Economic Development

191. The term ‘Core Banking Solutions’ is sometimes seen in the news. Which

The term ‘Core Banking Solutions’ is sometimes seen in the news. Which of the following statements best describes/ describe this term?

  • 1. It is a networking of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts.
  • 2. It is an effort to increase RBI’s control over commercial banks through computerisation.
  • 3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank.

Select the correct answer using the code given below.

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

This question was previously asked in
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Statement 1 best describes the term ‘Core Banking Solutions’ (CBS).
– Core Banking Solutions (CBS) are a centralized system implemented by banks that allows all branches to access and process customer data and transactions in real-time from a central database.
– This enables customers to operate their accounts from any branch of the bank that is on the CBS network, regardless of where the account was originally opened (Statement 1). Services like cash withdrawal/deposit, fund transfers, account balance checks, etc., become available across the network.
– CBS is a technology platform that modernizes banking operations, improves efficiency, customer service, and data management. It facilitates activities across various departments of a bank, including deposit accounts, loan management, ledger maintenance, and customer relationship management.
– While computerization inherent in CBS provides banks with better data and operations management that *can* be used for regulatory compliance, its main purpose is not to increase RBI’s control (Statement 2 is incorrect).
– Statement 3 describes a banking merger or resolution process related to non-performing assets (NPAs), which is unrelated to the technical term CBS (Statement 3 is incorrect).

192. With reference to ‘Stand Up India Scheme’, which of the following stat

With reference to ‘Stand Up India Scheme’, which of the following statements is/are correct?

  • 1. Its purpose is to promote entrepreneurship among SC/ST and women entrepreneurs.
  • 2. It provides for refinance through SIDBI.

Select the correct answer using the code given below.

[amp_mcq option1=”1 only” option2=”2 only” option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option3″]

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Both statements are correct with reference to the ‘Stand Up India Scheme’.
– The purpose of the Stand Up India Scheme is indeed to promote entrepreneurship among women and Scheduled Castes (SC) and Scheduled Tribes (ST) categories (Statement 1). It facilitates bank loans for greenfield enterprises in manufacturing, services, or trading sectors.
– The scheme mandates bank branches to facilitate at least one loan between ₹10 lakh and ₹1 crore to an SC or ST borrower and at least one loan to a woman borrower.
– The scheme does provide for refinance through the Small Industries Development Bank of India (SIDBI) (Statement 2). SIDBI is the nodal agency for the Stand Up India Scheme and provides refinance assistance to banks for lending under the scheme.
The scheme was launched on April 5, 2016. It aims to address institutional credit gaps by enabling banks to extend financial support to these underserved sectors of the population, thereby promoting inclusive growth.

193. With reference to ‘Pradhan Mantri Fasal Bima Yojana’, consider the fol

With reference to ‘Pradhan Mantri Fasal Bima Yojana’, consider the following statements :

  • Under this scheme, farmers will have to pay a uniform premium of two percent for any crop they cultivate in any season of the year.
  • This scheme covers post-harvest losses arising out of cyclones and unseasonal rains.

Which of the statements given above is/are correct?

[amp_mcq option1=”1 only” option2=”2 only” option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option2″]

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The correct answer is B) 2 only. Statement 2 is correct regarding the coverage of post-harvest losses under PMFBY, while statement 1 is incorrect regarding uniform premium rates.
– Statement 1 is incorrect: Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), the premium rates vary based on the crop and season. Farmers pay 2% of the sum insured for Kharif crops, 1.5% for Rabi crops, and 5% for commercial/horticultural crops. The remaining premium is paid by the government (Central and State).
– Statement 2 is correct: The PMFBY scheme includes coverage for post-harvest losses. These losses are assessed at the individual farm level for damage arising out of specified perils like cyclone, cyclonic rains, and unseasonal rains that occur up to a period of two weeks from harvesting, for those crops which are required to be kept in cut & spread condition to dry in the field.
PMFBY was launched in 2016, replacing previous schemes like the National Agricultural Insurance Scheme (NAIS) and Modified NAIS. It aims to provide comprehensive risk coverage against non-preventable natural risks from pre-sowing to post-harvest stages.

194. Which of the following is/are included in the capital budget of the Go

Which of the following is/are included in the capital budget of the Government of India?

