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Daily Prelims Test – 01_February_2022

1. Consider the following statements regarding Economic Survey:

1)    It is prepared by the Economics Division of the Department of Economic Affairs.

2)    The first Economic Survey in India was presented in the year 1950-51.

3)    It projects the Gross Domestic Product (GDP) for the next financial year.

Which of the above statements is/are correct?

a)     1 and 3 only

b)    2 and 3 only

c)     1 only

d)    1, 2 and 3

Answer: (d) 1, 2 and 3

Explanation:

In NEWS: Economic Survey: From 38 pages to nearly 900, and now down to 413

●      This year’s Survey has been prepared by Principal Economic Adviser Sanjeev Sanyal, in absence of a Chief Economic Adviser — a post to which V Anantha Nageswaran was appointed

●      The Economic Survey has predicted 8 to 8.5% GDP growth in FY23 (April 2022 to March 2023). For the ongoing FY22, the GDP growth has been projected at 9.2%.

●      The total consumption is estimated to have grown by 7.0% in 2021-22 with significant contributions from government spending.

●      Agriculture and allied sectors are expected to grow by 3.9% in 2021-22.                                                                                                         

●      The Services sector is estimated to grow by 8.2% in the ongoing financial year.

●      The Economic Survey 2021-22 details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth.

●      The GDP contracted by 7.3% in 2020-21. Hence statement (3) is correct.

●      Furthermore, the Economic Survey focuses on supply-side issues to improve the resilience of the Indian economy.

About Economic Survey

●      The Survey was first published in 1950-51 and was less than 50 pages, initially being a part of the Budget documents. Hence statement (2) is correct.

●      The Economic Survey is an annual report that underscores the condition of different sectors of the economy and suggests reforms that should be undertaken to accelerate growth.

●      The Economic Survey is prepared by the Chief Economic Advisor (CEA), however, this time, the report was drafted by the principal economic adviser and other officials after Krishnamurthy Subramaniam’s term ended in December 2021. Hence statement (1) is correct.

●      The Economic Survey document is prepared by the Economics Division of the Department of Economic Affairs (DEA) under the guidance of the Chief Economic Advisor.

●      For the past few years, the Economic Survey has been presented in two volumes, but this year it is clubbed in a single volume.

●      Since India’s Independence in 1947, the Economic Survey was presented alongside the Budget, but was delinked in 1964 and was presented in advance, a practice that continues to date.

●      It is to be noted that it is not mandatory for the government to present the Economic Survey and the recommendations presented in the first volume are not binding on the government.

Source: https://indianexpress.com/article/explained/economic-survey-volume-pages-budget-nirmala-sitharaman-7749650/

2. Recently, IndEA framework is seen in news, it is related to

a)     E-Governance

b)    Fiscal Consolidation

c)     Air Traffic

d)    Army Equipment

Answer: (a) E-Governance

Explanation:

In NEWS: Linking of multiple IDs to develop ‘Federated Digital Identities’ mooted

●      The government has invited stakeholder comments on a proposal that seeks to establish ‘Federated Digital Identities’ to optimise the number of digital identities that a citizen needs to have, by linking various consumer identification data into a single unique ID for digital transactions such as authentication and eKYC services.

●      The proposal is part of the Ministry of Electronics and IT’s India Enterprise Architecture 2.0 (IndEA 2.0) framework that aims to enable the governments and the private sector enterprises to design IT architectures that can span beyond organisational boundaries for delivery of integrated services.

IndEA:

●      India Enterprise Architecture (IndEA) is a way to establish Unity in Diversity in the domain of e-Governance. Hence option (a) is correct.

●      It is a framework that enables the development and implementation of Enterprise Architectures independently and in parallel by all governments and their agencies across India, conforming to the same models and standards.

●      It enables planned development through architecture thinking.

●      IndEA has been notified as an e-Governance standard by the Ministry of Electronics and Information Technology (MeitY) in October 2018.

●      The primary purpose of IndEA is to help state governments, ministries and departments in the governments at various levels to adopt a structured approach for developing their enterprise architecture. 

Source: https://www.thehindu.com/news/national/linking-of-multiple-ids-to-develop-federated-digital-identities-mooted/article38351629.ece

3. Consider the following statements regarding Mistletoes:

1)    They need a host tree or shrub in order to thrive.

2)    They provide food for frugivorous birds.

