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Daily Prelims Test – 06_September_2021

1. Consider the following statements:

1) The Financial Stability and Development Council (FSDC) is a non-statutory apex council under the Ministry of Finance constituted by the Executive Order in 2010.

2) The Raghuram Rajan committee (2008) on financial sector reforms first proposed the creation of FSDC.

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: Financial Stability and Development Council asks regulators to ease norms

●    Finance Minister Nirmala Sitharaman has asked financial regulators to relax and simplify investment norms to boost the infrastructure investment instruments and for better coordination to speed up the monetisation project and streamline approvals.

●    Sitharaman chaired the meeting of the Financial Stability and Development Council (FSDC) to discuss the general economic scenario and the pending reforms.

●    Investment in the Infrastructure sector remained the key issue. Most regulators agreed that this is the best way to kickstart the economic recovery and the minister asked for making processes easier for the investors

About Financial Stability and Development Council

●        The Financial Stability and Development Council (FSDC) is a non-statutory apex council under the Ministry of Finance constituted by the Executive Order in 2010Hence statement (1)is correct.

●        The Raghuram Rajan committee (2008) on financial sector reforms first proposed the creation of FSDC. Hence statement (2) is correct.

Composition:

●        It is chaired by the Finance Minister and its members include the heads of all Financial Sector Regulators (RBI, SEBI, PFRDA IRDA), Finance Secretary, Secretary of Department of Economic Affairs (DEA), Secretary of Department of Financial Services (DFS), and Chief Economic Adviser.

●        In 2018, the government reconstituted FSDC to include the Minister of State responsible for the Department of Economic Affairs (DEA), Secretary of Department of Electronics and Information Technology, Chairperson of the Insolvency and Bankruptcy Board of India (IBBI) and the Revenue Secretary.

●        FSDC sub-committee is headed by the Governor of RBI.

●        The Council can invite experts to its meeting if required.

Functions:

●        The objective of FSDC is to strengthen and institutionalize the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.

●        It also intends to monitor macro-prudential supervision of the economy. It will assess the functioning of the large financial conglomerates.

Responsibilities of FSDC

●        Bringing about stability in the financial sector

●        Development of the Financial Sector

●        Coordination of Inter-Regulatory bodies

●        Promoting financial literacy

●        Ensuring financial inclusion

●        Macroprudential supervision of the economy including the functioning of large financial conglomerates.

●        Coordinating India’s international interface with financial sector bodies like the Financial Action Task Force (FATF), Financial Stability Board (FSB) and any such body may be decided by the Finance Minister from time to time.

Sourcehttps://www.financialexpress.com/economy/finance-minister-led-financial-stability-and-development-council-discusses-stressed-asset-issue/2323691/

2. Under which of the options given below, the election commission of India identifies the seat as vacant and notifies it for the by-election?

1) If persons wins from two constituency in one election

2) If MLA MP is defected under Anti defection law

3) Sudden death of the MLA/MP

4) Resignation

Select the correct answer using the code given below:

a)  1 and 2 only

b) 3 only

c)  2 and 4 only

d) 1, 2, 3 and 4

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

Explanation:

In NEWS: Election Commission declares bypolls, ends Bengal suspense

●    Elections were countermanded in the Shamshergunj and Jangipur Assembly constituencies where candidates succumbed to Covid (elections to the West Bengal Assembly were held on to 292 of the 294 seats). And in Khardaha, the Trinamool Congress (TMC) candidate, Kajal Sinha, died of Covid

●    The bypolls are crucial to Ms Banerjee continuing as the Chief Minister. She has lost Nandigram Assembly polls to BJP Suvendu Adhikari with a narrow margin of 1956 votes. Ms Banerjee has to get elected to the State Assembly by the first week of November, within six months of being elected as the Chief Minister.

Elections which are conducted only in a particular constituency or few particular constituencies because of

●    Sudden death of the MLA/MP.

●    Resignation to his post

●    Disqualified for any serious reason

●    If persons wins from two constituency in one election

●    If MLA MP is defected under Anti defection law

In any of the above scenarios, the election commission of India identifies the seat as vacant and notifies for the election. This election is called the bye-election. Hence option (d) is correct.

