Indian Economy Quiz: Economic Survey 2020 – 2021 |4 Mar, 2021

The Indian policymakers also recognized that the supply shock induced by the lockdown would disrupt the productive capacity of the economy. This capacity would need to be strengthened to meet the pent-up demand once it resumes – any mismatch would lead to macro-economic instabilities.

Source: Economic Survey 2020 – 2021

The Modigliani-Miller theorem states that a company’s capital structure is not a factor in its value.

· Market value is determined by the present value of future earnings, the theorem states.

· The theorem has been highly influential since it was introduced in the 1950s.

Source: Economic Survey 2020 – 2021

Ricardian equivalence is an economic theory that says that financing government spending out of current taxes or future taxes (and current deficits) will have equivalent effects on the overall economy.

This means that attempts to stimulate an economy by increasing debt-financed government spending will not be effective because investors and consumers understand that the debt will eventually have to be paid for in the form of future taxes.

Source: Economic Survey 2020 – 2021

Pradhan Mantri Kisan Samman Nidhi (Pm-Kisan) is a Central Sector Scheme. It provides income support to all small and marginal landholding farmer families having cultivable land.

· PM Fasal Bima Yojana is a centrally sponsored scheme and it replaced all other existing insurance schemes except the Restructured Weather-Based Crop Insurance Scheme.

· Formation and Promotion of Farmer Producer Organizations (FPOs) is a Central Sector Scheme under Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW).

Source: Economic Survey 2020 – 2021

The Pradhan Mantri Matsya Sampada Yojana (PMMSY) aims to enhance fish production to 220 lakh metric tons by 2024-25 from 137.58 lakh metric tons in 2018-19 at an average annual growth rate of about 9%.

· The Union Minister for Fisheries, Animal Husbandry and Dairying, Shri Giriraj Singh, said the ambitious scheme will result in doubling export earnings to Rs.1,00,000 crore and generate about 55 lakhs direct and indirect employment opportunities in fisheries sector over a period of next five years.

· Dedicating the PMMSY to fishers, fish farmers, fish workers, fish vendors and other stakeholders associated with the fisheries sector, Shri Giriraj Singh said that insurance coverage for fishing vessels is being introduced for the first time.

· The PMMSY will be implemented over a period of 5 years from FY 2020-21 to FY 2024-25 in all States/Union Territories.

· The Fisheries Minister said that about 42% of the total estimated investment of the PMMSY is earmarked for creation and upgradation of fisheries infrastructure facilities.

· Focus areas include Fishing Harbours and Landing Centers, Post-harvest and Cold Chain Infrastructure, Fish Markets and Marketing Infrastructure, Integrated Modern Coastal Fishing Villages and Development of Deep-sea Fishing.

· Besides creating critical fisheries infrastructure by attracting private investments in fisheries sector, the scheme plans to reduce post-harvest losses from the present high of 25% to about 10% by modernizing and strengthening value chain.

· Under the Swath Sagar plan, activities envisaged with a view to modernize the fisheries sector include promotion of Bio-toilets, Insurance coverage for fishing vessels, Fisheries Management Plans, E-Trading/Marketing, Fishers and resources survey and creation of National IT-based databases.

Source: The Hindu

In some situations, such as high budget deficit etc, there is rise in government borrowing from the market.

· Due to the excessive borrowing by the government from the market, there is little credit left for private sector to borrow.

· As a result, interest rate rises, making borrowings by private sector costly and leading to decline in private investment. This is known as crowding out effect.

· The private borrowing and subsequent private investment are discouraged.

Source: Economic Survey 2020 – 2021

A cross-country comparison of debt levels points out that for India, the government debt level as a proportion of GDP is equal to the median in the group of G-20 OECD countries and in the group of BRICS nations.

India’s overall debt levels as a per cent of GDP are the lowest amongst the group of G-20 OECD countries and also among the group of BRICS nations

Source: Economic Survey 2020 – 2021

Sovereign credit ratings seek to quantify issuers’ ability to meet debt obligations. When favorable, these can facilitate countries access to global capital markets and foreign investment.

Source: Economic Survey 2020 – 2021

The (“SPI”), compiled by the Social Progress Imperative, a US-based non-profit, ranks 149 countries’ social performance over six years (2014-2019).

· It uses 51 indicators including: nutrition, shelter, safety, education, health, personal rights and inclusiveness.

· The Social Progress Index is the first holistic measure of a country’s social performance that is independent of economic factors.

· The index is based on a range of social and environmental indicators that capture three dimensions of social progress: Basic Human Needs, Foundations of Wellbeing, and Opportunity.

· The index captures outcomes related to all 17 Sustainable Development Goals and is a comprehensive snapshot of a country’s overall progress towards the achievement of the goals.

Source: TMH Ramesh Singh

A liquidity trap is an economic situation where people hoard financial capital instead of investing or spending it.

As a result, the nation’s central bank can’t use expansionary monetary policy to boost economic growth. It often occurs when short-term interest rates are zero.

Source: Investopedia