Which of the above statements is/are correct?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Answer: (c) Both 1 and 2

Explanation:

In NEWS: New genus of parasitic flowering plant discovered from Nicobar Islands

●      Hemi-parasites are commonly referred to as mistletoes that contain 18 families, 160 genera and over 2,200 species.

●      They need a host tree or shrub in order to thrive and exhibit a worldwide distribution in tropical as well as temperate habitats that evolved approximately five times in the order and are important in forest ecology, pathology and medicine. Hence statement (1) is correct.

●      They play an important role as they provide food for frugivorous birds. Hence statement (2) is correct.

●      Mistletoe species grow on a wide range of host trees, some of which experience side effects including reduced growth, stunting, and loss of infested outer branches.

●      A heavy infestation may also kill the host plant.

Source: https://www.thehindu.com/news/national/other-states/new-genus-of-parasitic-flowering-plant-discovered-from-nicobar-islands/article38345955.ece

4. Which of the following countries are the parts of ASEAN Nations?

1)    Philippines

2)    Singapore

3)    India

4)    Nepal

5)    Thailand

6)    Vietnam

Select the correct answer using the code given below:


a)     2, 3, 4 and 5 only

b)    1 and 6 only

c)     1, 2, 5 and 6 only

d)    1, 2, 3, 4, 5 and 6

Answer: (c) 1, 2, 5 and 6 only

Explanation:

In NEWS: India-ASEAN Digital Work Plan 2022 approved at 2nd ASEAN Digital Ministers (ADGMIN) meeting

●      The ADGMIN is an annual meeting of Telecom Ministers of 10 ASEAN (Association of South-East Asian Nations) countries.

●      The meeting discussed and deliberated various matters relevant to strengthening regional digital cooperation in the spirit of digital inclusion and integration.

Association of Southeast Asian Nations (ASEAN):

●      It is a political and economic organisation aimed primarily at promoting economic growth and regional stability among its members.

●      It was founded in 1967 by the five South-East Asian nations of Indonesia, Malaysia, the Philippines, Singapore and Thailand.

●      Brunei Darussalam joined in 1984, Vietnam in 1995, Lao PDR and Myanmar in 1997, and Cambodia in 1999, making up ten Member States of ASEAN.

●      ASEAN Summit is the highest policy-making body in ASEAN comprising the Head of States or Government of ASEAN Member States.

●      Summit is held twice annually.

●      The First ASEAN Summit was held in Bali, Indonesia in 1976.

ASEAN countries are:

●      Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam and dialogue partner countries – Australia, Canada, China, EU, India, Japan, Republic of Korea, New Zealand, Russia, UK and US. Hence option (c) is correct.

Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1793449#:~:text=The%202nd%20ASEAN%20Digital,Myanmar%20co%2Dchaired%20the%20meeting.

5. Consider the following statements regarding Rani Gaidinliu:

1)    She was the Naga spiritual and political leader.

2)    Jawaharlal Nehru called her the Daughter of the Hills.

3)    She was Joined the Heraka movement, which aimed at the revival of the Naga tribal religion.

Which of the above statements is/are correct?

a)     1 and 3 only

b)    2 and 3 only

c)     1 only

d)    1, 2 and 3

Answer: (d) 1, 2 and 3

Explanation:

In NEWS: PM Modi lauds first ever goods train reaching Manipur’s Rani Gaidinliu Railway Station

●      Prime Minister Narendra Modi has lauded the first ever goods train that reached Rani Gaidinliu Railway Station in Manipur’s Tamenglong district.

●      In a tweet, Mr Modi said that now Manipur’s connectivity will be enhanced and commerce will be boosted.

Rani Gaidinliu:

●      She was born on January 26, 1915, in the present-day Tamenglong district of Manipur and died in 1993.

●      She was the Naga spiritual and political leader who belonged to the Rongmei tribe (also known as Kabui). Hence statement (1) is correct.

●      She led an armed uprising against the British in Manipur, Nagaland and Assam

●      In 1927, at the age of 13, Gaidinliu, along with her cousin Haipou Jadonang, joined the Heraka movement, which aimed at the revival of the Naga tribal religion and establishing self-rule of the Nagas (Naga Raj) ending the British rule. Hence statement (3) is correct.

●      She was arrested in 1932 when she was just 16 and was sentenced to life imprisonment by the British rulers.

●      Between 1932 and 1947, the Naga freedom fighter was kept at several prisons across the Northeast.

