1. Understanding Indian Economy (a) Technological research
The economy of India is currently the world’s (b) Population growth
fourth largest in terms of real GDP (purchasing power (c) Diversification of Industry
parity) after the USA, China and Japan and the second (d) Increased saving
fastest growing major economy in the world after Ans : (b) Population growth
China.  The socialist pattern aimed at by our planning
 India’s annual growth rate is above 8% while that comes through
of China is about 10%. (a) a closed economy (b) mixed economy
 India is a developing country and our economy (c) public sector (d) open economy
Ans : (b) mixed economy
is a mixed economy.
 Which of the following is not a characteristic of
 In a mixed economy the public sector co-exists Indian economy?
with the private sector.
(a) High rate of population growth
 Dadabhai Naoroji is known as the (b) Extensive disguised unemployment
Father of Indian Politics and Eco- (c) Low level of adult literacy
nomics. He is also called the ‘Grand
(d) High level of exports
Old Man of India’.
Ans: (d) High level of exports
 In his book Poverty and Un Brit-
Naoroji
ish Rule in India he describes his Basic Features of
theory, i.e. the economic exploitation of India by Indian Economy
the British. His theory is popularly called the Eco- (i) Low per capita income.
nomic Drain Theory. (ii) Inequalities in income distribution.
 'Brain drain' means talented men leaving their own (iii) Predominance of agriculture.
country because of lack of opportunities and facili- (More than 2/3rd of India’s working population
ties and going to foreign countries for better condi- is engaged in agriculture. But in USA only 2% of
tions. the working population is engaged in agriculture.)
 Which of the following does not contribute to (iv) Rapidly growing population.
the development in India? (v) Chronic unemployment
260

2. (A person is considered employed if he / she Five Year Plans
works for 273 days of a year for eight hours every  Father of Indian Planning : M. Visweswarayya.
day.)
 M. Visveswarayya, in his book, Planned Economy
(vi) Low rate of capital formation. of India, advocated the need of economic plan-
(vii) Dualistic Nature of Economy (features of a ning in India.
modern economy, as well as traditional).  The concept of planning is based on the Russian
(viii) Mixed Economy model initiated by Joseph Stalin.
(ix) Follows Labour Intensive Techniques.  The best way to describe the overall aim of In-
dian planning is
National Income (a) achievement of industrial development
(tZiob hcp-am-w) (b) growth with justice
 The national income is the sum total of the value (c) socialism
of all the final goods produced and services of the (d) regional prosperity
residents of the country in an accounting year. Ans : (b) growth with justice
 For comparison purposes the national income is  The Planning Commission was set up in 1950 with
measured at constant prices with a base year. The Jawaharlal Nehru as its first Chairman.
base year at present is now 1993 - 94 and current  The Planning Commission is only an advisory
prices are converted to the prices of the base year body according to 39th article of constitution.
(Base year was originally 1960-61 but later peri-  The National Development Council (NDC) was
odically revised.) set up in August 6, 1952. It gives final approval
 CSO : Central Statistical Organisation is under to Plans in India. The Prime Minister is its Chair-
the Department of Statistics. Govt. of India is re- man. All the Chief Ministers of the States, Lt. Gov-
sponsible for estimating the national income. ernors of Union Territories, all Union Cabinet Min-
 CSO was founded by Prof. Mahalanobis. isters and other Planning Commission members are
 CSO is assisted by the National Sample Survey its members. .
Organisation (NSSO) in estimating National In-  The main function of the National Development
come. Council in India is to
 Dadabhai Naoroji was the first to calculate the
national income of India.
 Gross Domestic Product (GDP) is the money
New Economic Policy (NEP)
value of final goods and services produced in the  LPG - ie. Liberalisation Privatisation &
domestic territory of a country during the ac- Globalisation are the three steps in NEP.’
counting year.  Globalisation of Indian Economy means that
 In India Gross Domestic Product (GDP) is larger the Indian Economy is having minimum pos-
than national income because net factor income sible restrictions on economic relations with
from abroad is negative, i.e. foreign payment is other countries.
larger than the foreign receipt.  Privatisation is the forecast of the Removal of
 Net National Product (NNP) at market prices = state interference in the economic programme.
Gross National Product at Market Prices - Depre-  The New Economic Liberalisation Policy was
ciation launched in India in July 1991.
 Depreciation is the losses arised due to wear and  LERMS - Liberalisation Exchange Rate Money
tear and technological obsolescence. System.
 Net National Product at factor cost NNP (fc) =  Devaluing the Indian Currency is considered
NNP at market prices - Net Indirect taxes. to a step towards liberalisation.
 Under LERMS 16% of the foreign exchange
 Net National Product at factor cost is the actual
reserve could be converted into the market.
National income.
261

3. (a) promote national integration The First Plan (1951-56)
(b) review the working of the National Plan from  It gave priority to agricultural development.
time to time  Community Development Programme (CDP), and
(c) develop villages Family Planning Programme (FPP) were launched
(d) None of the above in 1952.
Ans: (b) review the working of the National  National Extension Service (NES) was launched
Plan from time to time in 1953 during the first five year plan period.
 On which of the following did the Mahalanobis  Important multipurpose projects in India like
Model lay greater emphasis for planned develop- Bhakranangal, Hirakud and Damodar Valley
ment in India after Independence? Projects were also launched during this plan
period.
(a) Agriculture  The first five year-plan was a successful one.
(b) Development of heavy industries
(c) Generation of power The Second Plan (1956-61)
(d) Science and Technology  It gave priority to industrial development.
Ans: (d) Development of heavy industries  The three important steel plants of India were built
during this plan period. They are Durgapur (West
Bengal) with British help, Bhilai (Chhattisgarh) with
Russian help and Rourkela (Orissa) with
Poverty German help.
According to NSSO report, the people living The Third Plan (1961-66)
below poverty line in India during (1999-2000) is
26.10%.  It failed because of the Chinese aggression in
 In Kerala 12.72% people live below poverty line
1962 and the conflict with Pakistan in 1965.
(1999-2000).  A plan holiday was declared during 1966-1969 due
 Punjab has the least percentage of people to the conflict with Pakistan.
living below poverty line among the states
(6.16%). The Fourth Plan (1969-74)
 Orissa has the highest number of poor people.  It also failed due to the Indo-Pak war of 1971.
About 47.15% live below poverty line. Growth with stability was the objective of the plan.
 {Kma- {]- tZ- i-§-fn {]Xn-Znw HcmÄ¡v 2400 Itemdn
DuÀÖw tSm³ Bh- iy- amb Blmcw tSm- pÅ The Fifth Plan (1974-79)
km¼- ¯nItijn- bmWv Zmcn- {Zy- tc- J- bpsS am- Z-WvUw.
 It is associated with Indira Gandhi's slogan of
CXnv Xmsg-bp- Å- hÀ Zmcn-{Zy-tc- J¡v Xmsg hcp-¶p.
“Garibi hatao” (remove poverty).
K- c-§-fn CXv 2100 Itemdn DuÀÖ-amWv .
 C´y-bnse Zmcn-{Zy-tcJm nÀ®b I½nän : e¡-  Indira Gandhi launched the 20 point programmes
Sm-hmem I½nän during this plan. Self sufficiency in food grains
was the major achievement of this Plan.
New parameters for identifying
 The Plan was terminated in 1978 by the Janata
BPL (Below Poverty Line) Government, and they started the Rolling Plan.
13 new parameters have been notified by the
centre for defining the category of people living The Sixth Plan (1980-85)
Below Poverty Line (BPL) in the country. They are  Elimination of unemployment and poverty was
type of dwelling, clothing, food, hygiene, capacity its objective.
to buy commodities, literacy, minimum wages, edu-
cation of children, debt, migration and priority for The Seventh Plan (1985-90)
assistance. The earlier definition based on food
 It also aimed to eliminate poverty and unemploy-
calories or annual earning has been scrapped.
ment.
262

