levels of the Government in order to provide services to the citizens.
  • There are four types of e-governance services:
  • They are Government-to-Citizen (G2C), Government-to-Business (G2B), Government-to-Employee (G2E), and Government-to-Government (G2G).

The correct answer is Tapas Majumdar Committee.

• Tapas Majumdar Committee was appointed by Government in 1998, to estimate the educational Expenditure.

Key Points

• Tapas Majumdar Committee was set up by the NDA Government in 1999 which encompassed the insertion of Article 21A.
• The Tapas Majumdar committee recommended that even children belonging to the poorest sections of society must receive an education that was comparable in quality with the best.
• The Committee also suggested a required expenditure of around Rs. 1.37 lakh crores over a ten-year time frame (1998-2007) to bring all the children in the 6-14 age groups under the purview of school education by 2008 under its financial memorandum.
• The 86^th amendment to the constitution of India in 2002, provided the Right to Education as a fundamental right in part-III of the Constitution.
• The same amendment inserted Article 21A which made the Right to Education a fundamental right for children between 6-14 years.
• The 86th amendment provided for follow-up legislation for the Right to Education Bill 2008 and finally the Right to Education Act 2009.

Additional Information

Janaki Ram Committee

• The Janakiraman Committee was set up by the Reserve Bank of India in April 1992.
• Janakiraman Committee was constituted with the aim to investigate the irregularities that had taken place in the securities transactions undertaken by the banks and financial institutions in 91–92.
• Janakiraman was the Deputy Governor of the Reserve Bank of India.

Kothari Commission

• The Indian Education Commission is popularly known as Kothari Education Commission (1964-66).
• It was set up by the Government of India on July 14, 1964, under the chairmanship of Dr. Daulat Singh Kothari.
• The objective of the Kothari Commission was to examine the different aspects of the education system in India.
• It aimed to increase enrollment in schools to attend the desirable goal of free and compulsory education.

Malimath Commission

• Malimath Committee (2000) on reforms in the Criminal Justice System of India (CJS) submitted its report in 2003.
• The report was submitted to the Deputy Prime Minister of India L. K. Advani.
• The committee was constituted by the Home Ministry.
• The committee was headed by Justice V. S. Malimath, former chief justice of Karnataka and Kerala.
• It suggested 158 changes in the Criminal Justice System of India but the recommendations weren’t implemented by the government.
• The Committee had opined that the existing system “weighed in favour of the accused and did not adequately focus on justice to the victims of crime.”

The correct answer is Situational poverty.

Key Points

• Situational Poverty is temporary poverty based on an unfortunate event like an environmental disaster, health problem, job loss, etc.
• Poverty is a scarcity of food, money, clothing, and shelter and people can’t complete their basic needs.

Additional Information

• Generational Poverty is handed over a family at least two generations (one generation to the one).
• Absolute Poverty is also known as extreme or abject poverty which is the scarcity of basic food, health, education, and clean water.
  • In other words, where household income is insufficient to afford the basic necessities of life.
• Relative Poverty is a living standard compared to the economic standards where household income is a certain percentage below median income.

The correct answer is ​Providing easy formal credit to the poor.

Key Points

• The concept of social banking was to provide:
  • Banking for the poor population
  • Working for their developmental needs
  • Providing them with easy formal credit
  • Minimal requirements to open accounts
  • Ease of access and friendly staff  
• Hence option 3 is correct.

Additional Information

• Local Area Banks (LAB)
  • Introduced in India in the year 1996.
  • These are organized by the private sector.
  • Earning profit is the main objective of Local Area Banks.
  • Local Area Banks are registered under the Companies Act, 1956.
  • At present, there are only 4 Local Area Banks all of which are located in South India.
• Regional Rural Banks (RRB)
  • These are special types of commercial Banks that provide concessional credit to the agriculture and rural sector.
  • RRBs were established in 1975 and are registered under a Regional Rural Bank Act, 1976.
  • RRBs are joint ventures between the Central government (50%), State government (15%), and Commercial Bank (35%).
  • 196 RRBs have been established from 1987 to 2005.
  • From 2005 onwards government started the merger of RRBs thus reducing the number of RRBs to 82.
  • One RRB cannot open its branches in more than 3 geographically connected districts.

The correct answer is Kerala.