●      After being released in 1947 she continued to work for the betterment of the community.

●      Jawaharlal Nehru called her the “Daughter of the Hills” and gave her the title “Rani” or queen acknowledging her role in the struggle against the British. Hence statement (2) is correct.

●      In 1972, she was awarded Tamara Patra by the Government of India for her contribution to the freedom movement.

●      She also received the Padma Bhushan in 1982.

Source: https://newsonair.gov.in/News?title=PM-Modi-lauds-first-ever-goods-train-reaching-Manipur%E2%80%99s-Rani-Gaidinliu-Railway-Station&id=434445#:~:text=Prime%20Minister%20Narendra%20Modi%20has,and%20 commerce%20will%20be%20boosted.

6. Consider the following statements regarding Capital expenditure:

1)    It is a cause for a reduction in the government’s liabilities.

2)    It is recurring in nature.

3)    It includes loans given to states and Union Territories along with repayment of borrowings.

Which of the above statements is/are correct?

a)     1 and 3 only

b)    2 and 3 only

c)     1 only

d)    1,2 and 3

Answer: (a) 1 and 3 only

Explanation:

In NEWS: What is the Expenditure Budget?

●      When FM Nirmala Sitharaman presents the Budget , the focus will be on a document that shows total expenditure of the government. It is classified as Expenditure Budget.

●      Part of the Union budget, Expenditure Budget offers a complete picture of the government’s expenditure in any financial year.

●      This exhaustive document tells us about various types of outlay and reasons for the variations in estimates.

●      It shows the funds allocated for disbursement to the different ministries and departments during a financial year. These allotments are made under plan and non-plan estimates.

Expenditure Budget

●      Expenditure Budget is classified into two broad categories — capital expenditure and revenue expenditure.

●      The government prepares its expenditure-related information in three separate documents. The first is the expenditure profile. It compiles data from all the ministries and departments to draw a complete picture of the financial performance of the Union government.

●      It serves as an explanatory document that aids economic analysis. The statements contained in this document are based on data provided by the ministries. Some of the statements are also based on the data provided in the Expenditure Budget.

●      The second is the Demand for Grants.

●      And the third and final one is the Expenditure Budget. It deals with both capital expenditure and revenue expenditure.

Capital expenditure

●      Capital expenditure is the amount spent on creating assets. It is a cause for a reduction in the government’s liabilities. Hence statement (1) is correct.

●      It adds to the capital stock of the economy and is non-recurring in nature. Hence statement (2) is incorrect.

●      It also includes loans given to states and Union Territories, along with repayment of borrowings. Hence statement (3) is correct.

●      While the former results in the creation of a physical asset or investment, the latter comprises mainly operational expenses

Source: https://www.business-standard.com/podcast/finance/what-is-expenditure-budget-122013100041_1.html

7. Consider the following statements regarding Buyback tax:

1)    It is levied on the net consideration paid by companies for repurchasing shares.

2)    Currently, it is applicable only for unlisted companies.

Which of the above statements is/are correct?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Answer: (a) 1 only

Explanation:

In NEWS: What is buyback tax? Why are experts calling for its abolition?

●      Companies can reward shareholders either by paying dividends or purchasing the shares back from shareholders.

●      Buyback tax is levied on the net consideration paid by companies for repurchasing shares after deducting the net amount received at the time of original issue of shares. Hence statement (1) is correct.

●      Unlisted companies used the buy back route instead of the dividend one to distribute surplus and to avoid taxes.

●      Buyback tax was introduced on unlisted companies in 2013 and extended to listed companies from July 2019. Hence statement (2) is incorrect.

●      Both listed and unlisted companies have to pay the tax at 20% plus surcharge at 12% and health and education cess of 4%, aggregating to 23.30% of the ‘distributed income’.

●      The government abolished the dividend distribution tax and made the dividends taxable in the hands of the recipient in 2020.

●      Currently, shareholders don’t have to pay any taxes on buy back income through the tender route but pay capital gains tax if the buy back happens through the open market.

●      Experts have now called for scrapping of buyback tax and introducing capital gains tax for shareholders on buy back income through the tender route.

