Question Discussion & Solution

The correct answer is 2011-12.

Key Points

• The Index of Industrial Production (IIP)
  • It is a short-term macroeconomic indicator widely used in measuring the industrial growth of the State.
  • The index indicates the relative change over time in the volume of production in the industrial sector and it is an effective tool to measure the trend of current industrial production.
  • Presently IIP is constructed based on the base year 2011-12. Hence, Option 3 is correct.
  • The Directorate of Economics and Statistics, Department of Planning, Rajasthan has been compiling/releasing an index of industrial production for the Rajasthan State since 1971 as per the guidelines of the Central Statistical Office (CSO), Govt. of India.
  • New base year IIP series based on 156 items/product groups for the manufacturing sector.
  • Shifting of the base year 2011-12 are in process to get monthly Production data from April 2011 onwards for a selected item for selected units in the prescribed format given by C.S.O.
  • Three major sectors in IIP 
    • Manufacturing:- For Manufacturing Sector the Production data is collecting for selected items from selected industrial units through district statistical officer’s and Now IIP web Portal has been developed for the collection of regular data from districts through an online system.
    • Mining:- Mining sector production data is supplied by the Indian Bureau of Mines, (IBM) Nagpur.
    • Electricity:- Electricity sector generation figures furnished by the Central Electricity Authority New Delhi.

The correct answer is Neither 1 nor 2.

Key Points

• Agriculture is the backbone of the Indian economy.
• Over the years, there has been a continuous decline in the share of the agriculture and allied activities sector to total GDP from around 52% in FY1951 to around 14% in FY2014.
• Agriculture is the main source of employment generation in India.
• It still provides more than 50% employment. In absolute terms, the working population engaged in the agriculture sector increased from 97.2 million to 234.1 million during 1950-2011.
• In India, the farming community uses the mixed crop-livestock farming system — cattle, goats, fowl are the widely held species.
• Livestock production provides increased stability in income, food security, transport, fuel, and nutrition for the family without disrupting other food-producing activities.
• The distribution of livestock in India:
  • Poultry accounts for the largest share with 58 per cent followed by cattle and buffaloes (24 per cent), goats and sheep (16 per cent), pigs (1 per cent).
  • Other animals which include camels, asses, horses, ponies, and mules are in the lowest rung. Hence, statement 1 is not correct.
• In the fisheries sector, presently, fish production from inland sources contributes about 64 per cent to the total value of fish production, and the balance of 36 per cent comes from the marine sector (sea and oceans).
• Today total fish production accounts for 0.8 per cent of the total GDP. In India, West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra, and Tamil Nadu are major fish-producing states. Hence, statement 2 is not correct.

The correct answer is Sales tax.

Key Points

• The principal source of State's own tax revenues is a sales tax which accounts for about 60 percent of the total.
• The taxation system in India is such that the taxes are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as the Municipality and the Local Governments.
• To run the government and manage the affairs of a state, money is required. So the government imposes taxes in many forms on the incomes of individuals and companies.
• Broadly taxes are divided into two categories:
  • Direct Taxes
  • Indirect Taxes
• Indirect Taxes:
  • The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax such as sales tax, a specific tax, value-added tax (VAT), or goods and services tax (GST) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer).
  • The intermediary later files a tax return and forwards the tax proceeds to the government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by the government from the persons (legal or natural) on which it is imposed.
  • Excise duty, value-added tax, and sales tax are included under the GST.

The correct answer is 1 only

Key Points

• Small Industries Development Bank of India (SIDBI)
  • SIDBI is the principal development financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprises (MSME) sector in India.
  • It was established on April 2, 1990, through an Act of Parliament (thus, it is a statutory body).
  • It is headquartered in Lucknow, Uttar Pradesh.
  • SIDBI aims to facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system across the country. Hence statement 1 is correct.
  • It coordinates functions of institutions engaged in similar activities.
  • Currently, the shares of SIDBI are held by Central Government and 29 other institutions including public sector banks (PSBs), insurance companies owned and controlled by Central Government.

• Functions of SIDBI:
  • It aims at emerging as a single-window to meet the developmental and financial needs of MSMEs in order to make them globally competitive, strong, vibrant and to protect the institution as a customer-friendly financial body. 
  • It also aims at enhancing the wealth of shareholders through the modern technology platform.
  • It is involved in the promotion and development of the MSME sector.
  • It is the principal institution for the development, promotion and financing of the MSME sector and for the coordination of functions of the institutions engaged in similar activities.
  • SIDBI retained its position in the top 30 Development Banks of the World in the ranking of The Banker, London.
     
• Note: Statement 2 is not correct, because SIDBI does not provide all type of loan to the agriculture sector.

The correct answer is 2 only.

Key Points

• Indian Agriculture:
  • ​The share of agriculture in the gross domestic product (GDP) has reached almost 20 per cent for the first time in the last 17 years, making it the sole bright spot in GDP performance during 2020-21, according to the Economic Survey 2020-2021.​ Hence statement 1 is not correct.
  • The resilience of the farming community in the face of adversities made agriculture the only sector to have clocked a positive growth of 3.4 per cent at constant prices in 2020-21 when other sectors slid.
  • The share of agriculture in GDP increased to 19.9 per cent in 2020-21 from 17.8 per cent in 2019-20. The last time the contribution of the agriculture sector in GDP was at 20 per cent was in 2003-04.
• Dependence on monsoon:
  • Reliance on seasonal rainfall hampers productivity. Additionally, change in climatic conditions and erratic weather patterns such as cyclones and droughts can impact the yields of agricultural crops.
  • The growth of India’s agriculture sector has been dependent on monsoons, and as a result, it has been volatile. Hence statement 1 is correct.
  • The government is now encouraging micro-irrigation to improve water usage/efficiency.
• Government initiatives:
  • Improve soil fertility on a sustainable basis through the soil health card scheme.
  • Provide improved access to irrigation and enhanced water efficiency through Pradhan Mantri Krishi Sinchai Yojana (PMKSY).
  • Support organic farming through Paramparagat Krishi VikasYojana (PKVY).
  • Creation of a unified national agriculture market to boost the income of farmers.
  • To mitigate risk in the agriculture sector, “Pradhan Mantri Fasal BimaYojana (PMFBY) has been launched for implementation from Kharif 2016.