4. Five Year Plans at a Glance 11th Plan (2007-11)
National Development Council (NDC) has given
First Plan .............................................. 1951-56 final approval for the 11th Plan. The theme of the plan
Second Plan ......................................... 1956-61 is ‘towards faster and more inclusive growth’.
Third Plan ............................................ 1961-66 The plan aims to achieve a growth rate of 9% in
3 Annual plans-1966-69 (Plan Holiday) the initial years and culminating to a growth target of
Fourth Plan .......................................... 1969-74 10% at the end of the plan period.
Fifth Plan ............................................. 1974-79
The important highlights of
(Plan was terminated in 1978)
11th plan
Rolling Plan was introduced in ................... 1978
 GDP growth to be increased to 10% by the end of
Annual Plan .............................................. 1979
the plan.
Sixth Plan ............................................. 1980-85
 Farm sector growth to be increased to 4%.
Seventh Plan ........................................ 1985-90
 Double per capita income by 2016-17.
2 Annual Plans-1990-92
 Create 7 crore new jobs.
Eighth Plan ........................................... 1992-97
Ninth Plan ......................................... 1997-2002  Reduce educated unemployment rate to below 5%.
Tenth Plan ........................................ 2002 -2007  Literacy to be increased to 80%.
Eleventh plan ................................... 2007-2011  Infant mortality rate to be reduced to 28 per 1000
births.
 The 8th plan would not take off due to fast chang-  Maternal mortality rate to be cut to 1 per 1000
ing political situation at the centre. So the new births.
government decides that the 8th plan could start  Clean drinking water to all by 2009.
in 1992.  A telephone in every village by November 2007.
 From 1990-92, two Annual Plans.
 Broadband connectivity to all Villages by 2011-
The Eighth Plan (1992-97) 12.
 It proposed a growth rate of 5.6% per annum and  Increase forest cover and tree cover by 5%.
the energy sector was accorded top priority in  Which of the plan priorities is wrongly matched?
the plan allocation. (a) 2nd Five Year Plan : Industry
(b) 1st Five Year Plan : Agriculture
The Ninth Plan (1997-2002) (c) 6th Five Year Plan : Poverty alleviation
 It aimed for 6.5% annual growth rate. (d) Ninth Five Year Plan : Growth with equity
 H¼Xmw ]©- hÂkc ]²-Xn-bpsS hfÀ¨m e£yw (e) All correctly matched
6.5% Bbn-cp-¶p. F¶m tSm³ IgnªXv 5.4% Answer: (e) All correctly matched
am{X-am-Wv.  Janata Government introduced the concept of
(a) Five Year Plan (b) Rolling Plan
The Tenth Plan (2002 - 2007) (c) National Development Council
The total outlay envisaged for the 10th plan is Rs. (d) Zero based budgetting
19,68,815 crore at 2001-02 prices.
Answer: (b) Rolling Plan
The plan envisaged rapid growth in labour force  The concept ‘Rolling Plan’ was introduced by
over the next decade. The 10th plan aimed at creating Gurnal Myrdal, in his famous book Asian Drama.
50 million jobs. Which of the following is true?
 The targetted growth rate for 10th plan was (a) Physical and financial plannings are comple-
8% mentary
263

5. Dr. Amartya Sen
1998 Â km¼-¯nI imkv{X-¯nv tm_Âk-½mw
tSnb C´y³ km¼-¯nI imkv{X-Ú-mWv AaÀXy-
Ip-amÀ sk³. He has researched into behavioural foun-
dations of economic theory and development econom-
ics.
 The incident which influenced Amartya Sen in In-
dia was Bengal Famine.
 Year : 1943
 Death Toll due to famine: 1.5 million persons.
Welfare Economics F¶ {]tXyI {_m©n Ct±lw kvs]jy-ssekv sNbvXn-cn-¡p-¶p. Cambridge-se
{Snnän tImtf-Pnse amÌ-dmbncp-¶p. Ct¸mÄ Ata-cn-¡-bnse lmÀhmÀUv kÀÆ-I-em-i-me-bnemWv. [-X-Xz-im-
kv{X-¯nv tm_Â k½mw (1998) e`n-¡p¶ BZy Gjy-¡m-c-mWv Ct±lw. 1999Â `mcXv cXv e`n-¨p. 2001
 tIcf bqWn-thgvknän D. Litt ÂIn BZ-cn-¨p.
 Development as Freedom, Poverty and Famine, An Argumentative Indian F¶nh Ct±-l-¯nsâ
]pkvX-I-§fm-Wv.
(b) Physical and financial plannings are equally  At present the share of service sector in the
important Indian economy at present is 42%.
(c) Financial planning is more important than  The Trickle Down Theory of Development holds
physical planning that development spreads downwards through
(d) Physical planning is more important than greater demand for labour.
financial planning  Discomfort index is a composite of annual infla-
Ans: (a) Physical and financial plannings are tion and unemployment rate.
complementary
 A serious effort to tackle the problem of poverty
State Planning Board (Kerala)
began with the  Deputy Chairman of Planning Commission :
(a) First Five Year Plan Dr. Montek Singh Ahluwalia.
(b) Second Five Year Plan  Chairman of the State Planning Board:
(c) Fourth Five Year Plan Chief Minister
(d) Seventh Five Year Plan  State Planning Board was set up in 1967.
 Vice Chairman of the State Planning Board:
Ans: (c) Fourth Five Year Plan
V. Ramachandran
 The general price level declined during the ——
 Perceptive planning refers to long term planning.
Plan
 Decentralised planning on the basis of Panchayati
(a) first (b) second Raj institutions was recommended by Balwant Rai
(c) third (d) fourth Mehta Committee.
Ans: (a) first
 The concept of Five Year Plans was adopted from Agriculture in India
(a) China (b) Russia  Agriculture is the life blood of Indian Economy.
(c) USA (d) Britain  Agriculture sector in India employs about 64% of
Ans: (b) Russia the work force, contributes 20% of GDP and
 At present the rate of saving in India is 21%. accounts for about 18% share of the value of the
country’s export.
264

6. Green Revolution
 Green Revolution means sudden increase of
12-þmw [-Imcy I½o-j³
agricultural output, especially wheat in India.
 The Father of Green Revolution - Norman
Borlaug.
 Dr. C. Rangarajan is the Chairman of 12th
Finance Commission.
Borlaug M.S. Swaminathan  RBI KhÀ®-dpw, B{Ôm-{]-tZiv KhÀ®-dp-ambn
 In India the Borlaug Award is given to agricul- Ct±lw tkh--ap-jvSn-¨n-«p-­v.
tural scientists.  BZys¯ Indian Statistical Commission
 Borlaug Award is given to the best agricultural sNbÀam³ IqSn- bm-bn-cp-¶pDr. C. Rangarajan.
scientist in India.  2005-þ2010 Ime-s ¯-tI{µ hnlnXw kwØm--
 M.S. Swaminathan is the world renowned Indian §Ä¡v hoXn-¡p-¶-Xn-s-Ip-dn¨v 12-þmw [-Imcy
agricultural scientist. I½o-j³ Xocp-am-n-¡pw.
 He is known as the Father of Indian Green Revolu-  Article 280 of the Constitution provides the
appointment of a Finance Commission every
tion
five year.
 Greening of the East means spread of green revo-
 The chairman of the 11th Finance Commis-
lution to non traditional areas of eastern India.
sion was Prof. A.M. Khusrau.
 Which of the following is not true about Green  The 11th Finance Commission recommended
Revolution? that the states share of net central revenue
(a) It was launched in 1966-67 from divisible pool will be 29.5%, i.e. 0.5%
(b) It had substantial impact on wheat and rice more than what recommended by the 10th
production only Finance Commission.
(c) It created regional disparity in food
production  The new name of APC is
(d) High Yielding Variety Programme (HYVP) was
(a) CACP (b) ICAR
associated with Green Revolution
(c) REC (d) K&VIC
(e) All the above are correct
Answer: (a) CACP
Answer: (e) All the above are correct
 CACP is Commission of Agricultural Costs and
 A major input emphasized in the present day ag- Prices
riculture production  Prices of agricultural products are fixed on the
(a) Use of bio fertilizer recommendation of CACP which was established
(b) Science based technology in 1965.
(c) High yielding variety of seeds  ICAR is Indian Council of Agricultural Research
(d) Better land use  REC is Rural Electrification Corporation. It was
Ans: (b) Science based technology set up in 1969
 Which of the following is the leading export item  Khadi and Village Industries Commission
among Indian plantation crops? (K & VIC) was set up in 1957.
(a) Coffee (b) Rubber  Irrigation potential of the country increased from
(c) Tea (d) Spices 22.6 million hectors in 1950 to 89.56 million hectors
Ans: (c) Tea in 1997.
265

