Economic Development

Answer : Long-term Capital Gain Tax: It is the tax paid on profit generated by an asset such as real estate, shares or share-oriented products held for a particular time-frame. The definition of Long-term Capital Gains, or LTCG, is different for various products. Budget re-introduced LTCG tax on stocks. Investors will have to pay 10 per cent tax on profit exceeding Rs 1 lakh made from the sale of shares or equity mutual fund schemes held ....

Answer : The Sustainable Development Goals (SDGs), otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. These 17 Goals build on the successes of the Millennium Development Goals, while including new areas such as climate change, economic inequality, innovation, sustainable consumption, peace and justice, among other priorities. The goals are interconnected – often the key to success on one ....

Answer : Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops. Minimum Support Price is an important part of India’s agricultural price policy. The MSP helps to incentivize the framers and thus ensures adequate food grains production in the country. At present, the MSP covers 24 crops that includes seven cereals (paddy, wheat, barley, jowar, bajra, maize and ragi); five pulses (gram, arhar/tur, moong, ....

Answer : A supermarket is a self-service shop offering a wide variety of food and household products, organized into sections and shelves. It is larger and has a wider selection than earlier grocery stores but is smaller and more limited in the range of merchandise than a hypermarket or big-box market.

Role of supermarkets in supply chain of perishable items such as fruits, vegetables, and food items are:

• Help to improve backward and forward linkages in agriculture sector.
• It has ....

Answer : The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of the Union Cabinet on January 1, 2015. NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs.

• While designing strategic and long term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States.
• The Government of India, in keeping with its reform ....

Answer : Protectionism is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations.

Currency manipulation is the deliberate attempt by authorities in a country to reduce the value of its currency in order to boost exports and stimulate economic growth. It is often referred to as a “Beggar thy Neighbour” policy as growth is bought at the expense of other ....

Answer : National Horticulture Mission was announced in 2004.The horticulture sector includes fruit, vegetables, spices, medicinal and aromatic plants, flowers, mushroom and a variety of plantation crops like coconut, areca nut, cashew nut and cocoa which has been contributing significantly to the GDP in agriculture (28.5 per cent from 8.5 per cent area).

Objectives of NHM

To develop horticulture to the maximum potential available in the State and to augment production of Fruits, Vegetable, flowers, Plantation crops, Spices, Medicinal ....

Answer : Crop pattern refers to the proportion of area under different crops at a particular period of time. A change in cropping pattern means a change in the proportion of area under different crops. It can be described in a number of ways but the most convenient method is to classify the agricultural production into two groups i.e. food grains and non-food grains.

As a result of emphasis of certain food grains, output substantially increased from 81.0 ....

Answer : Organic State carries far fewer toxic pesticide residues and is grown using no GMOs. It doesn’t poison farm workers or the micro-organisms living in the soil that produce healthy, drought-resistant crops. Organic farming is also better suited to climate change, protects biodiversity, enhances soil fertility, and, to top it off, organic foods are more nutritious and taste better. Sikkim, the picturesque northeastern Indian state in the eastern Himalayas, announced in January that it had transitioned ....

Answer : India is a very big country with 2nd largest population in the world which will soon become most populous. So, the Indian economy is also very big and for such big and complex economy not one factor can bring growth. To decide whether savings rate is the most effective factor for India’s potential for growth or not will require to analyse other factors of growth first.

Other factors of growth

1. External investments which bring extra wealth to ....

Answer : Manufacturing and labour intensive exports depend on many factors. These do not work in isolation. There are many reasons for failure of manufacturing to achieve goals of labour intensive exports and these reasons also hint towards suggestions to improve labour intensive over capital intensive exports.

Various reasons for failure

1. Long colonial past of India destroyed its manufacturing capacity which has not yet recovered fully. The manufacturing sector, itself, is growing slowly therefore the goal of labour intensive ....

Answer : Public-Private Partnership (PPP) is a new model which is used specially in infrastructure projects. It brings private efficiency and energy into governmental accountability. This is very important in the case of developing airports in India.

To examine development of airports in India through PPP, we need to see why PPP has been introduced in developing airports. Earlier, Airport Authority of India was developing airports. But it put serious strain on government finances, leading to slow pace ....

Answer : Explaining various revolutions in agriculture and its impact on poverty alleviation and food security in post-independent India requires understanding that agriculture is closely linked with land reforms and allied sectors like animal husbandry.

Explaining various revolutions:

• Land reforms and tenancy reforms had taken place immediately after the independence. But these reforms were insufficient to improve the situation of food security. These reforms also failed to alleviate poverty. Hence, the 1st revolution - revolution in agriculture was launched. ....

Answer : The World is changing very fast where cost effectiveness has become very important. But, despite being cost effective, the small units face less acceptance.

[A] Reasons for poor consumer acceptance:

• The smaller units usually produce non-standardised products.
• Usually, small units are not registered and don’t have certifications from Food Safety and Standards Authority of India (FSSAI), Organic India, Agricultural and Processed Food Products Export Development Authority (APEDA), Indian Standards Institute (ISI) etc.
• Varying taste and qualities are also contributing ....

Answer : Transform, Energise and Clean India (TEC) is the agenda of the Budget 2017-18. The TEC agenda is very specific which meant specific sectors like —

TEC term is not general. It denotes specific meaning. Clean does not mean clean India. Here, clean denotes corruption and political funding.

• Transform the quality of governance and quality of life of our people
• Energise various sections to society, specially the youth and the vulnerable and enable them to unleash their true potential ....

Answer : India is a large country and about 1 million are added to workforce every month. About 50% of population still depends on agriculture which needs to shift to industrial and services sector. But services can’t absorb so much rural population. Therefore, industries require exponential growth. But it is lagging behind the normal GDP growth itself. To understand whether changes in industrial policy will boost industrial growth, we need to know the reasons for industrial growth ....

Answer : India is the most diverse country and growth is required to be more inclusive than any other country. Inclusive growth for India means that the growth or progress of India is such that each and every citizen benefits from growth equitably.

Salient features of inclusive growth

Economic growth is necessary precondition for inclusive growth but it has to have some basic features in order to be called it as inclusive:

• Elimination or faster reduction of poverty is very ....

Answer : Yield of any crop depends on many factors like soil fertility, suitability of crop to the local climate, status of pollution of soil water and air, irrigation facilities, quality of seeds, crop rotation and many more. There are some issues of declining yield of rice and wheat in the cropping system.

Major Reasons

1. Due to favourable MSP and assurance of government procurement, almost every farmer grows rice and wheat. This has led to monocropping of these. But ....

Answer : Subsidies are a kind of cushion provided by the government to farmers. Most Indian farmers are small and marginal, hence they are poor. So, they respond much favourably to the subsidies. As choice of crop is decided by farmer so subsidies have a definite effect on cropping pattern and crop diversity and in return economy of farmers also faces impact.

Various types of subsidies

• Subsidies through minimum support price
• Fertiliser subsidy in urea and other
• Electricity subsidy shows impact ....

• In the modern globalized world, there has been an increasing trend towards ‘informalization’ of labour market conditions, especially in the developing countries. In the Indian context, the informal component roughly corresponds to ¾th of the total estimated employment.
• Post-globalization, state’s share in total employment has decreased substantially. Private firms on the other hand resorted to ‘cost cutting’ and maintaining low labour costs. Simplification of labour laws often resulted in adoption of ‘hire and fire’ policies leading to more informalization where the ....

• Financial inclusion is a national priority of the Government as it is an enabler for inclusive growth. Financial inclusion is important as it provides an avenue to the poor for bringing their savings into the formal financial system.
• Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a national mission on financial inclusion encompassing an integrated approach to bring about comprehensive financial inclusion of all the households in the country. The plan envisages universal access to banking facilities with at least one basic banking ....

• There is no universally accepted definition of a Smart City. The conceptualisation of ‘Smart City’ varies from city to city and country to country, depending on the level of development, willingness to change and reform, resources and aspirations of the city residents. In general, a smart city can be termed as a city which is able to meet the aspirations of its people.
• A Smart City provides smart solutions to the urban problems. To provide for the aspirations and needs of ....

• Foreign Direct investment (FDI) is a critical driver of economic growth in the country in the past liberalized era. Non-sufficiency of domestic sources of funds for meeting the developmental needs of the country is the primary reason for the increasing demand of FDI. The inflow of FDI also means achieving technical know-how and generating employment. Especially in the current scenario when domestic investment activity is mired in twin balance sheet problem, FDI can act as a crowding-in factor and boost ....

Answer : Inclusive growth is a concept that advances equitable opportunities for economic participants during economic growth with benefits to every section of the society. The inclusive growth challenge is huge in the Indian context where the majority of the labour force is unskilled and malnourished.

• To take care of the cared less segment of the Indian society and to use the used less man power in terms of inclusive growth is a challenge for the policymakers as ....

