iPTS18

StrategySession

BasicEconomicsand
EconomicDevelopment
 FocusOn

TheGovernment
CentralBank&Markets
Growth&Development
Inflation
Trade&InternationalOrganisations
RecentTrendsandIssues
 TheGovernment

Budget
Deficits
Taxation
Planning
 CentralBankandMarkets

Moneymarkets
Banking
StocksandMarkets
NewTrends
 GrowthandDevelopment

GDPandNationalIncomes
PovertyandUnemployment
HumanDevelopment
GrowthIndicesIIP,EightCoreIndustries,BaseEffectetc.
Initiatives
 Inflation

Calculation
CPI,WPI
LinkagesinEconomy
Types
 TradeandOrganisations

WTO,EU,G7etc.
TradingBlocksFTAs
BrettonWoodsandNewOrganisations
BalanceofPayments
 RecentTrendsandIssues
NITIAayog
BudgetaryReforms
MonetaryPolicyCommittee
NPA
Taxation
Digitisation
NicheBanks
IPR
 PreviousYearQuestions
2017

Whichofthefollowinghas/haveoccurredinIndiaafteritsliberalisationofeconomicpoliciesin1991:

1. ShareofagricultureinGDPincreasedenormously.
2. ShareofIndiasexportsinworldtradeincreased.
3. FDIinflowsincreased.
4. Indiasforeignexchangereservesincreasedenormously.

Selectthecorrectanswerusingthecodesgivenbelow:
(a) 1and4only
(b) 2,3and4only
(c) 2and3only
(d) 1,2,3and4
Whatis/arethemostlikelyadvantagesofimplementingGoodsandServiceTax
(GST)?
1. Itwillreplacemultipletaxescollectedbymultipleauthoritiesandwillthus
createasinglemarketinIndia.
2. ItwilldrasticallyreducetheCurrentAccountDeficitofIndiaandwillenable
ittoincreaseitsforeignexchangereserves.
3. ItwillenormouslyincreasethegrowthandsizeofeconomyofIndiaandwill
enableittoovertakeChinainthenearfuture.
Selectthecorrectanswerusingthecodegivenbelow:

(a) 1only
(b) 2and3only
(c) 1and3only
(d) 1,2and3
 BroadbasedTradeandInvestmentAgreement(BTIA)issometimes
seeninthenewsinthecontextofnegotiationsheldbetweenIndiaand

(a) EuropeanUnion
(b) GulfCooperationCouncil
(c) OrganisationforEconomicCooperationandDevelopment
(d) ShanghaiCooperationOrganisation
Considerthefollowingstatements:

1. NationalPaymentsCorporationofIndia(NPCI)helpsinpromotingthe
financialinclusioninthecountry
2. NPCIhaslaunchedRuPay,acardpaymentscheme.

Whichofthestatementsgivenaboveis/arecorrect?

(a) 1only
(b) 2only
(c) Both1and2
(d) Neither1nor2
 WhichofthefollowingstatementsbestdescribesthetermScheme
forSustainableStructuringofStressedAssets(S4A),recentlyseenin
thenews?

(a) Itisaprocedureforconsideringecologicalcostsofdevelopmental
schemesformulatedbytheGovernment
(b) ItisaschemeofRBIforreworkingthefinancialstructureofbig
corporateentitiesfacinggenuinedifficulties.
(c) ItisadisinvestmentplanoftheGovernmentregardingCentral
PublicSectorUndertaking
(d) ItisanimportantprovisioninTheInsolvencyandBankruptcy
CoderecentlyimplementedbytheGovernment.
WhatisthepurposeofsettingupofSmallFinanceBanks(SFBs)inIndia?

1. Tosupplycredittosmallbusinessunits
2. Tosupplycredittosmallandmarginalfarmers
3. Toencourageyoungentrepreneurstosetupbusinessparticularlyin
ruralareas
Selectthecorrectanswerusingthecodegivenbelow:

(a) 1and2only
(b) 2and3only
(c) 1and3only
(d) 1,2and3
 Otherareasin2017

ConsequenceofimplementingUPI
NationalIPRPolicy
NationalAgriculturalMarkets
DomesticContentRequirement
DigitalSingleMarketStrategybyEU
GenderGapIndex
MonetaryPolicyCommittee
 In2016
Therehasbeenapersistentdeficitbudgetyearafteryear.Whichaction/actionsofthefollowingcanbetakenby
theGovernmenttoreducethedeficit?

1. Reducingrevenueexpenditure
2. Introducingnewwelfareschemes
3. Rationalizingsubsidies
4. Reducingimportduty

Selectthecorrectanswerusingthecodegivenbelow:

(a) 1only
(b) 2and3only
(c) 1and3only
(d) 1,2,3and4
TheestablishmentofPaymentBanksisbeingallowedinIndiatopromote
financialinclusion.Whichofthefollowingstatementsis/arecorrectinthiscontext?

1. Mobiletelephonecompaniesandsupermarketchainsthatareownedand
controlled,byresidentsareeligibletobepromotersofPaymentBanks.
2. PaymentBankscanissuebothcreditcardsanddebitcards.
3. PaymentBankscannotundertakelendingactivities.

Selectthecorrectanswerusingthecodegivenbelow.

