IASbaba's Daily Static Quiz
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DAILY STATIC QUIZ will cover all the topics of Static/Core subjects – Polity, History, Geography, Economics, Environment and Science and technology.
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UPSC Static Quiz - 2020 : IASbaba's Daily Static Quiz - ECONOMY [Day 16]
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Question 1 of 10
1. Question
Consider the following statements
- Fifteenth Finance Commission (for horizontal devolution) has assigned highest weight for the criteria of ‘population’.
- Fifteenth Finance Commission (for horizontal devolution) has assigned lowest weight for the criteria of ‘Tax effort’.
Which of the statements given above is/are NOT correct?
Correct
Solution (a)
15th Finance Commission–Criteria and Weights Assigned for Horizontal Devolution
Criteria Weight (%) Population 15 Area 15 Forest and Ecology 10 Income Distance 45 Demographic Performance 12.5 Tax Effort 2.5 Hence Statement 1 is incorrect and Statement 2 is correct.
Incorrect
Solution (a)
15th Finance Commission–Criteria and Weights Assigned for Horizontal Devolution
Criteria Weight (%) Population 15 Area 15 Forest and Ecology 10 Income Distance 45 Demographic Performance 12.5 Tax Effort 2.5 Hence Statement 1 is incorrect and Statement 2 is correct.
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Question 2 of 10
2. Question
Consider the following statements
- The grants provided by 15th Finance Commission to the rural local bodies are completely (100%) untied.
- For rural local bodies, no conditions have been prescribed by 15th Finance Commission for getting the grants in 2020-21.
Which of the statements given above is/are correct?
Correct
Solution (b)
50 per cent grants to rural local bodies are untied, the remaining 50 per cent would be tied as grants for sanitation and water supply which are identified national priorities.
Hence Statement 1 is incorrect.
For rural local bodies, no conditions have been prescribed for getting the grants in 2020-21. However, from 2021-22 onwards, the entry level conditions for rural local bodies getting these grants is the timely submission of audited accounts.
Hence Statement 2 is correct.
Incorrect
Solution (b)
50 per cent grants to rural local bodies are untied, the remaining 50 per cent would be tied as grants for sanitation and water supply which are identified national priorities.
Hence Statement 1 is incorrect.
For rural local bodies, no conditions have been prescribed for getting the grants in 2020-21. However, from 2021-22 onwards, the entry level conditions for rural local bodies getting these grants is the timely submission of audited accounts.
Hence Statement 2 is correct.
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Question 3 of 10
3. Question
Consider the following statements
- 15th Finance Commission has recommended an aggregate share of 42 per cent of the net proceeds of Union taxes (divisible pool) for the States.
- One of the major components of the revenue expenditure of the Government is Interest payments.
Which of the statements given above is/are correct?
Correct
Solution (b)
15th Finance Commission has recommended an aggregate share of 41 per cent of the net proceeds of Union taxes (divisible pool) for the States, compared to 42 per cent recommended by the 14th Finance Commission. The reduction of 1 per cent devolution to states is meant to enable the Union Government to provide for the security and other special needs of the Union Territory of Ladakh and Union Territory of Jammu & Kashmir.
Hence Statement 1 is incorrect.
The major components of the revenue expenditure of the Government include Interest payments, Subsidies, Salaries, Pensions, Defence revenue expenditures, expenditure on Central Police Organizations and the revenue transfers made to the State/UT Governments in the form of Finance Commission grants, Centrally Sponsored Schemes and Other Transfers.
Hence Statement 2 is correct.
Incorrect
Solution (b)
15th Finance Commission has recommended an aggregate share of 41 per cent of the net proceeds of Union taxes (divisible pool) for the States, compared to 42 per cent recommended by the 14th Finance Commission. The reduction of 1 per cent devolution to states is meant to enable the Union Government to provide for the security and other special needs of the Union Territory of Ladakh and Union Territory of Jammu & Kashmir.
Hence Statement 1 is incorrect.
The major components of the revenue expenditure of the Government include Interest payments, Subsidies, Salaries, Pensions, Defence revenue expenditures, expenditure on Central Police Organizations and the revenue transfers made to the State/UT Governments in the form of Finance Commission grants, Centrally Sponsored Schemes and Other Transfers.
Hence Statement 2 is correct.
