Economic Development

1. Who among the following is known as the Father of the White Revolution

Who among the following is known as the Father of the White Revolution in India ?

[amp_mcq option1=”Dr. Verghese Kurien” option2=”Lal Bahadur Shastri” option3=”Dr. Amrita Patel” option4=”Maulana Abul Kalam Azad” correct=”option1″]

This question was previously asked in
UPSC SO-Steno – 2018
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The correct answer is Dr. Verghese Kurien.
Dr. Verghese Kurien is widely recognized as the “Father of the White Revolution in India” for his pivotal role in launching and leading “Operation Flood”, the world’s largest dairy development program.
Operation Flood transformed India from a milk-deficient nation into the world’s largest milk producer. Lal Bahadur Shastri was the Prime Minister who encouraged the milk cooperative movement and supported Kurien’s work. Dr. Amrita Patel is a prominent figure in India’s dairy cooperative sector and a former chairperson of NDDB. Maulana Abul Kalam Azad was a prominent freedom fighter and India’s first Minister of Education, not directly related to the White Revolution.

2. Which one of the following would be achieved through measures such as

Which one of the following would be achieved through measures such as increased supply of cheaper domestic coal, coal linkage rationalisation, liberal coal swaps from inefficient to efficient plants, coal price rationalisation based on GCV (Gross Calorific Value), supply of washed and crushed coal, and faster completion of transmission lines ?

[amp_mcq option1=”Operational efficiency” option2=”Reduction in cost of power” option3=”Reduction in interest cost” option4=”Enforcing financial discipline” correct=”option2″]

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UPSC SO-Steno – 2018
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The listed measures are primarily aimed at optimizing the cost of fuel (coal) and improving the efficiency of its usage and transmission in the power sector. Using cheaper domestic coal, rationalizing linkages, allowing swaps, pricing based on Gross Calorific Value (GCV), and using washed/crushed coal all directly reduce the cost of fuel per unit of energy or improve plant efficiency to get more energy from the fuel, thereby lowering the cost of power generation. Faster completion of transmission lines reduces transmission losses and grid costs. All these measures directly contribute to a reduction in the overall cost of generating and supplying power. While operational efficiency (A) is improved by some measures (like washed coal), the overarching goal and consequence of these actions in the context of the power sector are primarily related to reducing the cost of electricity. Options C and D are related to financial aspects not directly addressed by these technical/operational measures.
Measures targeting cheaper, better quality, and more efficiently supplied coal, along with improved transmission, directly reduce the input costs and losses in power generation and delivery, leading to a reduction in the cost of power.
The cost of coal is a major component of thermal power generation costs in India. Measures to optimize coal sourcing, quality, and usage are crucial for making power more affordable and improving the financial health of power generation and distribution companies. Similarly, reducing transmission and distribution losses through better infrastructure is vital for delivering power efficiently and reducing costs for the end consumer.

3. Some portions of the disinvestment proceeds should be used : 1. in t

Some portions of the disinvestment proceeds should be used :

  • 1. in the divested PSU itself for upgrading purposes
  • 2. in the turn-around of the other PSUs
  • 3. in the public debt repayment/ pre-payment
  • 4. in the social infrastructure (education, healthcare, etc.)

Select the correct answer using the code given below :

[amp_mcq option1=”1, 2 and 3 only” option2=”2, 3 and 4 only” option3=”1 and 4 only” option4=”1, 2, 3 and 4″ correct=”option2″]

This question was previously asked in
UPSC SO-Steno – 2018
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Disinvestment proceeds are typically used by the government for strategic purposes. Option 1, using proceeds to upgrade the *divested* PSU itself, is generally not the purpose; once a PSU is sold off, its investment needs are the responsibility of the new owners or the residual government holding. Options 2, 3, and 4 represent common and stated objectives for utilizing disinvestment proceeds in India. Funds are often used to turn around or restructure other loss-making or potentially viable PSUs, to reduce the national debt burden (by repayment/pre-payment), and to finance social sector programs and infrastructure development (education, healthcare, etc.) which otherwise might require increased taxation or borrowing.
Common uses of disinvestment proceeds include reducing government debt, funding social sector programs, and investing in other public sector enterprises.
The specific allocation of disinvestment proceeds is decided by the government based on its fiscal priorities. In recent years, the emphasis has often been on using the proceeds for infrastructure development and social sector schemes, besides covering the fiscal deficit or reducing debt. The National Investment Fund (NIF) was established to park disinvestment proceeds, initially intended for specific uses like investing in profitable and revivable PSUs or meeting social sector needs.

