1. Special Drawing Rights (SDRs)
i. It is a tool used by International Monetary Fund to manage liquidity shortages in world market.
ii. It is also called plastic money!
2. NAMA:
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Non-Agricultural Market Access is a provision under WTO which is to enhance trade in manufacturing and services sector. Developed nations are propelling it against the developing nations to promote trade in these sectors.
3. Non-tarift Trade Barriers:
These are additional trade barriers apart from tariff’s used to restrict imports or impose quality standards on imports. They are
i. Phytosanitary measures
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ii. Non-engagement of child labour in manufacturing a product etc.
3. Current Account Balance:
The current account balance is the difference between a country’s saving and investment. “If the current account balance is positive, it measures the portion of a country’s saving invested abroad. If negative, it gives the portion of domestic investment financed by foreigner’s savings.”
4. Free Trade Area:
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It is an arrangement between two or more countries to remove all import tariffs to quotas and export subsidies and other similar government measures to influence trade between them while allowing each to retain its tariff against other countires.
5. Write about the following .
(a) These are such higher goods which are equated to the universals goods budget, but users conformation is not kept in mind while arranging for such goods.
(b) Cheap Money is that money which is available at a low interest rate. This money can be gained in easy conditions.
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(c) This is a duty-imposed income. If any country decides to provide subsidy to its domestic producers, then the country which loses imposes an additional duty called Countervailing Duty.
(d) Hot Money is used for Money whose exchange rate is continuously decreasing and by exchanging it people may get money with more stable rate.
(e) The government generally implements its policies at higher levels and expects the benefits to trickle down to the last level in the economy.
(f) Stagflation signifies that situation in a country where both inflation and stagnant development of the country exist.
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(g) According to Engel’s Law, low income consumers spend most of their income in food and similar things but as income increases only a little part of their income is spent on such things.
(h) CCIL stands for Clearing Corporation of India Limited. It is a main organisation, regarding trade.
(i) Administered Price is that which is not determined by the market price but it is determined by the central power.
(j) Venture Capital indicates that capital, which can be used in the company business, market investors or some others invetment process.
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(k) The net balance of international trade in visible and invisibles, that is, export and import of goods and services.
(1) The national and state level funds in which all the money is deposited which is received by the government of India, except the money which is deposited in the Contingency Fund of India and the Public Accounts of India.
(m) Budget deficit is the difference between total income and total expenditure of an economic year.
(n) The quantity of capital which is used to produce one unit of output of any commodity.
(e) Indo-EU Economic Ties: In light of India’s growing economic constraints and hesisant European response, EU non-tariff barriers (Fortress Europe) are turning important. EU is becoming unified market and it has become India’s major trading partner.
6. What is Phillips Curve?
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 economy.
7. What is Hundi?
Hundis referred to legal financial instruments evolved on the Indian sub-continent. These were used in trade and credit transactions they were used as remittance instruments for the purpose of transfer of funds from one place to another.
8. What is twin deficit?
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 sudden.
9. What is the main difference between free trade area and common market?
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 markets makes it more simple 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 internally.
10. What is forward currency market?
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 forward”.
11. What is Laffer curve?
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 declines.
12. What is Eurobonds?
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 Euro clear and are traded cross border.
13. What is Disguised unemployment?
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 unemployed.
14. What are nifty and the nifty junior?
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 comprising S&P CNX Nifty and Junior Nifty are mutually exclusive i.e. a stock will never appear in both indexes at the same time.
15. What is Agri-Trade?
Agri-trade is an international summit, focused on integrating and strengthening the agro industrial sector from the Mexican, Central American and Caribbean region; offering new business, investment and co-investment opportunities.
16. What is CEMA bloc?
The Council of Economic Mutual Assistance (CEMA) was established by the USSR in 1949 to co-ordinate the economic activities of its newly acquired empire in Eastern Europe.