• Kudumbashree, the Kerala State Poverty Alleviation Mission was inaugurated on 17 May 1998 by the Prime Minister Shri Atal Bihari Vajpayee.
  • The mission aims at eradicating absolute poverty within a fixed time frame of 10 years under the leadership of empowered local self-government constituted by the 73rd and 74th Amendments to the Constitution of India.
  • The mission launched by the State Government with the active support of the Government of India and NABARD has taken a different approach to eradicate poverty by organizing the poor into community-based organizations.
  • The mission follows a process approach rather than a project approach.

Additional Information

• Kudumbashree has a three-tier structure for its women's community network
  • Neighborhood group at the lowest level (NHG)
  • Area Development Committees (ADS) at the Intermediate Level
  • Community Development Committees (CDS) at the local government level

Regional Rural Banks are sponsored by any Commercial Bank, PSU, or private banks. Regional Rural Banks are local level banking organizations operating in different States of India. They have been created with a view to serve primarily the rural areas of India with basic banking and financial services. However, RRBs may have branches set up for urban operations and their area of operation may include urban areas too.

The correct answer is Muhammad Yunus.

Key Points

•  Muhammad Yunus is credited with developing the concept of micro credit.
• He developed the Grameen Bank in 1983, based on this concept.
• The Grameen Bank focused on lending only to the poor as they “were considered high-risk borrowers, with a high likelihood of default."
• The bank is located in Bangladesh.
• Microcredit is a loan given to the poorer sections of the society.
• It is a part of microfinance.

Additional Information

•  Microfinance is a category of financial services targeting individuals and small businesses who lack the means to purchase loans.
• It is designed to reach the poorer sections of the society.

The correct answer is Farmer's market in Tamil Nadu.

Key Points

Uzhavar Sandies

• It is the farmer's market in Tamil Nadu. It is a type of alternate marketing channel where farmers directly sell their products to consumers. It helps in increasing the incomes of the farmers. Hence, Option 4 is correct.
• In the field of agriculture, marketing determines the value of the agricultural product in terms of money and delivers them to the final customer.
• Most of the farmers sell their produce through village-level markets, fairs, Mandies, Co-operative Societies, etc. In the above process of agricultural marketing, the middlemen exploit farmers as well as consumers.
• To eliminate the middlemen between farmers and consumers, the Government of Tamil Nadu introduced the new concept, namely “UZHAVAR SANTHAI” in 1999.
• Generally, the middlemen and wholesale businessmen purchase the Agricultural products from the farmers at a lower price.
• They also get the commission from the farmers for the transactions made.
• In turn, fresh vegetables and fruits purchased at the lower price from the farmers are sold out to retail businessmen at a higher price and the retail businessmen sell those Agricultural Products further at a higher price to the consumers.
• As a result, the farmers get only the lower price for their produce whereas the consumers have to pay a higher price for the same product.
• Hence, the Government of Tamil Nadu has introduced an alternate scheme of marketing, which is known as “UZHAVAR SANTHAI” to derive more benefits to the farmers as well as consumers.

Additional Information

• Rythu Bazars are vegetable and fruit markets in Andhra Pradesh and Telangana.
• Apni Mandi is an alternate marketing channel in Punjab, Haryana, and Rajasthan.
• Athavadi Bazar is a weekly marketplace for buying vegetables, clothes, meat, and grains in Maharashtra.

The correct answer is geographical conditions.

Key Points

• Economic development is the process of change over a long period of time.
• Economic development can involve a stronger economy enabling a greater range of social services that improve a nation's welfare.
• The most commonly used measures of economic development are:
  • Gross Domestic Product
  • Incidence of poverty
  • Green Index
  • Life status
  • Literacy rate
  • Average life expectancy

 Thus, we can say that geographical conditions are not a measure of economic development.

The correct answer is ​1965.

Key Points

• Green Revolution:
  • ​Father of the Green Revolution in worldwide- Norman Borlaug.
  • Father of the Green Revolution in India- M.S. Swaminathan.
  • This revolution led to an increase in food grain production.
  • In the year 1965, the government of India launched the Green Revolution.
  • India adopted a new strategy in agriculture, which resulted in the Green Revolution especially in the production of wheat and rice.
  • The movement of the green revolution was a great success and changed the country's status from a food-deficient economy to one of the world's leading agricultural nations.

