There is still time to fix the problem as the endgame--a full-scale run on sovereign debt--has not begun yet
Viral V Acharya & T Sabri, The Mint, Jul 31 2011
On 21 June, Fitch Ratings reported that the 10 biggest US prime money market mutual funds (MMMFs) had half of their assets exposed to European banks. On 23 June, when 16 Italian banks faced a possible rating downgrade, tensions in US MMMFs surfaced: about $3.6 billion in assets were pulled out of prime MMMFs and the three-month treasury bill rate went into negative territory, last seen in late 2008. On 24 June, after a rumour that Italian banks would have to raise more equity after the European stress test, Italian bank stocks crashed within minutes and the weakness of Italian bank stocks quickly spread across Europe.
Although markets showed some relief after the Greek parliament approved the €78 billion austerity programme on 29 June, US MMMFs remain wary of lending to European banks. A few hours before the Greek vote, senior International Monetary Fund officers warned given that many banks in Europe’s core countries are funded in good part by US MMMFs, a spillover of the Greece crisis into the rest of the continent could have dangerous effects. These events may appear reminiscent of the Lehman collapse in 2008. If history is any guide, however, we believe that we are still not there yet.
By Shyamal Banerjee/MintTo explain why, let us go back to 2006 and recall that most non-prime mortgages were securitized. When the US housing market changed course in 2006, the non-prime mortgage market began to deteriorate and many borrowers became insolvent. Since most non-prime mortgages were funded short-term in rollover debt markets, creditors began to refuse funding to their levered debtors in early 2007 and the crisis came in August following a “bank” run on two highly levered Bear Stearns hedge funds investing in non-prime mortgages in June 2007 in the repo market. It took eight months of further runs for Bear Stearns to collapse in March 2008; another five months of runs for Lehman to collapse and Merrill Lynch to merge with Bank of America in September 2008; and two more months for the entire Wall Street system of independent broker-dealers to collapse when Morgan Stanley and Goldman Sachs were forced to convert to bank holding companies.
Let us fast forward to the Europe of June 2011 and ask: Are we near June 2007, March 2008 or September 2008? We believe even June 2007 has not arrived yet which gives us hope that an appropriate policy response is still possible. In fact, the financial crisis that started in the US in 2007 offers valuable policy lessons in how to avoid the build-up to a Lehman event. One, while liquidity support from central banks to distressed entities can help them live another day, they do not provide a sustainable solution to their distress. Second, distressed entities can get addicted to the liquidity support refusing to make difficult choices to reduce their leverage and recapitalize. And third, a one-time decisive recapitalization of distressed entities based on transparent and credible assessment of how much capital the system needs is the only policy action that restores growth and stability by calming markets that are worried about distress.
While the European situation is more complex due to the inter-mix of bank and sovereign debt exposures, we believe that similar principles apply:
• First, a recapitalization of banks
• Second, a recapitalization of the distressed sovereigns
In particular, the possible steps of a comprehensive plan may be:
1. Sovereign bond holdings of the European Central Bank—where bonds are distressed—should be separated from its balance sheet into a special purpose vehicle. Any potential losses on these bond holdings should be met through the funds put into the European stabilization mechanism.
2. Sufficiently severe stress tests should be applied to systemically important European financial institutions, where the tests include reasonably plausible haircuts on sovereign bonds on both banking and trading books. Those systemically important financial firms found to be short of capital should be recapitalized privately and promptly. For those that cannot, stabilization funds should be used to do government recapitalization of these firms, as necessary.
3. Sovereign debt restructuring should follow this recapitalization of exposed financial firms. There is no way some of the troubled sovereigns can generate growth without first reducing the debt overhang. Further, any failure to reduce debt overhang puts at risk the welfare of future generations in these countries.
