UPSC Essentials: Daily subject-wise quiz — Economy (Week 8)

QUESTION 1

With reference to the Foreign Trade Policy (FTP) 2023, consider the following statements:

1. It is notified by the Central Government in the exercise of powers conferred under the Foreign Contribution Regulation Act.

2. The Directorate General of Foreign Trade is responsible for imposing import prohibitions or restrictions.

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

QUESTION 2

Which of the following pairs is not correctly matched?

(a) Global Financial Stability Report : World Bank

(b) Global Information Technology Report : World Economic Forum

(c) Global Money Laundering Report : Financial Action Task Force

(d) World Energy Outlook : International Energy Agency

QUESTION 3

Consider the following statements about Green Deposits:

1. These deposits are accepted only by the scheduled commercial banks.

2. The proceeds raised by the green deposits could be used in climate change adoption and renewable energy.

3. Production and distribution of fossil fuels are not included in the list of projects. 

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

QUESTION 4

Consider the following:

1. Trade in goods

2. Trade in services

3. Transfer payments

How many of the above form the components of the current account?

(a) One only

(b) Two only

(c) All three

(d) None

QUESTION 5

With reference to the guidelines for TDS (Tax Deduction at Source) for online gaming, consider the following statements:

1. The platforms will not deduct tax at the source for a player if the net winning does not exceed Rs 1000.

2. The referral bonus and the incentives given by the online gaming company to the intermediate user are not considered taxable deposits.

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

ANSWERS TO MCQs

1. (b)

FYI:

— The policy is notified by the Central Government, in the exercise of powers conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992”. Hence, statement 1 is not correct.

— This Act empowered the Centre to “make provision for the development and regulation of foreign trade by facilitating imports and increasing exports” and to “make provision for prohibiting, restricting or otherwise regulating… import or export of goods or services or technology”.

— FTP 2023 is an ideal platform for the government to prepare India’s exporters to cope with the challenges in the global market.

— The Directorate General of Foreign Trade (DGFT) will coordinate with all the standard-setting agencies of the government, the export promotion councils, and the relevant institutions in the private sector to prepare a roadmap for upgrading institutions and production facilities.

— The DGFT will be responsible for imposing import prohibitions or restrictions. Hence, statement 2 is correct.

Therefore, option (b) is the correct answer.

2. (a)

FYI:

— Global Financial Stability Report : International Monetary Fund

Therefore, option (a) is the correct answer.

3. (b)

FYI:

— The Reserve Bank of India issued detailed guidelines for acceptance of ‘green deposits’ by banks and NBFCs wherein the funds could be used for financing activities like renewable energy, green transport and green buildings. Hence, statement 1 is not correct.

— The financial sector can play a pivotal role in mobilising resources and their allocation thereof in green activities/projects. Climate change has been recognised as one of the most critical challenges and globally, various efforts have been taken to reduce emissions as well as promote sustainability.

— The purpose and rationale for the framework are to encourage Regulated Entities (REs) to “offer green deposits to customers, protect the interest of the depositors, aid customers to achieve their sustainability agenda, address greenwashing concerns and help augment the flow of credit to green activities/projects”.

— The projects must encourage energy efficiency in resource utilisation, reduce carbon emissions and greenhouse gases, promote climate resilience and/or adaptation and value and improve natural ecosystems and biodiversity. Hence, statement 2 is correct.

— The projects or activities which are on the list where REs could allocate the proceeds raised through green deposits are renewable energy, energy efficiency, clean transportation, climate change adaptation, sustainable water and waste management, and green buildings.

— Some of the projects are excluded from the list such as new or existing extraction, production and distribution of fossil fuels; nuclear power generation; and direct waste incineration. Hence, statement 3 is correct.

Therefore, option (b) is the correct answer.

4. (c)

FYI:

— Current Account is the trade record in goods and services and transfer payments.

— Trade in goods: It includes exports and imports of goods.

— Trade in services: It includes factor income and non-factor income transactions.

— Transfer payments: These are the receipts that the residents of a country get for ‘free’, without having to provide any goods or services in return. They consist of gifts, remittances and grants. They could be given by the government or by private citizens living abroad.

Therefore, option (c) is the correct answer.

Source: (ncert.nic.in)

5. (d)

FYI:

— The Central Board of Direct Taxes (CBDT) has come out with guidelines for Tax Deducted at Source (TDS) for online gaming platforms.

— The online gaming platforms will not be required to deduct tax at the source for a player if the net winning does not exceed Rs 100. Hence, statement 1 is not correct.

— The CBDT circular also said that bonuses, referral bonuses, incentives etc., are given by the online gaming company to the intermediate user and they are to be considered as taxable deposits under Rule 133 of the Income-tax Act. Hence, statement 2 is not correct.

Therefore, option (d) is the correct answer.

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