4. Which one of the following is an important driver of economic growth w

Which one of the following is an important driver of economic growth which helps in sustaining high growth rate, increasing productivity, a major source of non-debt financial resources, and employment generation ?

[amp_mcq option1=”Foreign Direct Investment” option2=”Ease of doing business” option3=”Make in India” option4=”Start-up India” correct=”option1″]

This question was previously asked in
UPSC SO-Steno – 2018
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Foreign Direct Investment (FDI) is widely recognized as a crucial driver of economic growth. It brings significant capital flows which are typically non-debt creating, unlike external borrowings. FDI often brings advanced technology, management expertise, and access to global markets, which can enhance productivity. It also leads to the establishment of new businesses or expansion of existing ones, creating substantial employment opportunities. Ease of doing business is an enabler, Make in India is a manufacturing promotion initiative, and Start-up India supports entrepreneurship, but FDI is the direct source of non-debt finance and a comprehensive driver across all mentioned aspects.
FDI is a major source of non-debt capital, technological transfer, and management know-how, directly contributing to increased productivity, employment generation, and sustained economic growth.
FDI inflow is influenced by factors like market size, economic stability, policy environment (ease of doing business), availability of skilled labor, and infrastructure. Governments often actively seek to attract FDI through policy reforms, incentives, and promotional activities like Make in India, aiming to leverage its benefits for overall economic development.

5. The first Industrial Policy Statement of India was announced on

The first Industrial Policy Statement of India was announced on

[amp_mcq option1=”8th March, 1948″ option2=”8th April, 1948″ option3=”6th March, 1949″ option4=”6th April, 1949″ correct=”option2″]

This question was previously asked in
UPSC SO-Steno – 2018
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India’s first Industrial Policy Resolution was announced on April 6, 1948. Among the given options, April 8, 1948, is the closest date. It is highly probable that the option contains a minor typographical error, and it intends to refer to the correct date.
The first Industrial Policy Resolution in independent India was announced in 1948, laying down the broad framework for industrial development in the country.
The 1948 Industrial Policy Resolution broadly classified industries into four categories: those under exclusive state monopoly, those where the state would progressively establish new undertakings, those under state regulation, and those open to private enterprise. It also emphasized the role of cottage and small-scale industries. This policy set the stage for India’s mixed economy model of development. Subsequent Industrial Policy Resolutions were announced in 1956, 1977, 1980, and the New Industrial Policy in 1991.

6. Supply chain activities cover everything, such as 1. Product develop

Supply chain activities cover everything, such as

  • 1. Product development
  • 2. Sourcing
  • 3. Production
  • 4. Logistics

Select the correct answer using the code given below :

[amp_mcq option1=”1, 2 and 3 only” option2=”2, 3 and 4 only” option3=”1 and 4 only” option4=”1, 2, 3 and 4″ correct=”option4″]

This question was previously asked in
UPSC SO-Steno – 2018
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Modern supply chain management takes a comprehensive view that includes activities from the initial conception or design of a product to its final delivery and even post-sales service. While traditionally, supply chain focused primarily on sourcing, production, and logistics, the integration of product development (design and engineering) with supply chain considerations (like manufacturability, sourcing options, cost implications) is crucial for optimizing the entire process and ensuring competitive advantage. Therefore, a complete understanding of supply chain activities encompasses product development, sourcing of raw materials/components, production (manufacturing/assembly), and logistics (transportation, warehousing, distribution).
A comprehensive supply chain encompasses the entire flow from concept to consumer, including design, sourcing, production, and logistics.
Supply chain management involves coordinating and integrating these flows both within and among companies. Effective supply chain management aims to improve efficiency, reduce costs, enhance quality, and deliver value to customers. Other activities often considered part of or closely integrated with the supply chain include demand planning, inventory management, quality control, and customer service.

7. The MSPs are fixed at incentive level, to fulfil the following purpose

The MSPs are fixed at incentive level, to fulfil the following purposes :

  • 1. to induce less investment by farmers in the farm sector.
  • 2. to motivate farmers to adopt improved crop production technologies.
  • 3. to enhance production and thereby farmers’ income.