In summary, full bailouts of all troubled nations are beyond the pockets of even the wealthiest countries. Those who aim to avoid restructuring debt by simply window dressing it are delaying the inevitable; in the short run, their efforts help the financial sector in wealthy countries, but produce little to fix the core issue—the insolvency problem of troubled countries. The real risk is that in the end, as with Lehman bankruptcy, all will have to pay. This risk can be managed through appropriate policies as the endgame of full-scale run on sovereign debt—and the likely market freezes that may result— has not even started! (Source: The Mint)
Sunday, July 31, 2011
US debt shakes Indian mkts, but economy safe
Sandeep Singh, Hindustan Times
Mumbai, July 31, 2011
Will the grim debt scenario that is being played out in the US embrace the Indian economy, or will it just be a passing gust of financial wind?
The US stock markets fell for the last six trading sessions, and the Dow Jones Industrial index lost 4.6% as the world's largest economy moved closer to a debt default and a rating downgrade.
The Indian markets followed suit, and in the last four sessions to Friday, the Bombay Stock Exchange benchmark Sensex lost 673 points or 3.6%.
The US debt-ceiling issue may well get sorted out before Tuesday, and even an actual US default may not have a broad impact on India's domestic growth and economic fundamentals. But market sentiments are a different story.
"Previous US debt ceiling revision experiences across several decades suggests that the ceiling will be revised upwards even this time," said Nilesh Shah, president, corporate banking, Axis Bank. "However it will be a big setback for investor sentiment if it technically defaults as the AAA rated economy will get downgraded."
But India's growth is not likely to be hit, feel economists.
"It won't impact India on the macro-economic front. (But) since the global recovery is fragile such a thing will shake the overall confidence," said DK Joshi, principal economist, Crisil.
On the contrary, a rating downgrade of US treasury from its current AAA may actually work to the benefit fo emerging economies, say experts.
US Treasury has been considered a safe haven, and in the past investors shifted from emerging markets to the US treasury in risk scenarios. In the event of a US default this pattern may well change.
"Their pain may become our gain in the medium term and it is possible that people will shift their money from US treasury to emerging markets including India," felt Shah.
"Talks of US debt default have been on for some time now... the immediate reaction will be muted as compared to 2008 (when Lehman Brothers folded up)," he said.
Mumbai, July 31, 2011
Will the grim debt scenario that is being played out in the US embrace the Indian economy, or will it just be a passing gust of financial wind?
The US stock markets fell for the last six trading sessions, and the Dow Jones Industrial index lost 4.6% as the world's largest economy moved closer to a debt default and a rating downgrade.
The Indian markets followed suit, and in the last four sessions to Friday, the Bombay Stock Exchange benchmark Sensex lost 673 points or 3.6%.
The US debt-ceiling issue may well get sorted out before Tuesday, and even an actual US default may not have a broad impact on India's domestic growth and economic fundamentals. But market sentiments are a different story.
"Previous US debt ceiling revision experiences across several decades suggests that the ceiling will be revised upwards even this time," said Nilesh Shah, president, corporate banking, Axis Bank. "However it will be a big setback for investor sentiment if it technically defaults as the AAA rated economy will get downgraded."
But India's growth is not likely to be hit, feel economists.
"It won't impact India on the macro-economic front. (But) since the global recovery is fragile such a thing will shake the overall confidence," said DK Joshi, principal economist, Crisil.
On the contrary, a rating downgrade of US treasury from its current AAA may actually work to the benefit fo emerging economies, say experts.
US Treasury has been considered a safe haven, and in the past investors shifted from emerging markets to the US treasury in risk scenarios. In the event of a US default this pattern may well change.
"Their pain may become our gain in the medium term and it is possible that people will shift their money from US treasury to emerging markets including India," felt Shah.
"Talks of US debt default have been on for some time now... the immediate reaction will be muted as compared to 2008 (when Lehman Brothers folded up)," he said.
Thursday, July 14, 2011
China’s GDP growth slows to 9.5 per cent
(Source: Indian Express/Associated Press Posted online: Thu Jul 14 2011, 01:53 hrs)
Beijing : China’s rapid economic growth slowed in the latest quarter to a still robust 9.5 per cent, easing fears of an abrupt slowdown and giving Beijing room to tighten controls to fight surging inflation.
Growth slowed from 9.7 per cent in the January-March quarter following repeated interest rate hikes and other controls, data showed Wednesday. Factory output rebounded and retail sales grew by double digits.