The Correct Answer is Capitalistic Economy.

 Key Points

• Capitalism is an economic system in which private individuals or businesses own capital goods.
• The production of goods and services is based on supply and demand in the general market.
• The purest form of capitalism is free market or laissez-faire capitalism.
• Here, private individuals are unrestrained.
• They may determine where to invest, what to produce or sell, and at which prices to exchange goods and services.

 Additional Information

• Mixed Economy
  • A mixed economic system is a system that combines aspects of both capitalism and socialism.
  • A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.
• Communist Economy
  • Communist Economy advocates for a classless system in which the means of production are owned communally and private property is nonexistent or severely curtailed.

The correct answer is Capital receipts are non-recurring whereas the other is recurring

The correct answer is Only I.

Key Points

• Treasury bills were first issued in India in 1917.
•  In 1997 the government also issued 14-day immediate treasury bills.
• The discount rate for the 14-day bills will be set every three months and the effective yield on this instrument will be equivalent to the interest rate on ways and means advances (WMA).
• As per an agreement signed between the RBI and the government, the interest rate on ways and means advances has been fixed at three percentage points below the average yield of 91-day T-bills in the preceding quarter.
• The bills will be sold only to state governments, foreign central banks and other specified bodies. 
• The 14-day bills will be sold for a minimum amount of Rs 1 lakh and its multiples. The bills will be repaid or renewed at par after 14 days from the date of issue.

 Important Points

• Treasury bills are issued when the government needs money for a short period.
• Funds collected through such tools are typically used to meet the short term requirements of the government, hence, to reduce the overall fiscal deficit of a country.
• These bills are money market instruments issued only by the central government, and the interest on them is determined by the market forces.
• They are issued via auctions conducted by the Reserve Bank of India (RBI) at regular intervals.
• Treasury bills have a maximum tenure of 364 days.
• At present, treasury bills are issued in three maturities — 91-day, 182-day and 364-day.

The correct answer is Both 1 and 2.

Key Points

• A Budget is in deficit if the expenditure surpasses the revenue for a designated year.
• There are various measures that capture government Deficit:
  • Revenue Deficit: It refers to the excess of the government’s revenue expenditure over revenue receipts.
    • Revenue Deficit = Revenue expenditure – Revenue receipts. Hence, Statement 1 is correct.
    • The revenue Deficit includes only such transactions that affect the current income and expenditure of the government.
    • When the government incurs a revenue deficit, it implies that the government is dissaving and is using up the savings of the other sectors of the economy to finance a part of its consumption expenditure.
  • Fiscal Deficit: It is the gap between the government’s expenditure requirements and its receipts.
    • This equals the money the government needs to borrow during the year.
    • A surplus arises if receipts are more than expenditure.
    • Fiscal Deficit = Total expenditure – (Revenue receipts + Non-debt creating capital receipts). Hence, Statement 2 is correct.
    • It indicates the total borrowing requirements of the government from all sources.
    • From the financing side:
      • Gross fiscal deficit = Net borrowing at home + Borrowing from RBI + Borrowing from abroad
    • The gross fiscal deficit is a key variable in judging the financial health of the public sector and the stability of the economy.
  • Primary Deficit: Primary deficit equals fiscal deficit minus interest payments.
    • This indicates the gap between the government’s expenditure requirements and its receipts, not taking into account the expenditure incurred on interest payments on loans taken during the previous years.
    • Primary deficit = Fiscal deficit – Interest payments

The correct answer is the Reserve Bank of India.

• The Reserve bank of India manages the public debt of central as well as state governments.

Key Points

• Reserve Bank of India is the Central bank of India and plays an important role to maintain the economy in various ways.
• It issues new currency notes, interest payments, and repayment of loans.
• The total amount borrowed by the government is known as Public debt.
• The list of main sources of Public Debt is government securities or G-secs, Treasury Bills or T-bills, External Assistance, Short term borrowings, Public Debt definition by Union Government.

Additional Information

• Functions of RBI include:
  • Issue of Bank Notes
  • Banker to Government i.e. manages the banking needs of the government
  • Represents the Government of India as a member of the IMF and the World Bank
  • Custodian of Cash Reserves of Commercial Banks
  • Custodian of Country’s Foreign Currency Reserves
  • Lender of Last Resort
  • Controller of Credit i.e. Managing money supply (Liquidity)
• General information about RBI:
  • Headquarters- Mumbai
  • Governor- Shaktikanta Das (present)
  • Established on 1 April 1935 in Kolkata
  • Moved to Mumbai in 1937

The Correct answer is lower taxation in future.