17. What is rolling settlement?
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 the evening, and have to deliver no shares to the clearing corporation. However, if there is a net sell position of 100 shares at closing time, then shares have to be delivered a few days later.
18. What is Difference between Green Box Subsidies and Blue Box Subsidies?
Under Green Box Subsidies are allowed without limits, provided they comply with relevant criteria. They also include environmental protection and regional development programmes.
The blue box is an exemption from the general rule that all subsidies linked to production must be reduced or kept within defined minimal (“de minimis”) levels.
19. Full convertibility:
It refers to the total freedom by which a domestic currency may be converted into a foreign currency and vice-versa.
20. 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.
21. Difference between absolute poverty and relative poverty:
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 strata of the society.
22. India-US Nuclear Pact:
Full civil nuclear energy cooperation has been worked out where the USA will supply fuel for Indian reactors while India will place its civilian nuclear facilities under the IAEA safeguards and inspections.
23. Medical Tourism India promoting itself as an effective, cheap destination for health and medical solutions especially providing super- specialty services in medicine.
24. Mckong-Ganga Cooperation:
It is a grouping of six nations (India, Laos, Cambodia, Myanmar, Thailand and Vietnam) of the Rivers Ganga and Mekong region for economic cooperation, launched in 2000 in Vientiane, Laos.
25. IFC-International Finance Corporation:
It is a part of World Bank group whose purpose is to encourage the growth of productive private or partially governmental enterprises.
26. Crude Oil price and Indian Economy:
Rapidly rising crude oil prices has led to increase in import bill and has an adverse effect on improving balance of trade.
27. Gandhian Economy:
It is based on rural development, village industries, and village as self-sufficient units of production. Agriculture and allied activities are the focus of Gandhian economy.
28. Second Green Revolution:
Rapid improvement in the productivity of diverse crops which is environmentally sustainable and promotes balanced regional growth.
29. Kasturba Gandhi Balika Vidyalaya Yojana:
Launched in 2004-05 for setting up residential schools at elementary level for girls belonging to SC, ST, OBC and minorities.
30. Euro-control:
Emission norms regarding vehicular pollution having different stager viz Eures-I, II, III; better known in India as Bharat-I, II, III etc.
31. Dow Jones:
The sensitive index of the shares listed at the New York stock Exchange is called Dow Jones.
32. Bluetooth:
A wireless technology to connect one device to another, e.g. computers, multimedia kits, mobile phones for a short distance and transmitting data to one another.
33. MFN Status to India by Pakistan:
Pakistan has not accorded MFN Status to India, which seeks to end discrimination between trading nations.
34. Notion of development of under Development:
Concept of negative growth where the GDP is declining e.g. in sub-Saharan Africa to new areas e.g falling life expectancy due to AIDS and hunger.
35. Cost-Push Inflation:
Inflation (rise of prices) due to increase in production cost; caused by increase in wages; increase in profit margin or imposition of heavy taxation.
36. Green GDP:
Guidelines to renew development goals by tracking economic output and take environmental issues into account.
37.Terms of Reference of Abid Hussain Committee:
To outline the weaknesses and suggest measures to strengthen the small scale and village industries in India.
38. Structural Unemployment:
Here demand for labour falls short to the supply of labour as also the capital formation falls down limiting employment opportunities.
39. What are the major provisions of Agreements on Agriculture in the context of World Trade Organisation?
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 negligible level of export subsidies while developed countries are allowed to maintain 64 per cent of their subsidy outlays on the base level. Consequently, agricultural imports from developed countries are available at much below the market price in the domestic economy.
40. Elucidate Special Drawing Rights.
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 IMF.
41. What is Cash Reserve Ratio?
According to RBI’s Act, it is mandatory for the scheduled banks to deposite at least 3 per cent of their deposite to the RBI. This reserve deposite is known as Cash Reserve Ratio (CRR). It may varies from’3 per cent to 15 per cent. At present, CRR is 5 per cent.
