Political Science Test - 24

The correct answer is Indian Oil Corporation Limited.

Important Points

• In India, Central Public Sector Enterprises (CPSEs) are classified under three different categories.
  1. Maharatna.
  2. Navratna.
  3. Miniratna.
• The eligibility criteria for a company to be listed under Maharatna status are:
  • Three years with an average annual net profit of over ₹2,500 crores.
  • The average annual Net worth of ₹10,000 crores for 3 years.
  • Average annual Turnover of ₹20,000 crores for 3 years
• The Ministry of Heavy Industries and Public Enterprises is in charge of Central Public Sector Enterprises.
• The Ministry of Finance's Department of Public Enterprises (DPE) is the nodal department for all Central Public Sector Enterprises (CPSEs).
• As of October 2021, there are 11 Maharatna central public sector enterprises in India.
  1. Bharat Heavy Electricals Limited.
  2. Bharat Petroleum Corporation Limited.
  3. Coal India Limited.
  4. GAIL (India) Limited.
  5. Hindustan Petroleum Corporation Limited.
  6. Indian Oil Corporation Limited.
  7. NTPC Limited.
  8. Oil & Natural Gas Corporation Limited.
  9. Power Grid Corporation of India Limited.
  10. Steel Authority of India Limited.
  11. Power Finance Corporation Limited.

Key Points

• IOCL (Indian Oil Corporation Limited) is the country's largest commercial oil corporation.
  • Indian Oil Corporation Limited is listed under  Maharatna CPSEs.
  • It is owned by the Ministry of Petroleum and Natural Gas.
  • Indian Oil has branched out into alternative energy and downstream operations globalisation.
  • It has subsidiaries in Sri Lanka, Mauritius, the United Arab Emirates, Singapore, Sweden, the United States of America, and the Netherlands.

Additional Information

• The Indian Railway Catering and Tourism Corporation (IRCTC) is a government-owned company in India that offers ticketing, catering, and tourism services to Indian Railways.
  • IRCTC is listed under Miniratna CPSEs.
• Hindustan Aeronautics Limited (HAL) is an Indian state-owned aerospace and defence company and one of the oldest and largest aerospace and defence manufacturers in the world today.
  • Hindustan Aeronautics Limited is listed under Navratna CPSEs.
• The Airports Authority of India (AAI) is a statutory agency that is governed by the Directorate General of Civil Aviation of the Ministry of Civil Aviation of the Government of India.
  • The Airports Authority of India (AAI) is listed under Miniratna CPSEs.

The correct answer is  Dr. Manmohan Singh.

Key Points

• LPG model of development was introduced in 1991.
• The Finance minister from 1991-1996 was Dr. Manmohan Singh.
• Hence the correct answer is Dr. Manmohan Singh.

Important Points

• LPG Model:
  • India’s New Economic Policy was announced on July 24, 1991, which is popularly known as the LPG reforms.
  • LPG means Liberalisation, Privatisation, and Globalisation model. 
  • Liberalization- It refers to the process of making policies that are less constraining economic activity.
  • Privatization- It refers to the transfer of ownership of property or business from a government to a privately owned entity.
  • Globalization- It refers to the expansion of economic activities across political boundaries of nation-states.

Additional Information

• Salient features of LPG Policy:
  • Abolition of Industrial licensing/ Permit Raj.
  • Diluted role of the public sector enterprises.
  • Beginning of privatization.
  • Free entry to foreign investment and technology.
  • Reduction in import tariffs.
  • Deregulation of markets.
  • Reduction of taxes.

The correct answer is Narsimha Rao.

Key Points

• PV Narsimha Rao was the 9th Prime Minister of India (1991-1996).
• He is also referred to as “Chanakya of Modern India” for his ability to get legislation passed even while heading a minority government.
• The duo of PV Narsimha Rao and Manmohan Singh led the Economic reforms of 1991 and saved India from an Economic crisis.
• Under his leadership, India adopted LPG reforms (Liberalisation, Privatisation, and Globalisation).
• For his economic reforms, he is also called the “Father of Indian Economic Reforms”.

​​Additional Information

• Economic liberalization simply refers to the elimination of any restraints or restrictions in the economy to ensure economic growth and development.
• Dr. Manmohan Singh is called the pioneer of the liberalization of the Indian Economy.
• He was the Finance Minister of India in 1991.
• The Government announced the new Industrial Policy whereby it:
  • Delicensed most industries
  • Reduced import tariffs
  • Opened doors for foreign direct investment and
  • Introduced a market-determined exchange rate system.

Social policy is concerned with the ways societies across the world meet human needs for security, education, work, health, and wellbeing. The social policy addresses how states and societies respond to global challenges of social, demographic, and economic change, and of poverty, migration, and globalization.​

Key Points

• Liberalization is the process or means of the elimination of control of the state over economic activities. It provides greater autonomy to the business enterprises in decision-making and eliminates government interference.

