1.

Consider the following:

1. Overseas Direct Investments

2. Reserve assets

3. India''s portfolio investments

Which of the above are part of ''Overseas financial assets of Indian Residents'' ?

(a) 1 and 3 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Note:

https://www.livemint.com/economy/overseas-financial-assets-of-indian-residents-fell-by-43-9-bn-in-q1-rbi-11672403910981.html

1. Overseas Direct Investment (ODI) is what Indian residents are investing abroad.

This is opposite of FDI. So, this is basically in shares and hence its asset for us but

liability on foreign residents.

2. Reserve Assets means the Foreign currencies that RBI is  holding. Again this is

also an asset for us but liability for other countries

3. Our Portfolio Investments abroad means Indian residents investing in shares and

bonds abroad. This is opposite of FPI. If we have purchased bonds and shares of abroad

companies then its asset for us.

D

2.

Consider the following statements w.r.t. India’s stand on Isreal-Palestine issue:

1. India has always stood for a two-state solution.

2. India is in sync with the Arab world in its normalisation with Israel.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://www.thehindu.com/opinion/lead/the-israel-palestine-conflict-is-at-bend-point/article67477378.ece

B

Blue Pansy named official butterfly of

(a) Jammu and Kashmir

(b) Arunachal Pradesh

(c) Tamilnadu

(d) Kerala

Note:

https://risingkashmir.com/jk-govt-choses-blue-pansy-as-state-butterfly 

C

4.

Consider the following statements regarding ‘Non-Fungible Tokens (NFTs)’:

1. They are unique cryptographic tokens that exist on a blockchain.

2. They can be traded or exchanged at equivalency and therefore can be used as a medium of

    commercial transactions.

3. They cannot be used to represent real world items like digital artwork, music etc.

Select the correct answer using the code given below:

(a) 1 only

(b) 1 & 2 only

(c) 2 & 3 only

(d) 1 & 3 only

Note:

Non-Fungible Tokens (NFTs)

• NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated.
• They can represent digital or real-world items like artwork, photograph, song, video, real estate, individuals' identities, property rights, and more.
• Thus, NFTs are assets that have been tokenized via a blockchain. They are assigned unique identification codes and metadata that distinguish them from other tokens.
• The term ‘non-fungible’ simply means that each token is different as opposed to a fungible currency such as money (a ten-rupee note can be exchanged for another and so on).
• NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs—it all depends on the value the market and owners have placed on them.
• NFT transactions are recorded on blockchains, which is a digital public ledger, with most NFTs being a part of the Ethereum blockchain.
• NFTs became popular in 2021, when they were beginning to be seen by artists as a convenient way to monetise their work.

Blockchain Technology

• A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
• Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.
• Decentralized blockchains are immutable, which means that the data entered is irreversible.
• This means if one block in one chain was changed, it would be immediately apparent it had been tampered with.

A

5.

Why are India-Russia trade payments in crisis in recent times?

(a) There are reservations on rupee-rouble convertibility as the Rouble’s value is propped up by capital controls and not determined by the market.

(b) Staggering amounts of Indian rupees in Russian banks that cannot be used by Russia in its war efforts.

(c) Both (a) and (b) are the reasons

(d) Neither (a) nor (b) is the reason

Note:

https://www.thehindubusinessline.com/opinion/indias-oil-payment-woes-with-russia/article67002736.ece

C

6.

Full Capital Account Convertibility

1. may lead to downfall of domestic companies

2. will lead increased phenomenon of HOT money.

3. will increase Fiscal deficit

4. Cost of capital will Decrease

(a) 1, 2 and 4

(b) 1, 2 and 3

(c) 2 and 4

(d) 1, 3 and 4

Note:-

Ø Fiscal deficit will reduce as cost of government borrowing will reduce in light of reduced interest rates.

Ø There is a huge possibility of misallocation of capital inflows which means such capital inflows may fund low-quality domestic investments instead of investing in building up industries which leads to more capacity creation and utilization, and increased level of employment. This can also reduce the potential of country to increase exports and will thus create external imbalances. This can also lead to the export of domestic savings which one would have invested in domestic market otherwise but will now think of investing in foreign markets to reduce the risk.