Sourcehttps://www.thehindu.com/elections/west-bengal-assembly/election-commission-announces-bypoll-for-bhabanipur-assembly-constituency/article36286426.ece

3. Consider the following statements:

1) The Komodo dragon is the largest living species of lizard and is endemic to India.

2) They are listed as Vulnerable by the IUCN.

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: (d) Neither 1 nor 2

Explanation:

In NEWS: Over 900 species of animals have become extinct according to latest IUCN Red List

●    Some 902 species are officially extinct according to the latest Red List brought out by the International Union for Conservation of Nature (IUCN) at the World Conservation Congress in Marseille, France September 4, 2021.

●    The Red List also shows that 30 percent of the species (38,543) that it assessed (138,374) face the threat of extinction.

●    Some 80 species are extinct in the wild, 8,404 are critically endangered, 14,647 are endangered, 15,492 are vulnerable and 8,127 are near threatened. Some 71,148 species are of least concern, while 19,404 are data deficient.

●    The updated Red List also showed that 37 per cent of the world’s shark and ray species were threatened with extinction.

●        The Komodo dragon is now endangered according to the latest IUCN Red List.Hence statement (2) is incorrect.

Komodo Dragon

●        They are the largest and heaviest lizards on Earth.   Hence statement (1) is incorrect.

●    They have long, flat heads with rounded snouts, scaly skin, bowed legs, and huge, muscular tails.

●    They can eat almost anything, including invertebrates, birds, and mammals.

●    They have venom glands loaded with toxins which secrete anticoagulants.

●    The species is endemic to Indonesia and occurs only in the World Heritage-listed Komodo National Park and neighbouring Flores.

Source: https://www.downtoearth.org.in/news/wildlife-biodiversity/over-900-species-of-animals-have-become-extinct-according-to-latest-iucn-red-list-78836

4. With respect to World Conservation Congress, Consider the following statements:

1) It is held once every four years.

2) It is functioning under the auspices of IUCN.

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: Ahead of IUCN event, IFAD calls for more investment to protect biodiversity

●    The International Union for the Conservation of Nature (IUCN) World Conservation Congress will be held in France’s second-largest city on its Mediterranean coast September 3-11, 2021. The event is organised every four years and is one of the biggest of its kind for biodiversity.

●    Development would not be sustainable and hunger would never be eradicated unless the world invested in protecting biodiversity, the president of the International Fund for Agricultural Development

●    FAD’s commitment to focus 30 percent of its climate finance to support nature-based solutions in rural small-scale agriculture by 2030.

●    This step had been taken as part of IFAD’s own increase in biodiversity investments

About World Conservation Congress

●        Held once every four years, the IUCN World Conservation Congress brings together several thousand leaders and decision-makers from government, civil society, indigenous peoples, business, and academia, with the goal of conserving the environment and harnessing the solutions nature offers to global challenges. . Hence statement (1) is correct and statement (2) is correct.

●    The Congress aims to improve how we manage our natural environment for human, social and economic development, but this cannot be achieved by conservationists alone.

●    The IUCN Congress is the place to put aside differences and work together to create good environmental governance, engaging all parts of society to share both the responsibilities and the benefits of conservation.

Source: https://www.downtoearth.org.in/news/wildlife-biodiversity/ahead-of-iucn-event-ifad-calls-for-more-investment-to-protect-biodiversity-78824

5. Recently seen in the news, RELOS agreement related to?

a)  India-USA

b) India-France

c)  India-Germany

d) India-Russia

Answer: (d) India – Russia

Explanation:

In NEWS: Logistics agreement with Russia shortly, in final stages with U.K.

●    India is all set to conclude the bilateral logistics agreement with Russia soon while the agreement with the U.K. is in the final stages of conclusion. The Navy has been the biggest beneficiary of these administrative arrangements, signed with several countries, improving operational turnaround and increasing interoperability on the high seas.

●    With Russia, the Reciprocal Exchange of Logistics Agreement (RELOS) is likely to be signed in a month or two while the one with the U.K. is in the final stages and should see a conclusion soon. Hence option (d) is correct.

●    The RELOS, which has seen several delays, gives India access to Russian facilities in the Arctic region which is seeing increased global activity as new shipping routes open up and India’s own investments in the Russian Far East.

6. Consider the following statements:

1) AT-1 bonds are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.