  • 1. Expenditure on acquisition of assets like roads, buildings, machinery, etc.
  • 2. Loans received from foreign governments
  • 3. Loans and advances granted to the States and Union Territories

Select the correct answer using the code given below.

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

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The correct answer is D) 1, 2 and 3. All three statements are included in the capital budget of the Government of India.
– The capital budget comprises capital receipts and capital expenditure.
– Capital receipts include loans received from foreign governments and borrowings from the public.
– Capital expenditure includes expenditure on the acquisition of assets like land, buildings, machinery, and equipment, as well as loans and advances granted by the central government to state governments, union territories, and public sector undertakings.
The budget of the Government of India is divided into Revenue Budget and Capital Budget. The Revenue Budget deals with revenue receipts and revenue expenditure, which do not affect the asset/liability status of the government. The Capital Budget deals with capital receipts and capital expenditure, which create assets or liabilities for the government.

195. Which one of the following is a purpose of ‘UDAY’, a scheme of the

Which one of the following is a purpose of ‘UDAY’, a scheme of the Government?

[amp_mcq option1=”Providing technical and financial assistance to start-up entre- preneurs in the field of renewable sources of energy” option2=”Providing electricity to every household in the country by 2018″ option3=”Replacing the coal-based power plants with natural gas, nuclear, solar, wind and tidal power plants over a period of time” option4=”Providing for financial turnaround and revival of power distribution companies” correct=”option4″]

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UDAY stands for Ujwal DISCOM Assurance Yojana. It is a scheme launched by the Government of India aimed at the financial and operational turnaround of Power Distribution Companies (DISCOMs).
State-owned power distribution companies in India have historically suffered from significant financial losses and debt, primarily due to AT&C (Aggregate Technical and Commercial) losses and tariffs not covering the cost of supply. The UDAY scheme provides a framework for states to take over a portion of their DISCOMs’ debt, and for operational improvements to reduce losses and improve efficiency.
Option A relates more to schemes like Startup India or specific renewable energy promotion schemes. Option B relates to the Saubhagya scheme (Pradhan Mantri Sahaj Bijli Har Ghar Yojana). Option C relates to energy policy and transition towards cleaner sources but is not the specific purpose of UDAY. UDAY’s core focus is on resolving the financial distress of DISCOMs to ensure the sustainability of the power sector chain.

196. The establishment of ‘Payment Banks’ is being allowed in India to prom

The establishment of ‘Payment Banks’ is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?

  • Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks.
  • Payment Banks can issue both credit cards and debit cards.
  • Payment Banks cannot undertake lending activities.

Select the correct answer using the code given below.

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

This question was previously asked in
UPSC IAS – 2016
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Payment Banks are a new model of banks conceptualized by the Reserve Bank of India (RBI) to enhance financial inclusion. They are allowed to accept restricted deposits, but their primary function is facilitating payments and remittances.
Let’s evaluate each statement:
1. **Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks:** The RBI guidelines for licensing of Payment Banks specify that various entities including non-bank Pre-paid Payment Instrument (PPI) issuers, NBFCs, corporate business correspondents, mobile telephone companies, supermarket chains, and public sector entities can be promoters. Entities must be owned and controlled by residents. This statement is correct.
2. **Payment Banks can issue both credit cards and debit cards:** Payment Banks can issue ATM/Debit Cards. However, they are explicitly NOT allowed to issue Credit Cards. This statement is incorrect.
3. **Payment Banks cannot undertake lending activities:** One of the key restrictions on Payment Banks is that they cannot undertake lending activities, either directly or indirectly. Their role is focused on deposit acceptance (up to a certain limit) and payments/remittances. This statement is correct.
Payment Banks can accept demand deposits up to a certain limit per individual customer (initially ₹1 lakh, later increased). They can facilitate domestic remittances and payments, provide internet banking and mobile banking. They must maintain a certain percentage of their deposits in government securities and other approved instruments.

197. There has been a persistent deficit budget year after year. Which acti

There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?

  • Reducing revenue expenditure
  • Introducing new welfare schemes
  • Rationalizing subsidies
  • Reducing import duty

Select the correct answer using the code given below.