7.  Kisan Credit Card Scheme was launched in 1998  Keeping agriculture with livestock is known as
 India is the largest producer of -------in the world. mixed farming
(a) tea (b) milk  In shifting cultivation, place of cultivation is
(c) cardamom (d) turmeric shifted for fertility reason. This method is popular
(e) All the above among tribals.
Answer: (e) All the above  The first agricultural census was conducted in
 India is also the largest producer of ginger, the country in
sugarcane, millet. (a) 1970 (b) 1883 (c) 1988 (d) 1993
 India leads in the number of cattle population. Answer (a) 1970
 India is the largest exporter of spices.  Leading producer of wheat in India
 The practice of keeping more than one crop in a (a) Uttar Pradesh (b) Punjab
field is called.
(c) West Bengal (d) Karnataka
(a) rotation of crop (b) mixed farming
(c) mixed cropping (d) shifting cultivation Answer: (a) Uttar Pradesh
Answer: (c) mixed cropping  Uttar Pradesh is also the leading producer of
 Crop grown one after the other in different seasons sugarcane.
is called rotation of crop.  Wheat per hectare yield (i.e, productivity of
wheat) is the highest in Punjab.
 West Bengal is the leading producer of rice and
s]mXp JP-mhv (Exchequer) jute in India.
 s]mXp-]Ww kzoI-cn-¡mpw sNe-h-gn-¡mpw `c-  Karnataka leads in the production of coffee, silk
W-L-S--bn {]tXyIw hyhØ sNbvXn-«p-­v. and sandal wood
CXn-pÅ A[n-Imcw kwØm-§-Ä¡pw tI{µ-  Which of the following types of farming is
kÀ¡m-cn-p-ap-­v. popular in India?
 aq¶v ^­p- IÄ IqSn-tNÀ¶-XmWv C´y-bpsS JP- (a) Individual farming (b) State farming
m-hv. The Consolidated Fund of India, the Pub- (c) Co-operative farming (d) All the above
lic Account of India and the Contingency Fund Answer: (d) All the above
of India. Which of the following leading producer - prod-
 All revenue received, loans raised and money uct relationship is wrong?
received in repayment of loans by the Union
(a) Rubber - Malaysia
form the Consolidated Fund.
(b) Coffee - Brazil
 No money can be withdrawn from this fund ex-
cept under the authority of an Act of Parlia- (c) Coconut - Phillipines
ment. (d) Silk - India
 All other receipts, such as depoists, service Answer: (d) Silk - India
funds and remittances go to Public Account.  Leading producer of silk in the world is China.
 The disbursement of Public Account is not India stands at second place.
subjected to the vote of Parliament. The main impact of the Green Revolution has been
 s]s«-¶p-­m-Ip¶, ap³Iq-«n- Im-Wm³ Ign-bm¯ on
km¼-¯nImh-iy-§Ä nÀh-ln-¡m³ th­n-bp- (a) cereals (b) pulses
Å-XmWv Contingency Fund (Article 276 (1) of (c) fruits (d) vegetables
the Constitution)
Ans: (a) cereals
 C´y-bn tIcfw DÄs¸-sS- bpÅ FÃm kwØm-
-§Ä¡pw Cu aq¶v Funds D­v.  Which is India’s most fertile state?
 At¸mÄ tIcf JP-mhv F¶v ]d-ªm kw (a) Tamil Nadu (b) Kerala
Øm-s¯ Consolidated Fund, Public Accounts, (c) Uttar Pradesh (d) Punjab
Contingency Fund F¶nh IqSn-tNÀ¶-Xm-Wv. Ans: (d) Punjab
266

8. expected to increase 109.11 million hectare in
Food Production 2006-07.
2004-05 ................................. 210.44 million tonne  Approximately 33% of the irrigated area in India
are watered by canals 54% area are watered by
2003-04 ................................. 213.46 million tonne wells and 6.2% irrigated by tanks.
2002-03 ..................................... 212 million tonne  Rural Infrastructure Development Fund (RIDF) was
2001-02 ................................. 211.32 million tonne launched in 1995-96 by NABARD.
2000 - 01 ............................... 195.92 million tonne
1950 - 51 .................................... 54 million tonne Dairy Development
H¶mw ]©-h-Õ-c-]-²-Xn¡v tijw `t£ymÂ]m-Zw  Unfinished Dream is a book written by
GXm­v men-c«n-bn IqSp-X hÀ²n-¨n-«p-­v. C´y- (a) Amrita Patel (b) V. Kurian
bn IqSp- X D¸m- Zn- ¸n-¡ p¶ `£y-[ myw (c) M.S. Swaminathan (d) None of these
GXmWv? Answer: (b) V. Kurian
þ sÃv or tKmX-¼v. kwibw th­ sÃm-Wv.  Varghese Kurian is known as the
2004 þ 05 .............. sÃv ........................... 87.12 an.-S¬ Father of White Revolution.
2004 þ 05 .............. tKmX¼v .................... 74.05 an.-S¬  NDDB at Anand in Gujarat was set
up in 1965. V. Kurian
 Which state in India has the smallest farm hold-  The Technology Mission on Dairy
ings? Development was launched in 1988.
(a) Assam (b) Goa  Kerala State Co-operative Milk Marketing Fed-
(c) Sikkim (d) Kerala eration Ltd is located at Thiruvananthapuram.
 ICDP is Intensive Cattle Development Project. It
Ans: (b) Goa
was launched in 1964-65
 Targetted annual growth rate of agriculture dur-
 India is the largest producer of milk in the world.
ing 10th plan period is 4%.
 Percentage of protein in Indian milk is as high as
But the actual growth is less than 2% during the
4% which make Indian milk one of the best in the
period.
world.
 Horticulture, floriculture, fishery, poultry and ani-
mal husbandry accounts for 30% of production in
agriculture and allied sector.
 National Horticulture Mission (NHM) was [hf hn¹hw
launched in May 2005. (White Revolution)
 India is the 3rd largest producer of fish and sec-  Gähpw IqSp-X ]m DÂ]m-Zn-¸n-¡p¶ cmPy-
ond largest producer of inland fish in the world. amWv C´y 2004þ05þse IW-¡-p-k-cn¨v
 National Commission on Farmers was set up in 2004 DÂ]m-Zw 91 aney¬ S¬ BWv.
to suggest an action plan for farmers and farm sec-  1950þ55þÂ CXv 17 aney¬ S¬ Bbn-cp¶p.
tor with M.S. Swaminathan as its chairman.  Percapita availability of Milk in India is 232
gram/day. (2004-05).
Irrigation [h-f-hn-¹-h-¯nv Imc-W-amb kwtbm-PnX
In 1950-51, gross irrigated area, as percentage of ]m DZv]m-Z {]{Inbbmb Operation Flood
gross cropped area was only 17%. This ratio increased aq¶v L«-§-fm-bmWv S-¸n-em-¡n-b-Xv.
to 36% in 1993-94. (a) Operation Flood I - 1970-1981
 India’s irrigational potential has increased from
(b) Operation Flood II - 1981-1985
22.6 million hectares in 1950-51 to 86.26 in 1996-97 (c) Operation Flood III - 1985-1996
and to 93.95 million hectare in 2001-2002 and is
267