Answer : Land reform policy in India had two specific objectives; the first was to remove all impediments to increase agricultural production and the second was the elimination of all elements of exploitation and social injustice within the agrarian system.

The land reforms in India can be summarised into four main categories:

1. Abolition of intermediaries (Zamindari system)
2. Tenancy regulation (to improve the contractual terms including security of tenure)
3. A ceiling on landholdings (via Land ceiling Act)
4. Attempts to consolidate disparate landholdings.

Land reforms ....

Answer : Indian agriculture is often termed as a gamble against monsoon. Variability of rainfall in time and space coupled with untimely entry of droughts and floods increases the vulnerability of Indian agriculture to vagaries of nature. Despite the country treading the path of high economic growth we frequently hear the news of farmer suicides in Vidarbha and Bundelkhand. Often, these farmers got caught in debt traps due to crop failure.

In the current scenario of rural and ....

Answer : The spectre of jobless growth has haunted India for decades and recent data suggests that this trend is still continuing.India faces a serious challenge of dealing with joblessness despite statistically being the world’s fastest growing economy. The spread, depth and intensity of the problem, especially among the educated youth are not reflected in the latest unemployment number of 4.9 per cent in 2013-14. This estimate captures the chronically unemployed - those who sought or were ....

Answer : The livestock sector provides us with meat, dairy and eggs, as well as wool and leather. Livestock rearing is a key livelihood and risk mitigation strategy for small and marginal farmers, particularly across the rain-fed regions of India. It plays an important role in the national economy and in the socio-economic development of the country. Also, as livestock is less prone to global warming and climate change, it can be considered more reliable than rain-fed ....

Answer : Agriculture is the lifeline of India, a significant contributor to the GDP and employs more than half the workforce. But it is one of the least reformed sectors and agricultural distress is caused due to various reasons, like too many small land holdings, lack of proper credit and insurances etc. About 85% small land holdings are less than 2 hectares. This seriously limits any productivity enhancing technology and if pushed far, degrades the land. Rural ....

Answer : Government’s “Digital India” project launched on 1st July 2015 envisions empowering citizens with e-access to government services and livelihood related services, among others. The project has three core components, viz. digital infrastructure, digital services and digital literacy. Mobile phone is the preferred delivery medium with focus on m-Governance and m-Services. The m-Agriculture and m-GramBazar, out of the seven components covered under m-Services, directly impact agricultural extension and marketing services.

Measure taken by government:

1. Government has put ....

Answer : DBT was launched as a citizen empowerment tool with an objective to transfer benefits to the beneficiaries directly by removing the middlemen. It is aimed at better targeting of subsidies and reducing delays in the delivery of benefits such as scholarships and pensions to the intended beneficiaries. It will also help in curbing wastages and leakages, savings crores of rupees of public money, and result in financial inclusion.

• It aims to transfer subsidies, scholarships and other ....

Answer : India is largest producer and consumer of food items. The major challenges in India’s food processing industry include ineffective legal framework. There is a lack of clear national policy. Presently, food processing is governed and regulated by various statutes created by different ministries; there is no clear policy nationwide. Lack of such policy creates disparities and impedes the development of sector. Multiple laws have been enacted in India to ensure food safety standards. These laws ....

Answer : India is known to be one of the world’s largest importers of gold. It imports anything between 800-1000 tonnes of gold every year to meet its insatiable desire for this metal. This makes the yellow metal imports one of the main components of India’s burgeoning CAD besides oil imports. Despite the presence of large gold holdings in India, at almost 20,000 tonnes, it is neither traded nor monetized. Instead, individuals and institutions prefer to hoard ....

Answer : ‘Make in India’ project is an ambitious project to spot India on the world map as the manufacturing hub. Looking at the present Indian economic situation and present demographic divide the manufacturing sector has the huge potential to generate millions of jobs and could help India in making it trade surplus nation. The success of ‘Make in India’ depends on various factors such as land acquisition, business friendly laws and policies, skilled labour, business environment ....

Answer : The Special Economic Zone (SEZ) policy in India first came into inception on April 1, 2000. The prime objective was to enhance foreign investment and provide an internationally competitive and hassle free environment for exports. The main objectives behind the setting up of SEZs are generation of economic activity through exports, attracting investments primarily for infrastructure and generating employment. Manufacturing is crucial to India’s economic recovery. Thus, we need to review the problems of a ....

Answer : Liberalization and reforms is one of the important factors contributing to the growth of services sector in India. With economic growth and rise in per capita income, there is a change in demand pattern from necessary to discretionary consumptions like education and personal and health care services. High income elasticity of demand for services has contributed to the high growth of this sector. Technological progress and availability of high skilled manpower has led to growth ....

Answer : Demographic dividend refers to a period – usually 20 to 30 years – when a greater proportion of people are young and in the working age-group. This cuts spending on dependants, spurring economic growth.

• Reaping the benefits of a young working population via a demographic dividend is not a foregone conclusion, especially when India’s youth lack the preparation and opportunities necessary for gainful employment. According to a study by Federation of Indian Chambers of Commerce and ....

Answer : In order to improve the marketing system encouraging cooperative marketing, establishment of regulated markets, and grading, storage and warehousing are essential. In this connection the role of Agricultural Produce Marketing Committee (Markets in most parts of the country are established and regulated under the State APMC Acts) has been indispensable till day.

• The purpose of regulation of agricultural markets was to protect farmers from the exploitation of intermediaries and traders and also to ensure better prices ....

Answer : Credit is a catalyst that lubricates the process to accelerate the farm and non-farm sector development including rural industrialization, business and service segments of the economy. A number of factors inhibit smooth credit delivery to the agriculture sector. These are: (i) insistence on collateral, (ii) complicated loan administration procedures, (iii) distances from the villages to the branches, (iv) higher monitoring and follow up costs, (v) culture gap between bank officials and farmers, (vi) political interference, ....

Answer : The new land acquisition Act mainly provides for acquisition of land by the government, among others for

• Its own use, hold and control, including for a public sector undertaking
• The use of private companies for stated public purpose, including for public–private partnership projects, but excluding for state or national highway projects
• Immediate and declared use by private companies for public purpose

When the government acquires land for immediate and for declared public purpose, and wants to control the land ....

Answer : India has been in the news for its robust economic performance and for growth despite the recent global recession. The recent Indian Premier League suggests unbelievable investor confidence and provides great advertising opportunities, fantastic revenue, world-class sport, extraordinary entertainment, phenomenal television ratings and immense customer satisfaction. Yet, the incredible indices of development in India mask the inequity in the country and the human cost of the nation’s progress. For millions of Indians hunger is routine, ....

Answer : When it comes to PPP, the country has invested the last decade-and-a-half in asset creation. So, a number of PPP concessions have been awarded in national highways and ports sectors. In the airports sector, private entities have developed metro airports at Bangalore, Hyderabad, Delhi and Mumbai through PPP concessions. In Railways, the concessions for the operation of container trains have been awarded under PPP. According to a World Bank report on private participation in infrastructure, ....

Answer : Copyright law applies to “works of authorship” that are fixed in a tangible medium of expression (such as a CD or a book), and applies automatically. Cospyright prohibits the reproduction, distribution, modification, public performance and public display of such items that is “substantially similar” to the original. For example, if the software is protected only by copyright, anyone can avoid paying a license fee by re-creating the software from scratch without copying it.

• Patents protect “inventions” ....

Answer : Corporate Social Responsibility (CSR) is a form of corporate self responsibility integrated into business model which functions as a built-in, self-regulating mechanism whereby a business engages in actions that appear to further some social good, beyond the interests of the firm and that which is required by law.

New Companies Bill, 2013 which replaces the old Companies Act, 1956 makes CSR a mandatory obligation. It states that 2 % of average net profit of last 3 ....

Answer : The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) was enacted to institutionalise financial discipline, reduce India’s fiscal deficit, improve macroeconomic management and the overall management of the public funds by moving towards a balanced budget. The main purpose was to eliminate revenue deficit of the country (building revenue surplus thereafter) and bring down the fiscal deficit to a manageable 3% of the GDP by March 2008. However, due to the 2007 international financial crisis, ....

Answer : A tax expenditure program is government spending through the tax code. Tax expenditure can be defined as the “revenue foregone” due to provision of tax laws and various policies that allow:

• Deductions, exclusions and exemptions from taxpayers’ taxable expenditure, income or investment.
• Deferral of tax liability,
• Preferential tax rate.

For example, sops on excise and custom duties, etc. lead to the loss of government revenue and leads to tax expenditure.

Tax expenditures are considered “off-budget” spending by most economists and ....

Answer : The Food Security Bill aims to provide subsidized food grains to approximately two thirds of India’s 1.2 billion people. Under the provisions of the Bill, beneficiaries are to be able to purchase 5 kilograms per eligible person per month of cereals at Rs 3 per kg rice, wheat at Rs 2 per kg and coarse grains (millet) at Rs. 1 per kg.