42. What does “priority sector lending” mean?
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, have 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 organised lending market or could not afford to pay the interest at the commercial rate. The priority sectors are: agriculture, small industries, education, housing loans etc.
43. What is Minimum Alternative Tax (MAT)?
Generally companies announces 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 India.
44. What is Business Process Outsourcing (BPO)?
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 work of US has been completed in India.
45. What is ‘social justice’ in the context of Indian economy?
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 country.
46. How is human development index for life expectancy measured?
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:
47. Life and Health Life:
This is measured by life expectancy at birth. Maximum and minimum value of life expectancy are considered to be 85 years and 25 years respectively. The life expectancy index is calculated by applying the following general formula. ‘ Index
Actual Value- Minimum Value Maximum Value- Minimum Value
The value of the index calculated using this formula will lie between 0 and 1.
Other two measures are adult literacy rate and decent standard of living.
48. What are the objectives of the Twelfth Finance Commission?
The 12th Finance Commission is mandatory to review the state finances of the Union and the States and suggest a plan by which the Government collectively and severally may bring about a restructuring of public finances, restoring budgetary balances, achieving macro- economic stability and debt restructuring along with equitable growth. It is also required to review the fiscal reforms facility and suggest measures for effective achievements of its adjective.
49. Explain the necessity and role of controls in a mixed economy like India.
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 society.
50. Distinguish between primary sector, secondary sector and territory sector. What is the change in the share of each sector in Gross Domestic Product (GDP) during period of 1950- 2000?
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 tertiary 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 tertiary sector increased from 32.6% to 54.1%.
51. What is the main objective of Security and Exchange Board of India (SEBI)?
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 intermediatries of securities market are also promoted.
52. What has been the policy of agricultural development during last two decades in India?
Plant Varieties Right Act, 2002 empowers the farmers to hold the verities of plants and their seeds. They can grow these seeds for their use for the next season in their fields. Its aim is to make TRIPS more effectvie.
53. What is deficit financing?
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 governments expenditure and revenue Deliberately budgeting for a deficit is called deficit financing. This was popularised by Prof. J.M. Keynes to deal with the dipression and unemployment situations and to stimulate economic activity.
54. What is Plan Holiday?
Discontinuation of five year plans before its completion, due to instability of prevailing macroeconomic situations/indicators in the economy, refers plan holiday.
55. Why did India have a surplus in current account balance in 2001-02 after a gap of 24 years?
The current account turned into a surplus in 2001-02, after a gap of 24 years, owing to the buoyancy in invisible flows, which reached a level of 2.9 percent of GDP.
56. What is Value Added Tax?
Taxation coverage expanding to value addition at all stages of production and distribution chain refers Value Added Tax. Introduction of VAT is expected to increase revenue buoyancy.
57. What is the main objective of the Competition Act. 2002?
It is landmark legislation that aims at promoting competition through prohibition of anticompetitive practices, abuse or dominance and through regulation of companies beyond a particular size. This Act will replace the MRTP Act.
58. Name the two agencies that have helped to promote Foreign Direct Investment (FDI) in India.
Foreign Investment Promotion Board (FIPB) and Foreign Investment Implementation Authrirty (FIIA).
59. What is the main thrust of the Fiscal Responsibility and Budget Management Bill?
The main thrust of the Fiscal Responsibility and Budget Management Bill is to provide a statutory backing to the fiscal reform process initiated by the governments.
60. High Light the main features of the policy relating to buy-back of shares.
Shares are purchased back by the companies, from the market, in order to increase its assets, profit, return and finally to influence management practices.
61. Why was Janashree Bima Yojana introduced?
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 20C00 (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 of Rs 100 will be paid from the Social Security Fund of LIC.
62. When was the idea of Agriculture Insurance Corporation mooted?
The idea of Agriculture Insurance Corporation was mooted for covering other allied rural/agricultural risks in addition to crop insurance.
