Daily Quiz #55 UPSC Prelims Marathon – January 7, 2020

Explanation: The Securities Transaction Tax (STT) is a type of ‘financial transaction tax’ levied in India on transactions done on the domestic stock exchanges. The rates of STT are prescribed by the central government through its budget from time to time. In tax parlance, this is categorised as a direct tax. The tax came into effect from 1 October, 2004. In India, STT is collected for the Government of India by the stock exchanges. With charging of STT, long-term capital gains tax was made zero and short-term capital gains tax was reduced to 10 per cent (subsequently, changed to 15 per cent since 2008).

Explanation: The average combined fiscal deficits, of the Centre and states after 1975 had been above 10 per cent of the GDP till 2000–01. More than half of it had been due to huge revenue deficits. The governments were cautioned by the RBI, the Planning Commission as well as by the IMF and the WB about the un-sustainability of the fiscal deficits. It was at the behest of the IMF that India started the politically and socially painful process of fiscal reforms, a step towards fiscal consolidation. A number of steps were taken by the government at the Centre in this direction and there had been incessant attempts to do the same in the states’ public finances too. Major highlights in this direction can be summed up as given below:
1. Policy initiatives towards cutting revenue deficits:
(i) Cutting down expenditure—
(a) Cutting down the burden of salaries, pensions and the PFs (downsizing/ right-sizing of the government, out of every 3 vacancies 1 to be filled up, interest cut on the PF, pension reforms-PFRDA, etc.);
(b) Cutting down the subsidies (Administered Price Mechanism in petroleum, fertilizers, sugar, drugs to be rationalised, it was done with mixed successes);
(c) Interest burden to be cut down (by going for lesser and lesser borrowings, pre-payment of external debts, debt swaps, promoting external lending, minimal dependence on costlier external borrowings, etc.);
(d) Defence being one major item of the expenditure bilateral negotiations initiated with China and Pakistan (the historical and psychological enemies against whom the Indian defence preparedness was directed to, as supposed) so that the defence force cut could be completed on the borders, etc.;
(e) Budgetary supports to the loss-making PSUs to be an exception than a rule;

Explanation: A general budget by the government which allocates funds and responsibilities on the basis of gender is gender budgeting. It is done in an economy where socio-economic disparities are chronic and clearly visible on a sex basis (as in India). Gender budgeting started in India with the Union Budget 2006–07 which proposed an outlay of Rs. 28,737 crore dedicated to the cause of women and created gender budgeting cells in 32 ministries and departments.

Explanation: India enjoys a ‘competitive advantage’ in food processing sector given its huge production base of a number of agricultural, dairy, fishing and horticultural items. To ensure that this sector gets the stimulus it deserves, the MoFPI has been implementing a number of schemes for infrastructure development, technology up-gradation and modernisation, human resources development and R&D in this sector. In the context of the 12th Plan, it is felt that there is a need to decentralise the implementation of schemes through involvement of the states/UTs for better outreach, supervision, monitoring and ensuring job creation. Accordingly, National Mission on Food Processing (NMFP) was launched as a centrally sponsored scheme in 2012. The NMFP contemplates establishment of a National Mission as well as corresponding Missions at the state and district levels.

Explanation: The Twenty Point Programme (TPP) is the second Central Plan which was launched in July 1975. The programme was conceived for coordinated and intensive monitoring of a number of schemes implemented by the Central and the state governments. The basic objective was of improving the quality of life of the people, especially of those living below the poverty line. Under this, a thrust was given to schemes relating to poverty alleviation, employment generation in rural areas, housing, education, family welfare and health, protection of environment and many other schemes having a bearing on the quality of life in rural areas.