Economic Development

221. The main objective of the 12th Five-Year Plan is

The main objective of the 12th Five-Year Plan is

[amp_mcq option1=”inclusive growth and poverty reduction” option2=”inclusive and sustainable growth” option3=”sustainable and inclusive growth to reduce unemployment” option4=”faster, sustainable and more inclusive growth” correct=”option4″]

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The correct option is D. The main objective of the 12th Five-Year Plan (2012-2017) was ‘Faster, Sustainable and More Inclusive Growth’.
The 12th Five-Year Plan was the last of India’s Five-Year Plans. Its central theme and stated objective were “Faster, Sustainable and More Inclusive Growth”. This expands upon the “Inclusive Growth” objective of the 11th Plan by adding the dimensions of speed and sustainability, recognizing the need for not just equity but also environmental considerations and a higher growth rate to achieve development goals.
The 11th Five-Year Plan (2007-2012) had the objective “Towards Faster and More Inclusive Growth”. The 12th Plan built upon this by emphasizing sustainability alongside speed and inclusiveness.

222. What does venture capital mean?

What does venture capital mean?

[amp_mcq option1=”A short-term capital provided to industries” option2=”A long-term start-up capital provided to new entrepreneurs” option3=”Funds provided to industries at times of incurring losses” option4=”Funds provided for replacement and renovation of industries” correct=”option2″]

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The correct option is B. Venture capital means a long-term start-up capital provided to new entrepreneurs.
Venture capital is a form of private equity financing that is provided by venture capital firms or funds to start-ups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth. It is characterized by being a long-term investment, usually in equity, and is provided to fund initial operations or expansions of new ventures.
Venture capital is typically associated with high risk due to the early stage of the companies invested in, but it offers the potential for proportionally high returns if the ventures are successful. It is not short-term capital, nor is it primarily intended for companies already incurring losses (though start-ups often do in their early phase) or for replacement/renovation of established industries.

223. The sales tax you pay while purchasing a toothpaste is a

The sales tax you pay while purchasing a toothpaste is a

[amp_mcq option1=”tax imposed by the Central Government” option2=”tax imposed by the Central Government but collected by the State Government” option3=”tax imposed by the State Government but collected by the Central Government” option4=”tax imposed and collected by the State Government” correct=”option4″]

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The correct option is D. The sales tax you pay while purchasing a toothpaste is a tax imposed and collected by the State Government (in the pre-GST era or as a conceptual understanding).
Prior to the implementation of the Goods and Services Tax (GST) in India, Sales Tax (or Value Added Tax – VAT) on the sale of goods within a state was a state subject. This meant that the power to levy and collect sales tax on intra-state sales rested with the State Government, as per the State List (List II) of the Seventh Schedule of the Constitution of India.
With the advent of GST (implemented from July 1, 2017), most indirect taxes, including Sales Tax/VAT, Central Sales Tax, Service Tax, etc., were subsumed into a single tax. Under GST, tax on an intra-state sale is bifurcated into Central GST (CGST) and State GST (SGST), both levied simultaneously. However, the question refers to “sales tax,” implying the pre-GST regime or a general understanding of the tax on sales, which was a state domain.

224. What are the significances of a practical approach to sugarcane produc

What are the significances of a practical approach to sugarcane production known as ‘Sustainable Sugarcane Initiative’?

  • Seed cost is very low in this compared to the conventional method of cultivation.
  • Drip irrigation can be practiced very effectively in this.
  • There is no application of chemical/inorganic fertilizers at all in this.
  • The scope for intercropping is more in this compared to the conventional method of cultivation.

Select the correct answer using the code given below.

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

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The Sustainable Sugarcane Initiative (SSI) reduces seed cost by using single-budded setts, facilitates effective drip irrigation due to wider spacing, and increases the scope for intercropping in the wide inter-row spaces. Statement 3 is incorrect as SSI promotes reduced use but doesn’t entirely eliminate chemical fertilizers.
SSI is an agro-ecological approach to sugarcane cultivation that focuses on ‘more with less’ – more cane production using less seed, less water, and less land. Key practices include the use of single-budded setts or seedlings transplanted after raising them in a nursery, wider row spacing, and promotion of drip irrigation and organic manuring.
The advantages listed in statements 1, 2, and 4 are well-documented benefits of the SSI method compared to traditional sugarcane cultivation. Statement 3 is a common misconception or overstatement; SSI encourages integrated nutrient management, which includes organic sources and efficient use of inorganic fertilizers if needed, aiming for significant reduction rather than zero application.

225. Which of the following grants/grant direct credit assistance to rural

Which of the following grants/grant direct credit assistance to rural households?

  • 1. Regional Rural Banks
  • 2. National Bank for Agriculture and Rural Development
  • 3. Land Development Banks

Select the correct answer using the codes given below.

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

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Regional Rural Banks (RRBs) and Land Development Banks (or their successors within the cooperative structure) are financial institutions that provide direct credit facilities to rural households for various purposes like agriculture and rural development activities. NABARD, on the other hand, is primarily an apex institution providing refinance and support to banks and other financial institutions, rather than direct credit to individual households.
RRBs were established to cater to the banking and credit needs of the rural population directly. Land Development Banks (part of the cooperative credit structure) focus on long-term agricultural finance, also providing credit directly to farmers (rural households). NABARD functions as a refinancing and supervisory body for rural credit institutions.
While NABARD is crucial for the rural credit system, its role is mainly at the wholesale level, channeling funds to the retail institutions (like RRBs, Cooperative Banks, and sometimes commercial banks) which then disburse direct credit to the ultimate borrowers (rural households).

