[DAY 45] 60 DAY RAPID REVISION (RaRe) SERIES for UPSC Prelims 2022 – ECONOMICS, CURRENT AFFAIRS & CSAT; Test Series, Videos & Notes!

Solution (d)

Basic Info:

A financial market consists of two major segments: Money Market and Capital Market.

The money market is a market for short-term funds, which deals in financial assets whose period of maturity is upto one year. It should be noted that money market does not deal in cash or money as such but simply provides a market for credit instruments such as bills of exchange, promissory notes, commercial paper, treasury bills, etc.

Capital Market is an institutional arrangement for borrowing medium and long-term funds and which provides facilities for marketing and trading of securities. So it constitutes all long-term borrowings from banks and financial institutions, borrowings from foreign markets and raising of capital by issue various securities such as shares, debentures, bonds, etc.

Money market is regulated by RBI, while capital market is regulated by SEBI.

Solution (d)

Basic Info:

The secondary market or stock exchange provides a ready market for existing long term securities. It has further two components.

First, the spot market where securities are traded for immediate delivery and payment. The other is forward market where the securities are traded for future delivery and payment. This forward market is further divided into Futures and Options Market (Derivatives Markets)

In futures Market the securities are traded for conditional future delivery whereas in option market, two types of options are traded.

A Put option gives right but not an obligation to the owner to sell a security to the writer of the option at a predetermined price before a certain date, while a Call option gives right but not an obligation to the buyer to purchase a security from the writer of the option at a particular price before a certain date.

Solution (c)

Basic Info:

Terms of Trade
Commodity or net terms of trade (NTT) of a country is the ratio of the unit value (price) of export to the corresponding unit value (price) of import measured relative to a base year.

If this ratio increases, it implies that the country, for every unit of exports it exchanges for
imports, is receiving relatively more; if the ratio decreases then the country is receiving
relatively less.

Two other commonly used terms of trade indices are gross terms of trade (GTT) and
income terms of trade (ITT).

• The GTT is a ratio of total quantity of imports to that of exports of a given country.
• The ITT is the value of exports divided by the unit value (price) of imports to reflect how better or worse a country’s purchasing power to imports has become.

Solution (d)

Basic Info:

A Scheme For Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) has been
launched by the Ministry of Micro, Small & Medium Enterprises with an objective to set up a
network of technology centers, incubation centers to accelerate entrepreneurship and also to
promote start-ups for innovation and entrepreneurship in the rural and agriculture-based industry.

In order to promote innovation, rural entrepreneurship and agricultural industry, SIDBI launched a Rs 60 crore ASPIRE fund.

Through this SIDBI would contribute to various angel/ venture capital funds for investing in start-ups/ early-stage enterprises focusing on value addition in the rural economy and job creation.

Solution (d)

Basic Info:

Privatization
De-nationalization is the transfer of the state ownership of the assets to the private sector to the tune of 100 per cent. It is privatization in its purest sense.

If an asset has been sold out by the government to the tune of only 49 per cent the ownership remains with the state though it is considered Privatisation. It is also called disinvestment through minority stake sale.

If the sale of shares of the state-owned assets has been to the tune of 51 per cent, the ownership is really transferred to the private sector even then it is termed as privatisation. This is disinvestment through majority stake sale.

Strategic disinvestment would imply the sale of substantial portion of the Government  shareholding of a central public sector enterprise (CPSE) of up to 50%, or such higher percentage as the competent authority may determine, along with transfer of management
control.

Solution (b) 

Basic Info:

The National Infrastructure Pipeline (NIP) is a group of social and economic infrastructure projects slated to be established over a period of five years with an initial sanctioned amount of ₹102 lakh crore.

NIP will enable a forward outlook on infrastructure projects which will create jobs, improve ease of living, and provide equitable access to infrastructure for all, thereby making growth more inclusive. NIP includes economic and social infrastructure projects.

During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.

It has outlined plans to invest more than ₹102 lakh crore on infrastructure projects by 2024-25, with the Centre, States and the private sector to share the capital expenditure in a 39:39:22 formula.

Task Force was constituted to draw up the National Infrastructure Pipeline (NIP) for each of the years from financial years 2019-20 to 2024-25.