Key Points

• Public debt or government debt is the total amount, including total liabilities, borrowed by the government to meet its development budget.
• Higher government debt may result in
  • crowding out of the private sector as higher government borrowings will leave less capital for private players to borrow. Hence option 1 is correct.
  • the rise in inflation on government will spend this money which will increase the liquidity in the market. Hence option 2 is correct.
  • higher taxation in future because the current borrowings need to pay in future for which government will have to increase revenues which in turn may lead to higher taxation. Hence option 3 is not correct.
  • higher fiscal deficit as fiscal deficit is actually the govt borrowings so higher borrowings essentially means higher deficit. Hence option 4 is correct.
• In addition, the level of Government debt also affects investor confidence, impacts fiscal capabilities of the government, fiscal repression of commercial banks, exchange rate risk etc.

The correct answer is 1 only.

Key Points

• Components of Balance of Payments
  • Current account
    1. Trade in goods
       • Imports
       • Exports
    2. Trade in services
    3. Transfer payments
  • Difference between export and import is known as Balance of Trade.
    • ​When imports are lesser than exports, it results in Trade surplus. Hence, statement 1 is correct.
    • When exports are lesser than imports, it results in Trade deficit.
  • Balance of Trade is just a small part of BOP. Therefore, Trade deficit does not mean BOP is always negative. Hence, statement 2 is incorrect.

​Additional Information

• Other components of the BOP
• Capital account
  1. Investments
     • Direct investment
     • Portfolio investment
  2. External Borrowings
  3. External Assistance
• Capital account is in balance when capital inflows (like receipt of loans from abroad, sale of assets or shares in foreign companies) are equal to capital outflows (like repayment of loans, purchase of assets or shares in foreign countries).
• Surplus in capital account arises when capital inflows are greater than capital outflows, whereas deficit in capital account arises when capital inflows are lesser than capital outflows.

The correct answer is option (2) i.e. Exports < Imports.

The difference between a country's imports of goods and services and its exports is called Balance of Trade. There are three possibilities of Balance of Trade(BoT) and they are:

1. Balance, Balance of Trade i.e. Exports = Imports.
2. Adverse, Balance of Trade i.e. Exports < Imports.
3. Favourable Balance of Trade i.e. Exports > Imports.

• Piyush Goyal announced on a social platform on 15th July 2020 that India had recorded a trade surplus in June for the first time in last 18 years.
• Piyush Goyal is the incharge Ministry of Commerce and Industry. (July 2020)

The Correct answer is Both 1 and 2.

Key Points

• Inflexible exchange rates (also known as floating exchange rates), the exchange rate is determined by the forces of market demand and supply.
  • If the demand for foreign exchange goes up, the domestic currency (rupee) depreciates since it has become less expensive in terms of foreign currency. By contrast, the currency appreciates when it becomes more expensive in terms of foreign currency.
• Interest rate differential is important in determining exchange rate movements.
  • There are huge funds owned by banks, multinational corporations and wealthy individuals who move around the world in search of the highest interest rates.
  • If we assume that government bonds in country A pay 8 percent rate of interest whereas equally safe bonds in country B yield 10 percent, the interest rate differential is 2 percent.
• Investors from country A will be attracted by the high-interest rates in country B and will buy the currency of country B selling their own currency.
• At the same time, investors in country B will also find investing in their own country more attractive and will, therefore, demand less of country A’s currency.
• This means that the demand for country A’s currency will decrease while that of country B's currency will increase.
  • Therefore, country A's currency depreciates whereas that of country B's currency appreciates.
  • Thus, a rise in the interest rates at home often leads to an appreciation of the domestic currency which will increase in the exchange rate of the domestic currency. Hence, statement 1 is correct.
  • If a country's imports grow faster than exports, the capital inflows from exports will not be sufficient to pay for the imports.
    • This will lead to an increase in demand for foreign currency. Therefore the domestic currency depreciates. Hence statement 2 is correct.

Source - Investopedia

A devaluation of the exchange rate will make exports more competitive and appear cheaper to foreigners. This will increase demand for exports.