63. What is policy of the Government with respect to child labour?
The policy of the government is to ban the employment of children below the age of 14 years in factories, mines and hazardous employment and regulate the working conditions of children in other areas of employment.
64. Explain the objectives of the National Health Policy, 2002.
The National Health Policy, 2002, aims at achieving an acceptable standard of good health amongst the general population of the country and has set the goals for the next two decades.
65. What was the main objective of the ‘Operation Blackboard’ scheme?
Elementary education was the main objective of the operation black board scheme.
66. Explain the essential features of differential rate of interest scheme.
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 people.
67. Which are the three major items of expenditure of the Government of India on revenue account?
Interest payments, central plans and defence are the three major items of expenditure of the government of India on revenue account.
68. What was the essential features of the Pradhan Mantri Gram Sadak Yojana?
Every village, huts, remote habitations of India have to be connected through road networks by the end of fiscal 2006-07.
69. What is peak rate of Custom duty? what are its objectives in India?
Peak rate of certain duty is 35%. Objectives:
i. To save our domestic producer
ii. To earn government revenue.
70. Define fiscal deficit.
It is the difference between the revenue receipts plus certain non-debt capital receipts and the total expenditure loans. This indicate the total borrowing requirements of the government from all sources.
71. Explain the provision of OGL.
OGL or open general license is an import license for goods in which there are no import restrictions.
72. Elucidate ‘Special Economic Zones’.
SEZs are export oriented economic zones where government exempt units located there from certain tax preview and bureaucratic hurdles. So far 14 have been given the status of SEZ.
73. Highlight salient feature of “National Highway Development Project’.
Super national highways of about 14000 km of length to link big seaports with all the important cities of India. Golden quadrilatral + East-West corridors are included.
74. What is the role of SEBI?
SEBI role is to deal with all matters relating to development and regulation of securities market and investers protection and to advise the government on all the matter.
75. Explain RBI’s ‘automatic route’ in FDIs.
No prior permission of RBI is needed
in investment in certain sector -Eg. NBFC, SEZ etc.
76. With what objectives was ‘Annapurna’ Scheme launched?
Annapurna scheme was launched in March 1999, had the objective of providing 10 kg of food grain to the elderly and helpless in rural areas who are eligible for old age pensions.
77. Elucidate ‘Sampoorna Gramin Rozgar Yojana’.
It was launched in Sep. 2001 for wage employment and food security along with creating durable community, social and economic assets by the centre.
78. The Union Budget 2002-03 recommended some services to be taxed. Name any 4 of these services.
They include life insurance, in land cargo handling, storage and ware housing, health clubs.
79. What is ‘dumping’? What is its objective?
The export of a good at a price below that charged for the good in the domestic market. It is done for long term strategic means of penetrating export market.
80. What do you understand by ‘Capital Account convertibility’ of Rupee?
The extent to which one foreign currency can be exchanged for some other foreign currency in bonds and shares.
81. Define Sex ratio in the population of India, what is its present status?
Sex ratio is defined as the ratio of women per thousand men. Presently it is 933/ 1000.
Elementary education was the main objective of the operation black board scheme.
82. Explain the essential features of differential rate of interest scheme.
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 people.
83. Which are the three major items of expenditure of the Government of India on revenue account?
Interest payments, central plans and defence are the three major items of expenditure of the government of India on revenue account.
84. What was the essential features of the Pradhan Mantri Gram Sadak Yojana?
Every village, huts, remote habitations of India have to be connected through road networks by the end of fiscal 2006-07.
85. What is peak rate of Custom duty? what are its objectives in India?
Peak rate of certain duty is 35%. Objectives:
i. To save our domestic producer
ii. To earn government revenue.
86. Define fiscal deficit.
It is the difference between the revenue receipts plus certain non-debt capital receipts and the total expenditure loans. This indicate the total borrowing requirements of the government from all sources.
87. Explain the provision of OGL.
OGL or open general license is an import license for goods in which there are no import restrictions.