Ø Entry of foreign banks would result in increased competitiveness in terms of accessing the loan proposals as the foreign banks will shy away from giving loans to farmers and the small scale industrialists as they find them less credit worthy and Indian Banks will also follow the same route to be competitive.

International finance capital is highly volatile as the investor move from country to country in search for higher returns for their investments. This process has led to crisis in numerous developing countries. Such finance capital is referred to as "Hot Money ". FCAC exposes an economy to the risk of volatility on account on "Hot Money" flows in and out of the country.

A

7.

With reference to the Ghaggar River, consider the following statements:  

1. In pre-Harappan times the Ghaggar was a tributary of the Sutlej.

2. It originates in the Shivalik Hills.

3. It eventually dries up in the Thar Desert.

How many statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Note:

https://www.downtoearth.org.in/news/natural-disasters/a-dead-ghaggar-and-its-tributaries-wrought-havoc-in-haryana-early-july-here-is-how-90671#:~:text=The%20floodplain%20of%20the%20Ghaggar,the%20Ghaggar%20and%20its%20tributaries.

Ghaggar-Hakra River

It is an intermittent river in India and Pakistan that flows only during the monsoon season. The river is known as Ghaggar before the Ottu barrage and as Hakra downstream of the barrage in the Thar Desert. In pre-Harappan times the Ghaggar was a tributary of the Sutlej.

It originates in the village of Dagshai in the Shivalik Hillsof Himachal Pradesh and flows through Punjab and Haryana states into Rajasthan.

Tributaries: The main tributaries of the Ghaggar are the Kaushalya River, Markanda, Sarsuti, Tangri and Chautang.

The river, including its tributaries Tangri, Markanda, and others, were previously considered dead and heavily encroached upon. However, due to heavy monsoon rains in the Shivalik hills, the rivers flooded their catchment areas and breached their banks, resulting in significant losses.

Additionally, unscientific and illegal mining has harmed the natural balance of rivers like the Ghaggar and Yamuna.

c

8.

1. Ubinas - China

2. Moquegua - Brazil

3. Lima – Peru

How many of these pair(s) is/are correctly paired?

(a) Only one

(b) Only two

(c) All three

(d) None

Note:

https://newsonair.gov.in/News?title=Peru-declares-state-of-emergency-for-60-days-in-areas-around-Ubinas-volcano&id=463767#:~:text=Peru%20declared%20a%20state%20of,gas%20since%20earlier%20this%20week.

A

9.

Which of the following policies help to raise interest rate unambiguously and thereby lead to appreciation of currency?

(a) Expansionary fiscal and monetary policy

(b) Contractionary fiscal and monetary policy

(c) Contractionary fiscal policy and expansionary monetary policy

(d) Contractionary monetary policy and expansionary fiscal policy

Note:

Monetary policy refers to the actions undertaken by a nation’s central bank to control the money supply. Control of money supply helps to manage inflation or deflation. In India, the Reserve Bank of India (RBI) is in charge of the Monetary Policy. The monetary policy can be expansionary or contractionary.

Expansionary Monetary Policy

An expansionary monetary policy is focused on expanding (increasing) the money supply in an economy. This is also known as Easy Monetary Policy.

An expansionary monetary policy is implemented by lowering key interest rates thus increasing market liquidity (money supply). High market liquidity usually encourages more economic activity.

When RBI adopt Expansionary Monetary Policy, the central bank

·         decrease Policy Rates (Interest Rates) like Repo, Reverse Repo, MSF, Bank Rate etc.

·         decrease Reserve Ratios like Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)

·         buys government securities from the market as part of Open Market Operations (OMO) – providing liquidity in the market

Concepts associated with an expansionary monetary policy

·         Increase in Bond prices: Expansionary monetary policy results in a reduction in the bank interest rates. When the rate of interest provided by banks keeps falling, bonds which provide a fixed interest rate for a longer duration will become more attractive. This may drive up the demand for bonds and thus may result in an increase in bond prices.

·         Increase in Foreign bond prices: Even though the demands for bonds as such may increase, the lower interest rates may make domestic bonds less attractive. So the demand for domestic bonds may fall and the demand for foreign bonds may rise.

·         A decrease in the exchange rate:  Lower interest rates tend to be unattractive for foreign investment. This may decrease the currency’s relative value. Reduction in interest rate may result in less foreign investment and thus less foreign currency. As the demand for domestic currency falls and the demand for the foreign currency rises, a decrease in the exchange rate may happen.

