We posted 7 questions in 10 PM Daily Quiz on 5th April, 2016. Thanks for the amazing response. These questions will help you polish concepts based on current affairs. In case you have not attempted them, please attempt them by clicking below.
Q.1) Digital India Program aims to improve digital infrastructure as a utility to every citizen. Which of the following is/are associated with this program?
- Mobile phone & bank account enabling citizen participation in digital & financial space
- Shareable private space on a public cloud
- Collaborative digital platforms for participative governance
Select the correct answer using the codes given below
a) 1 only
b) 1 and 3 only
c) 2 and 3 only
d) All are true
Answer-d
Explanation
Digital Infrastructure as a Utility to Every Citizen
- Availability of high speed internet as a core utility for delivery of services to citizens
- Cradle to grave digital identity that is unique, lifelong, online and authenticable to every citizen
- Mobile phone & bank account enabling citizen participation in digital & financial space
- Easy access to a Common Service Centre
- Shareable private space on a public cloud
- Safe and secure cyberspace
Governance & Services on Demand
- Seamlessly integrated services across departments or jurisdictions
- Availability of services in real time from online & mobile platforms
- All citizen entitlements to be portable and available on the cloud
- Digitally transformed services for improving ease of doing business
- Making financial transactions electronic & cashless
- Leveraging Geospatial Information Systems (GIS) for decision support systems & development
Digital Empowerment of Citizens
- Universal digital literacy
- Universally accessible digital resources
- Availability of digital resources / services in Indian languages
- Collaborative digital platforms for participative governance
- Citizens not required to physically submit Govt. documents / certificates
Q.2) Consider the following statements regarding Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015
- Undisclosed foreign income or assets shall be taxed at the flat rate of 30 percent.
- The penalty for non-disclosure of income or an asset located outside India will be equal to two times the amount of tax payable thereon .
Select the correct answer using the codes given below
a) 1 only
b) 2 only
c) Both are correct
d) Neither is true
Answer-a
Explanation:- Undisclosed Foreign Income and Assets (Imposition of Tax) Bill seeks to deal with the menace of black money and to replace the Income Tax (IT) Act, 1961 for the taxation of foreign income.
The salient features of the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 are as under:-
- Scope – The Act will apply to all persons resident in India. Provisions of the Act will apply to both undisclosed foreign income and assets (including financial interest in any entity).
- Rate of tax – Undisclosed foreign income or assets shall be taxed at the flat rate of 30 percent. No exemption or deduction or set off of any carried forward losses which may be admissible under the existing Income-tax Act, 1961, shall be allowed.
- Penalties – Violation of the provisions of the proposed new legislation will entail stringent penalties.
The penalty for non-disclosure of income or an asset located outside India will be equal to three times the amount of tax payable thereon, i.e., 90 percent of the undisclosed income or the value of the undisclosed asset. This is in addition to tax payable at 30%.
One time compliance opportunity –
The Bill also provides a one time compliance opportunity for a limited period to persons who have any undisclosed foreign assets which have hitherto not been disclosed for the purposes of Income-tax. Such persons may file a declaration before the specified tax authority within a specified period, followed by payment of tax at the rate of 30 percent and an equal amount by way of penalty. Such persons will not be prosecuted under the stringent provisions of the new Act. It is to be noted that this is not an amnesty scheme as no immunity from penalty is being offered. It is merely an opportunity for persons to come clean and become compliant before the stringent provisions of the new Act come into force.
Q.3) Consider the following statements regarding Reverse Repo Rate
- It is the rate at which the RBI lends money to the banks for a short term.
- An increase in the reverse repo rate will increase the money supply.
Select the correct answer using the codes given below
a) 1 only
b) 2 only
c) Both are correct
d) Neither is true
Answer-d
Explanation:- Repo (Repurchase) rate also known as the benchmark interest rate is the rate at which the RBI lends money to the banks for a short term. When the repo rate increases, borrowing from RBI becomes more expensive. If RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate similarly, if it wants to make it cheaper for banks to borrow money it reduces the repo rate.
Reverse Repo rate is the short term borrowing rate at which RBI borrows money from banks. The Reserve bank uses this tool when it feels there is too much money floating in the banking system. An increase in the reverse repo rate means that the banks will get a higher rate of interest from RBI. As a result, banks prefer to lend their money to RBI which is always safe instead of lending it others (people, companies etc) which is always risky.
Repo Rate signifies the rate at which liquidity is injected in the banking system by RBI, whereas Reverse Repo rate signifies the rate at which the central bank absorbs liquidity from the banks. Current Reverse Repo Rate is 6 % and Repo Rate is 6.50%, so there is a difference of 0.5% between them.