9.  Second largest producer of milk in the world
(a) India (b) USA Special Economic Zone
(c) Canada (d) Denmark A policy was introduced on April 1, 2000 for
Answer: (b) USA setting up Special Economic Zone (SEZ) in the
 Largest constituent of milk is country with a view to provide an internationally
(a) water (b) protein competitive and hussle free environment for ex-
(c) fat (d) None of these ports. Units may be set up in SEZ for manufactur-
Answer: (a) water ing of goods and rendering of services. Some of
the existing Export Processing Zones (EPZ) in-
Telecom Revolution cluding one at Kochi were converted to SEZ. Cur-
 TRAI – Telecom Regulatory Authority of India rently, the country has 15 SEZs. The government
 DOT – Department of Telecommunications has approved as many as 164 or more SEZs.
 DOT has been corporatised with effect from A comprehensive Special Economic Zone Act,
1 October 2000 to form Bharat Sanchar Nigam 2005 was passed by the parliament in May 2005. It
Limited (BSNL). came into force on February 10, 2006.
 MTNL – Mahanagar Telephones Nigam Limited. A host of concessions have been allowed to
 A National Task Force on Information Technol- attract investments and set up SEZs in various
ogy and Software Development was formed un- parts of the country. Andra Pradesh, Maharashtra,
der the Chairmanship of Jaswant Singh. Haryana and Gujarat leads in proposed SEZ com-
 Father of Indian IT : Rajeeve Gandhi mitments.
Shilpa Shetty Wins
T
he cute Bollywood film
star proved that Indians
are more intelligent and
smart. She outwitted all her
opponents in the British
Television Chanal 4 Big
Brother Show in January 2007.
Jade Goody the British
actor has tormented Shilpa with
racial insult. In fact it has
proved a blessing in disguise.
The viewers felt sympathy for
Shilpa and voted her the No. 1.
268

10. Navaratna
On July 4, 1997 The Government identified nine leading, well-performing and high profit making public
enterprises as Navaratna Cina Precu Precious Jewels). Later in the same year two more were added to the list.
They are
Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) Steel Authority of India Ltd.
(SAIL), Bharat Heavy Electrical Ltd (BHEL), Oil and Natural Gas Commission (ONGC), Videsh Sanchar Nigam
Ltd (VSNL), National Thermal Power Corporation (NTPC) and Indian Petrochemical Corporation Ltd. (IPCL).
The Bharat Petroleum Corporation Ltd. (BPCL) Gas Authority of India Ltd. (GAIL), and Mahanagar Tele-
phones Nigam Ltd (MTNL). The main aim of establishing the Navaratna is to give autonomy to these
industries. Now some of these grants have been disinvested and others are on the line of disinvestment.
samss_Â hn¹hw as suggested by Abid Hussain Committee in 1997.
However, the limit has been brought down to Rs
 C´y-bn A£cmÀ°-¯n Hcp samss_ 1 crore in July 1998.
hn¹hw S-¡p-I-bmWv. Idea, BPL, Air Tel, Tata,
 For the tiny unit the investment limit is Rs. 25
BSNL, Reliance, Hutch are the major mobile ser-
lakhs.
vice providers.
 When was the New Liberalised Industrial Policy
 GSM and CDMA are the two different kinds of
announced in India?
technologies now available in India.
(a) 1989 (b) 1990
 GSM- Global System for Mobile Communi-
cation. (c) 1991 (d) 1992
 CDMA - Code Division Multiple Access. Ans: (c)1991
 SIM Cards - Subscriber’s Identy Module  An unorganised industry
Cards (a) Sugar (b) Cement
(c) Jute (d) Silk
Industry in India Ans: (d) Silk
 The cotton textile industry is the oldest industry  Public Sector consists of those enterprises in
in India. which the State owns
 The largest number of workers are employed in (a) 50 per cent of the capital
this industry. (b) 66 per cent of the capital
 Most of the cotton textile factories are in Maharashtra. (c) 85 per cent of the capital
 The industrially developed states in India include (d) 100 per cent of the capital
Maharashtra, Gujarat, Tamil Nadu, and West Ans: (d) 100 percent of the capital
Bengal.  NRIs have invested mainly in which of the fol-
 Industrially backward states are Rajasthan, Kerala, lowing Industries?
Haryana, Orissa, Himachal Pradesh. (a) Film Industry (b) Colleges
 To remove poverty and to achieve full employ- (c) Finance Companies
ment faster industrialisation and greater produc- (d) Hospitals and Real Estates
tivity are vital. Ans: (d) Hospitals and real estates
 Industrialisation means setting up of cottage,
 ——— is the largest consumer goods manufac-
small scale and large scale industries.
turer of India.
 In industrialisation equal opportunities are to be
(a) Hindustan Lever Ltd.
given to public, private and joint sectors.
(b) Colgate – Palmolive India Ltd.
 The investment limits being considered for a small
(c) Smithkline Beecham Consumer Heatlh Care
scale unit is Rs. 3 crore for plant and machinery
Ltd.
269

11. (d) Tata India Ltd.  A noticeable feature of our industrial develop-
Ans: (a) Hindustan Lever Ltd. ment has been the
 Almost 99% of the sick units are in the small scale (a) growth of small scale sector
sector. (b) establishment of Iron and Steel industries
 SICA : Sick Industrial Companies Act - 1985 (c) creation of employment opportunities
 aqe-[ nt£-]-t¯-¡mÄ IqSp-XÂ ISw Ib-dnb (d) growth of public sector
hyh-km-b-§-fmWv ]oVnX hyh-km-b-§Ä (Sick Ans: (a) Growth of small scale sector
industries)  Joint Sector refers to a partnership between the
 Omkar Goswami Committee set up for enquir- Government and the private sector.
ing about Industrial sickness and corporate re-  The committee appointed to examine the wage -
structuring. income price
 BIFR : The Board for Industrial and Financial Re- Ans: S. Bhoothalingam
construction. It was established in May 1987.  The profit and loss of a partnership concern is
]oVnX hyh-km-b-§sf klm-bn-¡phm³ th­n shared among the partners
cq]o-I-cn-¨-XmWv BIFR. (a) equally (b) in agreed ratio
 Which of the following states leads in commerce (c) in capital ratio (d) none of these
and industry? Ans: (b) in agreed ratio
(a) Maharashtra (b) Tamil Nadu  India’s major export items are
(c) Uttar Pradesh (d) West Bengal (a) Handicrafts (b) Tea leaves
Ans: (a) Maharashtra (c) Chemical and Engineering Goods
(d) All the above
 Which of the following is at present the largest
Ans: (d) All the above
power using sector of the Indian economy?
(a) Agriculture Industrial Relations
(b) Domestic consumers and street lighting
 AITUC – All India Trade Union Congress was
(c) Industry
formed in 1920. CPI bpsS sXmgn-emfn kwL-S--
(d) Transport and communication including rail-
bmWv AITUC.
ways
Ans: (c) Industry
Important Economic Facts
 Sugar Industry can be classified under
(a) tiny industry (b) medium industry  RBI does not transact the business of the State
(c) Agro-based industry Government of Jammu and Kashmir.
(d) None of these  National Renewal Fund (NRF) was instituted for
Ans: (c) Agro-based industry the purpose of restructuring and modernisation of
industries.
 Which is the most labour-intensive amongst the
 Multifibre agreement deals with textiles.
following?
 Total Fertility Rate (TFR) in population means
(a) Iron and Steel (b) Cotton Textiles the average number of children born to a woman
(c) Petroleum (d) Automobiles during her life time.
Ans: (b) Cotton Textiles  The unit of valuation known as paper gold is
 The most important small scale industry of India SDR (Special Drawing Right)
is  The labour participation of women in India is
(a) coir industry 20%
(b) matchbox Industry  Specific schemes for employment generation
(c) handloom Industry were evolved for the first time in the 6th Plan.
(d) toy-making Industry  Planning Commission was set up in accordance
Ans: (c) Handloom with the Directive Principles in Article 39.
270