Pregnant women, lactating mothers, and certain categories of children are eligible for daily free ....

Answer : Different types of agricultural subsidies given to farmers at the national and at state levels are of two types – Direct subsidy and indirect subsidy.

Direct subsidy:

1. Raw materials oriented subsidy like fertilizer, seed subsidy, etc.
2. Subsidy on energy inputs like electricity (power) and Diesel, etc.
3. Other infrastructure related subsidy like irrigation, etc.
4. Procurement prices net against natural calamity like MSP, FRP, etc.

Indirect subsidy:

1. Agricultural income is not taxed in India.
2. Various incentives provided for the marketing of food grains like Mandis, ....
   

Answer : India has already seen the ‘green’ and ‘white’ revolutions in its food industry come to pass; it now seems well on its way to realizing a ‘pink revolution’ too; the modernization of meat production processes.

India is the largest dairy and milk producer worldwide. In 2012, it also became beef exporter as well. With respect to the prevailing malnutrition in the country, it seems pertinent that there should be focus on promotion of meat industries and ....

Answer : It was in 1990s, the first initiation towards economic liberalization was undertaken by Dr Manmohan Singh, the then Finance Minister of India. Liberalization along with globalization has greatly influenced the Indian economy and made it a huge consumer market. This led to the growth of service sectors, industrial sectors and the agriculture sector to a great extent.

Besides, the impacts of liberalization on Indian companies are:

• Greater operational autonomy
• Greater financial flows due to increased FDI and FIIs.
• Increase ....

Answer : The focus of land-reform policy in India was to increase agricultural productivity. Besides, it should help in creating conditions for evolving as speedily as possible as an agricultural economy with high levels of efficiency and productivity.

On the other hand, the ways in which land is taxed has implications for poverty reduction through agricultural growth. In theory, if the state taxes the value of land more heavily and productive activity less heavily, the outcome will almost ....

Answer : FDI entry into multi-trade retail sector on supply chain management will lead to greater investment in back-end and front-end infrastructure, minimization of waste, cold storage facilities, greater export potential, greater employment opportunities to people in general and farmer friendly market.

• The cold storage chains set up by international retailers will solve the perennial problem of wastages. As much as 40 % of India’s fruits and vegetables rot due to lack of processing facilities. The foreign retail ....

Answer : As per current FDI policy in the retail sector, in multi-brand segment, where only 51 per cent FDI is allowed, it is “mandatory” for the company to procure 30 per cent from SMEs.Foreign retailers in multi-brand segment will have to make a minimum investment of 100 million in India, of which 50 per cent must be in the back end chain.Also FDI is allowed only in cities with a population of more than 10 lakhs ....

Answer : 115th Constitutional Amendment Bill was introduced in the Parliament for the introduction of Goods and Service Tax (GST). The rationale for introducing GST in India could be attributed to:

• Simplification of tax laws
• Broadening of tax base and minimizing exemptions
• Improve tax collections and boost India’s economic development by breaking tax barriers between States and integrating India through a uniform tax rate
• Efficiency as well as economy in tax collection

There are number of reasons which have contributed to the ....

Answer : One key argument in support of PPPs from the public-sector perspective is that they avoid limitations on public-sector budgets, which today are one of the major restraining factors for developing economies. They also provide considerable improvement to the level of service delivered to the public by introducing private-sector efficiencies as well as innovations in working methods and uptake of new technologies. PPPs free up the public sector to act as a regulator and thus concentrate ....

Answer : India enacted legislation relating to patent in 1970 and its patent industry is regulated by Indian Patent Act, 1970. Initially, it allowed only product patent, and no process patent. After the LPG (Liberalisation, Privatisation and Globalisation) era in 1991, Pharmaceuticals companies grew at an unprecedented pace. However, India had to revisit its patent laws in accordance with the provision of TRIPS agreement where India, along with many other countries, agreed to grant 20-year patents on ....

Answer : Government of India decided to bring out the National Manufacturing Policy to bring about a quantitative and qualitative change with the following six objectives:

1. Increase manufacturing sector growth to 12-14% over the medium term to make it the engine of growth for the economy. The 2 to 4 % differential over the medium term growth rate of the overall economy will enable manufacturing to contribute at least 25% of the National GDP by 2022.
2. Increase ....

Answer : Unit Links Insurance Plan (ULIP) and Mutual Fund (MF) are the two most preferred options for a part time investor to invest into equity. First of all it is important to understand the main differences between ULIP and MF. Mutual Fund is pure investments. ULIP are combination of Insurance and Investment.

• Since insurance money is loved by long term investors so in the garb of providing insurance cover (that was meager portion of the total investment ....

• International trade served as an engine of economic development for many years. The export growth accounted for over 60% of the GDP growth of the developing countries and 40% of GDP growth of least developed countries between 2000 and 2005. The share of the developing countries in the world merchandise trade exceeded one third of the world trade and developing countries accounted for more than half of the world trade in 2007. However, the growth is concentrated in small number ....

Answer : The Damodaran Committee on customer service constituted by the RBI submitted its report in August 2011. The recommendations are

• It has recommended active involvement of the boards of banks to guarantee customer satisfaction.
• To include customer service and grievance redressal as a mandatory parameter in the performance appraisal report of every employee.
• It has suggested an agenda on the level of implementation of the Bank's Code of Commitments to Customers and an overview on the grievance redressal mechanism ....

Answer : Small & Medium Enterprises Expo (SME Expo) provides the perfect platform for Small and Medium Enterprises from around the globe to interact, learn, develop lasting business relationships and explore new business opportunities. In short, it brings together people interested in doing business with each other - it connects buyers with sellers and start-ups with investors. Countries in the Middle East region can effectively create new employment opportunities for their youth by promoting and developing small ....

Answer : The solution has been designed to prevent a future debt crisis. In this direction:

• It hands the European Commission greater powers to sanction countries that do not keep down their debts and deficits.
• The European Commission can impose fines of 0.2 per cent of GDP which can only be overturned by a majority vote of member states in the council.
• The European Parliament has been given the right to call finance ministers from countries that have been warned.
• It ....

Answer : The WCO's primary function is to enhance the efficiency and effectiveness of member customs administrations, thereby assisting them to contribute successfully to national development goals, particularly revenue collection, national security, trade facilitation, community protection, and collection of trade ....

Answer : With India's freight traffic projected to grow at more than 7% p.a., the Government of India plans to urgently add more freight lines along these congested routes by establishing dedicated freight-only lines, mostly paralleling the existing quadrilateral. These corridors will help India make a quantum leap in increasing the railways' transportation capacity by building high-capacity, higher-speed dedicated freight corridors along the Golden Quadrilateral.

• The government's DFC program is proposed to be completed in stages, with the ....

Answer : Repo rate is the rate at which RBI lends money to other commercial banks and Reverse repo rate as the name suggests is the Rate at which RBI borrows from other commercial banks. RBI has these interest rate instruments at its disposal to regulate the monetary policy of India. Both the repo and the reverse repo are treated as rates to control the short term money supply in the market. Officially they are considered as ....

Answer : India just hosted the costliest Common Wealth Games (CWG) ever in its history. Post a fairly good show that the nation was able to present to the international world now with the game ended a frank analysis can be done. Since more than one lakh crore rupees was involved from the State’s exchequer it becomes important that a cost benefit analysis is done.

• Certainly India is a nation that is home to world’s largest number of ....

Answer : Wadhwa Committee looked into the matters related to the targeted Public Distribution System and found that there was large scale corruption resulting from diversion and leakages of food grains meant for the poor populace of the country. The committee suggested that PDS operations be computerized and human intervention be reduced to the extent possible, so as to check the diversions and leakages which plague the system at present.

Recognizing the fact that the need of the ....

Answer : China and India both are the most vigorously growing economies in this doomed scenario of financial recession that the world is into. Most interesting part of this growth-region that is made up of these two neighbors is that both are growing on different business models.

• India has over time with English educated middle class population has emerged as the service hub whereas China being a vast nation with abundant resources and huge floating population from the ....

Answer : Uruguay round negotiations in 1995 and the resultant World Trade Organisation (WTO) that called for international trade between nations on equal footings introduced many changes. Trade related to goods, services, people (immigrants skilled labor i.e. on-site workers) and Capital was to be made more “impartial” so that there is gradual reduction in the treatment for these factors of trade arising from the host nation and from the imported country. Still there is lot of hiccups ....

Answer : Energy is the prime mover of economic growth. Availability of energy with required quality of supply is not only key to sustainable development, but also the commercial energy has a direct impact and influence on the quality of service in the fields of education, health and, in fact, even food security.

