Economic Development Archives

211. The Fair and Remunerative Price (FRP) of sugarcane is approved by the

The Fair and Remunerative Price (FRP) of sugarcane is approved by the

[amp_mcq option1=”Cabinet Committee on Economic Affairs” option2=”Commission for Agricultural Costs and Prices” option3=”Directorate of Marketing and Inspection, Ministry of Agriculture” option4=”Agricultural Produce Market Committee” correct=”option1″]

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UPSC IAS – 2015

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The Fair and Remunerative Price (FRP) of sugarcane is approved by the Cabinet Committee on Economic Affairs (CCEA).

The Commission for Agricultural Costs and Prices (CACP) is an advisory body that recommends the Minimum Support Prices (MSPs) for various crops and the Fair and Remunerative Price (FRP) for sugarcane. However, the final approval for the FRP comes from the Union Cabinet, specifically the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.

FRP is the minimum price that sugar mills are legally required to pay to farmers for sugarcane. It is fixed by the Central Government under the Sugarcane (Control) Order, 1966. States can also declare their own State Advised Price (SAP), which is usually higher than the FRP.

212. In the Index of Eight Core Industries’, which one of the following is

In the Index of Eight Core Industries’, which one of the following is given the highest weight?

[amp_mcq option1=”Coal production” option2=”Electricity generation” option3=”Fertilizer production” option4=”Steel production” correct=”option2″]

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UPSC IAS – 2015

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Among the given options in the ‘Index of Eight Core Industries’, Electricity generation is given the highest weight.

The Index of Eight Core Industries includes Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Based on the 2011-12 series base used for calculation, Electricity generation has the highest weight among these eight industries, followed by Refinery Products and Steel.

The eight core industries represent about 40.27% of the weight of items included in the Index of Industrial Production (IIP). Their performance significantly impacts the overall industrial activity. As of recent data using the 2011-12 series, the approximate weights are: Electricity (19.858%), Refinery Products (17.166%), Steel (17.917%), Coal (10.332%), Crude Oil (8.983%), Natural Gas (6.877%), Cement (5.372%), and Fertilizers (2.632%).

213. With reference to Union Budget, which of the following is/are covered

With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?

Defence expenditure
Interest payments
Salaries and pensions
Subsidies

Select the correct answer using the code given below.

[amp_mcq option1=”1 only” option2=”2 and 3 only” option3=”1, 2 and 3 and 4″ option4=”None” correct=”option3″]

This question was previously asked in

UPSC IAS – 2014

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All four listed items fall under the traditional definition of Non-Plan Expenditure in the Union Budget.

Non-Plan Expenditure refers to the government’s essential or committed expenditures that are not directly linked to specific central plans or schemes. These include expenditures necessary for the functioning of the government and basic services.
Defence expenditure is a major component of non-plan expenditure.
Interest payments on the government’s borrowing constitute a significant portion of non-plan expenditure and are mandatory obligations.
Salaries and pensions for government employees are committed expenditures and fall under non-plan expenditure.
Subsidies (e.g., for food, fertilizers, petroleum) are also typically treated as non-plan expenditure aimed at providing support to specific sectors or populations.

The distinction between Plan and Non-Plan Expenditure was abolished starting from the Union Budget 2017-18. Expenditures are now classified based on Capital and Revenue accounts and outcomes. However, questions based on the older classification may still appear in exams referencing past budgets. Under the new system, these expenditures would still be classified, primarily under the Revenue account, but the “non-plan” label is no longer used for budget presentation.

214. Which of the following organizations brings out the publication known

Which of the following organizations brings out the publication known as ‘World Economic Outlook’?

[amp_mcq option1=”The International Monetary Fund” option2=”The United Nations Development Programme” option3=”The World Economic Forum” option4=”The World Bank” correct=”option1″]

This question was previously asked in

UPSC IAS – 2014

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The International Monetary Fund (IMF) is the organization that publishes the ‘World Economic Outlook’ report.

The World Economic Outlook (WEO) is a comprehensive report published by the IMF typically twice a year, in spring and fall. It presents the IMF staff’s analysis and projections of global economic developments and trends. It provides analysis of global output, inflation, trade, and other macroeconomic indicators.

The World Bank publishes reports like the ‘Global Economic Prospects’. The World Economic Forum is known for reports such as ‘The Global Competitiveness Report’. The United Nations Development Programme (UNDP) publishes the ‘Human Development Report’.

215. In the context of food and nutritional security of India, enhancing th

In the context of food and nutritional security of India, enhancing the ‘Seed Replacement Rates’ of various crops helps in achieving the food production targets of the future. But what is/are the constraint/constraints in its wider/greater implementation?

1. There is no National Seeds Policy in place.
2. There is no participation of private sector seed companies in the supply of quality seeds of vegetables and planting materials of horticultural crops.
3. There is a demand-supply gap regarding quality seeds in case of low value and high volume crops.

