Indian Economy MCQs

Notes:
General Anti-Avoidance Rule or GAAR is a broad set of rules aimed at curbing aggressive tax planning. These rules will empower tax authorities to disregard any arrangement if its main purpose is to obtain tax benefit. The arrangement as a whole or in part may be disregarded and tax benefit denied.

Notes:
EPFO, Employees’ Provident Fund Organisation, manages over Rs 28 lakh crore in assets as of 2023. EPFO allocates more than 89% of its portfolio to debt instruments. The organization invests in central and state government securities, State Development Loans, and corporate bonds. EPFO was established in 1952 under the Employees’ Provident Funds and Miscellaneous Provisions Act.

Notes:
Transfer pricing refers to pricing of transactions between associated enterprises, specified in Section 92 of the Income Tax Act, 1961. India implemented transfer pricing provisions in 2001 to prevent shifting profits to low-tax jurisdictions by related parties. The law requires use of the arm’s length principle for cross-border and certain domestic transactions between related parties.

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Unified Package Insurance Scheme aims at providing financial protection to citizens associated in agriculture sector, thereby ensuring food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from financial risks. The cover will be for one full year except for Crop Insurance (which will be bi-annual separately for Kharif and Rabi seasons) renewable from year to year.

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Indirect taxes such as GST and excise duties are levied at uniform rates regardless of the income level of the consumer. This results in all consumers, irrespective of their earning capacity, paying the same rate on goods and services. Indirect taxes are considered regressive for this reason. The tax rate is not linked to income or earning ability.

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The SARFAESI Act allowed the creation of asset reconstruction companies (ARC) and allowed banks to sell their non-performing assets to ARCs.

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The GDP deflator is a measure of price inflation. It is calculated by dividing Nominal GDP by Real GDP and then multiplying by 100. Nominal GDP is the market value of goods and services produced in an economy, unadjusted for inflation

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There are three component of capital market are:- EQUITY MARKET, DEBT MARKET and DERIVATIVE MARKET.

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The fifth plan was terminated by the Janta Government in 1977-78 and they launched their own sixth plan for the period 1978-83 and called it ” rolling plan” later the Janta government came down and Indira Gandhi again became prime minister of India who immediately discarded the sixth plan by the Janta government and launched her own plan for year 1980-85. The year 1978-79 was restored back to fifth plan of 1974-79.

Notes:
The textile industry is the largest employer in India after agriculture. It directly employs about 45 million people as of 2023. Including allied sectors, total employment exceeds 100 million. The industry includes handlooms, powerlooms, spinning, and garment manufacturing. The Indian textile and apparel market was valued at USD 223 billion in 2021 and has significant export share globally.