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

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A persistent deficit budget means that the government’s total expenditure exceeds its total receipts (excluding borrowings) year after year, leading to an increase in public debt. To reduce this deficit, the government needs to either increase its revenue or decrease its expenditure.
Let’s analyze each action:
1. **Reducing revenue expenditure:** Revenue expenditure includes government spending on salaries, pensions, interest payments, subsidies, etc., which do not create assets. Reducing these items directly lowers total government expenditure, thus helping to reduce the fiscal deficit. This action is correct.
2. **Introducing new welfare schemes:** Welfare schemes involve government spending, typically revenue expenditure (e.g., subsidies, direct benefit transfers). Introducing new schemes increases government expenditure, which would likely increase the fiscal deficit, not reduce it. This action is incorrect.
3. **Rationalizing subsidies:** Subsidies are a significant part of government expenditure. Rationalizing subsidies (e.g., by targeting them better, reducing their amount, or phasing them out) reduces government expenditure, thus helping to reduce the fiscal deficit. This action is correct.
4. **Reducing import duty:** Import duties (customs duties) are a source of tax revenue for the government. Reducing import duties would decrease government revenue (unless the reduction stimulates imports so much that the volume effect outweighs the rate reduction, which is not guaranteed), thus increasing the fiscal deficit. This action is incorrect.
Therefore, actions 1 (Reducing revenue expenditure) and 3 (Rationalizing subsidies) are effective ways for the government to reduce a budget deficit. Other measures to reduce the deficit could include increasing tax rates, improving tax collection efficiency, divesting from public sector undertakings, etc.

198. With reference to the Indian Renewable Energy Development Agency Limit

With reference to the Indian Renewable Energy Development Agency Limited (IREDA), which of the following statements is/are correct?

  • 1. It is a Public Limited Government Company.
  • 2. It is a Non-Banking Financial Company.

Select the correct answer using the code given below.

[amp_mcq option1=”1 only” option2=”2 only” option3=”Both 1 and 2″ option4=”Neither 1 nor 2″ correct=”option3″]

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Both statements are correct.
The Indian Renewable Energy Development Agency Limited (IREDA) is indeed a Public Limited Government Company (a Mini Ratna under the Ministry of New and Renewable Energy) and is also registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC).
IREDA’s primary objective is to promote, develop, and extend financial assistance for renewable energy and energy efficiency/conservation projects. Its status as a government company enables it to fulfil its developmental role in the renewable energy sector, while its registration as an NBFC allows it to perform lending and financial services within the regulatory framework set by the RBI.

199. Which of the following has/have been accorded ‘Geographical Indication

Which of the following has/have been accorded ‘Geographical Indication’ status?

  • 1. Banaras Brocades and Sarees
  • 2. Rajasthani Daal-Bati-Churma
  • 3. Tirupathi Laddu

Select the correct answer using the code given below.

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

This question was previously asked in
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Banaras Brocades and Sarees (1) and Tirupathi Laddu (3) have been accorded Geographical Indication (GI) status.
A Geographical Indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
Banaras Brocades and Sarees are famous traditional textiles from the Varanasi region. Tirupathi Laddu is a famous sweet Prasad from the Venkateswara Temple in Tirumala, Tirupathi. Both have received GI tags acknowledging their unique geographical origin and associated traditional craftsmanship or reputation. Rajasthani Daal-Bati-Churma is a popular culinary dish from Rajasthan but does not have a GI tag, as GI status is generally not granted to generic culinary preparations unless they have a very specific unique characteristic tied to the geography (like Darjeeling Tea leaves).

200. There has been a persistent deficit budget year after year. Which of t

There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit?

  • 1. Reducing revenue expenditure
  • 2. Introducing new welfare schemes
  • 3. Rationalizing subsidies
  • 4. Expanding industries

Select the correct answer using the code given below.

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

This question was previously asked in
UPSC IAS – 2015
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Actions 1 (Reducing revenue expenditure) and 3 (Rationalizing subsidies) can be taken by the government to reduce a persistent deficit budget.
A budget deficit occurs when a government’s total expenditures exceed its total revenues. To reduce the deficit, the government must either increase revenue or decrease expenditure.
Reducing revenue expenditure (e.g., on salaries, pensions, administrative costs) directly lowers government spending. Rationalizing subsidies (e.g., reducing their amount or targeting them better) also reduces expenditure. Introducing new welfare schemes typically increases government expenditure, thus increasing the deficit. Expanding industries is a long-term strategy for economic growth which *may* eventually lead to higher tax revenues, but it is not a direct or immediate action specifically aimed at *reducing* a persistent deficit through expenditure cuts or quick revenue increases; it might even require initial government investment.
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