·         Increase in exports and BoP: A lower exchange rate may cause exports to increase, imports to decrease and the balance of trade to increase.

·         Higher Capital Investment: Lower interest rates lead to higher levels of capital investment.

Contractionary Monetary Policy

A contractionary monetary policy is focused on contracting (decreasing) the money supply in an economy. This is also known as Tight Monetary Policy.

A contractionary monetary policy is implemented by increasing key interest rates thus reducing market liquidity (money supply). Low market liquidity usually negatively affect production and consumption. This may also have a negative effect on economic growth.

When RBI adopt a contractionary monetary policy, the central bank

·         increase Policy Rates (Interest Rates) like Repo, Reverse Repo, MSF, Bank Rate etc.

·         increase Reserve Ratios like Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)

·         sells government securities from the market as part of Open Market Operations (OMO) – taking out liquidity from the market

Concepts associated with a contractionary monetary policy

·         A decrease in Bond prices: Contractionary monetary policy results in an increase in bank interest rates. When the rate of interest provided by banks keeps increasing, bonds which provide an interest rate fixed earlier may become less attractive. This may result in a fall in the demand for bonds and thus may result in a decrease in bond prices.

·         A decrease in Foreign bond prices: Even though the demands for bonds as such may fall, the higher interest rates offered in India may make foreign bonds less attractive. So the demand for foreign bonds may fall and the demand for domestic bonds may rise.

·         An increase in the exchange rate:  Higher interest rates tend to be attractive for foreign investment. This may increase the currency’s relative value. Increase in interest rate may result in more foreign investment and thus more foreign currency. As the demand for domestic currency increases and the demand for foreign currency falls, an increase in the exchange rate may happen.

·         A decrease in exports and BoP: A higher exchange rate may cause exports to decrease, imports to increase and the balance of trade to fall.

·         Lower Capital Investment: Higher interest rates may lead to lower levels of capital investment.

Expansionary Fiscal Policy and its impact on ''Interest Rate'' in the economy

In case of expansionary fiscal policy, Govt. increases the expenditure or reduces the tax which increases money with the people (individuals, businesses) which results in increase in demand in the economy resulting in increase in inflation and interest rate.

The other way to look at is in case of expansionary fiscal policy, generally govt.''s expenditure increases while receipts decreases which results in deficit leading to more borrowing by Govt. and hence increase in interest rate in the economy.

If money with the banks and financial institutions increases then it results in decrease in interest rate in the economy. This is because banks and financial institutions are suppliers of money and if they have more money then its price will come down i.e. interest rate comes down. BUT if more money is put into the hands of people and businessmen then it will result in increase in demand in economy leading to inflation and increase in interest rate.

(Nominal) Interest Rate = Inflation + Real interest rate

So, if inflation goes up, generally (nominal) interest rate goes up.

D  

10.

1. The Cabinet Committee on Economic Affairs chaired by the Prime Minister of India takes the final decision on the level of MSPs.

2. Government announces minimum support prices (MSPs) for 24 mandated crops.

Which of the statements given above is/are correct w.r.t. Minimum Support Price (MSP)?.

(a) 1 Only

(b) 2 Only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://vikaspedia.in/agriculture/market-information/minimum-support-price

https://pib.gov.in/PressReleasePage.aspx?PRID=1930443

A    

11.

Consider the following statements w.r.t. National Tribal Pride Day:

1. It is observed on August 9 every year.

2. It is celebrated to honour Bhagwan Birsa Munda.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://www.business-standard.com/social-viral/world-tribal-day-know-history-theme-importance-of-indigenous-people-123080900238_1.html

https://zeenews.india.com/india/who-is-birsa-munda-know-all-about-this-legendary-freedom-fighter-2619527.html#:~:text=He%20rallied%20the%20tribes%20against,belonged%20to%20the%20Munda%20tribe.

B

12.

1. Majorana zero modes cannot work as qubits.

2. An electron and hole constitute Majorana zero mode.

Which of the statements given above is/are correct w.r.t. Majorana zero mode?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://www.thehindu.com/sci-tech/science/microsoft-topological-quantum-computer-majorana-zero-modes/article67053462.ece

B  

13.