(a) 1and2only
(b) 1and3only
(c) 2only
(d) 1,2and3
WithreferencetoIFCMasalaBonds,sometimesseeninthenews,whichof
thestatementsgivenbelowis/arecorrect?

1. TheInternationalFinanceCorporation,whichoffersthesebondsinan
armoftheWorldBank.
2. Theyaretherupeedenominatedbondsandareasourceofdebt
financingforthepublicandprivatesector.

Selectthecorrectanswerusingthecodegivenbelow.

(a) 1only
(b) 2only
(c) Both1and2
(d) Neither1nor2
 Inthecontextofwhichofthefollowingdoyousometimesfindthe
termsamberbox,blueboxandgreenboxinthenews?

(a) WTOaffairs
(b) SAARCaffairs
(c) UNFCCCaffairs
(d) IndiaEUnegotiationsonFTA
Whichofthefollowingis/areincludedinthecapitalbudgetofthe
GovernmentofIndia?

1. Expenditureonacquisitionofassetslikeroads,buildings,machineryetc.
2. Loansreceivedfromforeigngovernments
3. LoansandadvancesgrantedtotheStatesandUnionterritories

Selectthecorrectanswerusingthecodegivenbelow:

(a) 1only
(b) 2and3only
(c) 1and3only
(d) 1,2and3
Whatis/arethepurpose(s)oftheMarginalCostofFundsbasedLendingRate
(MCLR)announcedbyRBI?

1. Theseguidelineshelpimprovethetransparencyinthemethodologyfollowed
bybanksindeterminingtheinterestratesonadvances.
2. Theseguidelineshelpensureavailabilityofbankcreditatinterestrateswhich
arefairtotheborrowersaswellasthebanks.

Selectthecorrectanswerusingthecodegivenbelow.

(a) 1only
(b) 2only
(c) Both1and2
(d) Neither1nor2
 In2015
WithreferencetoFourteenthFinanceCommission,whichofthefollowingstatementsis/
arecorrect?

1. IthasincreasedtheshareofStatesinthecentraldivisiblepoolfrom32%to42%.
2. Ithasmaderecommendationsconcerningsectorspecificgrants.

Selectthecorrectanswerusingthecodegivenbelow:

(a) 1only
(b) 2only
(c) Both1and2
(d) Neither1nor2
 AdecreaseintaxtoGDPratioofacountryindicateswhichofthe
following?

1. Slowingeconomicgrowthrate
2. Lessequitabledistributionofnationalincome

Selectthecorrectanswerusingthecodegivenbelow:

(a) 1only
(b) 2only
(c) Both1and2
(d) Neither1nor2
 WhentheRBIreducestheStatutoryLiquidityRatioby50basispoints,
whichofthefollowingislikelytohappen?

(a) IndiasGDPgrowthratedecreasesdrastically
(b) ForeignInstitutionalInvestorsmaybringmorecapitalintoour
country
(c) ScheduledCommercialBanksmaycuttheirlendingrates
(d) Itmaydrasticallyreducetheliquiditytothebankingsystem
 WithreferencetoinflationinIndia,whichofthefollowingstatements
iscorrect?

(a) ControllingtheinflationinIndiaistheresponsibilityofthe
GovernmentofIndiaonly
(b) TheReserveBankofIndiahasnoroleincontrollingtheinflation
(c) Decreasedmoneycirculationhelpsincontrollingtheinflation
(d) Increasedmoneycirculationhelpsincontrollingtheinflation
 Otherareas
FSDCNITIAayog
BEPS
BITCOINS
SGBandGMS
MUDRA
RCEP
APY
EuropeanStabilityMechanism
 Understandingisimportant

Usehouseholdlevelexamplestounderstandtheconceptsand
enhanceclarity

BasiclinksofDemand,SupplyandCosts
 TheAnalogy

TheUnionGovernmentAJointFamily
LocalMoneylender/BankerCentralBank/LendersinMarket
RevenueExpenditureMaintainingGardens,Driversetc.
CapitalExpenditureProvidingeducationtochildrenetc.
 RevenueDeficit

Itmeansthatgovernmentneedstoborrowtocarryoutthe
administrativeactivities.
Noassetcreation.

Thesituationissimilartoahouseholdborrowingmoneyforthe
servicesofacook,driverandgardener
Educationofthechildreninhouseholdmaybecompromised
 FiscalDeficit
Differencebetweenthegovernmentstotalexpenditureandtotal
nondebtreceipts
Impliesthatthegovernmenthasexhaustedalloptionsforfinancing
expenditureandonlyrecourseistoborrow

Inahousehold,itmeansthatallformsifreceiptshavebeenexplored
sellinglandassets,goldetc.
Thefutureexpensesneedtobemetbyloans
 PrimaryDeficit

FDInterestpaymentsofearlieryeardebts

Imagineinachangeinhouseholdleadership
Tendencytoshowhisprudentmanagementoffinances
Subtractstheinterestpaymentstowardsthedebtincurredby
previousheadofthefamily
ThisisPrimaryDeficitalesserfigurethatFD,tokeepuptheimage
ofthepresentleadership
 EffectiveRevenueDeficit

GrantsgiventoStatesareconsideredasrevenueexpenditure

Inahousehold,fundsmaybegiventoconstituentfamilies.
Ifthisisusedforproductivepurposesschooltuitionfeesthese
aredeductedfromtherevenuedeficit
Thereiscreationofhumancapital.
ThankYou