Q 1: Consider the following statements and choose the correct options
- Fiscal deficit refers to the shortfall in a government’s income compared with its spending.
- A high fiscal deficit is always harmful for the economy.
- The Fiscal Responsibility and Budget Management Act provides for the fiscal deficit to be upto 3% of the GDP by March 2021.
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Answer : c
Explanation
The government describes fiscal deficit of India as “the excess of total disbursements from the Consolidated Fund of India, excluding repayment of the debt, over total receipts into the Fund (excluding the debt receipts) during a financial year”.
it is a shortfall in a government’s income compared with its spending. It means the government that has a fiscal deficit is spending beyond its means.
A high fiscal deficit can also be good for the economy if the money spent goes into the creation of productive assets (Capital expenditure) like highways, roads, ports and airports that boost economic growth and result in job creation.
The Fiscal Responsibility and Budget Management Act, 2003 provides that the Centre should take appropriate measures to limit the fiscal deficit upto 3% of the GDP by 31 March, 2021.
Q 2: Consider the following statements with reference to Index of Industrial Production (IIP) and choose the correct opyions:
- The IIP is an index that shows the growth rates in different industry groups of the
economy in a fixed period of time.
- It is compiled and published annually by the National Statistical Office (NSO).
- Current Base Year for IIP calculation is 2004-2005.
- 1 only
- 1 and 2 only
- 1 and 3 only
- 1, 2 and 3
Answer : a
Explanation
The Index of Industrial Production (IIP) is an index that shows the growth rates in different industry groups of the economy in a fixed period of time.
It is compiled and published monthly by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
Base Year for IIP calculation is 2011-2012.
Q 3: With reference to the ‘Finance Commission’, consider the following statements and choose the correct options:
- It is a statutory body that determines the method for distributing the tax proceeds between the Centre and states.
- The Parliament is required to constitute a Finance Commission at an interval of five years.
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer : d
Explanation
The Finance Commission is a constitutional body, that determines the method and formula for distributing the tax proceeds between the Centre and states, and among the states as per the constitutional arrangement and present requirements.
Under Article 280 of the Constitution, the President of India is required to constitute a Finance Commission at an interval of five years or earlier.
Q 4: With reference to ‘Gramodyog Vikas Yojana’, consider the following statements and choose the correct options:
- It is launched by the Ministry of Micro, Small and Medium Enterprises.
- Khadi and Village Industries Commission (KVIC) is entrusted with providing training and assistance.
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer : c
Explanation
The Ministry of Micro, Small and Medium Enterprises has approved a programme for the benefit of artisans involved in manufacturing of Agarbatti under the Gramodyog Vikas Yojana.
Khadi and Village Industries Commission (KVIC) will provide training and assistance as well as work and raw material to artisans working in this area, in tie-up with Agarbatti manufacturing machines.
Q 5: ‘Operation Breathing Space’ is a joint collaboration mission between which of the following two countries?
- India and Sri Lanka
- India and U.S
- India and Bhutan
- India and Israel
Answer : d
Explanation
In a mission code-named “Operation Breathing Space”, a team of top Israeli defence scientists and health experts will collaborate with Indian counterparts to develop, test and deploy rapid diagnostic tests for Covid-19 that aims to provide results in under a minute.
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