Consider the following statements regarding Price Stabilization Fund (PSF):

1. It is under Ministry of Agriculture.

2. It came into existence in the fiscal year 2014-15.

3. It provides interest-free loans to State Governments / Union Territories and Central Agencies.

(a) 1 and 3 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Note:

https://www.thehindu.com/news/national/centre-releases-more-stocks-under-open-market-sale-to-curb-foodgrains-price-rise/article67177392.ece

The PSF came into existence in the fiscal year 2014-15. Its primary purpose is to absorb and mitigate extreme price fluctuations in essential food commodities and selected goods. This measure helps shield consumers from sudden price surges and provides support to farmers by ensuring a fair price for their produce.

Procurement Process

·         Under the PSF scheme, the procurement of goods takes place directly from farmers or farmers’ organizations at the farm gate or mandis (marketplaces). By procuring goods directly from the primary producers, the PSF reduces intermediary costs and ensures that the benefits reach the farmers more effectively.

Role of the Price Stabilisation Fund Management Committee (PSFMC)

·         The PSF is centrally managed by the Price Stabilisation Fund Management Committee (PSFMC). This committee plays a vital role in overseeing the implementation of the fund. It reviews and approves proposals from State Governments and Central Agencies related to the procurement and distribution of commodities.

Interest-Free Loans

·         The PSF scheme provides interest-free loans to State Governments/Union Territories (UTs) and Central Agencies. These loans are aimed at financing their working capital and other expenses incurred during the procurement and distribution of commodities. This financial support enables them to stabilize prices and ensure that essential goods are available to consumers at affordable rates.

Transfer to the Ministry of Consumer Affairs, Food & Public Distribution

·         On 1st April 2016, the PSF scheme was transferred from the Ministry of Agriculture & Farmers’ Welfare to the Ministry of Consumer Affairs, Food & Public Distribution. This move aimed to streamline the operations and enhance the effectiveness of the fund in stabilizing commodity prices.

Procurement of Tomatoes under the PSF

·         Recently, the government initiated the procurement of tomatoes under the PSF scheme to counter the current increase in prices. The National Cooperative Consumers Federation (NCCF) and National Agricultural Cooperative Marketing Federation (NAFED) are actively involved in procuring tomatoes from mandis in Andhra Pradesh, Karnataka, and Maharashtra. These tomatoes are then made available at highly subsidized rates to consumers in major consuming centers across Delhi-NCR, Bihar, Rajasthan, and other regions.

C

14.

Which of the following necessary steps would be taken by govt to minimize the impact of inflation and supply shortage on the vulnerable section of society?

1. Free foodgrain scheme

2. Reduction of import duties & cess on pulses

3. Increase in export tax levies by various country

4. Declaring ‘Soya Meal’ as an Essential Commodity.

(a) 1, 2 and 3 only

(b) 2, 3 and 4 only

(c) 1, 2 and 4 only

(d) 1, 2, 3 and 4

Note:

Food inflation based on Consumer Food Price Index (CFPI) climbed to 7.0 per cent in FY23 from 3.8 per cent in FY22. Though the increase in food inflation is broad-based, the major contributors are vegetables, cereals, milk and spices.

Since September 2022, double-digit inflation was observed in cereals. To check the soaring prices of wheat and rice, the government has prohibited the export of wheat products and imposed an export duty on rice.

To insulate vulnerable sections from the rise in prices, the Government has launched a new integrated food security scheme, ‘Pradhan Mantri Garib Kalyan Ann Yojana’ on 1 January 2023, to provide free foodgrains to more than 80 crore beneficiaries.  

Inflation in pulses remained muted owing to higher production and measures taken by the government in terms of maintaining a buffer stock and reduction of import duties and cess on pulses.

International prices of edible oils surged in FY22 owing to a shortfall in global production and an increase in export tax levies by various countries, it has increased the prices, not decreased.  

 Cereals: Wheat flour exports were prohibited but were subjected to restrictions, imposed an export duty of 20 per cent on rice, brown rice, and semi-milled as well as wholly milled rice, except parboiled rice.

Pulses: A buffer stock of pulses has been maintained for price stabilisation, the import duty and Agriculture Infrastructure and Development Cess (AIDC) on masur was brought down to zero per cent.

