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Journalism of Courage
UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Each day, we will cover one new subject. Attempt today’s subject quiz on Economy to check your progress. Come back tomorrow to solve the MCQs on International Relations. Don’t miss checking the answers and explanations at the end of the quiz.
Consider the following statements:
1. The Labour Force Participation Rate (LFPR) represents the demand for jobs in an economy.
2. India’s working-age population has declined from 2016-17 to 2023-24.
3. India’s overall LFPR has increased from 2016-17 to 2023-24.
How many of the statements given above are correct?
(a) Only one
(b) Only two
(c) All three
(d) None
The Reserve Bank of India (RBI) has launched the PRAVAAH portal for:
(a) Digital infrastructure innovation
(b) Individuals and entities to apply online for various regulatory approvals from the RBI
(c) Hassle free and seamless banking transactions
(d) Any individual or entity to participate in the government securities (G-Secs) market.
With reference to the evergreening of loans, consider the following statements:
1. It is a process whereby a lender tries to revive a loan that is on the verge of default by extending more loans to the same borrower.
2. RBI has barred NBFCs from investing in any scheme of Alternative Investment Funds having investment in companies that have taken loan from the lenders concerned in the past 12 months.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Consider the following statements:
1. The share of food in consumption expenditure in rural India has increased in 2022-23 from 1999-2000.
2. In urban India, the share of food in the average monthly per capita consumption expenditure (MPCE) has increased in 2022-23 from 1999-2000.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
With reference to the India-Australia trade, consider the following statements:
1. India is Australia’s largest trade partner with a 33 per cent share in its exports and a 27 per cent share in its imports in 2021.
2. India primarily imports raw materials.
3. India’s largest export to Australia is pharmaceutical products.
How many of the statements given above are correct?
(a) Only one
(b) Only two
(c) All three
(d) None
FYI:
— In April of this year, CSDS-Lokniti, a major research outfit that has been studying Indian voters’ behaviour for decades, released the results of their pre-poll survey. It discovered that the single most critical problem for voters in 2024 is unemployment.
— The working-age population is the total population over the age of 15 years.
— The Labour Force Participation Rate (LFPR) is the percentage of the working-age population that is demanding a job. Hence, statement 1 is correct.
— As a result, it excludes individuals such as a 35-year-old married woman who is not actively seeking employment, a 22-year-old who is pursuing higher education, and a 65-year-old who no longer want to work. Thus, the LFPR reflects an economy’s job demand.
— Unemployment Rate (UER) is the percentage of people looking for a job but are as yet unemployed. The UER is expressed as a percentage of the labour force. All over the world, the UER is often the most widely used metric to assess the health of the labour market.
— The Employment Rate (ER) is often considered the best metric to assess the health of employment in the Indian context.
— India’s working-age population grew 18.1% or 17.4 crore (or 170 million) from 96.45 crore in 2016-17 to 113.86 crore in 2023-24. Hence, statement 2 is not correct.
— India’s overall LFPR was low in 2016-17 and has further declined by 5.8% over the past eight years. Hence, statement 3 is not correct.
Therefore, option (a) is the correct answer.
FYI:
— The Reserve Bank of India (RBI) launched three major initiatives, including a mobile app, to enable retail investors to participate in the government securities (G-Secs) market.
— The central bank launched the PRAVAAH portal for any individual or entity to apply online for various regulatory approvals in a seamless manner.
— This portal will also enhance the efficiency of various processes related to granting regulatory approvals and clearances by the Reserve Bank, the central bank said in a statement.
— ‘PRAVAAH’ (Platform for Regulatory Application, VAlidation and AutHorisation) portal is a secure and centralised web-based portal for any individual or entity to seek authorisation, license or regulatory approval on any reference made by it to the Reserve Bank.
Therefore, option (b) is the correct answer.
FYI:
— The Reserve Bank of India (RBI) placed business restrictions on two Edelweiss group firms, Edelweiss Asset Reconstruction Company (EARCL) and ECL Finance Ltd (ECL), citing substantial concerns raised during regulatory investigations.
— The regulator directed ECL to immediately discontinue any structured transactions involving its wholesale exposures, with the exception of account repayment and/or closure in the normal course of business.
— Evergreening of loans is a process whereby a lender tries to revive a loan that is on the verge of default by extending more loans to the same borrower. Hence, statement 1 is correct.
— The process of evergreening of loans is typically a temporary fix for a bank. It could be noted that in May 2023, RBI Governor Shaktikanta Das raised concerns over banks adopting innovative methods for evergreening of loans.
— The Reserve Bank of India (RBI) has also barred banks and NBFCs from investing in any scheme of Alternative Investment Funds (AIFs) having investment in companies that have taken loans from the lenders concerned in the past 12 months. Hence, statement 2 is correct.
— Banks and NBFCs, which are Regulated Entities (RE) under the Reserve Bank of India (RBI), make investments in units of AIFs as part of their regular investment operations.
Therefore, option (c) is the correct answer.
FYI:
— However, for the first time, food expenditure has decreased to less than 50% of total consumption expenditure in rural India and less than 40% in urban India.
— Food consumption expenditure in rural India peaked at 59.4 per cent in 1999-2000, stayed around 50 per cent over the first decade of the new millennium, and stood at 46.38 per cent in 2022-23. Hence, statement 1 is not correct.
— In urban India, the share of food in the average monthly per capita consumption expenditure (MPCE) has fallen to 39.17 per cent in 2022-23 from 48.06 per cent in 1999-2000. Hence, statement 2 is not correct.
Therefore, option (d) is the correct answer.
FYI:
— At a time when India and Australia are negotiating to expand a mini-trade agreement into a more comprehensive accord, an Australian parliamentary committee raised concerns about child employment in India in a report handed to its MPs.
— As of 2021, China is Australia’s largest trade partner, accounting for 33% of exports and 27% of imports, while India accounts for 3.7% of exports and 2.4% of imports. Hence, statement 1 is not correct.
— The necessity for Australia to diversify its commerce away from China, due to a variety of geopolitical concerns, dramatically tilts the scale in favour of India, resulting in a win-win cooperation. Petroleum, medicaments, gems, jewellery, railway coaches and vehicles, milled rice, and herbicides make up 72% of India’s exports to Australia.
— India mostly imports raw commodities. Coal, gold, copper ore, aluminium oxide, liquefied natural gas, manganese ore, aluminium waste, pigments, lentils, and other products account for 82 per cent of its imports from Australia. Hence, statement 2 is correct.
— The trade agreement will enhance pharmaceutical shipments to Australia, India’s second-largest export after petroleum goods, because medicines that have previously been licenced in the United States and the United Kingdom will receive expedited regulatory approval from Australian authorities. Hence, statement 3 is not correct.
— The Indo-Australia ECTA will result in duty elimination on 100% tariff lines with no restrictions, benefiting India’s labour-intensive exports such as textiles and apparel, agriculture and fish products, leather, footwear and furniture, several engineering products, jewellery, select pharmaceutical and medical devices, furniture, and sports goods.
— The agreement would provide duty-free access to over 6,000 broad categories of Indian products in the Australian market.
Therefore, option (a) is the correct answer.
Daily subject-wise quiz — Polity and Governance (Week 60)
Daily Subject-wise quiz — History, Culture, and Social Issues (Week 60)
Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 60)
Daily subject-wise quiz — Economy (Week 59)
Daily subject-wise quiz – International Relations (Week 59)
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