Select the correct answer using the code given below :

[amp_mcq option1=”1 and 2 only” option2=”2 and 3 only” option3=”1 and 3 only” option4=”1, 2 and 3″ correct=”option2″]

This question was previously asked in
UPSC SO-Steno – 2018
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Statement 1 is incorrect. Minimum Support Prices (MSPs) are fixed at incentive levels specifically to *encourage* farmers to invest more in the farm sector by assuring them a minimum price for their produce, thereby reducing market risk. Statements 2 and 3 are correct. By ensuring a floor price, MSPs reduce the risk associated with adopting new technologies (like better seeds, fertilizers) that require higher initial investment. This motivates farmers to modernize agriculture, leading to increased production and potentially higher income, especially for farmers cultivating MSP-covered crops who can sell their produce at the guaranteed price.
MSPs aim to provide a price guarantee to farmers, reduce income volatility, encourage production of certain crops, and incentivize investment and technology adoption.
MSPs are announced by the Government of India for certain crops based on recommendations from the Commission for Agricultural Costs and Prices (CACP). While intended to support farmers, the MSP system has also been criticized for creating market distortions, encouraging the production of specific crops (like rice and wheat) over others, impacting soil health, and contributing to procurement and storage challenges.

8. Consider the following statements: The major traits of depression coul

Consider the following statements:
The major traits of depression could be as given below:

  • an extremely low aggregate demand in the economy causes activities to decelerate
  • the inflation being comparatively lower
  • the employment avenues start shrinking forcing unemployment rate to grow fast

Which of the above statements are correct ?

[amp_mcq option1=”1 and 2 only” option2=”2 and 3 only” option3=”1 and 3 only” option4=”1, 2 and 3″ correct=”option4″]

This question was previously asked in
UPSC SO-Steno – 2018
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Statements 1, 2, and 3 are all correct descriptions of major traits of an economic depression.
An economic depression is characterized by a severe and prolonged decline in economic activity. This involves: 1. A significant drop in aggregate demand, leading to reduced spending and production (deceleration of activities). 2. Low inflation or deflation (falling prices) due to the collapse in demand and economic stagnation. 3. A sharp increase in unemployment as businesses fail and production slows down, leading to widespread job losses.
A depression is a more severe form of a recession. Key indicators include substantial declines in GDP, high unemployment rates, and often deflation.

9. Consider the following statements: With an overall objective of bringi

Consider the following statements:
With an overall objective of bringing transparency in the Indian real estate market, the housing price index is expected to serve some highly important and timely purposes:

  • Whether a broker is quoting too high a price for houses in the cities.
  • Banks/housing finance bodies will be able to estimate only if the loan applications are realistic for the properties.
  • This will also show the level of performing assets in the housing sector.

Which of the above statements are correct ?

[amp_mcq option1=”1 and 2 only” option2=”2 and 3 only” option3=”1 and 3 only” option4=”1, 2 and 3″ correct=”option1″]

This question was previously asked in
UPSC SO-Steno – 2018
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Statements 1 and 2 are correct.
A transparent housing price index provides valuable market data. Statement 1 is correct because the index can help potential buyers or sellers gauge whether a quoted price is reasonable compared to market averages. Statement 2 is correct because banks rely on market data to assess property values when considering loan applications, ensuring that the loan amount is appropriate relative to the collateral’s worth. Statement 3 is incorrect; a housing price index tracks property values, not the repayment status or ‘performing’ nature of housing loans, which is a measure of asset quality for lenders.
Housing price indices contribute to market transparency and efficiency, benefiting buyers, sellers, lenders, and policymakers. However, they are distinct from metrics that measure the health of the loan portfolio itself.

10. The rate of inflation is the rate of change of general price level whi

The rate of inflation is the rate of change of general price level which is measured as

[amp_mcq option1=”Rate of inflation (year x) = Price level (year x) – Price level (year x – 1) / Price level (year x – 1) × 100″ option2=”Rate of inflation (year x) = Price level (year x) – Price level (year x + 1) / Price level (year x + 1) × 100″ option3=”Rate of inflation (year x) = Price level (year x) + Price level (year x – 1) / Price level (year x – 1) × 100″ option4=”Rate of inflation (year x) = Price level (year x) + Price level (year x + 1) / Price level (year x + 1) × 100″ correct=”option1″]

This question was previously asked in
UPSC SO-Steno – 2018
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The rate of inflation (year x) is measured as (Price level (year x) – Price level (year x – 1)) / Price level (year x – 1) × 100.
Inflation rate is defined as the percentage change in the general price level over a period. The standard formula for calculating the percentage change between two values (in this case, price levels in year x and year x-1) is (New Value – Old Value) / Old Value * 100. Applying this to price levels, where the “old value” is the price level in the base year (year x-1) and the “new value” is the price level in the current year (year x), yields the formula in option A.
Price level can be represented by indices like the Consumer Price Index (CPI) or the Wholesale Price Index (WPI). The formula calculates the annual inflation rate if year x and year x-1 are consecutive years.
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