12.  INTUC – Indian National Trade Union Congress 19 Nationalised Banks
- tIm¬{Kkv (sF)-bpsS sXmgn-emfn kwL-S-.  Allahabad Bank  Andhra Bank
 BMS – Bharatiya Mazdoor Sabha. _n.-sP.-]n-bpsS  Bank of Baroda  Bank of India
sXmgn-emfn kwL-S  Bank of Maharashtra  Corporation Bank
 CITU – Centre for Indian Trade Union. amÀIvknÌv
]mÀ«n-bpsS sXmgn-emfn kwL-S  Canara Bank  Central Bank of India
 Dena Bank  Indian Overseas Bank
 Indian Bank  Oriental Commercial
Banking Sector 
Bank
Punjab National Bank  Punjab & Sindh Bank
 The organised banking system in India can be  Syndicate Bank  Union Bank of India
divided into the RBI, the Commercial Banks and  UCO Bank  United Bank of India
Co-operative Banks.  Vijaya Bank
The Reserve Bank of India The State Bank of India
 SBI is the largest public sector bank in India.
 The central banking functions in India are performed
by  First Presidency Bank is the Bengal Presidency
Bank (1806).
(a) Central Bank (b) State Bank of India
 In 1921, the three Presidency Banks (Bengal, Bombay
(c) Reserve Bank of India (d) Both (b) and (c)
& Madras) amalgamated to form Imperial Bank of
Ans : (c) Reserve Bank of India
India.
 RBI was established in 1935 and was nationalised
 In 1955 Imperial Bank was nationalised and named
in 1949.
as State Bank of India.
 It represents India at the IMF.
 It is the Central Bank of India.  It is now the largest Commercial Bank in India in
 It is also known as the Banker's Bank and its head- terms of branches. It has seven associated banks.
quarters is in Mumbai.
 Its first Governor was Sir Osbourne Arkall Smith
NABARD
and its first Indian Governor was C.D. Deshmukh  The National Bank for Agricultural and Rural
(1943). Development was set up in July 12, 1982.
 Y.V. Reddy is the present Governor of RBI. He  Its primary objective is to promote agriculture and
replaced the post of Mr. Bimal Jalan. rural development through credit facilities to farm-
 RBI has several banking functions like ers. It is the apex bank for rural credit.
(1) issue of notes Its headquarters - Mumbai.
(2) act as governments bank
(3) act as Banker’s bank EXIM Bank
(4) Custodian of Foreign Exchange Reserves  The Export Import Bank of India (1982) was set
(5) To Manage Public debt. up to boost exports from India.
(6) To stabilise the value of money, etc.  Exim Policy 2002-2007 was announced by
government on March 31, 2002.
Days in Economics
World Thrift Day ............................... October 30 IDBI
World Book and Copyright Day .............. April 23  The Industrial Development Bank of India was
World Population Day ............................. July 11 established on 1964. It is the apex bank for indus-
World Consumer’s Day ......................... March 15 trial finance in India.
World Standard Day .......................... October 14
World Tourism Day......................... September 27 Lead Bank Scheme
Inter National Customs Day ................ January 26  Under the Lead Bank Scheme a bank adopts a
Central Excise Day ............................ February 20 district for developmental purpose.
271

13.  Nariman Committee recommended the Lead
Bank Scheme. Nationalisation of Banks
 Lead Bank of Trivandrum District : Indian  The first nationalisation of banks took place on
Overseas Bank July 19, 1969 during the tenure of Prime Minister
 Lead Bank of Kollam District : Indian Bank Indira Gandhi. 14 banks were nationalised.
 The first bank of limited liability managed by
 The second nationalisation took place in 1980
Indians was Oudh Commercial Bank founded in
and six banks were nationalised.
1881.
 Punjab National Bank was established in 1894.  In 1993, the New Bank of India was merged with
the Punjab National Bank. So at present there
Scheduled Banks are only 19 nationalised banks in the country
Scheduled banks are banks included in the besides the Reserve Bank of India and State
second schedule of Reserve Bank Act 1934. The Bank of India and its seven subsidiaries.
bank included in this list should fulfil certain con-  {KmaoW P-§Ä¡v _m¦nwKv s{IUnäv kuI-cyw
dition and also they enjoy certain facilities. e`y-am-¡pI F¶Xmbn-cp¶p tZi-km¡c-W-
 The paid up capital and collected funds of ¯nsâ {][m e£yw. Cµn-cm-KmÔn C´y³
banks should not be less than Rs. 5 lakh. {][m--a-{´n Bbn-cn-¡p-t¼m-gm-bn-cp¶p c­v _m¦v
 They should safeguard the interest of the de-
tZi-km¡-c-W§fpw S-¶-Xv.
positors.
The Federal Bank, The South Indian Bank, Ans: (a) 10
The Catholic Syrian Bank, etc. are scheduled  Overdraft facility is available for those who have
banks. (a) Savings Bank Account
(b) Fixed Deposit
ICICI (c) Current Account
(d) Recurring Deposit
 C´y-bnse Gähpw henb kzIm-cy-ta-Je _m¦v
Ans: (c) Current Account
BWv ICICI.
 Industrial Credit and Investment Corporation of  Custodian of foreign exchange is
India (ICICI) was started in 1955. (a) Foreign Exchange Bank
 NHB : National Housing Bank. (b) State Bank of India
 SIDBI : Small Industries Development Bank of (c) Foreign Bank
India is a wholly owned subsidiary of IDBI. sNdp- (d) Reserve Bank of India
InS hyh- kmb§sf t{]mÂkm-l n-¸n- ¡m³ Ans: (d) Reserve Bank of India
tem¬ ÂIp¶ _m¦m-Wn-Xv.  When was 'Savings Bank System' introduced in
 FIIs Foreign Institutional Investors India?
 The term “Plastic Money” applies to trans-
(a) 1830 (b) 1885 (c) 1910 (d) 1935
actions made up of
Ans: (b) 1885
(a) bank Drafts made of plastic coated paper to
make it more durable
RRBs
(b) Credit cards mainly issued by Banks
 {Kma-§-fpsS km¼-¯nI hnI-k¯nmbn
(c) Currency notes impregnated with plastic
{]tXyIw Bcw-`n¨ _m¦p-I-fmWv Regional
thread to prevent them from forgery
Rural Banks AYhm {Kmao-¬ _m¦p-IÄ.
(d) None of the above
 tIc- f- ¯nse RRBs BWv North Malabar
Ans: (b) Credit cards mainly issued by Banks
Grameen Bank-Dw South Malabar Grameen
 The maximum number of partners allowed in a Bank-Dw.
banking business is
 C´y-bn Ct¸mÄ 196 RRBs D­v.
(a) 10 (b) 20 (c) 30 (d) 50
272

14. These banks are also called New Generation
The Commissions & Banks, as their style of functioning is more customer
Committees oriented and high-tech.
Kelkar Committee ................ Direct Indirect Taxes  Which State in India sold lottery tickets for the first
G.V. Ramakrishna ....... Disinvestment Commission time?
Narasimham Committee ............. Banking Reforms (a) Kerala (b) Tamil Nadu
Malhotra Committee ....... Insurance Privatisation (c) Assam (d Manipur
Raja Chelliah Committee ................... Tax Reforms Ans: (a) Kerala
L.C. Gupta ............................... Trading of shares  BZy-ambn online lottery Bcw-`n¨ kwØmw-
þkn¡nw.
Nedungadi Bank & Tarapore Committee on
Lord Krishna Bank Convertability
 The Nedungadi Bank was merged with Punjab S.S. Tarapore Committee report on fuller CAC (Capi-
National Bank in 2003 due to acute financial tal Account Convertability) was published by RBI on
problem the bank faced as a result of misman- September 1, 2006. The Committee has recommended
agement. Lord Krishna Bank was merged with that the scheme for fuller convertability of rupee should
Centurian Bank in 2006 Ganesh Bank of
Krunthvad (Maharashtra) was merged with Fed- be implemented in a five year period in three phases.
eral Bank in 2006. `
 Ip´-e-X-bpsS IÀ¯m-hmb A¸p-s-Sp-§mSn Foreign Direct Investment
tImgn-t¡mSv tI{µ-ambn 1899-þÂ Bcw-`n¨ tIc-f- (FDI)
¯nse BZys¯ _m¦n-mWv Cu ZpÀKXn Foreign Direct Investment (FDI) is investment of
kw`-hn-¨-Xv. foreign assets into domestic structures, equipments
and organisations.
Co-operative banks
FDI provides opportunities to Indian Industry for
 Central co-operative banks operate at district level, technological upgradation, gaining access to global
while state co-operative banks operate at the state managerial skills and and practices. It is also highly
level and primary agricultural credit societies op- conducive for optimum utilization of human and natu-
erate at village level. ral resources and competing globally with higher effi-
ciency. FDI has a significant role in integration of In-
Foreign Banks dian economy with global production chain, which
Banks which are registered outside India but has involves production of multinational corporations
taken permission to operate in India are Foreign Banks. spread across locations the entire world over. In
There are 44 Foreign Banks operating in India. recent years the quantum of FDI has increased
substantially. It is a sign that multinationals have picked
HSBC, American Express are example
India as their investment destination.
 ANZ Grindleys is the largest Foreign Bank oper-
ating in India. Banking Reforms
 Indian Banks also operate in other countries.
 M. Narasimham was the chairman of the Commit-
tee on Banking Sector Reforms.
Private Bank
 c-knwlw I½n-änbpsS nÀtZ-i-{]-Imcw 1992-þ93Â
Under the recommendation of Narashimhan Com- C´y-bn _m¦n§v ]cn-jvIm-c-§Ä¡v XpS-¡-an-
mittee, the government gave permission to start new «p. 1991se New Economic Liberalisation policy
private banks. Bcw-`n-¨-Xnsâ `mK-am-bn-cp¶p ]cn-jvIm-c-§Ä.
Some of the prominent Private Banks in India are  Second Generation Reforms
ICICI Bank, UTI Bank Ltd., HDFC Bank, Centurian 1991Â Bcw-`n¨ ]pXnb km¼-¯nI ]cn-jvIm-c-
Bank Ltd., IDBI Bank, etc. §Ä C´y³ km¼-¯nI hfÀ¨bv¡v Btcm-Ky-
273