Sector-wise:

• According to the Task Force, Government has planned to increase participation of private sector in freight traffic. It will add 30% of net cargo by 2025 and will increase private trains to 500.
• Irrigation and rural infrastructure projects would account for 7 lakh crore each. 3.07 lakh crore would be spent on industrial infrastructure. Agriculture and social infrastructure would account for the rest.
• Road projects will account for 63 lakh crore while another 13.68 lakh crore would be for railway projects.
• Port projects would see spending of 1 lakh crore and airports another 43 lakh crore. 16.29 lakh crore would be spent on urban infrastructure and 3.2 lakh crore in telecom projects.
• According to the sector-wise break-up of projects made available by the Finance Ministry, 54 lakh crore investment will flow in the energy sector, and of that 11.7 lakh crore would be in just the power sector.
• 42 lakh crore NIP projects which are in the implementation stage now include expressways, national gas grid and PMAY-G.

Solution (a)

Basic Info:

Udyamimitra Portal is an enabling platform, aims to provide ‘End to End’ solutions not only for credit delivery but also for the host of credit plus services by way of handholding support, application tracking, multiple interface with stakeholders (i.e. lenders, service providers, applicants).

Small Industries Development Bank of India (SIDBI) has launched the ‘Udyami Mitra’ Portal to improve accessibility of credit and handholding services to Micro, Small and Medium Enterprises (MSMEs).

Anyone who wants to start their own business but is afraid of all the expenditure cost can quickly get the financial help and expert guidance from Udyami Mitra Portal.

Scheduled Commercial Banks (SCBs) have been advised to ensure a target of 7.5% of Adjusted Net Bank Credit (ANBC) for Micro Enterprises, that collateral security is not required for loans upto Rs. 10 lakh to MSE sector, a simplified working capital requirement for MSEs.

Solution (a)

Basic Info:

The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.

It is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.

It is a composite indicator that measures the growth rate of industry groups classified under:

• Broad sectors, namely, Mining, Manufacturing, and Electricity.
• Use-based sectors, namely Basic Goods, Capital Goods, and Intermediate Goods.

Base Year for IIP is 2011-2012.

Significance of IIP :

• IIP is the only measure on the physical volume of production.
• It is used by government agencies including the Ministry of Finance, the Reserve Bank of India, etc, for policy-making purposes.
• IIP remains extremely relevant for the calculation of the quarterly and advance GDP estimates.

Solution (d)

Basic Info:

The Eight Core Industries, includes Natural Gas, Coal, Refinery Products, Crude Oil, Cement, Electricity, Steel, and Fertilizers. These industries are termed as the core industries owing to their strong impact on the general economic activities and the other industrial activities.

These industries comprise a total of 40.27% of the total weight of the overall items that are included in the Index of Industrial Production (IIP).

The weightage figures are stated below in decreasing order

Note :  The compilation and releasing of the Index of Eight Core Industries index is done by the Office of the Economic Adviser (OEA), Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.

Solution (c)

Basic Info:

The impact of LPG reform on the industrial sector were:

Industrial growth had recorded a slowdown. This was because of the decreasing demand for industrial products due to various reasons such as cheaper imports, inadequate investment in
infrastructure, etc.

In a globalized world, developing countries are compelled to open up their economies to a greater flow of goods and capital from developed countries and rendering their industries vulnerable to imported goods.

Cheaper imports have, thus, replaced the demand for domestic goods. Domestic manufacturers are facing competition from imports.

The infrastructure facilities, including power supply, have remained inadequate due to lack of investment.

Globalization is, thus, often seen as creating conditions for the free movement of goods
and services from foreign countries that adversely affect the local industries and employment opportunities in developing countries.

Solution (b)

Basic Info:

Industrial Policy resolution 1956 (IPR 1956):

IPR 1956 was adopted with the goal of the state controlling the commanding heights of the economy. This resolution formed the basis of the Second Five Year Plan, the plan which tried to build the basis for a socialist pattern of society.

This policy was used for promoting the industry in backward regions; it was easier to obtain a license if the industrial unit was established in an economically backward area.

In addition, such units were given certain concessions such as tax benefits and electricity at a lower tariff. The purpose of this policy was to promote regional equality.

Even an existing industry had to obtain a license for expanding output or for diversifying production (producing a new variety of goods).

This was meant to ensure that the number of goods produced was not more than what the economy required. The license to expand production was given only if the government was convinced that the economy required a larger quantity of goods.

The IPR 1956 was based on the Mahalanobis model of growth. This model suggests that there should be an emphasis on heavy industries that can lead the Indian economy to a long term growth path.

Solution (d)

Basic Info:

In 1955, the Village and Small-Scale Industries Committee, also called the Karve Committee, noted the possibility of using small-scale industries for promoting rural development.

It was set up for the growth and development of small scale industries and rural development.

