UPSC Essentials | Daily subject-wise quiz : Economy MCQs on import of crude oil, wilful defaulter and more (Week 90)

1. The wage growth of 13 per cent in nominal terms in the unincorporated sector was higher than (-)1.1 per cent recorded during 2022-23.

2. The number of workers in the unincorporated sector was recorded 10 per cent higher than the previous year.

3. The number of establishments in the other services sector recorded a 13 per cent increase in the manufacturing sector.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Explanation

— In 2023-24 (October-September), the unincorporated non-agricultural sector added around 84 lakh establishments and 1.1 crore jobs, according to the results of the Annual Survey of Unincorporated Sector Enterprises (ASUSE).

— The unincorporated non-agricultural sector, which includes non-corporate entities, had a 13% increase in nominal wages for workers in 2023-24, in contrast to the corporate sector’s slower wage growth.

— Wage growth of 13% in nominal terms in the unincorporated sector was higher than the (-)1.1% observed in 2022-23. The real rate of wage increase, adjusted for inflation, would be less than 13%, given that retail inflation averaged 4.9 percent between October 2023 and September 2024. Hence, statement 1 is correct.

— The number of workers in the unincorporated sector was registered at 12.06 crore in 2023-24, a 10% increase over the previous year, with other services experiencing the fastest development. The number of enterprises in other services increased by 23.6%, followed by a 13% increase in manufacturing. Hence, statements 2 and 3 are correct.

— According to the ASUSE, gross value added (GVA) growth in the country’s unorganised firms increased by 16.5% in 2023-24, compared to 16.1% the previous year.

Therefore, option (c) is the correct answer.

QUESTION 2

Consider the following statements:

Statement 1: The Securities and Exchange on Board of India (SEBI) has suspended trading in Bharat Global Developers Ltd (BGDL), a BSE-listed company.

Statement 2: Its stock prices decreased by over 10,000% between November 2023 and November 2024 due to false disclosures made by the company to exchanges.

Which one of the following is correct in respect of the above statements?

(a) Both Statement 1 and Statement 2 are correct and Statement 2 is the correct explanation for Statement 1.

(b) Both Statement 1 and Statement 2 are correct and Statement 2 is not the correct explanation for Statement 1.

(c) Statement 1 is correct but Statement 2 is incorrect.

(d) Statement 1 is incorrect but Statement 2 is correct.

Explanation

— The Securities and Exchange on Board of India (SEBI) has suspended trading in Bharat Global Developers Ltd (BGDL), a BSE-listed company, after its stock prices surged over 10,000% between November 2023 and November 2024. Hence, statement 1 is correct and statement 2 is not correct.

— This significant rise was the result of the company’s fraudulent representations to exchanges. Following the SEBI’s move, the BSE banned trading in BGDL’s securities effective December 23.

— SEBI’s examination revealed that BGDL’s management was revamped in December 2023, after which the business made two preferential share allotments – 9.72 crore shares in April 2024 to 31 allottees and 35 lakh shares in August 2024 to 10 allottees. As a result, the 41 allottees, who were classified as public shareholders, had 99.5% of the stock.

Therefore, option (c) is the correct answer.

QUESTION 3

With reference to the opinion trading, consider the following statements:

1. These platforms allow users to wager on the outcome of future events.

2. India has a law which can directly deal with opinion trading.

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

Explanation

— Opinion trading services allow users to wager on the fate of future events. The business is expanding rapidly, attracting money and an estimated 5 crore users, but it appears to have mostly flown under the radar in India, unregulated. Hence, statement 1 is correct.

— Opinion trading systems look to be betting platforms, and some in government share this perspective. However, investors and creators say that making money on these platforms requires a significant amount of skill.

— India’s sector includes companies such as Gurugram-based Probo and MPL Opinio. The former asks questions about a wide range of topics, including sports, elections, and cryptocurrency, whereas the latter exclusively asks about cricket matches.

— India currently lacks a law that can deal directly with opinion trading platforms such as Probo and MPL Opinio – however, in foreign markets such as the United States and Australia, where this industry is more mature, governments have decided to treat wagers as securities, putting the responsibility for regulation on the stock market regulator. Hence, statement 2 is not correct.

— In India, the primary legal lens through which internet games are viewed is whether they are games of chance or skill. In games of chance, no one can have a competitive advantage over another because the outcome is entirely dependent on luck. However, in skill games, considerable preparation may be necessary to put someone in a better position to make a forecast.

Therefore, option (a) is the correct answer.

QUESTION 4

With reference to the wilful defaulter, consider the following statements:

1. A ‘wilful default’ would be deemed to have occurred if the borrower has defaulted in meeting their repayment obligations to the lender even when they have the capacity to honour the obligations.

2. The number of wilful defaulters has decreased from March 2020 to March 2024.

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

Explanation

— A staggering 2,664 corporates have been classified as wilful defaulters, failing to repay bank loans despite having the means to do so, according to the Reserve Bank of India (RBI).

— According to RBI data, the number of wilful defaulters increased from 2,154 in March 2020 to 2,664 in March 2024, while the amount due increased from Rs 1,52,860 crore to Rs 1,96,441 crore over the last four years. Hence, statement 2 is not correct.

— These firms have claimed many thousand crores in default and other obligations before the National Company Law Tribunal (NCLT). According to the RBI classification, a ‘wilful default’ occurs when a borrower fails to complete their repayment commitments to the lender despite having the capacity to do so. Hence, statement 1 is correct.

— A wilful default happens when the borrower has not utilised the finance from the lender for the specific purpose for which finance was availed of, and has diverted the funds for other purposes, or siphoned off funds, or disposed of or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank.

Therefore, option (a) is the correct answer.

QUESTION 5

With reference to the import of crude oil, consider the following statements:

1. Heavy dependence on imported crude oil makes the Indian economy vulnerable to global oil price volatility.

2. Higher imports leads to lower trade deficit.

3. A downward pressure on international oil prices is negative for India due to its extremely high dependence on oil imports.

Which of the statements given above is/are correct?

(a) 1 and 3 only

(b) 1 only

(c) 2 and 3 only

(d) 3 only

Explanation

— The current drop in global crude oil prices has resulted in India’s oil import bill falling year on year in September, October, and November, despite the fact that import volumes increased in each of these months, according to the latest petroleum ministry data.

— Because of India’s reliance on oil imports, a drop in international oil prices, and hence in its oil import bill, is a plus.

— The Indian economy’s heavy reliance on imported crude oil makes it vulnerable to global oil price volatility, which has an impact on the country’s trade deficit, foreign exchange reserves, rupee exchange rate, and inflation. Hence, statement 1 is correct.

— A downward pressure on international oil prices, and consequently on India’s oil import bill, is a positive for the country due to its extremely high dependence on oil imports. Hence, statement 3 is not correct.

— Greater imports result in a greater trade deficit. Hence, statement 2 is not correct.

— According to an analysis of provisional oil industry data from the oil ministry’s Petroleum Planning & Analysis Cell (PPAC), India’s oil imports in value terms fell 9% year on year to $31.2 billion in the September-November period, despite an increase in import volumes of 4.4 percent to 57.2 million tonnes.

Therefore, option (b) is the correct answer.

Previous Daily Subject-Wise-Quiz

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 89)

Daily subject-wise quiz — Polity and Governance (Week 90)

Daily subject-wise quiz —  Science and Technology (Week 90)

Daily subject-wise quiz — Environment and Geography (Week 90)

Daily subject-wise quiz — Economy (Week 89)

Daily subject-wise quiz – International Relations (Week 89)

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