Additional Information

• The transfer of ownership, property, or business from the government to the private sector is termed privatization. The government ceases to be the owner of the entity or business. The process in which a publicly-traded company is taken over by a few people is also called privatization.
• Globalization is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalization has increased the production of goods and services.
• Disinvestment is when governments or organizations sell or liquidate assets or subsidiaries. Disinvestments can take the form of divestment or a reduction of capital expenditures (CapEx). Disinvestment is carried out for a variety of reasons, such as strategic, political, or environmental.

Since the relaxation of government restrictions in areas of social or economic policy is known as liberalization. Therefore Option 4 is the correct answer.

The correct answer is Option 2.

Key Points

• To increase the demand for domestic goods, the government poses certain restrictions on imports thus making international trade difficult.
• These restrictions are called trade barriers and tax on imports is a type of trade barrier.
• Tax on imports increases their price which in turn reduces their demand in the market thus eliminating competition for domestic goods.

The correct answer is Foreign investment.

Key Points

• An MNC is a Multinational Corporation that owns or controls production in more than one nation.
• Investment is the money spent to buy assets such as land, building, machines and other equipment.
• The investment made by the MNCs is called foreign investment.
• It is when a company or individual from one nation invests in assets or ownership stakes of a company from a different nation.

 Thus, we can say that the investment made by MNCs is called foreign investment.

Additional Information

• Globalization is the process of rapid integration or interconnection between countries.

• Due to the volatile political situations, for the year 1990-1991 and 1991-1992 annual plans were created.
• The Eighth Plan was to begin from April 1990 but successive governments were unable to finalize the plan document.
• The 8^th Plan was finally launched in April 1992.
• In the year 1991, India faced a crisis in foreign exchange (forex) reserves.
• To overcome these crises, India launched LPG (Liberalisation, Privatisation, and Globalisation).

The process of rapid integration or interconnection between countries is known as Globalisation.

Globalization:

• Globalization means the speedup of movements and exchanges (of human beings, goods, and services, capital, technologies or cultural practices) all over the planet.
• One of the effects of globalization is that it promotes and increases interactions between different regions and populations around the globe.
•  Globalization is this process of rapid integration or interconnection between countries.
• MNCs (Multinational corporations) are playing a major role in the globalization process.
• More and more goods and services, investments, and technology are moving between countries.
• Besides the movements of goods, services, investments, and technology, there is one more way in which the countries can be connected.
• Rapid improvement in technology has been one major factor that has stimulated the globalization process. 
• Even more remarkable have been the developments in information and communication technology.
• In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly.

​Special Economic Zones:

• In recent years, the central and state governments in India are taking special steps to attract foreign companies to invest in India.
• Industrial zones, called Special Economic Zones (SEZs), are being set up.
• SEZs are to have world-class facilities: electricity, water, roads, transport, storage, recreational and educational facilities.
• Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years

The correct answer is None of the above.

Key Points

• Globalisation is defined as the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs).
• Increase in foreign trade, migration of people from one country to another, the flow of capital finance from one country to another and private and public investments from foreign countries all together contribute to globalization.
• Fair globalization means the benefits of globalization are shared in a better way and there are better opportunities for all. However, globalization has not benefited everyone. Hence option 1 is incorrect.
• The best use of new opportunities thrown open by globalization were done by people with better skills, wealth and education.
• On the other hand, there are plenty of people who have not received similar benefits. Large number of people in the developed and developing world have been negatively affected by globalization. Hence options 2 and 3 are incorrect.
• To have a uniform impact of globalization, the governments can play a major role.
• At WTO, to prevent the domination of developed countries, Governments of developing countries can cooperate with each other.
• For rules which are fair, Governments can negotiate with WTO and even use investment and trade barriers.

Globalization is a phenomenon that has a dualistic structure, although the primary is economic and its have repercussion on society. 

Key PointsStatement I: Social structure, values and attitudes have been impacted by the process of globalization.

• India has a society that is multilingual, multiethnic, and multicultural. 
• It affects social institutions, values, attitudes, and the social structure.

So, Statement I is correct. 

Statement II: Globalization has noticeably impacted cultural identity and social harmony among various social groups. 

• The Indian social structure is highly stratified, with numerous enclaves of various types and strata.
• Enclaves separate several groups, such as the caste-Dalits, men-women, castes, organized-unorganized, formal-informal, etc.
• Cultural identity and social cohesion between various socioeconomic groupings have experienced significant effects of globalization. 

Thus, Statement II is correct. 

Therefore, Both Statement I and Statement II are correct.