226. The national income of a country for a given period is equal to the

The national income of a country for a given period is equal to the

[amp_mcq option1=”total value of goods and services produced by the nationals” option2=”sum of total consumption and investment expenditure” option3=”sum of personal income of all individuals” option4=”money value of final goods and services produced” correct=”option1″]

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National income, strictly defined (like NNP at Factor Cost), represents the total income earned by the residents (nationals) of a country. Among the given options, the total value of goods and services produced by the nationals corresponds to the Gross National Product (GNP), which is a measure of the total economic output attributable to the residents of a nation, regardless of the physical location of the output.
While Gross Domestic Product (GDP) (defined in option D) measures the total value of goods and services produced within a country’s borders, National Income (NI) conceptually aligns more closely with the income accruing to the residents of the nation. GNP is the aggregate most directly linked to “production by nationals”. National Income (NNP at Factor Cost) is derived from GNP (NNP at Market Price minus Net Indirect Taxes).
Option B describes the expenditure side of GDP calculation. Option C describes personal income, which is a part of national income but not the total. Option D describes GDP. While GDP is a crucial measure, the term “national income” often implies a focus on the income or production attributable to the nation’s residents (GNP) or the net income available to factors of production (NNP at Factor Cost). Given the options, A is the most appropriate choice representing the productive output linked to the “nationals”.

227. Economic growth in country X will necessarily have to occur if

Economic growth in country X will necessarily have to occur if

[amp_mcq option1=”there is technical progress in the world economy” option2=”there is population growth in X” option3=”there is capital formation in X” option4=”the volume of trade grows in the world economy” correct=”option3″]

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Economic growth in country X will necessarily have to occur if there is capital formation in X.
Capital formation (investment in physical capital like machinery, infrastructure, and human capital like education, skills) increases the productive capacity of an economy. An increase in the stock of capital, combined with labour, directly leads to an increase in the potential output of goods and services, which is the basis of economic growth. While other factors like technology and labor are also crucial, sustained economic growth fundamentally requires investment in increasing the factors of production or improving their productivity.
Technical progress in the world economy and growth in world trade provide opportunities but do not guarantee growth in a specific country X without internal conditions being met (like capital to adopt technology or participate in trade). Population growth increases the labour supply but doesn’t necessarily translate into growth without sufficient capital and technology to employ the additional population productively; it can even lead to a decrease in per capita income if growth in output doesn’t keep pace.

228. Supply of money remaining the same when there is an increase in demand

Supply of money remaining the same when there is an increase in demand for money, there will be

[amp_mcq option1=”a fall in the level of prices” option2=”an increase in the rate of interest” option3=”a decrease in the rate of interest” option4=”an increase in the level of income and employment” correct=”option2″]

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When the supply of money remains the same and there is an increase in the demand for money, it leads to an increase in the rate of interest.
In the money market, the demand for money (Md) is inversely related to the interest rate, while the supply of money (Ms) is typically considered fixed by the central bank. If the demand for money increases (shifts right) while the supply is fixed, the equilibrium in the money market shifts to a higher interest rate, as people are willing to pay more to hold money or borrow funds.
This concept is explained by theories of money demand, such as the Keynesian liquidity preference theory, which posits that individuals hold money for transactional, precautionary, and speculative motives. A higher demand for money, for whatever reason (e.g., increased economic activity, higher expected inflation), ceteris paribus, drives up the cost of holding or borrowing money, which is reflected in the interest rate.

229. Which one of the following is likely to be the most inflationary in it

Which one of the following is likely to be the most inflationary in its effect?

[amp_mcq option1=”Repayment of public debt” option2=”Borrowing from the public to finance a budget deficit” option3=”Borrowing from banks to finance a budget deficit” option4=”Creating new money to finance a budget deficit” correct=”option4″]

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Creating new money to finance a budget deficit is likely to be the most inflationary among the given options.
Financing a budget deficit by creating new money (also known as seigniorage or printing money) directly increases the money supply in the economy without a corresponding increase in output. This is a direct monetary expansion that can lead to significant demand-pull inflation, especially if the deficit is large.
Borrowing from the public (B) involves transferring existing money from the public to the government. Borrowing from banks (C) involves credit creation by banks, which also increases money supply but often through a multiplier effect rather than directly creating base money like option D. Repayment of public debt (A), unless financed by printing money, generally doesn’t cause inflation and can even reduce demand if financed through taxation or borrowing from other sources. Direct money creation (D) is considered the most inflationary because it directly increases the monetary base.

230. A rise in general level of prices may be caused by 1. an increase in

A rise in general level of prices may be caused by

  • 1. an increase in the money supply
  • 2. a decrease in the aggregate level of output
  • 3. an increase in the effective demand

Select the correct answer using the codes given below.

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

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All three factors listed can cause a rise in the general level of prices (inflation).
1. An increase in the money supply, if not matched by a proportional increase in output, leads to too much money chasing too few goods, causing demand-pull inflation.
2. A decrease in the aggregate level of output, with demand remaining constant or increasing, creates scarcity relative to demand, leading to cost-push or supply-side inflation.
3. An increase in effective demand (aggregate demand) that exceeds the available supply leads to demand-pull inflation.
Inflation is a complex phenomenon influenced by various factors. These three points represent fundamental drivers: monetary factors (money supply), supply-side factors (output level), and demand-side factors (aggregate demand). Often, inflation is a result of a combination of these factors.
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