• Abid Hussain Committee: Development Of Capital Markets
• SL Kapoor Committee: Institutional Credit To SSI
• SS Kohli Committee: Rehabilitation Of Sick Industrial Units

Solution (c)

Basic Info:

Financial Support to MSMEs in ZED Certification Scheme:

It seeks to inculcate Zero Defect & Zero Effect practices in manufacturing processes, ensures
continuous improvement and supporting the Make in India initiative. The scheme is an extensive drive of the Government of India to enhance the global competitiveness of MSMEs by providing them financial support in assessment, rating & handholding of its manufacturing  processes on quality and environment aspects.

It seeks to promote the adaptation of Quality tools/systems and Energy Efficient manufacturing.

It is under the purview of Ministry of Micro, Small & Medium Enterprises, Govt. of India

The ZED Scheme will be implemented nationwide through Implementing Agencies such as QCI,
NPC, Industry Chambers like CII, FICCI & ASSOCHAM, MSME-Development Institutes, MSME
Technology Centres, Industry Associations, BEE, etc.

ZED Certification is not mandatory by the Government; it is a voluntary scheme which will provide the MSMEs a road map to global competitiveness. The ZED Certification Scheme covers only, the MSME sectors belonging to the manufacturing sector.

Solution (b)

Basic Info:

Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy program administered by the Ministry of Micro, Small and Medium Enterprises, Government of India.

Objectives:

• To generate employment opportunities in rural as well as urban areas through setting up of self employment ventures.
• To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and unemployed youth, to help arrest migration of rural youth to urban areas.

The scheme is applicable to all viable (technically as well as economically) projects in rural as well as urban areas, under the Micro-enterprises sector.

Khadi & Village Industries Commission (KVIC), is the nodal agency at the national level for
implementation of the scheme. At the state level, the scheme is implemented through KVIC, KVIB and District Industries center.

Solution (b)

Basic Info:

The Department of Industrial Policy and Promotion (DIPP) has been renamed as the Department for Promotion of Industry and Internal Trade (DPIIT) with a mandate to deal with matters related to start-ups, facilitating ease of doing business among others.

DIPP (under the Ministry of Commerce and Industry) was established in 1995 and reconstituted in the year 2000 with the merger of the Department of Industrial Development.

Functions of this body include:

• Formulation of industrial policy and strategies
• Monitoring of industrial growth
• Formulation of FDI policy and its regulation
• Formulation of policies relating to various Intellectual Property Rights (IPRs)
• Coordinates with UN Industrial Development Organization
• Administers Laws: The Explosives Act, 1884; The Salt Cess Act, 1953; The Patent Act, 1970; The Boilers Act, 1923 etc.

Solution (d)

Basic Info:

SFURTI  “ Scheme of Fund for up-gradation and Regeneration of Tradition Industries” aims to set up more Common Facility Centres (CFCs) to facilitate cluster-based development to support traditional industries.

The objective of the scheme is to –

• Organize the traditional industries and artisans into clusters to make them competitive and provide support for their long term sustainability, sustained employment
• Enhance the marketability of products of such clusters
• Equip traditional artisans of the associated clusters with improved skills
• Make provision for common facilities and improved tools and equipment for artisans
• Strengthen the cluster governance systems with the active participation of the stakeholders
• Build up innovated and traditional skills, improved technologies, advanced processes, market intelligence and new models of public-private partnerships, so as to gradually replicate similar models of cluster-based regenerated traditional industries.

Solution (c)

Basic Info:

National Investment & Manufacturing Zones (NIMZs):  The Government of India has announced a National Manufacturing Policy with the objective of enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs.

The National Investment & Manufacturing Zones (NIMZs) are an important instrumentality of the manufacturing policy. NIMZs are envisaged as large areas of developed land with the requisite ecosystem for promoting world-class manufacturing activity.

NIMZs are based on the principle of industrial development in partnership with states and focuses on manufacturing growth and employment generation.

Special Economic Zones (SEZs)
SEZs are established mainly for the promotion of exports under the Special Economic Zones Act,
2005. National Investment and Manufacturing Zones (NIMZ) is a self-governing body declared/
notified/sanctioned in official gazette by Central Government (DIPP) as “Industrial Township”
under Article 243Q(c) of the constitution. No separate legislation / law is needed to be passed to establish an NIMZ.