While the US and Europe try to shore up sluggish growth, Beijing wants to steer its breakneck expansion to a more manageable level and cool inflation that soared to a three-year high of 6.4 per cent in June. “The strength of the economy will make them confident and well prepared to impose more tightening measures if needed,” said Frances Cheung, a senior strategist for Credit Agricole CIB in Hong Kong.
Many analysts had expected second-quarter growth of 9.3 per cent to 9.5 per cent. Asian stock markets, which have wilted in recent days amid Europe’s worsening debt crisis, got a boost from the Chinese economy’s resilience.
The slowdown in the world’s second-largest economy could have global repercussions if it cuts into demand for iron ore, factory machinery and other imports. Data released earlier showed China’s import growth fell sharply in June.
Inflation is politically dangerous for the communist government because it erodes the public’s economic gains and can fuel unrest. Analysts expect inflation to ease later in the year but June’s unexpectedly sharp price rises, driven by a 14.4 per cent jump in food costs, prompted suggestions Beijing might hike rates again or tighten other controls.
“Stabilising prices remains the top priority for our macro-regulatory policies,” Premier Wen Jiabao told a group of businesspeople on Tuesday, according to the official Xinhua News Agency.
Beijing : China’s rapid economic growth slowed in the latest quarter to a still robust 9.5 per cent, easing fears of an abrupt slowdown and giving Beijing room to tighten controls to fight surging inflation.
Growth slowed from 9.7 per cent in the January-March quarter following repeated interest rate hikes and other controls, data showed Wednesday. Factory output rebounded and retail sales grew by double digits.
While the US and Europe try to shore up sluggish growth, Beijing wants to steer its breakneck expansion to a more manageable level and cool inflation that soared to a three-year high of 6.4 per cent in June. “The strength of the economy will make them confident and well prepared to impose more tightening measures if needed,” said Frances Cheung, a senior strategist for Credit Agricole CIB in Hong Kong.
Many analysts had expected second-quarter growth of 9.3 per cent to 9.5 per cent. Asian stock markets, which have wilted in recent days amid Europe’s worsening debt crisis, got a boost from the Chinese economy’s resilience.
The slowdown in the world’s second-largest economy could have global repercussions if it cuts into demand for iron ore, factory machinery and other imports. Data released earlier showed China’s import growth fell sharply in June.
Inflation is politically dangerous for the communist government because it erodes the public’s economic gains and can fuel unrest. Analysts expect inflation to ease later in the year but June’s unexpectedly sharp price rises, driven by a 14.4 per cent jump in food costs, prompted suggestions Beijing might hike rates again or tighten other controls.
“Stabilising prices remains the top priority for our macro-regulatory policies,” Premier Wen Jiabao told a group of businesspeople on Tuesday, according to the official Xinhua News Agency.
After 2 years, GoM wakes up to discuss opening up mining
(Source: Indian Express by Amitav Ranjan Posted online: Thu Jul 14 2011, 02:12 hrs)
New Delhi : The UPA government has suddenly revived a two-year old proposal to open up coal mining for commercial sale. A Group of Ministers under Finance Minister Pranab Mukherjee, constituted almost two years back on August 26, 2009, is scheduled to meet for the first time to consider re-introduction of a bill to amend the Coal Mines (Nationalisation) Act, 1973 that will allow private Indian companies extract coal for commercial sale.
The GoM meeting has been convened in short notice with the Coal Ministry drafting a proposal on Tuesday and circulating it today for vetting by other ministries. Given the large demand-supply gap that will only widen over the next five years, India will have to import over 100 million tonnes of coal each year — a step that will skew international prices, it has pointed out in its proposal.
According to the Planning Commission, that is servicing the GoM, coal demand for 2011-12, the terminal year of the 11th Plan, stood at 696 MT implying a compounded annual growth rate of 8.9 per cent.
As against this, production for this fiscal is pegged at 554 MT. To bridge the divide, the fuel’s end users have been resorting to imports, which surged from 49 MT on 2007-08 to 95 MT in 2010-11. The Plan panel has noted that coal imports could shoot up to 114 MT in 2011-12, although a lot would depend on the status of existing linkages.