2) Investors cannot return AT-1 bonds to the issuing bank and get the money.

3) AT-1 bonds are listed and traded on the exchanges.

Which of the above statements is/are correct?

a)  1 and 3 only

b) 2 only

c)  1 only

d) 1, 2 and 3

Answer: (d) 1, 2 and 3

Explanation:

In NEWS: SBI raises Rs4,000 crore via AT1 bonds

●    The country’s largest lender State Bank of India (SBI) said it has raised Rs4,000 crore via additional Tier 1 bonds at a coupon rate of 7.72%, the first such issuance in the domestic market after the Securities and Exchange Board of India issued new rules.

●    While SBI has AAA credit rating from local credit agencies, the AT1 offering is rated AA+, which is the highest rating in the country for such instruments, given their hybrid and high-risk nature.

About AT-1 bonds

●        AT-1 bonds are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms. . Hence statement (1) is correct.

●    AT-1 bonds are like any other bonds issued by banks and companies, but pay a slightly higher rate of interest compared to other bonds.

●        These bonds are also listed and traded on the exchanges. So, if an AT-1 bondholder needs money, he can sell it in the secondary market. Hence statement (3) is correct.

●        Investors cannot return these bonds to the issuing bank and get the money. i.e there is no put option available to its holders. . Hence statement (2) is correct.

●    However, the issuing banks have the option to recall AT-1 bonds issued by them (termed call options that allow banks to redeem them after 5 or 10 years).

●    Banks issuing AT-1 bonds can skip interest payouts for a particular year or even reduce the bonds’ face value.

●    AT-1 bonds are regulated by RBI. If the RBI feels that a bank needs a rescue, it can simply ask the bank to write off its outstanding AT-1 bonds without consulting its investors.

There are two routes through which these bonds can be acquired:

●    Initial private placement offers of AT-1 bonds by banks seeking to raise money.

●    Secondary market buys of already-traded AT-1 bonds.

Source: https://www.livemint.com/companies/news/sbi-raises-rs4-000-crore-via-at1-bonds-11630496070501.html

7. Consider the following statement regarding Hycean planet:

1) It is a habitable planet described as a hot, water-covered planet with a hydrogen-rich atmosphere

2) These exoplanets could support microbial underwater life.

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:

●        A team of astronomers have identified a class of planets namely exoplanets – with hydrogen-rich atmosphere, they believe these ‘Hycean planets’ could host life as we know it, according to a research published in ‘The Astrophysical Journal’. There are numerous exoplanets which means they could be fertile territory in the search for alien life. Hence statement (1) is correct.

●    Dubbed as ‘Hycean’ — hot, ocean-covered planets with hydrogen-rich atmospheres, the new class of exoplanets are more numerous and observable than Earth-like planets, and can support life

●    In future, atmospheres of Hycean worlds can be looked to try and identify biosignatures – compounds including ozone, oxygen and methane, but on Hycean worlds, which don’t have as much atmospheric oxygen, other compounds, such as methyl chloride and dimethyl sulphide, could signal the presence of life.

●        Hycean planets can be up to 2.6 times larger than Earth and have atmospheric temperatures up to nearly 200 degrees Celsius, but their oceanic conditions could be similar to those conducive for microbial life in Earth’s oceans. Hence statement (2) is correct.

●    These planets also allow for a far wider habitable zone, or ‘Goldilocks zone’, compared to Earth-like planets. This means that they could still support life even though they lie outside the range where a planet similar to Earth would need to be in order to be habitable.

Source: https://www.indiatvnews.com/science/new-habitable-exoplanets-to-boost-search-for-life-out-of-solar-system-729293

8. With reference to World Meteorological Organization, Consider the following statements:

1) It is the specialised agency of the United Nations for meteorology, operational hydrology and related geophysical sciences.

2) It is headquartered in Geneva.

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: Weather disasters killed 2 million in last 50 years, UN agency says

●    The number of disasters, such as floods and heatwaves, driven by climate change have increased fivefold over the past 50 years, killing more than 2 million people and costing $3.64 trillion in total losses, a UN agency

●    The World Meteorological Organization (WMO) says its “Atlas” is the most comprehensive review of mortality and economic losses from weather, water and climate extremes ever produced.