88. Elucidate ‘Special Economic Zones’.
SEZs are export oriented economic zones where government exempt units located there from certain tax preview and bureaucratic hurdles. So far 14 have been given the status of SEZ.
89. Highlight salient feature of ‘National Highway Development Project’.
Super national highways of about 14000 km of length to link big seaports with all the important cities of India. Golden quadrilateral + East-West corridors are included.
90. What is the role of SEBI?
SEBI role is to deal with all matters relating to development and regulation of securities market and investers protection and to advise the government on all the matter.
91. Explain RBI’s ‘automatic route’ in FDIs.
No prior permission of RBI is needed in investment in certain sector -Eg. NBFC, SEZ etc.
92. With what objectives was ‘Annapurna’ Scheme launched?
Annapurna scheme was launched in March 1999, had the objective of providing 10 kg of food grain to the elderly and helpless in rural areas who are eligible for old age pensions.
93. Elucidate ‘Sampoorna Gramin Rozgar Yojana’.
It was launched in Sep. 2001 for wage employment and food security along with creating durable community, social and economic assets by the centre.
94. The Union Budget 2002-03 recommended some services to be taxed. Name any 4 of these services.
They include life insurance, in land cargo handling, storage and ware housing, health clubs.
95. What is ‘dumping’? What is its objective?
The export of a good at a price below that charged for the good in the domestic market. It is done for long term strategic means of penetrating export market.
96. What do you understand by ‘Capital Account convertibility’ of Rupee?
The extent to which one foreign currency can be exchanged for some other foreign currency in bonds and shares.
97. Define Sex ratio in the population of India, what is its present status?
Sex ratio is defined as the ratio of women per thousand men. Presently it is 933/ 1000.
98. Distinguish between ad-valorem and specific duties.
Ad-valorem is imposed on a goods or service according to its monetary value while specific duties according to the weight, volume etc.
99. Define zero-based budget.
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 oriented.
100. What is ‘CRISIL’? What does it do?
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 issues.
101. What do you understand by “Current Account Convertibility of Rupee”?
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 etc.
102. What do you mean by providing industry status to agriculture in India?
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 taxed.
103. Elucidate “Oration Flood”.
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 production.
104. Expand the term “nasdaq”.
‘NASDAQ’ is National Association of Securities Development Activation Quote.
105. Differentiate between “galloping inflation” and “run-away inflation”.
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 inflation.
106. What is meant by “couple protection ratio”?
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 trend.
107. Distinguish between “human development index” and “gender-related development index”.
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 basis.
108. What is green GNP?
We are now talking about Gross Environmental Product along with Gross National Product. Green GNP relates to all those products which are environment friendly. Stress on this aspect has been given in Doha Summit.
109. Distinguish between a “hard” currency and a “soft” currency.
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 currencies.
110. Explain “rolling plan”.
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 1980.
111. Illustrate Lorenz curve.
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 remain straight all through. The distribution would be unequal when the firm numbers inspite 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 greater.
112. What is meant by “trickle-down” theory of development?
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 opportunities, (n) What is “misery index”? Ans. 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 process.
113. What is meant by “Most Favoured Nation” policy?
Most Favoured Nation (MFN) is based on the idea of equality. The MFN principle seek to remove discrimination between trading states. Under the MFN, parties extend to each other the same advantage that they have extended to other third parties in the part, or are extending concurrently.
114. What are the main objectives of the 9th five year plan of the Government of India ?
“Growth and Social justice and social equality” is the main theme of 9th five year plan to bring balanced socio-economic development of the country.
115. Write a note on MODVAT scheme for 1986.
It is amended version of value added Tax. It is levied on final value of goods is abolished. It thus excludes the possibility of doubles taxation.
116. Explain per capita income as measurement of economic growth.
Per capita income is the outcome of total national income divided by total population. It does not give correct figure of nation’s income status also of income distribution.
