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Poverty, Planning, Finance and Economic/Social Development (Part-III)

📆 March 17, 2025

Total Questions: 61

11. Which of the following is/are the aim/aims of "Digital India" Plan of the Government of India? [2018-1]

1. Formation of India's own Internet companies like China did.

2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries.

3. Connect many of our villages to the Internet and bring Wi-Fi to many of our school, public places and major tourist.

Select the correct answer using the code given below:

Correct Answer: (b) 3 only
Solution:Digital India programme has three vision areas namely, digital infrastructure as a utility for every citizen, governance and services on demand and digital empowerment of citizens by bridging the digital divide in the country.

Hence #1 and #2 are irrelevant, and by elimination we are left with answer B: 3 only.

12. Consider the following statements: [2018-1]

1. The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.

2. Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.

3. Treasury bills offer are issued at a discount from the par value.

Which of the statements given above is/are correct?

Correct Answer: (c) 2 & 3 only
Solution:RBI is public debt manager for both state and union Governments, so #1 is wrong.

According to Dept of Economic Affairs, Short-term debt of the Central Government on residual maturity basis includes 14-day intermediate treasury bills, regular treasury bills, dated securities maturing in the ensuing one year and external debt with remaining maturity of less than one year.

Short-term debt of State Governments comprises internal debt that includes market loans maturing within next one year, and repayment of loans to Centre. Therefore, #2 is right.

T-bills are sold at discount and re-purchased at par value (face value). So, #3 is right.

13. If a commodity is provided free to the public by the Government, then: [2018-1]

Correct Answer: (c) the opportunity cost is transferred from the consumers of the product to the tax-paying public.
Solution:From the finite money available, Government could build a street light or a water tap. So, opportunity cost is involved in pursuing either one of the activity. Experts were divided over C or D-some interpreting that opportunity cost is borne by the Decision Maker, while others saying opportunity cost is borne by the person who eventually pays for it. UPSC has kept "C" as the official answer.

14. Increase in absolute and per capita real GNP do not connote a higher level of economic development, if : [2018-1]

Correct Answer: (c) poverty and unemployment increase.
Solution:Economic development includes not only economic growth but also various other economic changes that improve the quality of life or standard of living of people in a country.

If with economic growth, a country experiences various economic changes such as reduction in poverty and unemployment, reduction in income and wealth inequality, increase in literacy rate, improvement in health and hygiene, etc, that improve the quality of life then that is economic development.

So, C is the fitting choice.

15. Atal innovation mission is set up under the: [2019-1]

Correct Answer: (c) NITI Ayog
Solution:The Atal Innovation Mission (AIM) is a flagship initiative of the Prime Minister, set up by NITI Aayog to promote innovation and entrepreneurship across the length and breadth of the country.

16. In a given year in India, official poverty lines are higher in some states than in other because: [2019-1]

Correct Answer: (b) Price levels vary from state to state
Solution:Page 19, Asian Development Bank document on Understanding poverty in India.

Poverty lines are estimated using the original state-specific poverty lines identified by the Expert Group and updating them to 2004-2005 prices using the Consumer Price Index of Agricultural Laborers (CPIAL) for rural poverty lines and Consumer Price Index for Industrial Workers (CPIIW) for urban poverty lines. So, B: price levels is the most appropriate choice.

17. With reference to India's Five Year Plans, which of the following statements is/are correct? [2019-1]

1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.

2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.

3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.

Select the correct answer using the code given below:

Correct Answer: (a) 1 & 2 only
Solution:2nd FYP: rapid industrialization with particular emphasis on the development of basic and heavy industries so Statement is correct. This eliminates B and C. The correct answer could be A or D. In both these options, second statement is common so we should accept statement #2 to be correct without checking its validity.

5th FYP: Fifth Plan (1974-79) was formulated against the backdrop of severe inflationary pressures. objectives of the plan were to achieve self-reliance and adopt measures for raising the consumption standard of people living below the poverty line.

This Plan also gave high priority to bring inflation under control and to achieve stability in the economic situation. It targeted an annual growth rate of 5.5 percent in the national income. There is no mention of Financial Sector here, so #3 is wrong. We are left with Answer A: only 1 and 2.

18. Which of the following statements is/are correct regarding the Maternity Benefit (Amendment) Act, 2017? [2019-1]

1. Pregnant women are entitled for three months pre-delivery and three months post-delivery paid leave.

2. Enterprises with creches must allow the mother minimum six creche visits daily.

3. Women with two children get reduced entitlements.

Select the correct answer using the code given below:

Correct Answer: (c) 3 only
Solution:As per the bare act: In case of a woman who has two or more children, the maternity benefit will continue to be 12 weeks. If less than two children then she'll get 26 weeks paid leave.

Every establishment with 50 or more employees to provide crèche facilities within a prescribed distance. The woman will be allowed four visits to the crèche in a day. So #2 is wrong. We are left with Answer C: only 3.

19. Considering the following statements: [2019-1]

1. Purchasing Power Parity (PPP) exchange rates are calculated by the prices of the same basket of goods and services in different countries.

2. In terms of PPP dollars, India is the sixth largest economy in the world.

Which of the statements given above is/are correct?

Correct Answer: (a) I only
Solution:PPP: Hypothetical concept that tries to compare two currencies exchange rate through their purchasing power in respective countries. So, #1 is right.

2014-April, Economic Times: India displaces Japan to become third-largest world economy in terms of PPP: World Bank. So #2 is wrong, we are left with answer A: 1 only.

20. Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee? [2019-1]

Correct Answer: (d) Following an expansionary monetary policy.
Solution:To control rupee weakening.

A: will help by reducing the Current account deficit.

B: will help by reducing the demand of dollars in loan-repayment.

C: will help by increasing the inflow of dollars and other currencies.

D: will backfire, because rupee currency supply will increase without corresponding increase in the supply of dollars and as a result: dollar will strengthen, Indian Rupee will weaken further. So D is the answer.

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