Central Government has notified an order under the Essential Commodities Act to declare ‘Soya Meal’ as an Essential Commodity up to 30 June 2022, by amending the Schedule of the Essential Commodities Act, 1955.  

https://www.businesstoday.in/latest/economy/story/centre-to-extend-free-ration-scheme-for-80-crore-for-next-five-years-pm-modi-404558-2023-11-04

C

15.

Consider the following statements w.r.t. Global Multidimensional Poverty Index (MPI):

1. It is released by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative at the University of Oxford.

2. It is calculated by multiplying the incidence of poverty and the average intensity of poverty.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://www.thehindu.com/news/international/india-registers-remarkable-reduction-in-poverty-with-415-million-people-coming-out-of-it-in-15-years-united-nations/article67066698.ece

https://www.thehindu.com/news/national/415-crore-indians-exited-multi-dimensional-poverty-since-2005-06/article66023269.ece

C

16.

Consider the following statements w.r.t. Nawab Wajid Ali Shah:

1. He was the last king of Awadh.

2. He popularized Kathak as a court dance.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://indianexpress.com/article/explained/explained-history/wajid-ali-shah-after-1857-calcutta-garden-reach-8867194/

• An exhibition, heritage walk, and talk will be held in Kolkata to commemorate the bicentenary year of Nawab Wajid Ali Shah, the last king of Awadh.

Nawab Wajid Ali Shah

• Mirza Wajid Ali Shah (30 July 1822 – 1 September 1887) was the eleventh and final King of Awadh, reigning from 13 February 1847 to 11 February 1856.
• He is remembered as a poet, playwright, dancer, and patron of the arts who made significant contributions during his rule.

Reign and fall

• Ascension to the Throne: Wajid Ali Shah became the King of Awadh in February 1847, assuming the position during a period of decline for the kingdom.
• British Annexation: The British East India Company annexed Awadh on 11 February 1856, just two days before the ninth anniversary of Wajid Ali Shah’s coronation. He was subsequently exiled to Garden Reach in Metiabruz, near Kolkata, living on a pension.

Patron of the Arts

• Contributions to Music: Wajid Ali Shah was a generous patron of music and a talented composer. He nurtured the Lucknow Gharana of Kathak dance and enriched the light classical form of thumri. He composed ghazals and introduced new ragas, leaving a lasting impact on Hindustani music.
• Kathak Dance: Wajid Ali Shah’s patronage elevated Kathak dance in Lucknow. He emphasized artistic expression, incorporating drama, emotion, and literature. The king popularized Kathak as a court dance and made it accessible to the common people.
• Hindustani Theatre: The king established the Jogia Jashan, a grand pageant, and staged Rahas (dance-dramas) filled with poetry, lyrical compositions, and Kathak performances. His contributions laid the foundation for the development of Hindustani theatre.

Literary Pursuits

• Prose and Poetry: Wajid Ali Shah was a prolific writer in both Persian and Urdu. His works covered various subjects, including history, literature, and personal reflections. Notable works include “Huzn-i-Akhtar,” an autobiographical piece, and “Bani,” a treatise on music and dance.
• Patronage of Writers: The king patronized numerous poets and writers in his court, including Mirza Ghalib. He granted pensions to renowned literary figures and encouraged the production of works that reflected the culture and life of the era.

Exile Years and Legacy (1856-1887)

• Exile in Metiabruz: After losing his kingdom, Wajid Ali Shah settled in Metiabruz near Kolkata. He created a miniature version of Lucknow and maintained his lavish lifestyle. Matiya Burj, a magnificent complex, served as a reminder of his beloved city.
• Enduring Impact: Wajid Ali Shah’s compositions, including his famous thumri “Babul Mora Naihar Chhooto Jaay,” remain influential and have been performed by various artists. His contributions to music, dance, literature, and theatre continue to shape the cultural landscape, preserving his legacy.

Conclusion

• Mirza Wajid Ali Shah, the last King of Awadh, reigned from 1847 to 1856 before being exiled.
• His patronage of the arts, including music, dance, theatre, and literature, left an indelible mark on the cultural heritage of Awadh.
• Despite the challenges he faced and the loss of his kingdom, Wajid Ali Shah’s artistic endeavors and enduring legacy continue to inspire and enrich the region’s cultural identity.

C

17.