SEZs and NIMZs enjoy tax-related benefits. The SEZs enjoy 100% income tax exemption on export income for the first five years, 50% for the next five years thereafter and 50% of the ploughed back export profit for the next five years. Besides, NIMZ, under the National Manufacturing Policy, has provisions of tax incentives to small and medium enterprises (SMEs)

NIMZs are different from SEZs in terms of size, level of infrastructure planning, governance
structures related to regulatory procedures, and exit policies.

Both the NIMZ & SEZ are approved by the Union Government.

Solution (d)

Basic Info:

In order to promote the Ease of Doing Business, the Ministry of Micro, Small and Medium Enterprises (MSME) has introduced various initiatives including the online filing of Udyog Aadhaar Memorandum (UAM). The Ministry has also taken the following steps:

MSME SAMBANDH Portal- to help in monitoring the implementation of public procurement
policy for micro and small enterprises.

MSME SAMPARK Portal – A digital platform wherein jobseekers (passed out trainees/students
of MSME Technology Centres) and recruiters get connected.

MSME SAMADHAAN Portal- for empowering micro and small entrepreneurs across the country to directly register their cases relating to delayed payments.

Digital Payments- to pass on the benefits of the schemes of Ministry of MSME through digital
payment gateway.

Solution (b)

Basic Info:

Unorganized sector:

Unorganized sector is defined under Section 2 (l) of the Unorganized Workers Social Security Act, 2008.

It is defined as a production or service-oriented enterprise owned by individuals or self-employed workers (one who is not working for an employer and is engaged in an unorganized sector job earning an income below a threshold or owning land below a notified limit) and if workers are employed, then the total number of workers cannot exceed 10

The term ‘unorganized worker’ is defined in India under Section 2(m) of the Unorganized Workers Social Security Act, 2008.

The organised sector is defined as the sector which is not the unorganized sector. It is pertinent to note that the organised sector may also have unorganized workers working there.

Workforce in the unorganized sector:

• The exact figures of the unorganized workforce vary as per different estimates.
• The Economic Survey of 2018-19 estimates “almost 93%” of the total workforce is ‘informal’.
• Niti Aayog’s Strategy for New India at 75, released in November 2018 estimates India’s informal workforce approximately 85%.
• Report of the Committee on Unorganised Sector Statistics of the National Statistical Commission (NSC), 2012, which says the share of the informal workforce is “more than 90%” of the total .
• However, by all estimates, the unorganized workforce is more than 75% of the total

Solution (c)

Basic Info:

Engineering, Procurement, and Construction (EPC) Model:

• Under this model, the cost is completely borne by the government.
• Government invites bids for engineering knowledge from the private players.
• Procurement of raw material and construction costs are met by the government.
• The private sector’s participation is minimum and is limited to the provision of engineering
• A difficulty of the model is the high financial burden for the government.
• Under the EPC model, NHAI pays private players to lay roads. The private player has no role in the road’s ownership, toll collection or maintenance (it is taken care of by the government).

Solution (b)

Statement Analysis:

 Context –The bill received President’s assent.

Solution (a)

Statement Analysis:

 Context – India – UAE CEPA was in news.

Solution (c)

LAMITIYE-2022 is a Joint Military Exercise between the Indian Army and Seychelles Defence Forces.

Context – The military exercise took place

Solution (d)

Statement Analysis:

 Context – MoEFCC exempted Site directed nuclease (SDN)1 and SDN2 genome edited plants from certain rules of the Environment Protect Act (EPA)

Solution (c)

Statement Analysis:

 Context – Promotion of rural and indigenous/tribal games component of Khelo India- National Programme for Development of sports Scheme

Solution (b)

According to the question,

1, 5, 7, 4, 3, 5, 7, 3, 4, 5, 3, 9, 5, 7.

There are 2 such 5’s.

Solution (c)

9 -> 3²

25 -> 5²

49 -> 7²

81 -> 9²

Similarly,

324 -> 18²

256 -> 16²

196 -> 14²

144 -> 12^2.

Solution (c)

153, 146, 137, 126, 113, 98, 81, X

7         9     11     13    15  17  19 – > difference between the numbers

So, subtracting 19 from 81 gives the answer, which is 62.

Solution (b)

6, 15, 49, 201, 1011, X

6

6 * 2 + 3 = 15

15 * 3 + 4= 49

49 * 4 + 5= 201

201 * 5 + 6= 1011

1011 *6 + 7 = 6073

Solution (d)

Refer to, “The Chinese, Japanese and Koreans excelled in perfecting production techniques; as a result they have managed to corner a substantial chunk of the wealth.”

The above statement in the 2nd paragraph of the passage clearly states opposite of what’s stated in option d.

Hence, option d is the correct answer.