The approach of Integrated Energy Policy is summarized below:-

1. Till market matures in independent regulation across the energy streams is a necessity.
2. Pricing and ....

• Round-tripping, also known as round-trip transactions or “Lazy Susan’s”, is defined as a form of barter that involves a company selling “an unused asset to another company while at the same time agreeing to buy back the same or similar assets at about the same price.” Simplistically speaking, this is a money laundering technique. There is a view that bulk of the GDR/ADR as well as FII investments is nothing but money belonging to Indians stashed away in Switzerland and ....

Answer : IMF and World Bank (WB) both are international financial institutions made after the Bretton Woods Conference in 1945 attended by nations mostly from the League of Nations. After that initial establishment, presently almost all the nations have become member of these after ratifying the clauses mentioned in its AoA. Both have similar and contrasting functions at the same time.

• Being financial institutions both have got international mandate to stabilize the international financial status with economically stable ....

Answer : PIIGS nations is actually abbreviated form that sarcastically stood for Western European particularly Euro Zone nations namely Portugal, Iceland, Ireland, Greece and Spain that got badly engaged in the recent financial recession. With false reporting regarding their Sovereign status of their nations during the boom years has made their economy heavily leverage the finances of their national incomes. This has created a steep asset-liability mismatch and on time scale this has further steepened on the ....

• Government of India has been putting special emphasis on increasing agricultural output and its diversification in order to achieve 4% annual growth rate during 11th five year plan. A number of steps have been taken in this direction with a regionally differentiated approach that includes Micro irrigation schemes and micro-credit schemes for regions with bulk of marginalised farmers. Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize (ISOPOM) have been designed to give flexibility to the states as per their ....

Answer : ICAR is an autonomous organization under the department of agricultural research and education (DARE) ministry of agriculture, GOI. It is the apex body for coordinating, guiding and managing research and education in agriculture and allied areas.

• ICAR has played a pioneering role in ushering the Green revolution and subsequent researches in agriculture in India, which has enabled the country to increase the production of food grains by 4 times, horticultural crops by 6 times, fish by ....

Answer : The pre-monsoon season in India comprising of the months of March, April and May is also popularly known as Hot Weather or Summer Season. The temperatures, particularly the maximum, during this season are very high over most parts of the country especially over central and northwest India. The maximum temperatures when become 4-5°C above normal, they are called as heat wave conditions causing great discomfort.

• During this season, northwest & adjoining central India is usually affected ....

Answer : India needs to sustain 8% to 10% economic growth to eradicate poverty and meet its economic & human development goals. In such a scenario India faces dual challenges of meeting its energy needs and providing adequate energy of desired quality to users in a sustainable manner and at reasonable costs. To meet the new challenge India under the expert guidance of the Planning Commission formulated an Integrated Energy Policy (IEP), which was recently approved by ....

Answer : The fallout of the global financial crisis on the Indian economy has been palpable in the industry and trade sectors and has also permeated the services sector. While some segments, especially the export-oriented industries, suffered during the second half of the year, the Indian economy has withstood the adverse global economic situation and posted a growth rate of 6.7 per cent in 2008-09. The economy continues to face wide-ranging challenges- from improving its social and ....

Answer : The Indian economy has reached in the orbit of high rate of economic growth. To integrate foreign investment with economic development following steps have been taken by the government:

• Government has removed 10% voting limit in banks.
• Higher ceiling in FDI in airport revamp ventures & real estate investment.
• Revisited foreign shareholding norms in telecom sector.
• Removal of unwarranted restrictions on hindrances to financial investments has already allowed FDI up to 51% with prior government approval in the retail ....

Answer : “Protectionism” is the word that is being treated as the placebo for all the ‘financial-ills’ that has recently plagued the financial world. But paradoxically this concept propagated by the anti-globalization lobby is nothing more than the placebo and not the real cure for the ill. Actually the debacle in the financial world took place not due to financial liberalization but ironically to the “selfishly” driven and “asymmetric” openness in the world market. Actually prior to ....

• India in the context of “Doha Development Rounds” (DDR) has always been considered in the international arena of various summit meets as the biggest “impediment” of the talks going forward. India has evolved as the mouthpiece of all the developing nations that feel threatened by the pressurizing techniques of the First world nations. India is firstly emerging as a powerful member of the international arena. Consequently, in all the summit meets, she has always endeavored to speak for the developing ....

Answer : Agricultural productivity in India remains low due to various institutional and infrastructural factors, institutional factors like land reforms, land consolidation, proper land tenure system is lacking in India. Moreover institutional shortcomings like absentee landlordism are prevailing in much part of rural India. It has grossly reduced the agricultural productivity in India.

• Infrastructural factors like hybrid seeds, proper irrigational facility, power supply, credit at low rate, proper food processing and storage facilities of other agricultural extension services ....

Answer : Pros of Special Economic Zones:

• Increased inflow of foreign investment.
• Generates more employment brings in up-to-date technology
• Enriches FOREX reserves.
• Supports lot of ancillary industries.
• Enhances the export.
• Acts as growth engine for regional development

Cons:

• Revenue loss to the tune of Rs. 70,000 Crore per year due to tax holidays and rebates to the government.
• Fertile agricultural land is used for industrial purposes. It may affect the food security of the nation.
• Large tract of land maybe misused by ....

Answer : The Doha ministerial conference which was held in 2001, adopted a comprehensive work programme, also called the Doha Development Agenda (DDA) launching negotiations on some issues and setting out additional parameters and time frames for the negotiations on agriculture and services that had commenced on 1 January 2000 in accordance with the built in mandates in the respective WTO Agreements.

• The Cancun Ministerial Conference 2003 was to take a stock of the progress in DDA negotiations, ....

Answer : ASIDE: Assurance to states for creating infrastructure for the development and growth of Exports.

• Exports have come to be regarded as an engine of economic growth in the wake of liberalization and structural reforms in the economy. A sustained growth in exports is, however, not possible in the absence of proper and adequate infrastructure as adequate and reliable infrastructure is essential to facilitate unhindered production, cut down the cost of production and make our exports internationally ....

Answer : Convertibility of a currency implies that a currency can be transferred into another currency without any limitations or any control. A currency is said to be fully convertible, if it can be converted into some other currency at the market price of that currency.

• At present, Indian rupee is partly convertible on current Account. That is convertibility in the case of transactions relating to exchange of goods and services, money transfer.
• In 1997, the Tarapore Committee ....

Answer : India has fallen five notches in the latest annual rankings of the Global Competitiveness Report released by the World Economic Forum. India was place 48 in the list of 131 economics covered under the Global Competitiveness Index (GCI) which tracks twelve parameters to come out with the rankings. Among the top emerging markets, India is second this year behind China.

• Last year India ranked 43 and was ahead of other BRIC markets. This year China, at ....

• Copyright is one of the creative Intellectual Property Rights and protects creative or artistic works. Copyright applies on literative, music, art, painting, etc.
• A Trademark is a type of intellectual property represented by a distinctive sign or indicator of some kind used by an individual, business organization or other legal entity to identify uniquely the source of its products or services to ....

Answer : The Government of India has recently undertaken a comprehensive review of the FDI policy and associated procedure. Many rationalization measures have been undertaken, inter alia include, dispensing with the need of multiple approvals from Government and/or regulatory agencies that exist in certain sectors, and allowing FDI in new sectors.

India’s large market size and potential, the skilled labour force and low wage cost is the main key for attracting foreign investor.

According to the UNCTAD report ....

• At present the increasing number of dirty slums has become the main problem of the town planning. From the official figures, it has become clear that in cities almost 1440 lakh people live in slums. 45% of the people in the slums do not have pure drinking water and sanitation system. Child mortality rate is high at such places, as well as various diseases and ill-nutrition exists. Due to these slums the facilities of the city and the beauty of ....

Answer : In case of over-production of any goods their prices go down in the market even lower than the stipulated lowest prices. In such a condition, these kinds of goods are sold in foreign markets at thrown away prices some times. They are almost destroyed for the manufacturing country. This process is called dumping. Sometimes for the betterment of the producers and to stop falling prices of goods in the market dumping is done.

• The under-developed countries ....

Answer : Almost 60% of the labour power in India is associated with cultivation. A large number of Indian farmers are labour-intensive. In such conditions, farmers should be made able to invest on cultivation, land reform and increase in produce by providing loan. In India non-governmental businessmen, commercial banks etc. are providing loans to the farmers. Data tell us that the users of loan in the states of Punjab, Haryana, Andhra Pradesh, Maharashtra etc. are really increasing ....

Answer : Alternative source of energy like solar, wind, tidal, geothermal etc, are gradually been adapted and adopted, as the technology for efficiently harnessing these is being developed and the cost are adequately reduced. Such alternative sources of energy are renewable by nature and have also the advantage of generally producing energy in a non-polluting form. Incidentally India has vast potential to harness solar and wind energy. India’s North-West part and Eastern and Western coast have great ....

