Indian Economy Quiz: Economic Survey 2020 – 2021 and Reports |5 Mar, 2021

The chart clearly establishes that India has the 3rd largest entrepreneurship ecosystem in the world.

Literacy, education, physical infrastructure are the key areas that will foster entrepreneurship and thereby job creation and wealth creation.

Source: Economic Survey

Creative destruction refers to the incessant product and process innovation mechanism by which new production units replace outdated ones.

· This restructuring process permeates major aspects of macroeconomic performance, not only long-run growth but also economic fluctuations, structural adjustment and the functioning of factor markets.

· Over the long run, the process of creative destruction accounts for over 50 per cent of productivity growth.

· At business cycle frequency, restructuring typically declines during recessions, and this add a significant cost to downturns.

· Obstacles to the process of creative destruction can have severe short- and long-run macroeconomic consequences.

· It was coined by Joseph Schumpeter (1942), who considered it ‘the essential fact about capitalism’.

Source: Economic Survey

The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories.

It’s the world’s premier measurement of economic freedom, measuring and ranking countries in five areas:

· size of the government,

· legal structure and security of property rights,

· access to sound money,

· freedom to trade internationally and regulation of credit,

· labour and business.

Source: The Hindu

The National list of essential medicines is one of the key instruments in balanced healthcare delivery system of a country which inter alia includes accessible, affordable quality medicine at all the primary, secondary, tertiary levels of healthcare.

· The first National List of Essential Medicines of India was prepared and released in 1996.

· The National List of Essential Medicines (NLEM), prepared by Ministry of Health and Family Welfare, is a list of medicines considered essential and high priority for India’s health needs.

· DPCOs are issued by the Government, in exercise of the powers conferred under section 3 of the ECA to ensure that the medicines listed under NELM are available at a reasonable price to the general public.

Source: The Hindu

Capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country. The term refers to additions of capital goods, such as equipment, tools, transportation assets, and electricity.

GFCF in India is not following a particular trend in last 12 years.

Gross capital formation (formerly gross domestic investment) consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories.

· Fixed assets include land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases;

· And the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings.

· Inventories are stocks of goods held by firms to meet temporary or unexpected fluctuations in production or sales, and work in progress. According to the 1993 SNA, net acquisitions of valuables are also considered capital formation.

Source: Economic Survey

Smurfing (also called structuring) is a method in which small sizes of money is kept in several number of bank accounts to hide the real identity of the real owner.

· This has been a very commonly used method of money-laundering.

· During the reform period, as more prudential norms of banking regulation evolved, such acts declined in India.

‘Smurfer’ (or ‘money mule’) is a person who does this.

Source: TMH Ramesh Singh

Export-Import Bank of India (EXIM Bank) is a specialized financial institution, wholly owned by Government of India, set up in 1982, for financing, facilitating and promoting foreign trade of India.

EXIM Bank extends Lines of Credit (LOCs) to

· overseas financial institutions,

· regional development banks,

· sovereign governments and

· other entities overseas,

to enable buyers in those countries to import developmental and infrastructure projects, equipments, goods and services from India, on deferred credit terms.

Source: EXIM

The Reserve Bank of India (RBI) will simultaneously buy and sale government securities worth ₹10,000crore each in December 2019 under its open market operations — a move aimed at managing the yields.

· The RBI will purchase the longer-term maturities, that are trading at a spread of 150 bps (basis points) over the repo rate, so that the yield of these papers will soften and sell the shorter duration ones.

· The central bank said it will buy ₹10,000 crore of 6.45% government bonds maturing in 2029 and simultaneously sell ₹10,000 crore of short-term bonds maturing in 2020.

· Operation Twist is a move taken by U.S. Federal Reserve in 2011-12 to make long-term borrowing cheaper.

Source: The Hindu

The Tamil Nadu Government has introduced a Bill in the Legislative Assembly seeking to declare the Cauvery delta region a Protected Special Agriculture Zone (PSAZ).

· The Bill said, since certain non-farming activities were adversely affecting agriculture in the region, threatening the State’s food security, “to protect the agriculture in this region, it is proposed to prohibit certain activities in the region.”

· The Bill also sought to establish a 30-member Tamil Nadu Protected Agricultural Zone Authority headed by the Chief Minister to advise the government on various measures to protect and improve farming activities to increase farm production and farm productivity to serve the interest of farmers.

· The proposed PSAZ would comprise of Thanjavur, Tiruvarur and Nagapattinam districts and five blocks each in Cuddalore and Pudukkottai districts.

· These areas have been listed under the First Schedule of the Act, to which the government may add or omit any area in the future.

· The government has identified zinc smelter; iron ore process plants, copper smelter, aluminum smelter, tannery, and ship breaking industries among others as industries that adversely affect agriculture developments in the PSAZ. This list in the Second Schedule of the Act too, is subject to omission and addition subsequently.

Source: The Hindu

The MIEWS Dashboard and Portal is a ‘first-of-its-kind’ platform for ‘real time monitoring’ of prices of tomato, onion and potato (TOP) and for simultaneously generating alerts for intervention under the terms of the Operation Greens (OG) scheme.

· This portal is a novel initiative of MoFPI leveraging IT tools and furthering the goals of Digital India.

· The portal would disseminate all relevant information related to TOP crops such as Prices and Arrivals, Area, Yield and Production, Imports and Exports, Crop Calendars, Crop Agronomy, etc in an easy-to-use visual format.

Source: Sriram’s IAS