Select the correct answer using the code given below.

[amp_mcq option1=”1 and 2″ option2=”3 only” option3=”2 and 3″ option4=”None” correct=”option2″]

This question was previously asked in

UPSC IAS – 2014

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Let’s analyze the statements regarding constraints in enhancing Seed Replacement Rates (SRR):
1. There is no National Seeds Policy in place. – This statement is incorrect. India does have a National Seeds Policy, for instance, the National Seeds Policy of 2002, which aims to ensure the availability of quality seeds.
2. There is no participation of private sector seed companies in the supply of quality seeds of vegetables and planting materials of horticultural crops. – This statement is incorrect. The private sector plays a significant role in the Indian seed industry, especially in the high-value segments like hybrid vegetables and horticultural crops.
3. There is a demand-supply gap regarding quality seeds in case of low value and high volume crops. – This statement is correct. For major crops like cereals, pulses, and oilseeds (low value, high volume per farmer), ensuring the timely availability of affordable, quality seeds to a large number of small and marginal farmers across vast areas is a significant logistical and economic challenge, leading to a demand-supply gap, particularly for specific varieties or during peak seasons. This limits the potential for enhancing SRR for these crops.
Therefore, only statement 3 represents a constraint.

– Seed Replacement Rate (SRR) refers to the percentage of the total cropped area sown with certified/quality seeds of improved varieties in place of farm-saved seeds.
– Enhancing SRR is crucial for improving crop productivity and achieving food security goals.
– Constraints often include the cost of quality seeds, limited awareness among farmers, inadequate infrastructure for production and distribution, and the availability challenges mentioned in statement 3.

While the private sector is active, public sector institutions and policies are still vital for seed production, certification, and distribution, especially for food security crops and in remote areas, to address constraints like the one mentioned in statement 3.

216. If the interest rate is decreased in an economy, it will

If the interest rate is decreased in an economy, it will

[amp_mcq option1=”decrease the consumption expenditure in the economy” option2=”increase the tax collection of the Government” option3=”increase the investment expenditure in the economy” option4=”increase the total savings in the economy” correct=”option3″]

This question was previously asked in

UPSC IAS – 2014

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A decrease in the interest rate makes borrowing money cheaper.
A) decrease the consumption expenditure: Lower interest rates generally make it cheaper for consumers to borrow for purchases (like vehicles, homes) or to use credit, which tends to *increase* consumption expenditure, not decrease it. Also, lower returns on savings encourage spending.
B) increase the tax collection of the Government: While stimulating economic activity might eventually lead to higher tax collection, this is an indirect and not the most direct or immediate effect of a decreased interest rate.
C) increase the investment expenditure in the economy: Businesses often borrow money to finance investments in capital goods, expansion, research, etc. A lower interest rate reduces the cost of borrowing, making more investment projects financially viable and thus encouraging businesses to increase investment expenditure. This is a primary channel through which monetary policy (via interest rates) affects the economy.
D) increase the total savings in the economy: A lower interest rate means a lower return on savings. This makes saving less attractive relative to spending or investing, potentially leading to a *decrease* in the rate of saving or total savings, not an increase.

– Interest rates represent the cost of borrowing and the return on saving.
– Lower interest rates make borrowing cheaper and saving less attractive.
– Cheaper borrowing stimulates investment by businesses and consumption by households.

Central banks use interest rates as a tool of monetary policy. Decreasing interest rates (expansionary policy) is often used to stimulate economic growth during a slowdown by encouraging spending and investment. Conversely, increasing interest rates (contractionary policy) is used to curb inflation by making borrowing expensive and encouraging saving.

217. Which of the following are associated with ‘Planning’ in India? The

Which of the following are associated with ‘Planning’ in India?

The Finance Commission
The National Development Council
The Union Ministry of Rural Development
The Union Ministry of Urban Development
The Parliament

Select the correct answer using the code given below.

[amp_mcq option1=”1, 2 and 5 only” option2=”1, 3 and 4 only” option3=”2 and 5 only” option4=”1, 2, 3, 4 and 5″ correct=”option3″]

This question was previously asked in

UPSC IAS – 2014

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In the context of historical planning in India (primarily through Five Year Plans before the establishment of NITI Aayog), the National Development Council (NDC) and the Parliament were directly involved in the planning process.
Statement 2 is correct: The National Development Council (NDC), composed of the Prime Minister, Union Cabinet Ministers, Chief Ministers of all States, and members of the Planning Commission (now NITI Aayog), was the highest decision-making body for approving Five Year Plans and national development policies.
Statement 5 is correct: The Parliament discusses and approves the Five Year Plans, the Union Budget (which allocates resources based on the plans), and passes legislation related to economic and social development, thus playing a crucial role in the planning framework.
Statement 1 is incorrect: The Finance Commission is a constitutional body (Article 280) whose primary function is to recommend the distribution of tax revenues between the Union and States and grants-in-aid. While its recommendations are vital for resource allocation which supports planned development, the Finance Commission itself was not directly part of the *process* of formulating or approving the Five Year Plans.
Statements 3 and 4 are incorrect: The Union Ministries of Rural Development and Urban Development are implementing agencies. They execute specific schemes and projects aligned with the overall plan objectives but are not considered bodies primarily associated with the *process* of national planning itself.