Answer : The Patent Amendment Act, passed by Parliament in 2005 brings the Indian Patents Act in full conformity with the intellectual property system in all respects. This replaced the ordinance promulgated on December 23, 2004 to meet WTO obligations from January 1, 2005. It may be pointed out that, earlier the patient Act had been amended twice in 1999 and 2002. In 2001 the provision of EMRs was introduced. This was a transitional arrangement till the ....

Answer : Full convertibility of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage. Capital Account convertibility means the freedom to convert domestic financial assets at market determined rates. It can also imply conversion of overseas financial assets into domestic financial assets. Broadlyit would mean freedom to firms and residents to freely buy into overseas assets such as ....

Answer : The fourth ministerial level talk, started in November 2001, is popularly known as ‘Doha Round’ of talks. In this round too the differences between developing and developed nations were continued. Although Developing countries had protested against the Agricultural Subsidy (given by the developed countries to promote their export), they favoured free flow of labour and capital. Developing Countries have been opposing agricultural subsidy from the very beginning of the talks because it rendered their agricultural ....

Answer : The World Trade Organisation is increasing its role in determining the policies and points of the members developing economics to which India has not been an exception. By virtue of being the member of this important organisation India's policies are also guided by it, directly or indirectly. There have been many issues that explain the equation between India and WTO. Some of the significant issues with a wide range of coverage are: Intellectual property Rights, ....

Answer : The main sources of industrial finance in India are following:

• Industrial Development Bank of India: IDBI provides credit and other facilities for industrial development in the country. IDBI provides long term finance for Greenfield projects, as also for modernization, expansion and diversification. It has structured various products such as equipment finance, asset credit and corporate loans in order to cater to the diverse needs of its corporate clients.
• Industrial Finance Corporation of India Ltd. (IFCI Ltd.): IFCI's ....

• Since the 'liberalisation' of the economy, the environment of PSUs has undergone substantial change. Given the stated objectives of government to divest and privatize, entry of private firms into markets earlier reserved for public sector, many PSUs would have responded to these changes in some manner. Currently the government is pursuing disinvestments, which is driven more by budgetary considerations. It is not yet clear as to how strong is the intention of the government to improve the task orientation and ....

• The Phillips curve is a historical inverse relation and tradeoff between the rate of unemployment and the rate of inflation in an economy. Stated simply, the lower the unemployment in an economy, the higher the rate of change in wages paid to labour in that ....

• Hundis referred to legal financial instruments evolved on the Indian sub-continent. These were used in trade and credit transactions as remittance instruments for the purpose of transfer of funds from one place to ....

• An economy is deemed to have a twin deficit if it has a current account deficit and a fiscal deficit. In effect, the economy is giving claims on domestic assets to foreigners in exchange for foreign made goods. Traditional macroeconomics predicts that persistent twin deficits will lead to currency devaluation/depreciation that can be severe and ....

• A free trade area is a zone where regulations have been removed but each member country can still maintain their individual customs on specific areas. Common market makes it simpler to trade between members countries. This benefits all members’ trade balance towards the rest of the world. By harmonizing customs, laws and rules in every member country it also reduces expensive control organizations and allow free movement of goods ....

• A forward currency market is that locks in the price at which an entity can buy or sell a currency on a future date. Also known as "outright forward currency transaction", "forward outright" or "FX ....

• A graph purporting to show the relation between tax rates and government income; income increases as tax rates increase up to an optimum beyond which income ....

• A long-term loan issued in a currency other than that of the country or market in which it is issued. There is no withholding tax applied to interest payment. Euro-bonds are internationally underwritten and available in bearer form. They are cleared through Cedel and Euroclear and are traded ....

• Disguised unemployment is a situation under which productivity of the working force is very low. This is because an excessive number of workers are employed than what is optimally desirable. If a small plot of land has a maximum capacity to employ six workers then if the actual number of workers attached to land exceeds this limit, some of the workers will be disgustedly ....

• Nifty is an index of prices of a group of fifty stocks listed on the NSE. Nifty Junior is an index comprised of the next rung of 50 most liquid stocks after S&P CNX Nifty. In fact S&P CNX Nifty and Junior Nifty may be regarded as a basket of 100 most liquid stocks in India Stocks in Junior Nifty are filtered on their liquidity characterized by their impact cost and market value represented by their market capitalization. The stocks ....

• Rolling settlement involves shrinking the netting period to one day in Indian equity market. This is part of the historical progression that we have followed in India's equity market. The length of the netting period has gone from an undisciplined fortnight to a disciplined week, and with rolling period it now goes to a day. This means that trades net within the day. A person can buy 100 shares of ITC in the morning sell 100 shares of ITC in ....

Answer : Energy Independence: As governments around the planet push for innovative technologies related to alternative energy, a new phrase has grown in popularity: energy independence. On a national level, the concept means to free a country from depending on other nations for energy needs. But what does it mean on a personal level? First, we need to define “independence.” The most appropriate definition classifies it as “freedom from the control, influence, support and aid of others.” ....

Answer : Ecotourism is defined as "responsible travel to natural areas that conserves the environment and improves the well-being of local people." Ecotourism is about uniting conservation, communities, and sustainable travel. This means that those who implement and participate in ecotourism activities should follow the following ecotourism principles:

1. The local community should be involved leading to the overall economic development of the area.
2. The likely conflicts between resource use for eco-tourism and the livelihood of local inhabitants should ....

• Sethusamudram Shipping Canal Projects a proposed project that would link Palk Bay and the Gulf of Mannar between Tamilnadu in India and Sri Lanka by creating a shipping channel through the shallow sea called Sethusamudram and through a chain of islands collectively called Ram Sethu, Ramar Palam, and similar names. This would provide a continuously navigable sea route in and around the Indian Peninsula.
• The project involves digging a 44.9 nautical miles (51.7 mi; 83.2 km) long deepwater channel linking the ....

Answer : In the initial period after the independence India concentrated more on economic growth and industrialisation of country since it was backward in development when compared to other countries in the world. In order to develop the nation it started exploiting the natural resource with the motive to develop the country and do welfare to the people without realising the environmental degradation and its impact on global warming and climate change.

• But it soon realized the importance ....

Answer : The Sick Industries Companies (Special Provisions) Act 1985 first defined industrial sickness. Industrial units are sick under two situations: (a) either it’s not worth (defined as paid up capital plus free reserves) is entirely eroded or (b) its accumulated losses are equal to or exceed the entire net worth of the company and it has suffered cash losses for the current and preceding financial years. A company which has eroded 50 per cent or more ....

Answer : With the economic reforms restructuring Indian economy since 1991, external financial assistance has been coming in different fields like infrastructure development; poverty alleviation programmes; literacy campaigns; housing, employment generation, health care, etc.

• There was a time when India needed External Financial Assistance (EFA) even for importing food grains. Not anymore. With higher economic growth, India has in fact stopped taking EFA from all but a few countries viz. Japan, USA, U.K. Russia and E.U.
• Presently World Bank, ....

Answer : (a) Physical Quality Life Index : Used to assess level of social development, given by Jim Grant, it is calculated using indices of adult literacy, Infant Mortality Rate and Life Expectancy.

(b) Difference between Absolute Poverty and RelativePoverty: When a person is deprived of basic minimum needs, it is termed as absolute poverty. According to UN Parameters earning less than $ 1 per day is treated as absolute poverty. Relative poverty is in relation to other ....

• Golden Quadrilateral is a 5846 km long road project which aims to connect the four metros (Delhi, Mumbai, Kolkata and Chennai) via National Highways. 77 routes have been identified which will also connect major cities and ports. The existing National Highways are to be upgraded from 2-lanes to 4 lanes and even at certain places to 6 lanes. The initiative will result in colossal economic and social gains. It will give a big push to the road construction industry, lead ....

Answer : WTO is now a specialised agency of the UNO. It succeeded and subsumed the General Agreement on Tariffs and Trade (GATT) and came into existence on January 1, 1995. The main objective of the WTO is the liberalisation of world trade.

India’s objections of its overall functioning were/are as follows:

• India and the developing countries, who were already under the burden of fulfilling the commitments undertaken through the Uruguay Round Agreements and who also perceived many of ....

Answer : The Indian economy since 1991 has been undergoing constant and drastic economic reforms. These reforms have resulted in a shift from the inward-oriented policy of the past to an outward-looking one. The trend towards a liberal economic policy had funded its full expression in the early 1990s with the Government of India announcing a series of packages of stabilisation and structural policy reforms. The current economic policy reforms seems to have been guided mainly by ....

Answer : Important recommendations of the Narasimham Committee (1998) on Banking Sector are as follows:

• The committee has made out a strong case for a stronger banking system in the country especially in the context of Capital Account Convertibility (CAC) which would involve large inflows and outflows of capital and consequent complications for exchange rate management and domestic liquidity. For this purpose the committee has recommended the merger of strong banks which will have a multiplier effect on ....