If coal mines were to be denationalised, private investments would augment domestic supply as well as galvanise state-run coal companies to perform better, the ministry said.
It, however, warned that with trade unions opposing the move, the re-introduction of the Bill could result in strikes that could hamper other sectors such as power and steel. It has, therefore, left it for the GoM to provide directions if the amended Bill should be introduced in the coming session of Parliament.
At present, only public sector companies can mine coal for open market sale while private companies engaged in power generation and iron and steel production are allotted coal blocks only for captive use.
There have been numerous attempts since 1997 but an amendment could be introduced in the Rajya Sabha only in April 2000.
But this was stalled with trade unions demanding its withdrawal though the Standing Committee on Energy supported the move in 2001.
The proposal came up again in the Cabinet Committee on Infrastructure during the UPA regime but given strong opposition by trade unions, Prime Minister Manmohan Singh referred the issue to GoM for arriving at “a consensus”.
New Delhi : The UPA government has suddenly revived a two-year old proposal to open up coal mining for commercial sale. A Group of Ministers under Finance Minister Pranab Mukherjee, constituted almost two years back on August 26, 2009, is scheduled to meet for the first time to consider re-introduction of a bill to amend the Coal Mines (Nationalisation) Act, 1973 that will allow private Indian companies extract coal for commercial sale.
The GoM meeting has been convened in short notice with the Coal Ministry drafting a proposal on Tuesday and circulating it today for vetting by other ministries. Given the large demand-supply gap that will only widen over the next five years, India will have to import over 100 million tonnes of coal each year — a step that will skew international prices, it has pointed out in its proposal.
According to the Planning Commission, that is servicing the GoM, coal demand for 2011-12, the terminal year of the 11th Plan, stood at 696 MT implying a compounded annual growth rate of 8.9 per cent.
As against this, production for this fiscal is pegged at 554 MT. To bridge the divide, the fuel’s end users have been resorting to imports, which surged from 49 MT on 2007-08 to 95 MT in 2010-11. The Plan panel has noted that coal imports could shoot up to 114 MT in 2011-12, although a lot would depend on the status of existing linkages.
If coal mines were to be denationalised, private investments would augment domestic supply as well as galvanise state-run coal companies to perform better, the ministry said.
It, however, warned that with trade unions opposing the move, the re-introduction of the Bill could result in strikes that could hamper other sectors such as power and steel. It has, therefore, left it for the GoM to provide directions if the amended Bill should be introduced in the coming session of Parliament.
At present, only public sector companies can mine coal for open market sale while private companies engaged in power generation and iron and steel production are allotted coal blocks only for captive use.
There have been numerous attempts since 1997 but an amendment could be introduced in the Rajya Sabha only in April 2000.
But this was stalled with trade unions demanding its withdrawal though the Standing Committee on Energy supported the move in 2001.
The proposal came up again in the Cabinet Committee on Infrastructure during the UPA regime but given strong opposition by trade unions, Prime Minister Manmohan Singh referred the issue to GoM for arriving at “a consensus”.
Wages of virtue
(Source: Indian Express by P. Raghavan Posted online: Thu Jul 14 2011, 00:28 hrs)
The results of the 66th round of the National Sample Survey (NSS), which was conducted in 2009-10 and focused on employment, have been mired in controversy, with some experts questioning the credibility of the numbers. Its findings — a sharp deceleration the growth of the labour force, of the workforce and even of unemployment rates, have been challenged. However, the clamour about the robustness of the survey’s results has only served to camouflage its other major finding: the sharp surge in wages to an all-time high.
This is an important indicator of the growing impact of an inclusive growth strategy. And what is more significant is that wage gains have been extensive, covering all labour markets — both rural and urban, male and female, This, perhaps, explains the continued buoyancy in consumer markets despite the stagnant level of investment in the last few years.
Also interesting is the reversal of trends in growth rates. Wage gains have accelerated faster for women workers, in both salaried and casual-worker segments. For regular, or salaried, employees, the largest gains have been in urban markets; for casual workers, in rural markets — possibly due to the impact of NREGA. However, looking at the wage-gain numbers across genders shows that it was female workers who made the largest gains, in both rural and urban sectors. This might indicate a tightening in the availability of female workers across the board — perhaps due to withdrawals from the labour force.
