Indian Economy Questions and Answers

Answer: C

The minimum support price of bajra (pearl millet) for the kharif marketing season 2021-22 was fixed at Rs. 2250 per quintal, an increase of Rs. 100 over the previous year's Rs. 2150, as announced by the Cabinet in June 2021. So Rs. 2250 is the figure, option (C). Rs. 2150 is the price of the year before, and Rs. 2350 and Rs. 2450 are not the prices fixed for that season. Support prices are announced by the Government on the recommendation of the Commission for Agricultural Costs and Prices before each sowing season, so that farmers get a minimum return.

Answer: C

The Reserve Bank of India is the central bank of the country and has the sole right to issue currency notes (apart from one rupee notes and coins, which the Government issues), so statement I is correct. It also acts as the custodian of the country's foreign exchange reserves and manages them, so statement II is correct. Both functions belong to the Reserve Bank, and the answer is Both I and II, option (C).

Answer: D

The official key gives Madhya Pradesh as the state that is not one of those that began among the poorest and cut poverty faster than the national average. I could not verify the list in the question from a source. Reports on the 2022 index say that Bihar, Jharkhand and Uttar Pradesh were among the poorest states and that Bihar had the fastest fall in the index value in absolute terms, and Madhya Pradesh is also reported to stay in the group of ten poorest states.

The question does not give the list the key uses, so the explanation follows the key and a reviewer may wish to check the report.

Answer: D

The Act is the Companies (Amendment) Act of 2020.

The 2020 amendment inserted sub-section (9) in Section 135 of the Companies Act. It says that where the amount a company must spend on CSR does not exceed fifty lakh rupees, the company need not set up a CSR Committee, and the Board of Directors performs its functions.

The 2015 and 2017 Acts did not contain this exemption, and the 2019 Act dealt with other CSR matters such as unspent amounts.

Before the 2020 amendment every company covered by Section 135 had to form a CSR committee of three or more directors. The amendment let small spenders, those whose CSR amount does not exceed fifty lakh rupees in a year, skip the committee and let the board carry out its work, though the CSR obligation itself remains.

Answer: B

P Chidambaram has presented the budget 9 times.

He presented nine Union Budgets as Finance Minister over his terms in office. This is the count used by the question.

10, 8 and 7 are not the number of budgets he presented.

He presented nine Union Budgets over his terms as Finance Minister between the 1990s and 2014, and the count of nine is the figure the question uses. The options 10, 8 and 7 are other counts that he did not reach or exceed.

Answer: C

Legal tender means both currency notes and coins.

Legal tender is money that must be accepted when offered in payment of a debt. In India, notes issued by the Reserve Bank and coins issued by the government are legal tender, within the limits fixed by law.

A cheque is only an order to a bank to pay and no one is compelled to accept it, so 'bank cheque' is wrong. 'Only notes' and 'only coins' each leave one form out.

The Reserve Bank of India Act gives the Bank the sole right to issue notes, which are legal tender up to any amount, while coins are legal tender up to a limit under the Coinage Act. Cheques depend on the willingness of the payee to accept them, and so are not legal tender.

Answer: C

The institution is the Grameen Bank Model.

Muhammad Yunus founded Grameen Bank in Bangladesh in the 1970s and 1980s to lend small amounts to the poor, and he won the Nobel Peace Prize in 2006 for this work.

Self-Help Groups, Joint Liability Groups and rural cooperatives are other forms of micro-credit in India, not his creation.

Grameen Bank gives small loans without collateral to groups of poor borrowers, mostly women, who guarantee each other's repayment. It began as a project in Chittagong in 1976 and became a bank in 1983. Yunus and the bank shared the Nobel Peace Prize in 2006.

Answer: D

The Gas Authority of India Limited was set up in 1984.

GAIL was incorporated in August 1984 as a public sector company to look after the transmission and marketing of natural gas.

1980, 1981 and 1983 are earlier years in which it did not exist.

GAIL was set up by the Government of India in 1984 to build and run natural gas pipelines and to market gas. It later came to the stock market with a public offer in 2004. The earlier years in the options are before its incorporation.

Answer: A

The Deposit Insurance Corporation began functioning on 1 January 1962 under the Deposit Insurance Act, 1961, which received assent in December 1961. The later years 1963, 1964 and 1965 are after the start of its operations, so 1962 is the right year. The Act followed the failures of Laxmi Bank and the Palai Central Bank in 1960, and in 1978 the Corporation merged with the Credit Guarantee Corporation to form the DICGC.

Answer: A

The correct statement is that the unit was established in SPMCIL, Hoshangabad, Madhya Pradesh.

The new bank note paper line was set up at the Security Paper Mill, Hoshangabad (now Narmadapuram), a unit of the Security Printing and Minting Corporation of India Ltd (SPMCIL), and was commissioned in 2015 so that more of the paper for Indian currency notes could be made in the country instead of imported.

A paper mill makes the paper; it does not issue notes. Currency notes are issued by the Reserve Bank of India, and one-rupee notes by the Government of India, so the options about issuing 1 or 2 rupee notes describe something no paper unit does. That also rules out the last option, which only negates the first two.