The term ‘Dark Pattern’ seen in the news is related to

(a) Online Advertising

(b) Nebulae

(c) Dark Matter

(d) Wireless Electricty

Note:

https://www.thehindu.com/news/national/explained-understanding-dark-patterns/article67050817.ece

A

18.

Consider the following w.r.t. AT1 Bonds.

1. They are secured.

2. They were introduced by the Basel accord.

3. They have loss absorbing features.

Which of the above are true?

(a) 1 and 3 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Note:

https://indianexpress.com/article/business/banking-and-finance/indian-banks-dependence-on-at1-bonds-limited-8509445/

https://www.weforum.org/agenda/2023/03/at1-bonds-banking-financial/

§  AT-1 bonds are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.

§  There are two routes through which these bonds can be acquired:

o    Initial private placement offers of AT-1 bonds by banks seeking to raise money.

o    Secondary market buys of already-traded AT-1 bonds.

§  AT-1 bonds are like any other bonds issued by banks and companies, but pay a slightly higher rate of interest compared to other bonds.

§  These bonds are also listed and traded on the exchanges. So, if an AT-1 bondholder needs money, he can sell it in the secondary market.

§  Investors cannot return these bonds to the issuing bank and get the money. i.e there is no put option available to its holders.

§  However, the issuing banks have the option to recall AT-1 bonds issued by them (termed call options that allow banks to redeem them after 5 or 10 years).

§  Banks issuing AT-1 bonds can skip interest payouts for a particular year or even reduce the bonds’ face value.

§  AT-1 bonds are regulated by RBI. If the RBI feels that a bank needs a rescue, it can simply ask the bank to write off its outstanding AT-1 bonds without consulting its investors.

Basel-III Norms

§  It is an international regulatory accord that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector, post 2008 financial crisis.

§  Under the Basel-III norms, banks were asked to maintain a certain minimum level of capital and not lend all the money they receive from deposits.

§  According to Basel-III norms banks'' regulatory capital is divided into Tier 1 and Tier 2, while Tier 1 is subdivided into Common Equity Tier-1 (CET-1) and Additional Tier-1 (AT-1) capital.

§  Common Equity Tier 1 capital includes equity instruments where returns are linked to the banks’ performance and therefore the performance of the share price. They have no maturity.

§  Additional Tier-1 capital are perpetual bonds which carry a fixed coupon payable annually from past or present profits of the bank.

§  They have no maturity, and their dividends can be cancelled at any time.

§  Together, CET and AT-1 are called Common Equity. Under Basel III norms, minimum requirement for Common Equity Capital has been defined.

§  Tier 2 capital consists of unsecured subordinated debt with an original maturity of at least five years.

§  According to the Basel norms, if minimum Tier-1 capital falls below 6%, it allows for a write-off of these bonds.

RBI’s Regulations Over Banks

§  In a situation where a bank faces severe losses leading to erosion of regulatory capital, the RBI can decide if the bank has reached a situation wherein it is no longer viable.

§  The RBI can then activate a Point of Non-Viability Trigger (PONV) and assume executive powers of the bank.

§  By doing so, the RBI can do whatever is required to get the bank on track, including superseding the existing management, forcing the bank to raise additional capital and so on.

§  However, activating PONV is followed by a write down of the AT-1 bonds, as determined by the RBI through the Banking Regulation Act, 1949.

C  

19.

Which of the following are Non-Tax Revenue Receipts of Govt. of India?

1. Spectrum Auction

2. Revenues of IRCTC

3. Examination Fee of UPSC

(a) 1 only

(b) 1 & 3 only

(c) 3 only

(d) 1, 2 & 3

Note:

Spectrum auction is a revenue receipt as the spectrum which is asset of Govt. of India is not completely sold out during the auctions rather it is given on lease for 20/30 years of time period.  

Revenues of IRCTC are receipts of IRCTC and not of Govt. of India. IRCTC is a PSU and once it gives dividend to Govt. of India then it will be counted in non-tax revenue receipts.

