Daily Quiz: UPSC Prelims Marathon – September 25, 2018

Statement 1 is incorrect.

Disinvestment and Privatization are two different terms in technical sense, though both involve the sale of Government’s share in the Public Sector Undertakings.

Statement 2 is correct.

The term privatization is used for a stake sell in which there is a transfer of 51% or more equity to the private players. In disinvestment, the government sells only a part of the equity which is essentially less than 51% so that ownership and management rights can be hold by the Government itself.

Statement 1 is incorrect.

The steps involved are (1) Procurement of food grains (2) Storage of food grains (3) Allocation for families (4) Transportation of food grains.

Statement 2 is correct.

The Food Corporation of India is responsible for maintaining satisfactory level of operational and buffer stocks of food grains to ensure National Food Security. A part of this, FCI is responsible for meeting the following objectives of the Food Policy:

1. Effective price support operations for safeguarding the interests of the farmers.
2. Distribution of food grains throughout the country for public distribution system.

Statement 1 is incorrect.

Inflation refers to a situation where huge money is chasing few goods. Inflation may signify higher aggregate demand and less supply. With inflation investors may invest more because of higher demand.

Statement 2 is correct.

Purchasing power of money decreases if there is inflation in economy. Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Inflation decreases the amount of goods or services you would be able to purchase.

Statement 3 is correct.

Inflation, by itself, creates higher interest rates and makes borrowing more expensive.

All the statements are correct.

Cost-push inflation develops because the higher costs of production factors decreases in aggregate supply or the amount of total production in the economy.

It is caused by an increase in prices of inputs like labour, raw material, etc.

Apart from rise in prices of inputs, there could be other factors leading to supply side inflation such as natural disasters or depletion of natural resources, monopoly, government regulation or taxation,

change in exchange rates, etc. Generally, cost push inflation may occur in case of an inelastic demand curve where the demand cannot be easily adjusted according to rising prices.

GHI is multidimensional measure that describes state of hunger situation on regional, national and global level. It is published annually by International Food Policy Research Institute (IFPRI) since 2006. It ranks countries on a 0 to 100-point scale calculated by taking into account four indicator parameters. Zero means best score (no hunger) and 100 is worst.

India ranked 100th position among 119 countries on Global Hunger Index (GHI) 2017 report released by Washington-based International Food Policy Research Institute (IFPRI). This year slipped by three positions as compared to 97th rank in 2016 GHI.

Statement 1 is incorrect.

Generally, a bank with a high Capital Adequacy Ratio is considered safe and likely to meet its financial obligations. The Capital Adequacy Ratio is a thermometer of Bank’s health, because it is the ratio of its capital to its risk or Capital Adequacy Ratio = (Tier I + Tier II + Tier III (Capital funds)) /Risk-weighted assets

Statement 2 is correct.

In India, Capital Adequacy Ratio is decided by the Reserve Bank of India. It is done primarily to put a check on commercial banks to keep enough cushion to be able to manage reasonable losses and prevent from taking excess leverage thereby ultimately becoming insolvent.

Statement 1 is correct.

The Guinness World Records has declared Majuli in Assam as the largest river island in the world. It has toppled Marajo in Brazil to clinch the record. The beautiful river island is situated on the Brahmaputra river.

Statement 2 is correct.

Majuli island has been the hub of Assamese neo-Vaishnavite culture, initiated around 15th century by the revered Assamese saint Srimanta Sankardeva and his disciple Madhavdeva. Many Satras or monasteries constructed by the saint still survive and represent the colourful Assamese culture.

Why is it in the news?

The Union Government has launched a new scheme for protection of Majuli Island in Assam from flood and erosion. The scheme was sanctioned by Government in March, 2017 and funding for it will be from Ministry of Development of North Eastern Region (DoNER).

The scheme has been framed by Brahmaputra Board based on recommendations of the high level Expert Committee of Central Government that visits the largest riverine island at least twice a year to monitor and recommend anti-erosion measures.