Daily Current Affairs MCQ / UPSC / IAS / 29-09-19 | Free PDF

MCQ 1

Which of the following can increase agricultural productivity per unit land in India?

1. Greater use of capital equipments
2. Increasing water logging of field
3. Making the soil highly alkaline
4. Using irrigation instead of depending on rain-fed water

Select the correct answer using the codes below.

1. 3 and 4 only
2. 1 and 2 only
3. 1 and 4 only
4. 1, 3 and 4 only

• Greater use of capital equipments or mechanization of agriculture increases output per labour per unit land.
• In agriculture, various crops need air (specifically, oxygen) to a greater or lesser depth in the soil. Waterlogging (saturation of soil with water) stops air getting in and thus reduces crop produce.
• Alkaline soils are difficult to take into agricultural production. Due to the low infiltration capacity, rain water stagnates on the soil easily and, in dry periods, cultivation is hardly possible without copious irrigated water and good drainage.

MCQ 2

The “commanding heights” of the economy was a term attributed to which of the following in post-independent India?

1. Pivotal role to the public sector units in the Indian economy
2. Liberalization of markets to achieve higher economic growth
3. The strategy of import substitution followed by the Government
4. Collectivization of agriculture undertaken in the 1960s

• Commanding heights of the economy refers to existing private industry essential to the economy like public utilities, natural resources, heavy industry, and transport, as well as control over foreign and domestic trade.
• This phrase emerged from a branch of modern political philosophy concerned with organizing society, and can be traced back to Karl Marx’s idea on socialism, which stresses the commanding heights and advocates for government control of it. This should not be confused with complete socialism or communism.

MCQ 3

Consider the following Statements regarding types of goods:

1. Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called capital goods.
2. The goods that are of durable character which are used in the production process are consumer goods.

Identify the correct statements:

1. a) 1 only
2. b) 2 only
3. c) All are correct
4. d) None

• Capital goods and consumer goods are classified based on how they are used. A capital good is any good deployed to help increase future production. The most common capital goods are property, plant and equipment, or PPE.
• Consumer goods are any goods that are not capital goods; they are goods used by consumers and have no future productive use.

Capital Goods

• Capital goods are also known as intermediate goods, durable goods or economic capital. They are different than financial capital, which refers to funds companies use to grow their businesses. Natural resources not modified by human hands are not considered capital goods, although both are factors of production.
• Businesses do not sell capital goods, which means capital goods do not directly create revenue like consumer goods. To financially survive the accumulation of capital goods, businesses rely on savings, investment or loans.
• Consumer Goods
• A consumer good is any good purchased for consumption and not later used for the production of another consumer good. Consumer goods are sometimes called final goods. When economists and statisticians calculate gross domestic product (GDP), they do so based off of consumer goods.
• The same physical good could be a consumer good or a capital good. An apple bought at a grocery store and immediately eaten is a consumer good. An identical apple bought by a company to make apple juice is a capital good. The difference lies in its utilization.

MCQ 4

As a country develops, it undergoes ‘structural change’. In the case of India, the structural change is ‘peculiar’ with regard to its sectoral composition especially services sector. What is so ‘peculiar’ about this structural change?

1. Services sector has grown at a slower rate than any other sector of the economy.
2. Traditionally services sector growth is propelled by the manufacturing sector but in India agricultural sector has propelled services sector growth.
3. The service sector contributes more to the GDP than agriculture and manufacturing even though India is not a developed country.
4. Services sector has failed to generate additional employment despite high levels of growth in India.

• The services sector is not only the dominant sector in India’s GDP, but has also attracted significant foreign investment flows, contributed significantly to exports as well as provided large-scale employment. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction.
• The Indian services sector includes financial, banking, insurance, nonfinancial/business, outsourcing, research and development, courier and technical test analysis,

MCQ 5

Which of the following is not a part of changes in industrial sector post 1991 reform?

1. Industrial licensing under which every entrepreneur had to get permission from government officials to start a firm was abolished except in some sector.
2. Private sector was allowed in many industries.
3. Some goods could be produced only in small scale industries.
4. Controls on price fixation and distribution of selected industrial products.

a) 1, 3 and 4

b) 1, 2, 3 and 4

c) 1 and 4

d) 3 and 4

• Since the liberalization and deregulation of the Indian economy in 1991, most industries have been exempt from obtaining an industrial license to start manufacturing in India. Government attention is reserved only for those industries that may impact public health, safety, and national security.
• In India, industrial licenses are regulated by the IDRA, 1951 Act, and are approved by the Secretarial of Industrial Assistance (SIA) on the recommendation of the licensing committee.
• The provisions of the Act restrict a licensed industrial undertaking from manufacturing a new article unless the license has been renewed or a new license has been obtained to include the new article.
• Industries that require industrial licensing for manufacturing in India include:
• Industries under compulsory licensing; and,
• Industrial undertakings attracting locational restrictions. The licensing provision also applies to the expansion of the existing industrial units.