– Historically, planning in India was centralized under the Planning Commission, approved by the National Development Council (NDC), and subject to parliamentary oversight and approval.
– The Finance Commission deals with fiscal federalism and resource distribution, a distinct role from the planning commission/NDC’s function of drafting and approving development plans.
– Ministries implement planned programmes but are not the apex planning bodies.

With the abolition of the Planning Commission and the establishment of NITI Aayog in 2015, the formal structure of centralized Five Year Plans and the NDC’s role in approving them has changed. NITI Aayog serves as a think tank and policy advisory body. However, this question refers to the historical context of planning in India.

218. In the context of Indian economy, which of the following is/are the pu

In the context of Indian economy, which of the following is/are the purpose/purposes of ‘Statutory Reserve Requirements’?

1. To enable the Central Bank to control the amount of advances the banks can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements

Select the correct answer using the code given below.

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

This question was previously asked in

UPSC IAS – 2014

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The correct option is B. The purposes of ‘Statutory Reserve Requirements’ (CRR and SLR) include enabling the Central Bank to control the amount of advances banks can create and making people’s deposits with banks safe and liquid.

Statutory Reserve Requirements, specifically the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), are monetary policy tools used by the Central Bank (RBI).
1. By requiring banks to hold a portion of their deposits as reserves (cash with RBI for CRR, approved securities for SLR), the RBI limits the amount of funds banks have available for lending, thereby influencing credit creation and controlling the money supply. This directly enables the Central Bank to control the amount of advances banks can create.
2. CRR and SLR ensure that banks maintain a certain percentage of their liabilities in highly liquid assets (cash or approved securities), making a portion of the depositors’ funds safe and available if needed, thus enhancing the safety and liquidity of deposits.

3. Preventing commercial banks from making excessive profits is not the primary objective of reserve requirements. While controlling lending can indirectly impact profitability, the main goals are monetary stability, inflation control, and depositor protection.
4. Reserve requirements mandate holdings with the RBI (CRR) or in specific assets (SLR), not necessarily in the bank’s own vault cash for day-to-day requirements. Banks manage their day-to-day liquidity needs through other means, although reserve requirements do contribute to overall liquidity.

219. What is/are the facility/facilities the beneficiaries can get from the

What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?

1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in the rural areas to make deposits and withdrawals.

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″]

This question was previously asked in

UPSC IAS – 2014

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The correct option is C. Both statements 1 and 2 describe facilities that beneficiaries can get from the services of Business Correspondents (Bank Saathi) in branchless areas.

Business Correspondents (BCs), also known as Bank Saathis, are retail agents appointed by banks to provide banking services in remote locations where establishing brick-and-mortar branches is not viable. Their main role is to promote financial inclusion by extending banking services to the underserved population, particularly in rural areas.

1. BCs enable beneficiaries of government schemes, pensions, and other social security benefits to receive their payments conveniently in their villages, often using biometric authentication.
2. BCs provide basic banking services like account opening, cash deposits, cash withdrawals, balance enquiry, and fund transfers through micro-ATMs or other digital devices at or near the customer’s location in rural areas.
Both facilities are core functions aimed at bringing banking services to the doorstep of people in unbanked or underbanked regions.

220. The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time L

The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time Liabilities’, sometimes appearing in news, are used in relation to

[amp_mcq option1=”banking operations” option2=”communication networking” option3=”military strategies” option4=”supply and demand of agricultural products” correct=”option1″]

This question was previously asked in

UPSC IAS – 2014

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The correct option is A. The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time Liabilities’ are used in relation to banking operations.

Marginal Standing Facility (MSF) is a facility under which scheduled commercial banks can borrow additional funds overnight from the Reserve Bank of India (RBI) by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a certain limit. The MSF Rate is the interest rate charged by the RBI for this facility, and it is a key monetary policy tool. Net Demand and Time Liabilities (NDTL) represent the total liabilities of a bank (deposits, borrowings, etc.) minus its deposits with other banks and other approved assets. It is the base on which banks’ reserve requirements like the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are calculated by the RBI.

Both MSF Rate and NDTL are specific terms used in the context of banking regulations, monetary policy, and the operations conducted by commercial banks under the purview of the central bank (RBI) in India. They are not related to communication networking, military strategies, or supply and demand of agricultural products.