15. ]-c-amb hnIm-k-¯nv klm-bn-¨n-cp-¶p. ]t£  Indian Security Press (Nasik) prints postal and
CXnsâ XpSÀ¨-bmbn ]pXnb ]cn-jv¡m-c-§Ä judicial stamps, cheques and bonds.
Bh-iy-am-Wv.  Money accumulated by way of illegal transac-
The Second generation reforms refer to major tions without declaring it for tax purposes is called
steps which are yet to be taken in the path of black money.
structural adjustments to kick start and revitalize
Indian economy. Insurance Sector
 NPA : Non Performing Assets. c-knwlw I½-nän-  LIC
bpsS nÀtZ-i- {]-Imcw _m¦p-IÄ ÂIp¶ s{IUn- Life Insurance Corporation was set up in 1956.
äns c­mbn Xcw-Xn-cn-¨n-cn-¡p-¶p. H¶v Perform-
Its headquarters is in Mumbai. Life Insurance
ing Assets Dw c­m-a-t¯Xv Non Performing As-
Corporation (LIC) is the largest insurance com-
sets Dw.
 An NPA (In«m¡-Sw) is a loan which is in default pany in the world in terms of number of policies
for more than 6 months. covered.
 ISI - Indian Standard Institution was set up in
Indian Currency System 1946. Now it is named Bureau of Indian Stan-
 The rupee is the monetary unit of India and is dards (BIS).
based on the decimal system.  UTI - (Unit Trust of India) was set up in 1964. It
 The rupee coin is a token coin made of nickel and is the first mutual fund operated in India.
its face value is higher than its metallic value.  US 64 F¶ UTI ayq¨Â ^­vv hnhmZw krjvSn-
 The RBI calculates four concepts of money sup- ¨n-cp¶p
ply in India. These concepts are known as Money  UTI is associated with
Stock Measures. (a) Regulating Foreign Exchange Transactions
 The money stock measures are
(b) Foreign Trade (c) Road Transport
(1) Narrow Money (M1) = Currency with the pub-
(d) Investment Trust
lic (ie coins and currency notes) + demand
deposits of the public. Ans: (d) Investment Trust
(2) M2 = M1 + Post Office Savings deposit.
(3) Broad money (M3) = M1 + Time deposits of
the public with banks.
 Rupee was first minted in India during the reign
of Sher Shah Suri.
 Paper currency in India was introduced for the
first time in 1883.
 Indian rupee became an independent currency
with the establishment of RBI in 1935.
 India became a member of the IMF and exchange
value of the rupee came to be fixed by IMF stan-
dards in 1947.
 Decimal System of Coinage was introduced in
India in 1957.
 Currency notes are printed at Currency Note
Press (Nasik) and the Bank Note Press at Dewas
in Madhya Pradesh.
 Paper for making currencies and other security
papers are manufactured by Security Paper Mill
(Hoshangabad, MP).
274

16.  VABAL is Value Based Advanced Licence (c) cost price or market price which ever is lower
Scheme. R.N. Malhotra was the head of the In- (d) None of these
surance Sector Reforms Committee.
Ans: (c) Cost price or market price which ever
 IRDA – Insurance Regulatory and Development is lower
Authority.
 The shares in a co-operative society
 Insurance Regulatory Authority bv¡v ]Icw
(a) can be sold
Øm]n-¨n-cn-¡p-¶-XmWv IRDA.
(b) cannot be transferred
Commerce (c) can be transferred
 The multi-crore security scam was first investi- (d) none of these
gated by the Janaki Raman Committee. Later a Ans: (c) can be transferred
Joint Parliamentary Committee (JPC) under the  When two or more companies dissolve to form
chairmanship of Ram Nivas Mirdha enquired a new company, the process is called amalga-
about it. Harshad Mehta is the chief accused in mation.
the case.  When one company merges with another com-
 Maximum number of partners in a partnership pany, it is merging.
firm is 20.  Who manages a joint stock company?
 A private company must have at least 2 mem- (a) Its Board of Directors
bers. (b) Its General body
 Minimum number of share holders necessary (c) Its Management council
for a public company is 7. (d) All of the above
 Break - even - point in a business means No Ans: (a) Its Board of Directors
profit and loss.  What is the percentage of net earning of the
 Goodwill of a firm represents Intangible asset. Central Government through excise and customs
 The excess of current assets over current liabil- (as % of total receipts)?
ity is called Working capital. (a) 40% (b) 39%
 Single entry system of book-keeping means (c) 38% (d) 36%
(a) making entry for one aspect of transaction Ans: (c) 38%
(b) making entry for both aspects of a transac-  Activities which are undertaken by human be-
tion ings for earning money may be called as
(c) incomplete double entry (a) business (b) profession
(d) None of these (c) employment (d) cultivation
Ans: (b) Profession
Ans: (a) Making entry for one aspect of transaction
 Managerial control is more in the case of a
 The closing stock should be valued at (a) partnership firm (b) sole trading concern
(a) cost price (b) market price (c) co-operative Society
(d) private limited company
National Rural Employment Ans: (b) Sole trading concern
Guarantee Programme (NREGP)  Partner’s liability in India is
The programme accept a right based approach (a) equal (b) limited
to work. The NREGP empowers the poor house- (c) unlimited (d) None of these
holds to demand employment of at least 100 days Ans: (b) limited
from government. Rs. 11,300 crore has been pro-  Uncertain income in any enterprise is
vided to NREGP in 2006-07. The scheme is pro- (a) Rent (b) Wages
tected by the National Rural Employment Guaran- (c) Interest (d) Profit
tee Act. Ans: (d) Profit
275

17.  The code for corporate governance has been given  ‘Budget’ is a
by (a) Plan outlay
(a) ASSOCHAM (b) CII (b) Annual Financial Statement
(c) Chamber of Commerce (d) UTI (c) Balance Sheet
Ans: (b) CII (d) Estimate of expenditure
C11: Confederation of Indian Industries Ans: (b) Annual Financial Statement
 Debenture holders of a company are its  Who said, “The budget need
(a) Members (b) Creditors not be a secret affair?
(c) Debtors (d) Directors (a) R. Venkatraman
Ans: (b) Creditors (b) Palkiwalah
(c) C. Subramaniam
 Equity shareholders are the company’s
(d) Chintamani Deshmukh
(a) Owners (b) Creditors
Ans: (b) Palkiwalah Palkiwalah
(c) Customers (d) None of these
Ans: (a) Owners Taxes
 Macro Economics is a  Taxes can be broadly divided into two
(a) study of aggregates (b) machine (i) Direct Taxes (ii) Indirect Taxes.
(c) chemical analysis
 Personal Income tax, corporate tax, estate duty,
(d) branch of Engineering gift tax and wealth tax come under direct taxes.
Ans: (a) study of aggregates  Sales tax and excise duty, customs duty come
 The backbone of all economic activities is under indirect taxes.
(a) agriculture (b) finance  Union Excise Duties are the chief source of rev-
(c) industry (d) education enue of the Central Government.
Ans: (b) finance  Excise duties, customs duties, income tax and
 Internal trade means corporation tax are levied by the Central Govern-
(a) Export (b) Import ment.
(c) Trade within the country  Sales tax is the major source of revenue to the
(d) None of these State Government.
Ans: (c) Trade within the country  Land revenue, stamp duties and registration fees
 In Monopoly pricing, there will be are collected by the states.
(a) less competition (b) perfect competition  Estate duty on property other than agricultural in-
(c) more competiton (d) no competition come is collected by the central government.
Ans: (d) No competition  The agricultural income has been exempted from
 What is the life blood of commerce? the Union Income Tax. But the states have the
(a) Export, import (b) Trade statutory powers to do that.
(c) Agriculture (d) Industry  Taxation is a part of - fiscal Policy
Ans: (b) Trade  Interest is a - taxable income
 Saving is a function of  Octroi is the tax imposed on articles coming into
(a) investment (b) export a city; it simply means city tax.
(c) improvement in productivity  The most important source of revenue for the gov-
(d) Income ernment - taxes.
Ans: (d) Income  PPP - Purchasing Power Parity
 Budget : A budget is the anticipated annual  The form of market structure where the produce
estimate of expenditure and revenue of a coun- has total control over the price - Monopoly
try or a subordinate authority like a corpora-  Real national income divided by population is -
tion.
per capita income.
276