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Question 4 of 10
4. Question
Consider the following statements:
- In the recent Budget, the government has reduced the GST rate on Electric Vehicles and Electric Vehicle Chargers to 5 per cent.
- e-Nivaran is the online grievance redressal system of the Income Tax Department.
Which of the statements given above is/are NOT correct?
Correct
Solution (d)
In the recent Budget, the government has reduced the GST rate on Electric Vehicles and Electric Vehicle Chargers to 5 per cent.
Hence Statement 1 is correct.
e-Nivaran is the online grievance redressal system of the Income Tax Department. All types of Grievances such as PAN application, processing, assessment, appeals, TDS etc., can be filed by tax payers.
Hence Statement 2 is correct.
Incorrect
Solution (d)
In the recent Budget, the government has reduced the GST rate on Electric Vehicles and Electric Vehicle Chargers to 5 per cent.
Hence Statement 1 is correct.
e-Nivaran is the online grievance redressal system of the Income Tax Department. All types of Grievances such as PAN application, processing, assessment, appeals, TDS etc., can be filed by tax payers.
Hence Statement 2 is correct.
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Question 5 of 10
5. Question
Consider the following statements:
- PAHAL is an example of cash scheme of Direct Benefit Transfer (DBT), while PDS is an example for In-kind scheme of DBT.
- Proportion of external debt as percentage of total liabilities, amounts to 49 per cent of Central Government’s total liabilities as on March 31, 2019.
Which of the statements given above is/are correct?
Correct
Solution (a)
Cash schemes of DBT: This category includes 301 schemes or components of schemes where subsidies/benefits are transferred directly into the bank accounts of the beneficiaries.
For example, under PAHAL, beneficiaries buy LPG cylinders at market price and receive subsidy directly in their bank accounts.
In-kind schemes of DBT: This category includes 67 schemes or components of schemes where beneficiaries receive subsidies in the form of goods, commodities, etc. after conducting Aadhaar-based authentication preferably at Point of Sale (PoS). For instance, under PDS, food grains are distributed at subsidized rates via Fair Price Shops to authenticated beneficiaries.
Hence Statement 1 is correct.
One of the key features on country’s debt profile is low proportion of external debt as percentage of total liabilities, which amounts to 5.9 per cent of Central Government’s total liabilities as on March 31, 2019.
Hence Statement 2 is incorrect.
Incorrect
Solution (a)
Cash schemes of DBT: This category includes 301 schemes or components of schemes where subsidies/benefits are transferred directly into the bank accounts of the beneficiaries.
For example, under PAHAL, beneficiaries buy LPG cylinders at market price and receive subsidy directly in their bank accounts.
In-kind schemes of DBT: This category includes 67 schemes or components of schemes where beneficiaries receive subsidies in the form of goods, commodities, etc. after conducting Aadhaar-based authentication preferably at Point of Sale (PoS). For instance, under PDS, food grains are distributed at subsidized rates via Fair Price Shops to authenticated beneficiaries.
Hence Statement 1 is correct.
One of the key features on country’s debt profile is low proportion of external debt as percentage of total liabilities, which amounts to 5.9 per cent of Central Government’s total liabilities as on March 31, 2019.
Hence Statement 2 is incorrect.
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Question 6 of 10
6. Question
Consider the following statements regarding ‘Financial Stability’:
- Financial stability could be defined as a situation in which the financial sector provides critical services to the real economy without any discontinuity.
- Financial stability is an important aspect of the Monetary Policy of India
- Financial Stability report is published every year by Ministry of Finance.
Which of the above statements are correct?
Correct
Solution (a)
Financial Stability could be defined as a situation in which the financial sector provides critical services to the real economy without any discontinuity.
Hence Statement 1 is correct
Financial stability is now one of the three important objectives of monetary policy besides price stability and credit support.
Hence Statement 2 is correct
The RBI since 2010 is publishing India Financial Stability Report to assess financial stability scenario in the country.
Hence Statement 3 is incorrect
Incorrect
Solution (a)
Financial Stability could be defined as a situation in which the financial sector provides critical services to the real economy without any discontinuity.
Hence Statement 1 is correct
Financial stability is now one of the three important objectives of monetary policy besides price stability and credit support.
Hence Statement 2 is correct
The RBI since 2010 is publishing India Financial Stability Report to assess financial stability scenario in the country.