Q.4) Which of the following are the Qualitative measures of Monetary Policy
- Rationing of credit
- Credit ceiling
- Consumer credit regulation
Select the correct answer using the codes given below
a) 1 and 2
b) 2 and 3
c) 1 and 3
d) 1, 2 and 3
Answer-c
Explanation:-
Instruments of Monetary Policy Various instruments of monetary policy of RBI can be divided into quantitative and qualitative instruments. They have been discussed below.
Instruments of Monetary Policy Various measures of monetary policy can be divided into quantitative measures and qualitative measures. The quantitative measures are Open Market Operations, Liquidity Adjustment Facility (Repo and Reverse Repo), Marginal Standing Facility, SLR, Bank Rate, Credit Ceiling etc.
Credit Ceiling
Under the credit ceiling, RBI informs the banks to what extent / limit they would be getting credit. When RBI imposes a credit limit, the banks will get tight in advancing loans to public. Further, RBI may also direct the banks to provide certain fractions of their loans to certain sectors such as farm sector or priority sector.
Qualitative Measures of Monetary Policy
There are some qualitative measures also such as margin requirements, consumer credit regulation, guidelines, Moral suasion and direct action.
Margin requirements
This refers to difference between the securities offered and and amount borrowed by the banks.
Consumer Credit Regulation
This refers to issuing rules regarding down payments and maximum maturities of instalment credit for purchase of goods.
RBI Guidelines
RBI issues oral, written statements, appeals, guidelines, warnings etc. to the banks.
Rationing of credit
The RBI controls the Credit granted / allocated by commercial banks.
Moral Suasion
Moral Suasion refers to a request by the RBI to the commercial banks to take certain measures as per the trend of the economy. For example, RBI may ask banks to not to give out certain loans. It includes psychological means and informal means of selective credit control.
Direct Action
This step is taken by the RBI against banks that don’t fulfil conditions and requirements. RBI may refuse to rediscount their papers or may give excess credits or charge a penal rate of interest over and above the Bank rate, for credit demanded beyond a limit.
Q.5) Match the following:
- Fiscal deficit 1. Difference between total expenditure and total receipts
- Budget deficit 2. Difference between revenue expenditure and revenue receipts
- Revenue deficit 3. Difference between total expenditure and revenue receipts plus non
debt creating capital receipts
- Primary deficit 4. Difference between total expenditure and revenue receipts plus non
debt creating capital receipts minus interest payments
Select the correctly matched code given below:
A B C D
a) 3 1 2 4
b) 4 3 2 1
c) 1 3 2 4
d) 3 1 4 2
Answer-a
Q.6) Consider the following statements regarding Stand Up India
- The Stand Up India scheme provides for handholding support for borrowers at the pre loan stage only.
- The Stand Up India scheme provides for refinance window through Small Industries Development Bank of India (SIDBI).
Select the correct answer using the codes given below
a) 1 only
b) 2 only
c) Both are correct
d) Neither is true
Answer-b
Explanation:- The Stand Up India scheme provides for handholding support for borrowers both at the pre loan stage and during operations. This would include increasing their familiarity with factoring services, registration with online platforms and e-market places as well as sessions on best practices and problem solving.
The Stand Up India scheme provides for refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs 10,000 crore.
Q.7) Which of the following are associated with International Monetary Fund
- World Development Report
- World Economic Outlook
- Global Financial Stability Report
Select the correct answer using the codes given below
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) 1, 2 and 3
Answer-c
Explanation:-
World Development Report
The World Development Report (WDR) is an annual report published since 1978 by the World Bank. Each WDR provides in-depth analysis of a specific aspect of economic development. Past reports have considered such topics as agriculture, youth, equity, public services delivery, the role of the state, transition economies, labour, infrastructure,health, the environment, risk management, and poverty. The reports are the Bank’s best-known contribution to thinking about development.
World Economic Outlook
(WEO) is a survey conducted and published by the International Monetary Fund. It is published biannually and partly updated two times a year. It portrays the world economy in the near and medium context, with projections for up to four years into the future. WEO forecasts include key macroeconomic indicators, such as GDP, inflation, current account and fiscal balance of more than 180 countries around the globe. It also deals with major economic policy issues.
Global Financial Stability Report – GFSR
A semiannual report by the International Monetary Fund (IMF) that assesses the stability of global financial markets and emerging market financing. The Global Financial Stability Report focuses on current conditions, especially financial and structural imbalances, that could risk an upset in global financial stability and access to financing by emerging market countries. It emphasizes the ramifications of financial and economic imbalances that are highlighted in one of the IMF’s other publications, the World Economic Outlook.
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