Daily Quiz: UPSC Prelims Marathon – May 7, 2019

Capital gains tax is a tax that is charged on the profits that is made by selling capital asset. For making it easy for taxation, the capital assets are classified to ‘Short-Term

Capital Asset; and ‘Long-Term Capital Asset’.

Short-Term Capital Asset:

If the shares and securities are held by the taxpayer for a period not more than 36

months preceding the date of its transfer will be treated as a short-term capital asset.

Long- Term Capital Asset:

If the taxpayer holds the shares and securities for a period exceeding 36 months before the transfer will be treated as a long-term capital asset.

Equity shares which are listed in a recognised stock exchange, units of equity oriented mutual funds, listed debentures and Government securities, units of UTI and Zero Coupon Bonds’ period of holding will be considered for 12 months instead of 36 months. Transfer is giving up your right on an asset it includes sale, exchange, compulsory acquisition under any law and relinquishment.

Capital Gains include any property held by the assesse except the following:

Stock in trade.

• Consumable stores or raw materials held for the purpose of business or profession.
• Personal effects that are movable except jewellery, archaeological collections,
• drawings, paintings, sculptures or any art work held for personal use.
• Agricultural land. The land must not be located within 8kms from a municipality,
• Municipal Corporation, notified area committee, town committee or a cantonment
• board with a minimum population of 10,000.
• 6.5 percent Gold Bonds, National Defence Gold Bonds and Special Bearer Bonds.
• Gold Deposit bonds under Gold Deposit Scheme.

Fiscal deficit means Government need to borrow from the market which leads to crowding-outof funding for private players.Withdrawals from cash balance held in RBI and borrowing from RBI leads to increase in moneysupply. This increase in money supply may lead to rise in prices.Borrowing from public has no effect on money supply in the country. When governmentborrows, money gets transferred from the public to the government. The net effect on totalmoney supply in the country is nil.Deficit financing may lead to inflation depending upon the mode of operation of deficitfinancing.

Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced in the economic territories of a country in a given year, irrespective of who the producer of the goods and services are. In calculating India’s Gross Domestic Product, the monetary value of all final goods and services produced/rendered by Individuals, private sector, public sector and foreign companies will be considered. Hence, Statements 1, 3 and 4 are correct.

The services rendered by an Indian working in Dubai will not be considered in calculating India’s Gross Domestic Product. The services rendered by an Indian working and residing abroad will be counted for the calculation of the respective country’s GDP. Statement 2 is incorrect.

The income of all Indian nationals working abroad and Indian companies having business outside India will be considered in calculating India’s Gross National Product.

Green Gross Domestic Product is the index of the Economic growth of a particular country which enshrines the environment consequences of the economic growth. Green GDP accounts the monetized loss of biodiversity, costs caused by climate change. Green GDP is conventional gross domestic product figures adjusted for the environmental costs of economic activities. It’s a measure of how a country is prepared for sustainable economic development.

All of the above schemes are associated with development of urban infrastructure.

Smart Cities Mission is an urban renewal and retrofitting program by the Government of India with a mission to develop 100 cities all over the country making them citizen friendly and sustainable. The Union Ministry of Urban Development is responsible for implementing the mission in collaboration with the state governments of the respective cities.

The Swachh Bharat Mission (Urban) aims to create urban infrastructure like scientific processing/disposal reuse/recycle of Municipal Solid Waste, Capacity Building and Administrative & Office Expenses, Community and Public Toilets, Construction of Household Toilets etc. The Pradhan Mantri Awas Yojana (Urban) is a programme of the Ministry of Housing and Urban Poverty Alleviation (MoHUPA) which envisions provision of Housing for All by 2022. It includes slum rehabilitation, Promotion of Affordable Housing for weaker section through credit linked subsidy, Affordable Housing in Partnership with Public & Private sectors and subsidy for beneficiary-led individual house construction /enhancement.

The National Heritage City Development and Augmentation Yojana (HRIDAY) scheme focuses on holistic development of heritage cities. The Scheme supports development of core heritage infrastructure projects which shall include revitalization of urban infrastructure for areas around heritage assets identified / approved by the Ministry of Culture, Government of India and State Governments. These initiatives shall include development of water supply, sanitation, drainage, waste management, approach roads, footpaths, street lights, tourist conveniences, electricity wiring, landscaping and such citizen services.

Statement 1 is correct.

The Pradhan Mantri Suraksha Bima Yojana is a one year cover Personal Accident Insurance Scheme, renewable from year to year, offering protection against death or disability due to accident.

Statement 2 is incorrect. An individual who is willing to get enrolled in Pradhan Mantri Suraksha Bima Yojana must have a bank account. In case of multiple bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one bank account only.

Statement 3 is incorrect.

All individual (single or joint) bank account holders in the age 18 to 70 years in participating banks will be entitled to join in Pradhan Mantri Suraksha Bima Yojana.

All the statements are correct.

FDI is an investment by non-resident entities like MNCs to carry out business operations in India with the management of investment, production of goods or services, employing people and marketing their products. In FDI, both the ownership and control of the firm remains with the investor. Thus, FDI helps in technology transfer from developed countries to developing countries. FPI is investment aimed at getting profits from shares, interests from deposits etc. Thus, it is known as hot money. The portfolio investors stay his money in the capital market only for a short period of time. Its destination period is so small and is empirically considered as fluctuating (often short-term) capital. It is highly volatile, a fair weather friend, speculative, involves exchange risks and may lead to capital flight and currency crisis affecting real economic variables. It is destabilizing in the foreign exchange market. Fluctuations in the mobility of FPI affects the foreign exchange rate, domestic money supply, value of rupee, call money rates, security market etc. FII (Foreign Institutional Inflows) inflows depend on two factors: first, return potential of the destination market (host country) and second availability of risk capital at source geographies (home market; countries like the US). A change in the environment in any of these will result in quick reversal of the flows.