NTA UGC NET/JRF Exam, Dec. 2020/June 2021 (Commerce) Shift-I

Total Questions: 100

91. Read the given paragraph carefully and answer the questions that follow

The task of developing economic nation, its industrial policy requires regular updation to meet the growing demands of the industry as well as to increase the share of manufacturing in overall GDP as India's GDP has been dominated by services rather than agriculture or manufacturing, therefore structural modifications always required so that manufacturing activity be increased substantially to meet the global market requirements. This requires legal amendments, with the new laws aimed to facilitate better manufacturing and exports.

Actually, India faces two challenges, rather opportunities that the bullishness on the Indian economy is to be export-oriented as well as to feed its ever-growing domestic consumption. Also, no economic can only be consumption oriented as people should also save and invest actively. This brings to an important direction to the banking system which plays a critically important role in achieving the above two objectives. The public sector banks require to build on the capabilities and expertise on the due diligence methods for the credit appraisal for the loan requirements. Worth mentioning here is the data that the non-performing assets valuing Rs. 7.7 lakh crore (as on December 2017) as per the latest figures of the Finance Ministry. Nevertheless, given their large structure and geographic proliferation, the public sector banks must be recognized in India's development and that there is "no country in the world where banks have not had a problem".
 Which of the following is not a feature of the consumption economy?

Correct Answer: (b) It also imports more exports than imports
Solution:It also imports more exports than imports.
The consumption economy, is consuming more so, it should import more and export less.

92. Which of the following set defines Sustainable Consumption and Production (SCP)?

A. The use of services and related products which respond to basic needs and bring a better quality of life.
B. Minimizing the use of natural resources and toxic materials as well as the emission of waste as pollutants.
C. Pertinent use of service or product so as to jeopardise the needs of future generations.
D. Planned cities with a lower cost of production minimizing the retail inflation.

 

Choose the correct answer from the options given below :

Correct Answer: (b) A, B and D only
Solution:

Following are the set defines sustainable consumption and production (SCP):
■ The use of services and related products which respond to basic needs and bring a better quality of life.
■ Minimizing the use of natural resources and toxic materials as well as the emission of waste as pollutants.
■ Planned cities with a lower cost of production minimizing the retail inflation.

93. The credit appraisal process by a bank does NOT involve evaluation of the borrower on

Correct Answer: (d) Technical feasibility
Solution:

The credit appraisal process by bank does not involve technical feasibility of borrower.

94. The Indian banking sector requires that it :

Correct Answer: (b) build more manpower and ICT resources
Solution:

The public sector bank require to build on the capabilities and expertise on the due diligence methods for the credit appraisal for the loan requirements.

95. What problem is highlighted in the above passage?

Correct Answer: (b) High fiscal deficit
Solution:

High fiscal deficit

96. Read the paragraph carefully and give an answer to the question

The Economic Survey cautions against extending forbearance of credit default, draws that extended forbearance in the wake of the 2007-08 global financial crisis led to the build-up of bad loans and dragged down investment rates and economic growth.
If followed through, this would mean a major squeeze on company finances, as they scramble for resources to service loans on the brink of bankruptcy, and a big demand on the government to recapitalize the banks it owns, after they recognize and provide for a mass of bad loans.
Regulatory forbearance must be an emergency medicine, not a staple diet, is sound advice. A moratorium by banks on debt service by borrowers has been a part of the COVID cushioning to corporates. Many of these firms would face acute liquidity problems when the moratorium ends.
Fast growth that embraces all businesses would avert a crisis. Such Goldilocks perfection rarely materializes in real life. many companies could survive with access to liquidity could go under when banks think it is time to do asset quality reviews. The solution is to provide such companies with capital that does not need to be serviced when they do not make a profit or equity.
Companies would need a whole lot of capital, to service existing loans and to invest in new production, to cater to the demand thrown up by economic revival. The government had promised a fund that would mobilize large volumes of capital to invest in micro, small and medium enterprises.
This is the time to walk the talk. The equity stakes can be sold later, hopefully at a profit. Special situation funds, private equity, and allocations from retirement savings can be tapped for the needed capital. Managing the investment is the challenge.

Given below are two statements:
Statement I: Forbearance of credit default is a common phenomenon in Indian banking system
Statement II: Global financial crisis influences the quantum of bad loans in India
In the light of the above statements, choose the correct answer from the options given below :

Correct Answer: (b) Both statement I and statement II are true
Solution:

Both statement I and statement II are true.
Statement I : forbearance of credit default is a common phenomenon in Indian banking system. (Forbearance gives borrowers a chance to pause payments for loans, which results in accrual of interest will add onto existing balance and build financial hardship due to this it converts in NPA for banks and credit default accrue)
Statement II : Global financial crisis influences the quantum of bad loans in India. (2007-08 global financial crisis led to the build-up of bad loans)

97. Which could be suitable title for the above paragraph?

Correct Answer: (b) Forbearance and Corporate Funding in Crisis Times
Solution:

As the whole passage is discussing about credit default during crises wheather it was 2007-08 global financial crisis or Covid-19 pandemic. Its discussion is all about forbearance and corporate funding in crises times.

98. Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R.

Assertion A: The government had promised a fund of funds that would mobilize large volumes of capital to invest in micro, small and medium enterprises
Reason R: Companies would need a whole lot of capital to service existing loans and to invest in new production, to cater to the demand thrown up by economic revival
In light of the above statements, choose the most appropriate answer from the options given below :

Correct Answer: (d) Both A and R are correct but R is NOT the correct explanation of A
Solution:

Both A and R are correct but R is NOT the correct explanation of A

99. Both A and R are correct but R is NOT the correct explanation of A

Correct Answer: (a) Crisis of corporate funding during crisis times
Solution:

Crisis of corporate funding during crises times
times. It is the best theme of the paragraph narrated above because this passage is mostly discussed about the crises and the corporate funding during crisis

100. Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R

Assertion A: A moratorium by banks on debt service by borrowers has been a part of the COVID cushioning to corporates
Reason R: Regulatory forbearance must be an emergency medicine but not a staple diet
In light of the above statements, choose the most appropriate answer from the options given below :

Correct Answer: (c) Both A and R are correct and R is the correct explanation of A
Solution:Both A and R are correct and R is the correct explanation of A