Source: https://economictimes.indiatimes.com/budget-faqs/what-is-buyback-tax-why-are-experts-calling-for-its-abolition/articleshow/89236772.cms

8. Which of the following is/are the use/uses of Calcite mineral?

1)    Building material

2)    Abrasives

3)    Soil treatment

4)    Construction aggregate

5)    Pigment

Select the correct answer using the code given below:

a)     2, 3, 4 and 5 only

b)    1, 2, 3 and 4 only

c)     3 and 5 only

d)    1, 2, 3, 4 and 5

Answer: (d) 1, 2, 3, 4 and 5

Explanation:

In NEWS: Nimmalapadu’s protracted struggle: Despite legal win, 3 Andhra tribal villages fight to save land from mining

●      Villagers near Andhra-Odisha border are fighting the state for calcite reserves two decades after securing Supreme Court victory

●      In 1997, the residents of Nimmalapadu, a village in Andhra Pradesh, achieved the unthinkable: They won a legal battle against the state government and a private company to save their village from mining.

●      The Supreme Court overruled a 1993 Andhra Pradesh High Court order in favour of the state government, it declared that only people belonging to the Konda Dora tribe and their cooperatives can exploit the minerals in Fifth Schedule areas and that private mining here, even with government backing, is illegal.

●      The verdict, popularly called the Samata judgement after the name of the non-profit that helped the people fight the case, adds that even if the state government decides to mine directly, it needs to keep the interest of the tribal people first.

About Calcite

●      It is a rock-forming mineral with a chemical formula of CaCO3.

●      It is extremely common and found throughout the world in sedimentary, metamorphic, and igneous rocks.

●      Some geologists consider it to be a “ubiquitous mineral” – one that is found everywhere.

●      Calcite is the principal constituent of limestone and marble.

●      These rocks are extremely common and make up a significant portion of Earth’s crust.

●      They serve as one of the largest carbon repositories on our planet.

●      The properties of calcite make it one of the most widely used minerals.

●      It is used as a construction material, abrasive, agricultural soil treatment, construction aggregate, pigment, pharmaceutical and moreHence option (d) is correct.

Source: https://www.downtoearth.org.in/news/mining/nimmalapadu-s-protracted-struggle-despite-legal-win-3-andhra-tribal-villages-fight-to-save-land-from-mining-81206

9. Khoisan indigenous community is the earliest inhabitants to which of the following countries?

a)     South Africa

b)    Australia

c)     Myanmar

d)    Brazil

Answer: (d) South Africa

Explanation:

In NEWS: Amazon new Africa headquarters being built on sacred land: Indigenous communities protest

●      Groups representing Khoisan indigenous community, one of the earliest inhabitants of southern Africa, approached the Cape Town High Court January 19, 2022 to stop the construction of Amazon’s 70,000-square metre Africa headquarters on land they regard as sacred. Hence option (d) is correct

●      The word Khoisan is a combination of the names of two ancient tribes Khoi Khoi and San.

●      Members of the San tribe were hunter gatherers for tens of thousands of years. The Khoi Khoi, who were pastoralists, joined them over 2,000 years ago.

●      The site lies at the confluence of two rivers — Black River and Liesbeek — and is of spiritual significance to the community. The construction would also block the view to the Lion’s Head mountain, also considered sacred by the indigenous communities.

●      The reverence story dates back to 1510, when the Portuguese Viceroy Francisco de Almeida at the Battle of Gorinaiqua by the Gorinhaiqua Khoi in response to a Portuguese cattle raid. 

●      The first Khoi-Dutch War (1659-1660) over traditional grazing land access was also sparked at the floodplains. The area has been identified as part of the Khoisan Legacy Project and the National Liberation Heritage Route.  

Source: https://www.downtoearth.org.in/news/africa/amazon-new-africa-headquarters-being-built-on-sacred-land-indigenous-communities-protest-81324

10. In India, the central bank’s function as the ‘lender of last resort’ usually refers to which of the following?

1)    Lending to trade and industry bodies when they fail to borrow from other sources

2)    Providing liquidity to the banks having a temporary crisis

3)    Lending to governments to finance budgetary deficits

Select the correct answer using the code given below.

(a)  1 and 2

(b) 2only

(c)  2 and 3

(d) 3 only

Answer: (b) 2 only

Explanation:

●      A lender of last resort is an institution, usually a country’s central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky or near collapse.  

●      The lender of last resort functions to protect individuals who have deposited funds and to prevent customers from withdrawing out of panic from banks with temporary limited liquidity.

●      Commercial banks usually try not to borrow from the lender of last resort because such action indicates that the bank is experiencing a financial crisis. Hence option (b) is correct.