18. A regressive tax will tend to redistribute income  The BJP ruled States and Tamil Nadu initially
more refused to introduce VAT when other States
(a) equally (b) unequally accepted and introduced VAT from April 1, 2005.
(c) equitably (d) inequitably  Kerala introduced VAT on April 1, 2005.
Ans: (b) unequally  France was the first country to introduce VAT.
 L.K. Jha was the head of the Indirect Taxation
Committee which recommended introduction of Economic Offences
ad valorem taxes as far as possible.  Black money is money accumulated by evading
 Raja. D. Chelliah was the Chairman of the Tax Re- tax.
forms Committee.  Hawala Transaction means the illegal way of
 Finance Commission recommends distribution bringing foreign currency to India. Usually the
between the Union and the States of the net pro- foreign currency will be collected from outside
ceeds of taxes as enumerated in the Constitution India and its equivalent amount will be given here.
and allocation between the states of the respec- The chief accused in the Hawala case is S.K. Jain.
tive shares of such proceeds.  FERA - Foreign Exchange Regulation Act (1973).
 Excise duty is a tax levied on  FERA has been replaced by FEMA Foreign Ex-
(a) import of goods (b) export of goods change Management Act on June 1, 2000.
(c) production of goods (d) sales of goods  COFEPOSA - Conservation of Foreign Exchange
Ans: (c) production of goods and Prevention of Smuggling (Activities) Act.
 The tax paid by every individual is  FECA - Foreign Exchange Contribution Act.
(a) an indirect tax (b) a direct tax
(c) a progressive tax (d) None of these Stock Exchange
Ans: (b) a direct tax  India has the second largest share holding popu-
 An ad-valorem duty is a tax basis of lation, next to United States of America.
(a) the price of the commodity  A stock exchange is an organised market for buy-
(b) the value added ing and selling shares and other securities.
(c) the advertisement expenses
 There are 22 stock exchanges in the country.
(d) the unit of the commodity
Ans: (a) the price of the commodity CXn 20 F®w {]tZ-in-Ihpw 2 F®w tZio-b-
hpamWv.
MODVA T  National Stock Exchange (NSE), Over The Counter
 MODVAT is modified Value Added Tax. MODVAT Exchange of India (OTCEI) F¶n- h-bmWv 2 tZiob
has been in place from April 1, 1986. This was Stock Exchange-IÄ.
introduced to avoid double taxation of both the  Bombay Stock Exchange (BSE) Cu 20Â s]Sp¶
raw materials and finished goods. {]tZinI Stock Exchange BWv.
VAT
 VAT is Value Added Tax.
 VAT has replaced the Sales Tax.
 VAT has been adopted by all the States except
Uttar Pradesh and Pondicherry in 2007.
 Lakshadweep and Andaman and Nicobar has been
exempted from VAT.
277

19.  The first stock exchange was established in  The head of Co-operative Department is Regis-
Mumbai in 1875. trar of Co-operative Societies.
 Dalal Street is the place where the Bombay Stock  Supermarket run by the Kerala State Co-opera-
Exchange operates. tive Consumer Federation is Thriveni.
 National Stock Exchange (NSE) apwss_-bn-emWv.  There are 14 district Co-operative Banks in Kerala.
1948-þÂ cq]o-I-cn-¨p.  ‘CAMPCO’ was a Co-operative institution regis-
tered as a joint venture of Karnataka and Kerala
 SEBI Securities and Exchange Board of India was government.
set up in 1988. It was made a statutory body in
 The headquarters of ‘Coirfed’ is at Alappuzha.
1992.
 The headquarters of ‘MATSYAFED’ (Kerala State
 SEBI oversees the working of the Stock Exchange. Co-operative Federation for Fisheries Develop-
 Unit Trust of India, established in 1964, was the ment) is in Trivandrum.
first mutual fund in India.  Central Co-operative banks function at the district
 CRISIL - Credit Rating Investment Services of In- level.
dia Limited.  Nelkkathir Award is given to the best group farming
 CARE - Credit Analysis and Research Limited. society
 Blue Chip Share is a high valued share.  Karshakothama Award is given to the best farmer
 Bulls and Bears are terms associated with share in the state by Kerala Government -
market. Karshakashree is given to the best farmer by
 Bulls are the stock brokers who tries to raise the Malayala Manorama.
price of shares and make profit out of it.  Kera Kesari award is given to the best coconut
 Bears are the stock brokers who tries to dip the farmer in the state.
price of share and make profit out of it.  Granary of Kerala is Kuttanad, while the leading
 Harshad Mehta and Kethan Pareak were the stock producer of rice is Palakkad district.
brokers associated with stock scam in two differ-
ent time in India.
Rural Development
 Profit from shares is called dividend while profit  Pradana Mantri Grama Sadak Yojana (PMGSY)
from debentures is called interest. launched in December 2000, to provide
connectivity of roads to the unconnected
Co-operative Sector habitations in the rural areas.
 The state famous for ‘Dairy Co-operatives’ in  Antyodaya Anna Yojana (AAY) is launched by
India is Gujarat the government for the poorest of the poor.
 The only ‘Scheduled Bank’ in  Valmiki Ambedkar Awas Yojana (VAMBAY) is
the co-operative sector is announced by the Prime Minister of India on 15
Kerala State Co-operative Bank. August, 2001 to provide shelter or upgrade the
 Jawaharlal Nehru gave impor- existing shelter for people living below the
tance to co-operative move- poverty-line in urban slums in a march towards
ment in the Five year Plans of the goal of slumless cities with a healthy and
the country. enabling urban environment.
 IRDP - Integrated Rural Development Programme.
 The ‘Birthplace’ of land mort-
Nehru It was launched in 1978 and is a self-employment
gage banks is Germany.
scheme to improve economic and social condi-
 The report of All India Rural Credit Survey Com-
tions of the poor.
mittee is known as ‘Magnacarta’ of the Co-opera-
tive movement in India.  TRYSEM - Training of Rural Youth for Self-Employ-
ment. It was launched in August, 1979 to equip rural
 The name of retail stores started in 1997-98 by
youth with necessary skills for self - employment.
Goverment of Kerala under the direct supervision
of Kerala Co-operative consumer Federation is  DPAP - Drought Prone Area Programme was
Neethi. launched in 1973.
278