On the positive side, the higher growth of wages for female workers has pushed up the ratio of female-to-male wages across most segments. The only exception is the urban casual-labour market, where the ratio has been relatively stable. This is a significant turnaround; the female-to-male wage ratio had steadily declined for almost three decades since 1983.
A look at the trends over the last 10 years would provide a better perception of these gains. While the wages of urban, salaried women workers grew an annual average rate of 15 per cent to Rs 309 in the five years between 2004-05 and 2009-10, the wages of regular women workers in the rural sector increased by 12.8 per cent, to Rs 156. In contrast, the wages of male salaried workers went up by only 13.2 per cent, to Rs 378 in the urban sector and by 11.4 per cent, to Rs 149 in the rural sector.
For casual workers, too, wages increases were the highest for female workers, up by 14.6 per cent to Rs 69 in the rural sector, and by 11.8 per cent to Rs 77 in the urban sector. For male casual workers, wages grew at a lower 13 per cent to Rs 102 in the rural sector, and 11.5 per cent to Rs 132 in the urban sector.
But despite the significant wage gains made in the last five years, wage rates remain highly skewed. Look, for instance, at the daily average earnings of male, salaried urban workers. This is the best-off, highest-paid labour segment; and in big states, their average earnings varied sharply, from Rs 283 to Rs 709. The most disadvantaged segment of the workforce, is female casual workers in rural areas; and here the disparity was even larger, with daily wages varying between Rs 58 to Rs 207 during the year.
And where was the average daily wages of the regular or salaried workers the highest? Interestingly, not in the richest states, but in middle- and low-income states, including Chhattisgarh, Jharkhand, Himachal Pradesh and Kerala. In sharp contrast, male urban regular workers were paid the lowest in the richest states like Gujarat, Haryana, and Tamil Nadu. (The difference is between Rs 150 and Rs 200.) It is indeed a puzzle why fast-industrialising states, like Gujarat and Tamil Nadu, with larger manufacturing sectors, continue to be among those with the lowest wages for regular salaried employees. Is it perhaps that the low wages here are an added incentive for rapid industrialisation?
Coming to the female casual workers in the rural sector — the most disadvantaged labour segment — states with the highest wages included Kerala, Himachal Pradesh, Haryana, Uttaranchal, Rajasthan and Punjab. In contrast, the states which paid the lowest daily wage to female casual workers in the rural sector included both middle-income and poor states: Madhya Pradesh, Maharashtra, Orissa, Karnataka and Chhattisgarh.
It certainly looks like it will take a long time for wage rates to converge across states.
The writer is a senior editor with ‘The Financial Express’
The results of the 66th round of the National Sample Survey (NSS), which was conducted in 2009-10 and focused on employment, have been mired in controversy, with some experts questioning the credibility of the numbers. Its findings — a sharp deceleration the growth of the labour force, of the workforce and even of unemployment rates, have been challenged. However, the clamour about the robustness of the survey’s results has only served to camouflage its other major finding: the sharp surge in wages to an all-time high.
This is an important indicator of the growing impact of an inclusive growth strategy. And what is more significant is that wage gains have been extensive, covering all labour markets — both rural and urban, male and female, This, perhaps, explains the continued buoyancy in consumer markets despite the stagnant level of investment in the last few years.
Also interesting is the reversal of trends in growth rates. Wage gains have accelerated faster for women workers, in both salaried and casual-worker segments. For regular, or salaried, employees, the largest gains have been in urban markets; for casual workers, in rural markets — possibly due to the impact of NREGA. However, looking at the wage-gain numbers across genders shows that it was female workers who made the largest gains, in both rural and urban sectors. This might indicate a tightening in the availability of female workers across the board — perhaps due to withdrawals from the labour force.
On the positive side, the higher growth of wages for female workers has pushed up the ratio of female-to-male wages across most segments. The only exception is the urban casual-labour market, where the ratio has been relatively stable. This is a significant turnaround; the female-to-male wage ratio had steadily declined for almost three decades since 1983.
