Daily Quiz #91 UPSC Prelims Marathon – February 18, 2020

Explanation: There are two main set of inflation indices for measuring price level changes in India – the Wholesale Price Index (WPI) and the Consumer Price Index (CPI). The WPI, where prices are quoted from wholesalers, is constructed by Office of Economic Affairs, Ministry of Commerce and Industries. In the case of CPI (prices quoted from retailers), there are several indices to measure it: CPI for industrial labourers (CPI-IL), agricultural labourers (CPI-AL) and rural labourers (CPI-RL) besides an all India CPI. In addition, Gross Domestic Product (GDP) deflator and Private Final Consumption Expenditure (PFCE) deflator from the National Accounts Statistics (NAS) provide an implicit economy-wide inflation estimate.

Explanation: The Uruguay Round was the 8th round of Multilateral Trade Negotiations (MTN) conducted within the framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986 to 1994 and embracing 123 countries as “contracting parties”. The negotiations and process ended with the signing of the Final Act of the Marrakesh Agreement in April 1994 at Marrakesh, Morocco. The round led to the creation of the World Trade Organization (WTO), with GATT remaining as an integral part of the WTO agreements.

Explanation: Wholesale Price Index (WPI) measures the average change in the prices of commodities for bulk sale at the level of early stage of transactions. The index basket of the WPI covers commodities falling under the three major groups namely Primary Articles, Fuel and Power and Manufactured products. (The index basket of the present 2011-12 series has a total of 697items including 117 items for Primary Articles, 16 items for Fuel & Power and 564 items for Manufactured Products.)

Explanation: India’s foreign exchange earning capacity was always poor and hence it had all possible provisions to check the foreign exchange outflow, be it for current purposes or capital purposes (remember the draconian FERA). But the process of economic reforms has changed the situation to unidentifiable levels.
•Current Account: Current account is today fully convertible (operationalized on 19 August, 1994). It means that the full amount of the foreign exchange required by someone for current purposes will be made available to him at official exchange rate and there could be an un prohibited outflow of foreign exchange (earlier it was partially convertible).
•Capital Account: After the recommendations of the S.S. Tarapore Committee (1997) on Capital Account Convertibility, India has been moving in the direction of allowing full convertibility in this account, but with required precautions.

Explanation: The Green Revolution had its positive as well as negative socio-economic and ecological impacts on the countries around the world. Food production increased in such a way (wheat in 1960s and rice, by 1970s) that many countries became self-sufficient (self sufficiency of food must not be confused with the idea of food security) and some even emerged as food exporting countries. But the discrepancy in farmers’ income, it brought with itself increased the inter-personal as well as inter-regional disparities/inequalities in India. Rise in the incidence of malaria due to water-logging, a swing in the balanced cropping patterns in favor of wheat and rice putting pulses, oilseeds, maize, barley on the margins, etc., were negative impacts.