●    It surveyed some 11,000 disasters occurring between 1979-2019, including major catastrophes such as Ethiopia’s 1983 drought, which was the single most fatal event with 3,00,000 deaths, and Hurricane Katrina in 2005 that was the most costly, with losses of $163.61 billion.

●    The report showed an accelerating trend, with the number of disasters increasing nearly fivefold from the 1970s to the most recent decade, adding to signs that extreme weather events are becoming more frequent due to global warming.

●    The WMO attributed the growing frequency to both climate change and improved disaster reporting.

●    The WMO hopes the report, which gives a detailed regional breakdown, will be used to help governments develop policies to better protect people.

●    More than 91% of the 2 million deaths occurred in developing countries, the report said, noting that only half of the WMO’s 193 members have multi-hazard early warning systems.

World Meteorological Organization:

●        The World Meteorological Organization (WMO) is an intergovernmental organization with a membership of 193 Member States and Territories. Hence statement (1) is correct.

●        It originated from the International Meteorological Organization (IMO), the roots of which were planted at the 1873 Vienna International Meteorological Congress.

●        Established by the ratification of the WMO Convention on 23 March 1950, WMO became the specialised agency of the United Nations for meteorology (weather and climate), operational hydrology and related geophysical sciences a year later.

●        The Secretariat, headquartered in Geneva, is headed by the Secretary-General. . Hence statement (2) is correct.

●        Its supreme body is the World Meteorological Congress.

Source: https://indianexpress.com/article/world/weather-disasters-killed-2-million-in-last-50-years-un-agency-says-7482425/

9. Recently, which one of the following state governments announced its plan to set up India’s first Dugong Conservation Reserve?

a)  Odisha

b) Andhra Pradesh

c)  Karnataka

d) Tamilnadu

Answer: (d) Tamilnadu

Explanation:

In NEWS: India’s 1st dugong conservation reserve to be in Tamil Nadu

●    The State government in Assembly on Friday declared 500 sq.km of the biodiversity-rich waters in the Palk Bay, on the southeast coast of Tamil Nadu, as India’s first dugong conservation reserve.

●    The reserve will span the northern part of the Palk Bay from Adirampattinam to Amapattinam.

●    Marine biologists and conservationists have long demanded a reserve as the population of dugongs, known as sea cows, in Indian waters has been dropping to dangerous levels.

●    According to Wildlife Institute of India (WII) estimates, only 200-250 Dugongs are left in the wild, of which 150 are found in the Palk Bay and Gulf of Mannar in Tamil Nadu, among the last surviving natural habitats for dugongs in the world. 

●    AS part of the CAMPA-Dugong Recovery Project, various surveys were conducted in the Palk Bay and Gulf of Mannar, from November 2016 to March 2019. A dugong with its calf was sighted in the proposed reserve on December 29, 2018, the first sighting of dugongs in the wild in Tamil Nadu. 

About Dugong

●    Dugong is a sea mammal and is the only living species of the order Sirenia.

●    The mammal is restricted to coastal habitat because of seagrass, which is a major part of its diet. They have a distinct dolphin-like tail, different skull form and teeth pattern.

●    Its closest relative is Steller’s Sea cow, which went extinct in the eighteenth century.

●    The IUCN has listed dugong as a “vulnerable to extinction species”. On the other hand, the Convention on International Trade in Endangered Species has limited or banned the trade of derived products. Hence option (d) is correct.

Source: https://www.newindianexpress.com/states/tamil-nadu/2021/sep/04/indias-1st-dugong-conservation-reserve-to-be-in-tn-2354056.html

10. Which one of the following is a very significant aspect of the Champaran Satyagraha?

(a)                     Active all-India participation of lawyers, students and women in the National Movement

(b)                    Active involvement of Dalit and Tribal communities of India in the National Movement

(c)                     Joining of peasant unrest to India’s National Movement

(d)                    Drastic decrease in the cultivation of plantation crops and commercial crops

Answer: (c) Joining of peasant unrest to India’s National Movement

Explanation:

The Champaran peasant movement was launched in 1917-18. Its objective was to create awakening among the peasants against the European planters. These planters resorted to illegal and inhumane methods of indigo cultivation at a cost which by no canons of justice could be called an adequate remuneration for the labour done by the peasants. Hence option (c) is correct.