A look at the trends over the last 10 years would provide a better perception of these gains. While the wages of urban, salaried women workers grew an annual average rate of 15 per cent to Rs 309 in the five years between 2004-05 and 2009-10, the wages of regular women workers in the rural sector increased by 12.8 per cent, to Rs 156. In contrast, the wages of male salaried workers went up by only 13.2 per cent, to Rs 378 in the urban sector and by 11.4 per cent, to Rs 149 in the rural sector.
For casual workers, too, wages increases were the highest for female workers, up by 14.6 per cent to Rs 69 in the rural sector, and by 11.8 per cent to Rs 77 in the urban sector. For male casual workers, wages grew at a lower 13 per cent to Rs 102 in the rural sector, and 11.5 per cent to Rs 132 in the urban sector.
But despite the significant wage gains made in the last five years, wage rates remain highly skewed. Look, for instance, at the daily average earnings of male, salaried urban workers. This is the best-off, highest-paid labour segment; and in big states, their average earnings varied sharply, from Rs 283 to Rs 709. The most disadvantaged segment of the workforce, is female casual workers in rural areas; and here the disparity was even larger, with daily wages varying between Rs 58 to Rs 207 during the year.
And where was the average daily wages of the regular or salaried workers the highest? Interestingly, not in the richest states, but in middle- and low-income states, including Chhattisgarh, Jharkhand, Himachal Pradesh and Kerala. In sharp contrast, male urban regular workers were paid the lowest in the richest states like Gujarat, Haryana, and Tamil Nadu. (The difference is between Rs 150 and Rs 200.) It is indeed a puzzle why fast-industrialising states, like Gujarat and Tamil Nadu, with larger manufacturing sectors, continue to be among those with the lowest wages for regular salaried employees. Is it perhaps that the low wages here are an added incentive for rapid industrialisation?
Coming to the female casual workers in the rural sector — the most disadvantaged labour segment — states with the highest wages included Kerala, Himachal Pradesh, Haryana, Uttaranchal, Rajasthan and Punjab. In contrast, the states which paid the lowest daily wage to female casual workers in the rural sector included both middle-income and poor states: Madhya Pradesh, Maharashtra, Orissa, Karnataka and Chhattisgarh.
It certainly looks like it will take a long time for wage rates to converge across states.
The writer is a senior editor with ‘The Financial Express’
Monday, July 11, 2011
A new system
''Pilot projects will be implemented in six states.''
The recommendations made by the task force on subsidies headed by Nandan Nilekani can change the entire system of administering subsidies in the country. In its interim report, the task force has presented a plan for introduction of a phased system of cash transfers in place of the existing leaky system in the case of kerosene, LPG and fertilizers.
Pilot projects will be implemented in six states, including Tamil Nadu and Maharashtra, this year and the system will be extended all over the country later. It is known that the present system of subsidies is inefficient and, more often than not, the intended beneficiaries do not gain and the undeserving take advantage of them. Ways to improve the system have long been discussed and now there is an opportunity to try a method based on technology and management.
The proposed system envisages direct cash transfers to the targetted sections of population instead of sale of subsidised goods to them. In the case of kerosene, LPG and fertilizers there are two prices at present -- the actual price and the subsidised price. But in the new system there will be only one open market price.
The beneficiaries of subsidies will buy the goods from the market and get the subsidy transferred to their bank accounts from the government. The system can eliminate diversion and misuse of subsidised items. Kerosene is used for adulteration of diesel, domestic LPG is diverted for commercial use and manufacturers and rich farmers benefit more from fertilizer subsidy than poor farmers.
Middlemen can be eliminated if safe and proper arrangements are made for adequate supply of the needed items and for reaching the subsidy amount to the right persons. The government will be able to considerably reduce the subsidy amount on these items from the present Rs 80,000 crore and ensure that the subsidy reaches the really needy. The UID number will form an important tool for cash transfer and it is likely to prevent impersonation and fictitious claims.
But technology and management can go only to an extent. The major task of identifying the beneficiaries will still be left with the government machinery. Those who have vested interests in the existing system will try to scuttle the new proposal. Powerful persons can connive with officials to claim eligibility for subsidies or to open accounts in the names of poor people. But the malpractices can be reduced and eliminated once the system gets going.