117. What are the objectives of Social Security?
It is aimed at equal opportunity for development positive supportive environment and fulfillment of basic requirement from the society.
118. What do you mean by ‘parallel economy’?
When illegal money floats in the economy which has no declared source, such money is called parallel economy. It is made up of black-money, product of tax-evasion.
119. Describe the use of ‘command Area Development in India ?
Command Area Development is aimed at enhancing the agricultural product by creating modifying the irrigation facilities in defected areas.
It is additional investment in any existing project and the profit or output derived from it that is increase in output.
121. What are the main objectives of NABARD?
It is concerned with duel objectives of the agricultural and rural Development, like
i. Providing credit as an apex institute
ii. To refinance the institutions leading to agriculture and rural development.
122. What do you know about 11th Finance Commission?
Constituted under the chairmanship of A.M. Khusro on 1998 and it submitted its report on 2000. Recommended for the first time, to augmented the consolidated fund of a state to supplement the resources of the panchayats and Municipalities.
123. What do you mean revenue deficit in the central Government’s Budget?
It is the gap between Revenue receipt and the Revenue expenditure during the budget period.
124. How has the Census (1991) defined the urban areas?
Following are the Criteria :-
i. Place having Muncipality/Corporation/ Cantonment with population above 5000.
ii. Density 400 persons/54 km.
iii. 75% of male working population engaged in non-agriculture sector.
125. What are the objectives of New Economic Policy of the Government of India?
In 1991, seeing at the economic condition of country, new economy policy was introduced which ushered in factor of Liberalization, privitisation and Globalization in Indian economy.
126. Write a note on Rao-Manmohan model of development.
Under huge piles of debt, Indian economy was allowed roll over new changed economic policy with emphasis on Liberalisation, Globalisation and Privitisation.
127. What is the rational for ‘Mid-day Meal’ Scheme?
This scheme is launched to serve the people who are living below poverty line, thus can provide them with nutrition’s food apart from imparting basic educalion by attracting them to schools.
128. What has been the impact of the recent economic reforms Programme on the incidence of poverty in India.
The percentage of people living below poverty line has been decreasing but in slow pace. Inequality is still maintained.
129. Mutual Fund:
It is a financial asset to be invested in Selected Securities.
Small investors cannot directly invest but through mutual funds, they can profit from share markets. Mutual funds are regulated by the SEBI.
130. Per Capita Income:
It is the outcome total National Income divided by total population of that country. However this does not give correct figure of individualistic distribution of income across the region. Nor the Red size of economy.
131. Why was MODVAT scheme introduced in the year 1986?
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 goods.
132. What was the rational for, Mid – day Meal scheme?
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 country.
133. How has the census (1991) defined the urban Areas?
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.
134. Describe the use of ‘command Area Development’ in India.
In India, it can improve utilization of irrigation facilities and potentials, sustain productivity and increase production of agriculture.
135. What are the objectives of social forestry?
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 income.
136. What are the main objective of Ninth five year plan?
“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.
137. What is a Lorentz curve?
It was developed by Dr. Max O. Lorenze. It is a commutative 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 curve.
138. How do you distinguish between specific and ad-valorem duties?
Ad-Valorem duty is based on value of goods or services, changing in rate with the price specific duty is fixed on Weight, Area etc.
139. What is an MOU? What does it mean?
MOU is Memorandum of Understanding. It means that the government has agreed with any organisation or nation or institution in any matter and its terms and conditions are clarified in the MOU.
140. Differentiate between Balance of Trade and Balance of Payments?
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 only.
141. Where are India’s nuclear power plants located?
India’s nuclear power plants are located at: Tarapur (Maharashtra), Kalpakkam, (Tamil Nadu), Kakaapar (Gujarat) Ravatbhata (Rajasthan), Nerada (Uttar Pradesh).
142. What are Bailey’s beads?
Near the beginning and end of total solar eclipses, 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 peaks.