Answer : After independence, India launched a series of economic plans for rapid expansion in agriculture, industry, transport and other infrastructure, with a view to increase production and employment, to reduce poverty and inequality of incomes and wealth and to establish a socialist society based on equality and justice. To bring about increase in agriculture, the Five Year Plans in India brought additional land under cultivation, expanded irrigation facilities and used increasingly chemical fertilisers and pesticides and ....

Answer : Road is the life-line of the economy. Road transports have grown as a prominent system of transportation of goods and people in the country. India has an extensive road network of more than 3.3 million km, making it one of the largest in the world. In spite of this, India has a lot of problem in road transport. About 50 per cent of Indian roads are not in good condition. Therefore, transportation on these roads ....

Answer : Alternative energy sources refer to energy sources which are not based on the burning of fossil fuels or the splitting of atoms. The undesirable effects of pollution both from burning fossil fuels and from nuclear waste by products have given a fillip to the search of alternative energy sources.

Some of the possible alternatives are:

1. Solar Energy: It is one of the most resourceful sources of energy for the future. Solar energy is presently being used on ....

• The Agreement on Agriculture has only in theory favoured agriculture in developing countries, but in practice, its implementation has seriously affected agriculture in developing countries. According to the Agreement, developed countries agreed to reduce these subsidies by 20 per cent over six years and developing countries by 13 per cent over 10 years. However, developed countries under Green Box and Blue Box subsidies continue to support agriculture. Similar to domestic support subsidies, developing countries are not allowed to increase their ....

• SDR is a type of international money created by the International Monetary Fund (IMF) and allocated to its member nations. SDRs are an international reserve asset, although they are only accounting entries. Subject to certain conditions of the IMF, a nation that has a balance of payments deficit can use SDRs to settle debts to another nation or to the ....

• According to RBI’s Act, it is mandatory for the scheduled banks to deposit at least 3 per cent of their deposit to the RBI. This reserve deposit is known as Cash Reserve Ratio (CRR). It may vary from3 per cent to 15 per cent. At present, CRR is 5 per ....

• The concept of priority sector lending is mainly intended to ensure that assistance from the banking sector flows in an increasing manner to those sectors of the economy which, though accounting for a significant proportion of the national product, has not received adequate support of institutional finance in the past. RBI sets targets in terms of percentage (of total money lent by the Banks) to be lent to certain sectors, which in RBI’s perception would not have had access to ....

• Generally companies announce their loss or profit itself and pay taxes according to the Income Tax Act. Many companies have zero tax on its profit under Income Tax Act. To include this profit under tax network Minimum Alternative Tax (MAT) has been imposed in ....

• Business Process Outsourcing (BPO) is a process in which the work of one region or country has been completed by the outer or foreign country by a highly skilled person. For example, many works of US has been completed in ....

• Social justice mean equal development of all classes of society. For the social justice in Indian economy, mixed type of economy is accepted by India. The establishment of Public sectors is meant for social justice as well as development of the ....

Answer : The Human Development Index is a summary measure of human development. It measures average achievements of a State on the following three basic dimensions of human development:

Life and Health Life: This is measured by life expectancy at birth. Maximum and minimum value of life expectancy is considered to be 85 years and 25 years respectively. The life expectancy index is calculated by applying the following general formula.

• The value of ....

• Mixed economy refers to that economic system in which both private and public sector co-exists. Indian economy is an example of a mixed economy. For the social, economical, political development mixed economy is necessary in India. Private sector invests only in those areas where they have profit but the public sector invests for the social and economical development of the ....

• The production of raw materials such as minerals, crops, are included in primary sector, the production of manufactured goods from raw material are included in secondary sector and service sectors are included in territory sector. During the period of 1950-2000, the contribution of primary sector in GDP is reduced from 56.1% to 23.8%, in secondary sector GDP increased from 11.7% to 22% and the contribution of territory sector increased from 32.6% to ....

• The SEBI was set up in 1988, was given statutory recognition in 1992. It is mandated to create conducive and smooth environment, which would facilitate mobilisation of adequate resources through the securities market and its efficient allocation. SEBI regulates the business in stock markets and other securities markets. SEBI promotes and regulates the self-regulatory organisation. Investor’s education and training of intermediaries of securities market are also ....

• It is a practice restored to by modern government of spending more money than it received in revenue. It is a policy of bridging a deficit between government’s expenditure and revenue deliberately budgeting for a deficit is called deficit financing. This was popularised by Prof. J.M. Keynes to deal with the depression and unemployment situations and to stimulate economic ....

Answer : Prime Minister’s five point agenda for India’s development as a knowledge society are as follows:

1. Use Information technology to increase access to education and improve literacy in slums.
2. Provide for quality universal elementary education by 2010 and increase its reach, link higher education with industry and societal endeavours; increase IIT’s and IIM’s.
3. To increase employment–biotechnology promotion and application, promotion of knowledge based service industries, packaging and marketing of ancient scriptures, especially medicine and capacity building in R&D ....

Answer : Since 1951, India has completed nine five year plans. Tenth plan is currently under execution. The guiding principles of India’s Five Year Plans are provided by the basic objectives of growth, employment, self-reliance and social justice. Apart from these basic objectives, each five year plan takes into account the new constraints and possibilities faced during the period and attempt to make the necessary directional changes and emphasis.

• At the time of the First Five Year Plan ....

Answer : Task Force on Direct Taxes was set up under the chairmanship of shri Vijay L. Kelkar, to recommend measures for simplification and rationalisation of the taxes. Major recommendations were as follows.

Tax Administration

• Expansion of taxpayer services both qualitatively and quantitatively. Easy access to taxpayers through internet and e-mail and extension of facilities such as Tele-filing and Tele-refunds.
• Extension of PAN to cover all economic agents/citizens.
• Processing of all returns and issue of refunds within four months.
• Introduction of transparency ....

Answer : The Tenth Five Year Plan has kept on ‘ambitious’ objective of achieving 8 per cent per annum growth over the plan period. The plan itself admits that achieving this objective is bound to be a daunting task as the medium term performance of the economy over the past several years suggests that the ‘demonstrated growth potential’ is only about 6.5 percent.

In addition to the 8 per cent growth target, the Tenth Plan also aims at ....

Answer : Capital controls are being removed selectively—in capital account transactions—though full convertibility of the Indian rupee has been permitted in the current account for quite some time now. The Union Budget 2002-2003 has made the non-resident schemes fully convertible. Other measures announced during the current year included a hike in foreign exchange allowance for individuals up to US $ 10,000 and permission to Indian citizens to maintain foreign currency deposit out of foreign exchange earned/retained from ....

• Taxation coverage expanding to value addition at all stages of production and distribution chain refers to Value Added Tax. Introduction of VAT is expected to increase revenue ....

• It is landmark legislation that aims at promoting competition through prohibition of anti-competitive practices, abuse or dominance and through regulation of companies beyond a particular size. This Act will replace the MRTP ....

• Shares are purchased back by the companies, from the market, in order to increase its assets, profit, return and finally to influence management ....

• This scheme was launched on August 10, 2000 by the govt. for the people living below the poverty line. Under this scheme beneficiaries will have life security of Rs 20000 (in cases of natural death) and Rs 50000 (in case of accidental death) by paying an annual premium of Rs 200 only. Beneficiaries living below the poverty line will have to pay only Rs 100 as premium and the remaining amount of Rs 100 will be paid from the Social ....

• Under this scheme, public sector banks were directed to grant at least 1% of their total deposits of previous year to weaker sections of the society at a concessional interest rate of 4%. It was made a compulsion on the part of banks to allot at least 40% of their advances under this scheme to SC/ST ....

• Interest payments, central plans and defence are the three major items of expenditure of the government of India on revenue ....

Answer : As a concept, a growth center is a pattern of concentrated, higher-density, mixed-use development that:

• replicates and builds upon traditional patterns of development;
• is defined by an urban growth or infrastructure service area boundary;
• is planned to accommodate most anticipated growth in the community without resulting in widely scattered, low-density sprawl;
• is supported by public investment in infrastructure, within designated service areas;
• features a variety of land uses, including formal and informal public spaces; and
• supports walking, public transit, and alternative ....

Answer : In March 2002, a five year EXIM Policy was announced. A number of concessions have been offered to exporters focusing sharply on SEZs, Agri exports, industrial clusters, etc. These concessions aim at pushing export growth to 12%. The aim is to take India’s share in world trade to 1% from the current 0.6%.

SOPs for SEZs are following:

• Special incentive for existing 14 SEZs.
• SEZs permitted to setup overseas Banking units.
• SEZs can now access foreign funds at cheap ....

Answer : Minimum Support Price is that price at which government is ready to purchase the crop from the farmers directly if crop price becomes lower than MSP. Its main objectives are:

• To prevent fall of prices in the situation of over production
• To protect the interest of farmers by ensuring them a minimum price for their crops in the situation of a price falls in the market.

The policy of minimum support price had its beneficial consequences like income ....