Non-Tax Revenue

Non-Tax Revenue is the recurring income that is earned from sources other than taxes by the government. They are the revenue receipts that are not generated by taxing the public. Some of the major sources of non-tax revenue are mentioned below:

1.  Interests that are received by the government through the loans provided by it to the state governments, UTs, private enterprises, and the general public are an important source of non-tax revenue.
2. Power Supply Fees: This includes fees received by the central power authority of any nation. In the case of India, this includes fees received by the Central Electricity Authority.
3. Fees: They are the charges that cover the cost of recurring services that are provided and imposed by the government. It is a compulsory contribution like a tax.
4. License Fee: It is a form of tax charged by the government and it’s allied entities for conducting an activity that can be anything such as opening a restaurant or operating a heavy vehicle.
5. Fines and Penalties: Fines are mostly used in the context of criminal law wherein a court of law will punish a person convicted of a crime by imposing a fine. Penalty, meanwhile, is used in both civil as well as criminal law. It includes both monetary and physical forms of punishment.
6. Escheats: Escheats is the transfer of estate assets or property to the government if an individual passes away without leaving a legally biding bill or legal heirs
7. Several grants are received by the government from the various International Organisations and foreign governments. Such grants are not a fixed source of revenue and are generally received during a national crisis such as war, flood, etc.
8. Forfeitures: Forfeiture is the loss of any property without compensation as a result of defaulting on the obligations of a contract or a penalty for illegal conduct. Under the terms of a contract, forfeiture refers to the requirement by the defaulting party to give up ownership of an asset or cash flows from an asset, as compensation for the resulting losses to the other party.
9. Interests: It comprises of interests of loans and insurance given to the government for non-plan schemes and planned schemes and also interest on loans that have been advanced to Public Sector Enterprises or other statutory bodies.
10. Fees for Communication Services: This mainly includes the license fees from telecom operators on account of spectrum usage charges that licensed Telecom Service Providers to pay to the government ministry that handles telecommunications.

B

20.

Jabal Nablus hills is a part of

(a) Palestine

(b) Israel

(c) Ukraine

(d) Russia

Note:

Jenin is a Palestinian city in the West Bank. It is situated at the foot of the Jabal Nablus hills of the West Bank and along the southern edge of the Jezreel Valley. Throughout history, it was referred to as “Ein Ganim”, “Beth Hagan”, “Ginah”, and “Ginae”.

A

21.

1. The High seas are areas of oceans that lie beyond a country’s Exclusive Economic Zone.

2. High seas comprise more than 60 percent of the world’s oceans and nearly half the planet’s surface.

Which of the statements given above is/are correct w.r.t. High seas?.

(a) 1 Only

(b) 2 Only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

https://www.thehindu.com/sci-tech/energy-and-environment/explained-what-are-the-provisions-of-the-high-seas-treaty/article67050845.ece

C

22.

The Finance Ministry decides the interest rate (quarterly) on Small Savings Schemes (like PPF etc.) based on a formula linked with

(a) Yield on G-secs

(b) Repo rate

(c) CPI & WPI

(d) All the above

Note:

https://economictimes.indiatimes.com/news/economy/finance/govt-hikes-interest-rate-on-small-savings-schemes-for-q3-of-fy23/articleshow/94537436.cms#:~:text=The%20interest%20rates%20of%20the,Bank%20of%20India%20(RBI).

A

23.

Consider the following statements regarding GIFT-SEZ (an International Financial Services Centre):

1. It provides financial services to both residents and non-residents but only in foreign currency

2. GIFT-SEZ units are treated as non-resident in India

3. Overseas Direct Investment (ODI) rules will be applicable on Indian entities investing in GIFT-SEZ

(a) 1 and 3 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Note:

https://www.livemint.com/opinion/online-views/ifsc-gift-city-unlocking-potential-for-financial-services-11638782203187.html

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1921755

D

24.

Consider the following statements w.r.t. Central Consumer Protection Authority:

1. It is a statutory body.

2. It works under the administrative control of the Ministry of Commerce.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Note:

Central Consumer Protection Authority (CCPA):

• CCPA is a regulatory body established in 2020 based on the provisions of the Consumer Protection Act, 2019.
• CCPA works under the administrative control of the Ministry of Consumer Affairs.

Composition:

• It will have a Chief Commissioner as head, and only two other commissioners as members — one of whom will deal with matters relating to goods while the other will look into cases relating to services.
• The CCPA will have an Investigation Wing that will be headed by a Director General.
• District Collectors too, will have the power to investigate complaints of violations of consumer rights, unfair trade practices, and false or misleading advertisements.