Recent amendment to industrial licensing rule

• Earlier, large industries that manufactured items that were exclusively reserved for Micro, Small, and Medium Enterprises (MSME) also needed to obtain an industrial license. MSMEs were previously known as Small Scale Industry (SSI). The provision was aimed at protecting indigenous manufacturers from unequal competition with large scale industries.
• However, in April 2015, the government de-reserved these items to encourage greater investment, incorporate better technologies, and enhance competition in the Indian and global market for the products.
• Large industries are now permitted to manufacture items such as – bread, wood, firework, pickles and chutneys, mustard oil, groundnut oil, steel chairs and tables, padlocks, stainless steel and aluminum utensils, without obtaining an industrial license.

 Industries subject to compulsory licensing in India

• Businesses planning to establish industries to produce any of the following items in India must obtain a compulsory license:
• Distillation and brewing of alcoholic drinks;
• Cigars and cigarettes of tobacco and manufactured tobacco substitutes;
• Electronics and aerospace and defense equipment;
• Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches; and
• Hazardous chemicals including items hazardous to human safety and health and thus fall for mandatory licensing.
• These industries are under compulsory licensing mainly because of environmental, safety and strategic considerations. Compulsory licensing is regulated by the Ministry of Industrial Development.

 Locational restrictions for industries in India

• Under this provision, industries located within 25 kilometers of the periphery of cities having a population of at least one million, must obtain an industrial license from the federal government.
• This locational restriction does not apply in the following cases:
• Industries manufacturing electronics, computer software and printing, or any other industry that may be classified as a ‘non-polluting industry’; or
• Industries located in an area designated as an ‘industrial area’ before July 25, 1991.
• The location of industrial units is subject to appropriate local zoning, land use regulations, as well as environmental regulations in order to maintain ecological discipline.

MCQ 6

The “trickle down” strategy of reducing poverty relies on

1. Providing subsidized basic public services to the poor
2. Generating gainful employment by public works
3. Political and social empowerment of the poor
4. Achieving high economic growth rate

What is the ‘Trickle-Down Theory’

• Trickle-down economics, or “trickle-down theory,” states that tax breaks and benefits for corporations and the wealthy will trickle down to everyone else. It argues for income and capital gains tax breaks or other financial benefits to large businesses, investors and entrepreneurs to stimulate economic growth.
• The argument hinges on two assumptions: All members of society benefit from growth, and growth is most likely to come from those with the resources and skills to increase productive output.
• Trickle-down economics is political, not scientific. Although it is commonly associated with supply-side economics, there is no single comprehensive economic policy identified as trickle-down economics. Any policy can be considered “trickle-down” if the following are true: Frst, a principal mechanism of the policy disproportionately benefits wealthy businesses and individuals in the short run. Second, the policy is designed to boost standards of living for all individuals in the long run.

MCQ 7

If the population of a nation is fixed, how can it increase its human capital?

1. By investing in health security of citizens
2. By regulating service conditions in the unorganized sector
3. By promoting digital literacy

Select the correct answer using the codes below.

1. 1 and 2 only
2. 1 and 3 only
3. 2 and 3 only
4. All of the above

MCQ 8

Which of the following is/are ‘state intervention(s)’ in the field of agricultural marketing?

1. Provision of physical Infrastructure
2. Cooperative marketing for realising fair prices for farmers’ products
3. Assurance of minimum support prices (MSP)
4. Maintenance of food buffer stocks by Food Corporation of India (FCI)

Select the correct answer using the codes below.

1. 2 and 4 only
2. 3 and 4 only
3. 1 and 2 only
4. 1, 2, 3 and 4

MCQ 9

Productivity of Indian agriculture is lower in India as compared to China. Which of the following can be reason(s)?

1. China has much larger net sown area and arable land than India.
2. Chinese farmers do not use mixed cropping systems unlike India.

Which of the above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. None

• India has the second largest amount of arable land of any country after the U.S. Although the total land area of the country is only slightly more than one third of China’s, India’s arable land is marginally bigger than China’s. So, 1 is anyway incorrect. Moreover, size of total arable land is not linked with productivity.
• Mixed cropping systems are actually more efficient, productive and economical than other cropping systems.
• One possible reason for India’s low productivity, whether wheat or rice or any crop, is the small size of individual farm holdings. The 2001 census found that 80% of farm holdings were less than 2 hectares in size, with 62% averaging less than half a hectare.
• Both in China and India, small farm sizes inhibit mechanization. But fertilizer usage is much higher in China than India.
• In addition, China invests significantly more in agricultural research and development compared to India to produce high-yield and quicker-growing crop varieties. This, along with better irrigation and more intensive cultivation of the land by double or even triple cropping, are the primary reasons for China’s superior yields. Qu144 India agreed to the conditionalities of World Bank and IMF and announced the New Economic Policy (NEP) 1991 to avert
• A. A Balance of Payments (BoP) crisis
• B. A situation of hyperinflation in the economy
• C. A situation of monetary depression in the Indian economy
• D. The ill spread effects of the Asian Financial Crisis

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