Answer : The new industrial policy announced in 1991 envisaged disinvestment of part of government share holdings in the case of selected public sector enterprises to provide financial discipline and improve the performance of public enterprises. The primary objectives of disinvestments are:

• Releasing the large amount of public resources locked up in non-strategic PSE, for redeployment in areas that are much higher on the social priority.
• Stemming further outflow of this scarce public resource.
• Reducing the public debt.
• It would expose ....

Answer : The union government has approved the removal of the requirement of licensing of dealers and restriction on storage and movement of wheat, rice, paddy, sugar, edible oil etc. placed under the Essential Commodities Act.

• The decision of the government involves the objective of freeing up markets. It may also appear that this could also be the beginning of a unified Pan-India market for agriculture produce.
• Facilitating free trade and movement of food grains would enable famous to ....

• It is the difference between the revenue receipts plus certain non-debt capital receipts and the total expenditure loans. This indicates the total borrowing requirements of the government from all ....

• Ad-valorem is imposed on a goods or service according to its monetary value while specific duties according to the weight, volume ....

• The practice of justifying the utility in cost benefit terms of each government expenditure on projects. It involves a critical review of every scheme before a budgetary provision is made in its favour. Here every Re spent is result ....

Answer : Swarn Jayanti Gram Swaraj Yojana: Integrated Rural Development Programme (IRDP) and allied programmes such as Training of Rural youth for self employment (TRYSEM), DWACRA, Million Wells scheme, Sitra, and Ganga Kalyan yojna have been restructured in to a self employment programme called Swarna Jayanti Gram Swarojgar Yojna (SGSY) from April 1999 with the following objectives:

• (i) Focused approach to poverty alleviation (ii) Capitalising advantages of group lending and (iii) Overcoming the problems associated with multiplicity of ....

Answer : In an underdeveloped economy low capital formation is considered as one of the major hurdles of rapid economic growth. Gross domestic capital formation is composed of two components—gross domestic saving and net capital inflow from abroad. Gross domestic saving (measured at current price) was 10.4 percent of GDP in 1950-51, it improved to 12.7 percent by 1970-71. Thereafter, there was rapid spurt in gross domestic saving and it improved to 21.2 percent by 1980-81. Since ....

• Ever since 1991 when the Indian economy was liberalised, floodgates have opened for the so-called ‘white goods’ or consumer durables and electronic goods. Both foreign and indigenous entrepreneurs capitalised on the various sops and incentives to flood the market with consumer goods. The approval of FDI up to 51% as also trade flow, capital flow and technology flow helped in the rise of different brand names in the white goods sector- Whirlpool, Samsung, Thomson etc. to name a few. The ....

Answer : Although reduction of fiscal deficits was one of the major objectives of the reform process, a review of the fiscal deficits of both the centre and states level reveals that after remaining subdued at a moderate level, fiscal deficits again became larger towards the close of the nineties. The hurdles faced by the finance ministers of India in keeping the fiscal deficit below 3-4 percent of GDP are: growth of expenditure as a result of ....

Answer : This year the UTI declared it’s lowest ever dividend of 10% in 21 years. The reason behind the present crisis is not of any immediate factor. For over a year or more US-64 and most of the scheme of the UTI has been under a cloud. Its investment decision, the management’s conduct and its accountability have been vigorously debated since the stock market crashed in March 2001. Why talk of year 2001 only, even in ....

Answer : Vermicomposting is the process of growing earth-worms in various kinds of waste material and using the excretion of the earth-worms as manure which contains PNK. The earth-worm is useful in land reclamation, soil improvement and organic waste management. The earth-worm acts as waste controller, compost manufacturer and protein producers. They incorporate organic matter and turn over large amounts of soil by burrowing, feeding and casting. The agricultural wastes mainly include crop residues, stubbles and manures ....

• CRISIL (Credit Rating Information Services of India Limited) is the First Credit Rating Agency of the country which started its functioning since January 1988. This credit rating is meant only for debentures and not for equity ....

• In budget proposals of 1994-95, then finance minister, Dr. Manmohan Singh declared the full convertibility of rupee in the current account which means—liberalising the access to foreign exchange for all current business transactions including travel, education and medical expenses ....

• Providing industry status to agriculture mean all the infrastructural facilities that are being provided to industry should also be provided to agriculture. The main problem in providing the status is that after getting the industry status agriculture will be ....

• To accelerate the pace of white revolution ‘operation flood’ was introduced in the country. Operation Flood is world’s largest dairy development programme. It has made considerable progress in achieving its outlined objectives. India stands first in the world in milk ....

Answer : When the general price level starts an upward rising at a very fast pace, it is known as galloping inflation. Runaway inflation is the galloping inflation—the last and the most damaging state and stage of ....

• The “couple protection ratio” is the ratio of the couple having reproductive capacity to the total couple population. This is very useful to prepare population control policy. In India presently it shows a declining ....

• The ‘human development index’ and ‘gender related development index’ both are indices used by UNDP for Human Development Report 2000. Human development index is most important index and shows human resource development where as GDI indicates status of women. India has been placed at 128th on HDI basis and at 108th place on GDI ....

• As compared to the high demand for US($) dollar, its supply and availability with different nationals became very restricted for their products did not find ready acceptability in USA. So demand for dollar went far ahead of supply. It came to be called as hard currency while the other currencies by comparison came to be called as soft ....

• Rolling plan was first advocated by Gunnar Myrdal. It is an annual plan, a 5 year plan as well as a perspective plan. For example, if a plan is for the period say 1990-95, next year it will become for 1991-96, then next year for 1992-97 and so on. In India, it was first introduced by Janata Govt. in 1978 but it was abolished by Indira Govt. in ....

• Lorenz Curve shows the degree of inequalities of a frequency distribution in a graphical manner. 45” straight line would show perfect equality line. Such a line remains straight all through. The distribution would be unequal when the firm numbers in spite of being large employ less people while smaller number of firms employ large number. Plotting of such a line would be below the 45 degrees line and the degree of the curvature will be ....

• Trickledown theory of development is the notion that development is purely an economic phenomenon in which rapid gains from the overall growth of GNP and per capita income would automatically bring benefits (i.e. trickle down) to the masses in the form of jobs and other economic ....

• Misery index is the parameter of misery prevailing in economy and society. It is combination of inflation, unemployment and illiteracy. In recent days, it is widely used in planning ....

• India’s fertility rate has outnumbered the maternity rate with big margin which has led to population explosion from 1960’s to 1990’s especially in 80’s.
• Looking at our population growth rate, it is very much expected that we may outscore China and thus become world most popular country in coming 3 to 4 decades.
• With nearly 2.4% of land area of the globe we are sustaining around 16% of words population. This reflects our population–resource scenario of our country; we are sustaining huge ....

Answer : Following are the Criteria :-

• Place having Muncipality/Corporation/Cantonment with population above 5000.
• Density 400 persons/54 km.
• 75% of male working population engaged in non-agriculture ....

Answer : The Seattle Millennium talks on the WTO failed to achieve targets which was supposed to achieve. Therefore it could not come out with any agreements on Global trade strategy. This failure can be attributed to the lack of mutual consensus among the four powerful developed economics, Japan, USA, Canada and the EU countries. They could not agree on various topics discussed in the round.

Few American Trade Unions and NGO’s put effort in inclusion of environmental ....

Answer : The (Revised) Targeted Public Distribution system aims at ameliorating the persons living under below poverty line. At present about 26% of population live under BPL. Revised, targeted public distributed system provides them food grains just at help prices of original one.

• In this centre will made available food grains to states at less prices who implement the scheme. 50% subsidy will be provided for such grain stock.
• There is also provision for double ration cards, ....

Answer : Black money (or parallel economy) is like black dot on the Indian economy.

• It leads to huge loss of revenue to the country exchequer which would have brought investment in the economy. This black money comes into existence largely through tax-evasion. Due to less revenue collection, the government imposes more taxes and at higher rates. This eventually gives rise to a regressive tax structure.
• Existence of Black Money in an economy leads to Socio-economic disparity, creating huge ....

• India has followed a foreign policy on International peace and cooperation since its independence. India adopted Nehru ‘Panchsheel” as a cornerstone of its foreign policy, one of them is non-intervention principle.
• India respect sovereignty and integrity of every nation and do not interfere in the domestic matters of other nations and follows policy non-intervention.
• But the changing scenario of international politics led India to think again and reformulate its foreign policy. Even when the nations are demanding right to intervention on economic, ....

Answer : Through this 'Industrial Policy of 1991' major changes have been introduced during the last few years is 'new' to Indian economy such as

• Industrial licensing system has been almost abolish. No license is required from the government.
• Producers are free to decide their scale and level of production.
• Whole of the economy has been left open to the private capital. Exclusive reservation for the public sector has been cut down to only areas of strategic importance.
• Doors have been ....

