Daily Quiz: UPSC Prelims Marathon (Economy) – May 19, 2020

GDP may grow but the distribution of resources may in-fact worsen making the rich richer and poor poorer. Thus, Inclusive growth and not merely growth is required. An index that measures how all social groups are impacted by growth is necessary. This problem was recognized by Montek Singh Ahulwalia. The Ahulwalia-Chenery welfare Index, measures how each social group impacted by prosperity.

The CPSEs fulfilling the following criteria are eligible to be considered for grant of Maharatna status.

• Having Navratna status.
• Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.
• Average annual turnover of more than Rs. 25,000crore, during the last 3 years.
• Average annual net worth of more than Rs. 15,000crore, during the last 3 years.
• Average annual net profit after tax of more than Rs. 5,000crore, during the last 3 years.
• Should have significant global presence/international operations.

Hybrid Annuity Model (HAM).

Statement 1 is correct: In India, the new HAM is a mix of BOT Annuity and EPC models.

Statement 2 is correct: As per the design, the government will contribute to 40% of the project cost in the first five years through annual payments (annuity). The remaining payment will be made on the basis of the assets created and the performance of the developer.

IIFCL is a wholly-owned Government of India Company set up in 2006 to provide long-term financial assistance to viable infrastructure projects through the Scheme for Financing Viable Infrastructure Projects through a Special Purpose Vehicle called India Infrastructure Finance Company Ltd (IIFCL), broadly referred to as SIFTI. The sectors eligible for financial assistance from IIFCL are as per the Harmonized list of Infrastructure Sub-Sectors as approved by the Government and as amended from time to time. These broadly include transportation, energy, water, and sanitation, and communication, social and commercial infrastructure.

National Investment & Manufacturing Zones (NIMZs).

Statement 1 is incorrect: National Investment & Manufacturing Zones (NIMZs) are one of the important instruments of National Manufacturing Policy, 2011.  NIMZs are envisaged as large areas of developed land with the requisite eco-system for promoting world class manufacturing activity.

Statement 2 is correct: The main objective of Special Economic Zones is promotion of exports, while NIMZs are based on the principle of industrial growth in partnership with States and focuses on manufacturing growth and employment generation. NIMZs are different from SEZs in terms of size, level of infrastructure planning, governance structures related to regulatory procedures, and exit policies.

The World Investment Report has been published annually since 1991, by UNCTAD. Each year´s Report covers the latest trends in foreign direct investment around the World and analyses in depth one selected topic related to foreign direct investment and development.

ISAR is the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting, the United Nations focal point on accounting and corporate governance matters. It was established in 1982 by the United Nations Economic and Social Council (ECOSOC). Through its Division on Investment and Enterprise, the United Nations Conference on Trade and Development (UNCTAD) serves as ISAR’s secretariat, providing substantive and administrative inputs to its activities.

In December 1997, the Executive Board (IMF) opened a new lending window—the SRF—for member countries experiencing exceptional balance of payments problems owing to a large short-term financing need resulting from a sudden and disruptive loss of market confidence reflected in pressure on the capital account and the member’s reserves.

As the World Bank has adapted its mechanisms and approaches to address the evolving challenges developing countries have faced; it has evolved into the “World Bank Group”. This consists of five closely related institutions that specialize in different aspects of development:

• International Bank for Reconstruction and Development (IBRD);
• International Development Association (IDA);
• International Financial Corporation (IFC);
• Multilateral Investment Guarantee Agency (MIGA);
• International Centre for Settlement of Investment Disputes (ICSID).

The term “World Bank” refers only to IBRD and IDA. Together, these two organizations provide low-interest loans, interest-free credit, and grants to developing countries. Both IBRD loans and IDA credits support investment projects and programs designed to meet priority economic and social needs. They also provide financial support to help governments undertake reform in the structural and social policies that are crucial to effective private and public sector development, and to poverty reduction.

The Banks Board Bureau owes its genesis to the recommendations in the Report of The Committee set up by the Reserve Bank of India to Review Governance of Boards of Banks in India (Chair: Dr P J Nayak; May 2014), which envisaged the Bureau as a precursor to a Company which would eventually hold the Government’s investments in PSBs.