20. DISINVESTMENT
 Kh¬saâ v I¼-n-I-fpsS kÀ¡mÀ Hml-cn-IÄ Hml-cn-IÄ Sterlite Industries v hn¡m-mWv
kzImcy taJ-ebv¡v AsÃ-¦n aäv I¼-n-IÄ¡v Xocp-am-n-¨-Xv. BALCO sXmgn-emfn kwL-S--
ssIamäw sN¿p- ¶ - X m- W v Disinvestment. I-fpw, N¯o-kvKVv kÀ¡mcpw CXns J-in-
kÀ¡mÀ Hmlcn hnäv In«p¶ ]Ww aäv hnI- Im´w FXnÀ¯p. F¦nepw kp{]ow-tIm-SXn
k {]hÀ¯--§Ä¡v hnn-tbm-Kn-¡p-¶p. tI{µ-kÀ¡m-cnv Ap-Iq-e-ambn hn[n {]kvXm-
 Disinvestment -sIm­v kÀ¡m-cn-pÅ t«w hn¨ UnkvC³shâ vsaâns AwKo-I-cn-¨p.
H¶nÂIq-Sp-X-emWv. an¡-hmdpw disinvestment  Disinvest sNbvX Nne {][m I¼-n-IÄ.
S-¯p-¶Xv jvS-¯n-tem-Sp¶ I¼-n-I-fpsS Modern Foods Hml-cn-IÄ Hindustan Liver v
Hml-cnIfm-bn-cn-¡pw. CXp-hgn IqSp-XÂ jvSw hnäp. ITDC bpw VSNL sâ 25% Hml-cn-Ifpw
D­m- Ip-¶Xv Ah-km-n- ¸n¡mw. hnäv In«p¶ XpI Tata¡v ÂIn. IPCL Hml-cn-IÄ Reliancev
aäp hnI-k--{]-hÀ¯--§Ä¡v D]-tbm-Kn-¡mw. hnäp. IOC, ONGC, GAIL, NTPC, BSNL, The Na-
Cu I¼-n-IÄ kzIm-cy-ta-J-e¡v ssIam-dn-bm tional Aluminium Company (NALCO) F¶n-
AhÀ AXns em`- ¯ n {]hÀ¯n- ¸ n¨v
hbpw disinvestment sN¿m³ S-]Sn XpS-§n.
(kÀ¡mÀ S-¯p-t¼mÄ jvS-¯n-tem-Sp¶ I¼-
em`-¯n HmSp¶ Cu I¼-n-IÄ F´nv dis-
n-IÄ kzImcy taJebn em`¯nem-¡p-¶-
investment sN¿Ww? kÀ¡mcnsâ D¯cw IqSp-
Xnsâ clkyw n§Ä¡-dn-bp-atÃmþ kÀ¡m-À
X em`-¯nv F¶m-Wv. BtKm-f-h¡-cWw
I¼-n- am-t-Pvsaânsâ sISp-Im-cy-Ø-X, Agn-
krjvSn-¡p¶ ià-amb k½À±-§sf AXn-Po-
a-Xn, Ime-l-c-W-s¸« amt-Pvsaâ v coXn-IÄ...)
hn-¡m³ ZoÀL-ho-£-Whpw em`-Xm-ev]-cy-hp-
mSnsâ hnI-kw Xzcn-X-s¸-Sp-¯p-¶p.
apÅ kzImcy tImÀ¸-tdäv amt-Pp-saâp-IÄ¡v
 tImfn-f¡w krjvSn¨ kw`- h-am-WBALCO bpsS
v
am{Xta Ignbq F¶-XmWv kXyw. tkmjy-enÌv
Disinvestment Bharat Aluminium Company Ltd.
Nn´-bnÂn¶pw kÀ¡mcpw Iym¸n-ä-en-k-¯n-
O¯o-kvKVv kwØm--¯mWv. BALCO bpsS
tebv¡v o§p-I-bm-Wv.
 JRY - Jawahar Rozgar Yojana. It was launched in replaced IRDP, TRYSEM, DWCRA (Development
1989. It aims to guarantee employment to at least of Women and Children in Rural Areas), MWS
one person in a rural family below the poverty (Million Wells Scheme) GKY (Ganga Kalyan
line. Yojana), SITRA (Supply of Improved Tool Kits to
 NRY - Nehru Rozgar Yojana. It is the urban coun- Rural Artisans). It is the only self-employment
terpart of JRY both launched in 1989. programme currently being implemented. The
 NREP (National Rural Employment Programme) scheme is being implemented with the help of self
and RLEGP (Rural Landless Employment Guaran- help groups.
tee Programme) have been merged with JRY.  EAS - Employment Assurance Scheme was
 Jawahar Gram Samridhi Yojana (JGSY) is the new launched in 1993 to provide employment of atleast
name of Jawahar Rozgar Yojana (JRY). The new 100 days to the villagers.
scheme was launched on 1 April, 1999.
 JGSY - Jawahar Gram Samridhi Yojana (JGSY) was
 DWCRA - Development of Women and Children launched in 1999 and it replaced Jawahar Rozgar
in Rural Areas (1982).
Yojana (JRY).
 ICDS - Integrated Child Development Service
 IREP - Integrated Rural Energy Programme.  PMGY - Pradhan Mantri Gramodaya Yojana was
launched in 2000-01 in order to achieve an objec-
 BSY is the Balika Samridhi Yojana
tive of sustainable human development at village
 Swarnajayanthi Gram Swarozgar Yojana (SGSY)
level.
is the new scheme launched on 1 April, 1999 which
279

21.  SGRY - Sampoorna Grameen Rozgar Yojana  Nirmithi movement was started in Kerala in 1985.
(SGRY) was launched in September 2001 by merg-  Command Area Development Programme was
ing Jawahar Samridhi Yojana (JGSY) and Employ- (CADP) launched in 1974-75.
ment Assurance Scheme (EAS).  Which of the following is wrongly matched?
 PMRY - Pradhan Mantri Rozgar Yojana was (a) IRDP - 1978-79 (b) NREP - 1980
launched with the objective of making available (c) RLEGP - 1983 (d) DWCRA - 1982
self employment opportunities to the educated (e) All are correct
unemployed youth by assisting them to set up Answer: (e) All are correct
any economically viable activity.  BPL census - Below Poverty Line census- was
 Eco-mark is given to environmentally friendly held in Kerala in 1998. The aim of the census
products by the Bureau of Indian Standards (BIS), was to find out the families living under poverty
Agmark is given to agricultural products. in Kerala. Earlier this census was called IRDP
Rugmark is given to child labour free carpets. survey.
 CAPART - Council for Advancement of Peoples'  The annual income limit of poverty line was
Action and Rural Technology. refixed to Rs. 20,000 from Rs. 11,000 per year.
 To promote voluntary action in rural development  The State Institute of Rural Development is at
CAPART was launched in 1986. Kottarakkara.
 MSY - Mahila Samridhi Yojana. It is a savings  The National Institute of Rural Development is
scheme for rural women. in Hyderabad.
 AVARD - Association of Voluntary Agencies for  Name the scheme launched by the government
Rural Development. to develop saving tendency among rural women.
 CRISP - Computerised Rural Information System (a) National Saving Scheme
Programme. It was started in 1985. (b) Indira Vikas Pathra
 NSAP - National Social Assistance Programme, (c) Mahila Samrithi Yojana (MSY)
announced on August 15, 1995. (d) Post Office Saving Scheme
 Midday meal programme was launched by the Answer: (c) Mahila Samrithi Yojana (MSY)
Prime Minister on August 15, 1995.  The number of developmental blocks in Kerala
 ISO-International Organisation for (a) 150 (b) 151 (c) 152 (d) 153
Standardisation. Cochin Shipyard has recently Answer: (c) 152
been given ISO certificate.  Chairman of DRDA is
 SSI - Small Scale Industry. An industrial unit with (a) District Panchayat President
a capital investment of not more than Rs. 1 crore (b) Block Development Officer
is treated as a small scale industry. (c) District Collector
 Community Development Programme (CDP) was (d) Manager District Co-operative Bank
launched in the year Answer: (a) District Panchayat President
(a) 1953 (b) 1952 (c) 1975 (d) 1965  Local Administration Department and Rural
Answer: (b) 1952 Development have been amalgamated to form
 National Extension service was launched in 1953. Local Self Government Department.
 Twenty Point Programme was launched in 1975  Kerala Institute of Local Administration (KILA)
 The National Co-operative Consumer ’s is located at
Federation of India Limited was registered in (a) Mulamkunnathu kavu (Thrissur)
1965. (b) Kottarakkara(c) Kottayam
 CRSP was launched in (d) Kannur
(a) 1986 (b) 1985 (c) 1973 (d) 1978 Answer: (a) Mulamkunnathu kavu (Thrissur)
Answer: (d) 1978  The poverty alleviation programme launched by
 CRSP is Centrally sponsored Rural Sanitation Kerala government with the help of NABARD
Programme and Panchayat Raj Institutions in the state is
280