Answer : The Multilateral Agreement on investment protection is provided to foreign investments in the country from its administrative and legal procedures. It is an agreement under the Multilateral Investment Guarantee Agency, an institute related to the World Bank.

This device helps to protect investors from currency convertibility and transfer related regulation in any country.

India joined as a member to this Agency in 1993 for attracting foreign investment in our economy for development. India and other developing countries ....

Answer : After Independence, India inherited shattered economy of having colonial features. Thus India had to start from a rudimentary economy. This brought planned development, as a tool for development which continued for the coming 50 years, after which depending on the changed scenario of world economy, development started taking the path of market led growth. In the early first half of Independent India development had to be based on socio-economic needs of the society. Socialistic pattern ....

Answer : Poverty is multidimentional. It can be absolute or relative poverty.

Absolute Poverty is Poverty below breadline. Those who suffer from absolute poverty have no guarantee that will be able to meet the fundamental costs of livings as a human being. The world bank has set the norm of 1 dollar per day per person for this purpose. The absolute poverty line based on nutrition level, is defined as minimum requirement of

2400 calories per person/day for Rural ....

Answer : The Problem of Industrial Sickness in India is of growing concern because it wastes capital apart from decrease in employment.

Various committee appointed, found out many reasons for the Industrial Sickness. The important reasons are divided into-Internal and External reasons.

First one is associated with managerial ineffectiveness, which include poor control on key areas of operations and finance. Improper estimate of demand is another reason. Improper technology, wrong location of Industry, non-flexibility of fixed assets etc.

Defective capital ....

Answer : India inherited colonial economy at the time of her independence. Infrastructure at this stage was below the level from where effective growth could be carried out.

Thus Infrastructure bottlenecks both social and economic has been the cause of concern for economic development.

To achieve fast growth of economy, various factors are responsible, including Natural and Mineral resources, Capital, skill and technology, Liberal and Cooperative Government Policy and Infrastructure.

Except infrastructure, India is good with all other factors in ....

Answer : The monetary policy in India is decided and declared by the Reserve bank of India. It decides measures to regulate Indian economy and directs it. In Indian economy, the flow of money and capital is rather less than required to the size of Indian population. India has layer budget deficits which needs to be financed, especially, be borrowing. Inflation rate is yet high and saving rate is, therefore, low. Due to all these measures, the ....

Answer : Non-residential Indians are basically Indians but settled elsewhere in the world for one or another purpose. India has enough natural resource, much required for the economic development but has not enough capital to exploit them and progress the economy. For this, India depends, Largely, on Foreign investments.

After Liberalisation Policies introduced in 1990's, many NRI has invested in Indian economy considering its huge potential of growth. This investment were attached after manybeneficial schemes for them.

It helps ....

Answer : Under development means under utilisation of at available resources of a particular region. There can be many lying cause of such under development.

In India suppose in agricultural development, many factors like small size of farms, lack of fertility, improper irrigation facilities, uncertain monsoon, unavailability of scientific knowledge and modern tool and machinery etc. are the main reasons for under-development of agriculture.

While in Industry sectors, lack of raw material, power availability, lack of capital, technological draw ....

Answer : In 1962, the irrigation Commission declared about 1/3 of India as drought Prone. These parts are-

(1) Gujarat, Rajasthan etc. These are known for their arid and semi-arid zone of India, characteritising less than 40 cm rainfall annually.

(2) Parts of Maharashtra, Andhara Pradesh and Karnataka these parts fall on rain shadow of the western ghats and so amount of rainfall is less than wind- word side.

(3) Some districts of Tamil Nadu, U.P, Chotanagpur Kalahandi in Orissa ....

Answer : At the time of independence, India's economic condition was not satisfactorily strong. India had no agriculture or industry at developed stage and had to rely upon imports from the world. But economic planning gave a good direction to Indian economy. At the time of 1950-51, India's foreign trade amounted only about 1200 crore rupee with comprising 1.78% of total foreign trade in the world but at the end of 1997-98, India's foreign trade amounted to ....

Answer : Oil and it, products are used as the main sources of energy for about last one and half centuries through they dominated basically the twentieth century. Petrol, Diesel, kerosene, Nephta, Natural gas and other products are used as conventional sources of energy in industries, automobiles and production of electricity also.

Because we know that use of energy per capita indicates the economic level of a country and the life standard of its population. In twentieth century ....

Answer : After Independence, the social objective to equalize the distribution of wealth in India came in the form of land reforms so that poor rural farmers can be given land. The slogan to provide land to the tiller was to be materialized by government by policy. The Bhodan movement by Vinova Bhave had the aim of land reforms and constitutional laws in 9th schedule are related to its.

• The government introduced land reform programs which included and ....

Answer : Inflation is an economic phenomenon which adversely affects the economy if not controlled to some limit. Recently there is a pear in Indian economy of rising inflation rate which requires. To be controlled and for that the government has taken the following steps (at the time).

It targeted the limit of revenue Account deficit below 5 percent of GDP.

Increase and develop industrial production to raise supply according to the demands.

To increase industrial production, government liberalised laws ....

Answer : To make women economically independent is necessary to raise social level of India for these aims, the government of India apart from various state governments has proposed various schemes in this direction, in last decade.

In 1992-93, a National women fund was proposed to meet requirements of lows to poor women for their economic upliftment.

In April 1989, Jawahar Rozgar Yojna was started for rural employment, increase an assistance to be implemented through Panchayati Raj. This scheme ....

Answer : A new industrial policy was introduced on 24th July 1991 which aimed and effected liberalization in economy, promotion of global trade via globalisation and to some extent provisions for private partnership.

For these major measures proposed were

Elimination of requirements of registration and licensing for establishing new Industry or expanding the existing units.

No requirement to get government's permission for foreign technical cooperation.

Raise the limits of foreign investment up to 51 percent from 40 percent in most ....

Answer : The tenth finance commission has proposed the scheme of devolution of taxes as a better way to manage the tax reforms in the present condition of Indian economy Based on 26% of centre and 3% of state parts in taxes, the new schemes proposes to consolidate all central taxes as an alternative by partly and separately dividing all taxes. The benefits from this scheme would that the centre can introduce tax reforms. Without going into ....

Answer : MODVAT implies modified value added. Tax introduced in 1986-87 budget to exclude the possibility of double taxcation. It is levied on final goods and it abolished tax on inputs and intermediate ....

Answer : By providing mid-day meal, free of cost in schools. Run by Local bodies and government aided private primary schools, the government wanted to promote primary education in the ....

Answer : Every place which is either a Municipality or corporation or cantonment Board or an area with population above 5000, density above 400 persons per square km and above 75% of make working population engaged in non-agricultural activities. ....

Answer : In India, it can improve utilization of irrigation facilities and potentials, sustain productivity and increase production of agriculture. ....

Answer : with involvement of public, trees are planted on the waste tends of government, use of such forest products are allowed to society which can raise source of their ....

Answer : "growth with social justice and equality" by providing appropriate direction and balance to the socio economic development of the country is the main objective of the Ninth Five year plan. ....

Answer : Capital formation is the most important ingredient of growth and development, capital formation means the part of national income that is not used for consumption but is saved or spared to invest in some other productive sectors. If there is no capital formation or is slow, there can be no economic growth, because it requires capital to start any economic activity.

Without planning, based on market direct economy, we can achieve growth, or course, but only ....

Answer : Decline in the value of a currency in comparison to another comes if the supply of the former is more than requirement (i.e. demand) and the demand of later increases than its supply, as a general principle. But many other facts and factors plays a role in real economy.

In 1995-96, Indian Rupee started to decline in its value vis-a-vis U.S. Dollar because of some specific reasons, some of which can be mentioned as:

Rumours of market, ....

Answer : It was developed by Dr. Max O. Lorenze. It is a commutatives frequency curve showing the distribution of a variable such as population against an independent variable such as income. In this, cumulative percentage of income less than a given value are plotted against the cumulative percentage of persons. the curve, obtained is called after his name, as Larenz ....

Answer : Ad-Valorem duty is based on value of goods or services, changing in rate with the price specific duty is fixed on Weight, Area ....

Answer : MOU is Memorandum of Understanding. It means that the government has ageed with any organisation or nation or institution in any matter and its terms and conditions are clarified in the ....

Answer : Balance of trade is the whole picture of a country in total foreign trade, expect-import account condition. Balance of payments is related to the export-import difference in account of a country with any one particular country ....

Answer : India’s nuclear power plants are located at: Tarapur (Maharashtra), Kalpakkam

(Tamil Nadu), Kakaapar (Gujarat) Ravatbhata (Rajasthan), Narara (Uttar ....

Answer : Near the beginning and end of total solar aclipse, the thin slice of the sun visible appears broken up into beads of light. These lights are called 'Baily's Beads' after the British astronomer known is Baily who discovered them. They occur because the edge of the Moon is not smooth but jagged with mountain ....