Hence Statement 3 is incorrect
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Question 7 of 10
7. Question
Consider the following statements with reference to SEBI:
- It regulates the trading of Shares in the Stock exchanges
- The trading of Agricultural Commodities in Commodity exchanges is regulated by Forward Markets Commission (FMC) and SEBI supervises it.
Which of the following statements is/are correct?
Correct
Solution (a)
The primary function of SEBI is regulating the stock markets in India.
Hence Statement 1 is correct
Until September 2015, the SEBI was only regulator of the stock markets and the regulation of trade in Agricultural products was carried out by Forward Markets Commission. On 28 September 2015 the FMC was merged with the Securities and Exchange Board of India (SEBI). So, now, SEBI is the regulator of both the sectors.
Hence Statement 2 is incorrect
Incorrect
Solution (a)
The primary function of SEBI is regulating the stock markets in India.
Hence Statement 1 is correct
Until September 2015, the SEBI was only regulator of the stock markets and the regulation of trade in Agricultural products was carried out by Forward Markets Commission. On 28 September 2015 the FMC was merged with the Securities and Exchange Board of India (SEBI). So, now, SEBI is the regulator of both the sectors.
Hence Statement 2 is incorrect
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Question 8 of 10
8. Question
With reference to regulation of pension products, consider the below statements:
- Pension products floated by insurance companies or sold by mutual funds come under the purview of the Insurance Regulatory and Development Authority (IRDA).
- The National Pension System (NPS) is a voluntary defined contribution pension system administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
Which of the statements given above is/are correct?
Correct
Solution (b)
Pension products floated by insurance companies come under the purview of the Insurance Regulatory and Development Authority (IRDA) while those sold by mutual funds are overseen by the SEBI.
Hence Statement 1 is incorrect
The National Pension System (NPS), which is a voluntary defined contribution pension system administered, is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
Hence Statement 2 is correct
Incorrect
Solution (b)
Pension products floated by insurance companies come under the purview of the Insurance Regulatory and Development Authority (IRDA) while those sold by mutual funds are overseen by the SEBI.
Hence Statement 1 is incorrect
The National Pension System (NPS), which is a voluntary defined contribution pension system administered, is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
Hence Statement 2 is correct
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Question 9 of 10
9. Question
Consider the following statements with reference to the Financial Stability and Development Council (FSDC)
- It is a statutory body constituted under an Act of the Parliament
- The Chairman of the FSDC is the Finance Minister of India
Which of the above statements is/are NOT CORRECT?
Correct
Solution (a)
Financial Stability and Development Council was setup with a view to strengthen and institutionalize the mechanism for maintaining financial stability and enhancing inter-regulatory coordination, Indian Government has setup FSDC, not by the Act of Parliament.
Hence Statement 1 is incorrect
The Chairman of the FSDC is the Finance Minister of India and its members include the heads of the financial sector regulatory authorities (i.e, SEBI, IRDA, RBI, PFRDA and FMC), Finance Secretary and/or Secretary, Department of Economic Affairs (Ministry of Finance), Secretary, (Department of Financial Services, Ministry of Finance) and the Chief Economic Adviser.
Hence Statement 2 is correct
Incorrect
Solution (a)
Financial Stability and Development Council was setup with a view to strengthen and institutionalize the mechanism for maintaining financial stability and enhancing inter-regulatory coordination, Indian Government has setup FSDC, not by the Act of Parliament.
Hence Statement 1 is incorrect
The Chairman of the FSDC is the Finance Minister of India and its members include the heads of the financial sector regulatory authorities (i.e, SEBI, IRDA, RBI, PFRDA and FMC), Finance Secretary and/or Secretary, Department of Economic Affairs (Ministry of Finance), Secretary, (Department of Financial Services, Ministry of Finance) and the Chief Economic Adviser.
Hence Statement 2 is correct
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Question 10 of 10
10. Question
Which of the following constitutes Non-tax revenue in the economy:
- Interest and dividend receipts
- External grants and receipts from fiscal services
- External grants and receipts from the Union Public Service
- Disinvestment receipts
Choose the correct option from the code given below:
Correct
Solution (b)
Non-debt capital receipts: Recovery of loans and advances, and disinvestment receipts
Incorrect
Solution (b)
Non-debt capital receipts: Recovery of loans and advances, and disinvestment receipts
