Economy (Part-2) (CDS-Solved Paper)

Flexible exchange rates can be defined as exchange rates determined predominantly by market Mechanism In other words, they are prices of foreign exchange determined by the market, that can rapidly change due to supply and demand and are neither pegged nor controlled by Central Banks.

A Bill shall be deemed to be a Money Bill, if it contains only provisions dealing with all or any of the following matters: The imposition, abolition, remission, alteration or regulation of any tax.

The custody of the Consolidated Fund or Contingency Fund of India, the payment of money into or the withdrawal of money from any such fund. The appropriation of money out of the Consolidated Fund of India. Hence, option (a) is true.

Activities in the service or ternary sector include retail, banks, hotels, real estate, education, health, social work, computer services, recreation, media, communications, electricity, gas and water supply.

Secondary activities include manufacturing, processing and
construction (infrastructure) of industries. Hence, optoin(b) is true.

Industrial clusters not lead to Promotion of monopoly in the market. The objectives of industrial clusters development in India are
(i) To enhance the productivity and competitiveness of micro and small enterprises.
(ii) To facilitate economies of scale in terms of deployment of resources.
(iii) To build capacity of MSEs through formation of SHG, Mutual credit guarantee funds, BDS development etc.
Hence, option (d) is not correct.

Private investment in Indian agriculture is mostly on labour saving mechanisation. This could be a response to rising wages and tighter labour market.

Major recommendations of 14th Finance Commission
● States’ share in net proceeds of tax revenues be 42%, a huge jump from the 32% recommend by the 13th Finance Commission.
● Area under forest cover is an important variable in distribution of states’ share among states.
● Fiscal deficit should come down to 3.6% of GDP in 2015-2016 from projected 4.1% in 2014-15.
● Centre’s debt come down from 45.4% of GDP in 2014-15 to 43.6% in 2015-16 Hence option (d) is not correct.

The  New Development Bank  (NDB) is formerly referred to as the BRICS Development Bank. The headquarter of the bank is in Shanghai, China. KV Kamath  was appointed as first President of the bank, he is from India.
Hence, option (b) is correct.

Factors led to a decline in inflation rate in India during 2014-15 are as follows:
(i) Persistent decline in crude oil prices.
(ii) Softness in global prices of tradables such as edible oils and coal.
(iii) Tight monetary policy pursued by the RBI. (
iv) The Average Whole Price Index (WPI) declined to 3.4%.
(v) The rupee remained relatively stable vis-a-vis the currency of peer emerging countries. (vi) Moderation in wage rate growth.
Hence option (d) is correct.

Following are the provisions of Companies Act, 2013
(i) It regulates the corporate sector to make it accountable.
(ii) It provides for Corporate Social Responsibility (CSR).
(iii) It enables wide application of information technology.
(iv) Private companies maximum number of members will be 200 in place of 50.
Hence, option (c) is not correct.

In terms of monopolies, an existing business with an established infrastructure has a cost advantage when producing large quantities of a given product, enabling it to undercut the competition on price.

This is known as a natural monopoly and most typically refers to public utilities such as water services, natural gas and electricity, e.g. Delhi Jal Board.
Hence, option (b) is correct.