Powers and Functions:

• Inquire or investigate into matters relating to violations of consumer rights or unfair trade practices suo moto, or on a complaint received, or on a direction from the central government.
• Recall goods or withdrawal of services that are “dangerous, hazardous, or unsafe.
• Pass an order for refund the prices of goods or services so recalled to purchasers of such goods or services; discontinuation of practices which are unfair and prejudicial to consumer’s interest”.
• Impose a penalty up to Rs 10 lakh, with imprisonment up to two years, on the manufacturer or endorser of false and misleading advertisements. The penalty may go up to Rs 50 lakh, with imprisonment up to five years, for every subsequent offence committed by the same manufacturer or endorser.
• Ban the endorser of a false or misleading advertisement from making endorsement of any products or services in the future, for a period that may extend to one year. The ban may extend up to three years in every subsequent violation of the Act.
• File complaints of violation of consumer rights or unfair trade practices before the District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission, and the National Consumer Disputes Redressal Commission.

Consumer Protection Act 2019

Definition of consumer:

• A consumer is defined as a person who buys any good or avails a service for a consideration.
• It does not include a person who obtains a good for resale or a good or service for commercial purpose.
• It covers transactions through all modes including offline, and online through electronic means, teleshopping, multi-level marketing or direct selling.

The Act defines “misleading advertisement” in relation to any product or service, as “an advertisement, which—(i) falsely describes such product or service; or (ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals important information”.

Rights of consumers: Six consumer rights have been defined in the Act, including the right to: right to safety, right to be Informed, right to choose, right to be heard, right to seek redressal and right to consumer education.

About Consumer Disputes Redressal Commission: Consumer Disputes Redressal Commissions (CDRCs) will be set up at the district, state, and national levels. A consumer can file a complaint with CDRCs in relation to:

• unfair or restrictive trade practices;
• defective goods or services;
• overcharging or deceptive charging; and
• the offering of goods or services for sale which may be hazardous to life and safety.

Complaints against an unfair contract can be filed with only the State and National Appeals from a District CDRC will be heard by the State CDRC. Appeals from the State CDRC will be heard by the National CDRC. Final appeal will lie before the Supreme Court.

Jurisdiction of CDRCs: The District CDRC will entertain complaints where value of goods and services does not exceed Rs one crore. The State CDRC will entertain complaints when the value is more than Rs one crore but does not exceed Rs 10 crore. Complaints with value of goods and services over Rs 10 crore will be entertained by the National CDRC.

• The New Act also introduces the concept of product liability and brings within its scope, the product manufacturer, product service provider and product seller, for any claim for compensation.
• The Act provides for punishment by a competent court for manufacture or sale of adulterant/spurious goods.
• The court may, in case of first conviction, suspend any license issued to the person for a period of up to two years, and in case of second or subsequent conviction, cancel the license.

Increased compensation:

• The CCPA may impose a penalty on a manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years for a false or misleading advertisement.
• In case of a subsequent offence, the fine may extend to Rs 50 lakh and imprisonment of up to five years.

Mediation:

• The act provides for reference to mediation by Consumer Commissions wherever scope for early settlement exists and parties agree for it.
• Mediation Cells to be attached to Consumer Commissions. Mediation to be held in consumer mediation cells.
• Panel of mediators to be selected by a selection committee consisting of the President and a member of Consumer Commission.

The e-commerce portals will have to set up a robust consumer redressal mechanism as part of the rules under the Consumer Protection Act, 2019.

• They will also have to mention the country of origin which are necessary for enabling the consumer to make an informed decision at the pre-purchase stage on its platform.
• The e-commerce platforms also have to acknowledge the receipt of any consumer complaint within forty-eight hours and redress the complaint within one month from the date of receipt under this Act.

https://indianexpress.com/article/india/consumer-body-issues-notices-to-ias-coaching-centres-for-misleading-ads-8996723/

A

25.

Atlantic menhaden in news is a/an

(a) Amphibian

(b) Sea Cucumber

(c) Seaweed

(d) Fish

Note:

https://indianexpress.com/article/explained/explained-sci-tech/how-a-tiny-fish-that-fuels-an-atlantic-ecosystem-is-at-the-centre-of-industry-debates-8831352/

D