(Source: Deccan Herald, 11 July, 2011)
The recommendations made by the task force on subsidies headed by Nandan Nilekani can change the entire system of administering subsidies in the country. In its interim report, the task force has presented a plan for introduction of a phased system of cash transfers in place of the existing leaky system in the case of kerosene, LPG and fertilizers.
Pilot projects will be implemented in six states, including Tamil Nadu and Maharashtra, this year and the system will be extended all over the country later. It is known that the present system of subsidies is inefficient and, more often than not, the intended beneficiaries do not gain and the undeserving take advantage of them. Ways to improve the system have long been discussed and now there is an opportunity to try a method based on technology and management.
The proposed system envisages direct cash transfers to the targetted sections of population instead of sale of subsidised goods to them. In the case of kerosene, LPG and fertilizers there are two prices at present -- the actual price and the subsidised price. But in the new system there will be only one open market price.
The beneficiaries of subsidies will buy the goods from the market and get the subsidy transferred to their bank accounts from the government. The system can eliminate diversion and misuse of subsidised items. Kerosene is used for adulteration of diesel, domestic LPG is diverted for commercial use and manufacturers and rich farmers benefit more from fertilizer subsidy than poor farmers.
Middlemen can be eliminated if safe and proper arrangements are made for adequate supply of the needed items and for reaching the subsidy amount to the right persons. The government will be able to considerably reduce the subsidy amount on these items from the present Rs 80,000 crore and ensure that the subsidy reaches the really needy. The UID number will form an important tool for cash transfer and it is likely to prevent impersonation and fictitious claims.
But technology and management can go only to an extent. The major task of identifying the beneficiaries will still be left with the government machinery. Those who have vested interests in the existing system will try to scuttle the new proposal. Powerful persons can connive with officials to claim eligibility for subsidies or to open accounts in the names of poor people. But the malpractices can be reduced and eliminated once the system gets going.
(Source: Deccan Herald, 11 July, 2011)
Microfinance: Bill to bring in order
Source: Deccan Chronicle, July 11, 2011
The government’s proposed bill to bring the `22,000-crore microfinance industry under the regulation of a single entity — the Reserve Bank of India — has been widely welcomed, both by the industry and the public at large. In fact, the biggest listed name in the industry welcomed the move and saw its shares jump by 20 per cent on the day the proposed bill was announced. The government has invited comments on the bill from the public and will finalise it after taking these into account. Bringing the industry under one regulator was a long-felt need because if each state has its own rules and regulations, the situation can be pretty chaotic. The Reserve Bank deputy governor, Mr K.C. Chakrabarty, had said a few days earlier: “If we don’t act under a common set of regulations (for the microfinance industry), it won’t be practical to work. Five states having five different laws on the same subject will have practical difficulties for the industry.” Till a Central law is in place, the Andhra-type situation can arise again, and this will nullify whatever the RBI is trying to do to bring some order, he pointed out. AP is a classic example: the state government had passed an ordinance that contained stringent regulations for the industry to follow. Not surprisingly, it was up in arms as it was unable to collect crores of rupees from borrowers. The AP government, however, was not wrong to enact such an ordinance — its move had followed complaints about the use of muscle power against those who had failed to pay back loans, and subsequent suicides by borrowers who could not pay up. There was also a considerable amount of misuse of funds as borrowers in some cases had used the loans to pay back others from whom they had borrowed money, something called “evergreening” in banking terminology. This was far removed from the original concept of microfinance — as developed by its pioneer, Bangladesh’s Nobel Prize-winning Grameen Bank founder Muhammed Yunus, popularly known as the father of microfinance. The industry was accused of borrowing cheap from the banks and lending at exorbitant rates — of between 30 to even 60 per cent. It was not even sure if the borrowers, who were predominantly women, were really made financially independent or were able to have a sustainable business such as vegetable vending, which was the principal objective of microfinancing. It is to be hoped that the new bill will also provide for the independent monitoring of end users of loans — as it is absolutely vital for the borrowers to be made financially stable. Microfinance is in a way the device which can make possible “inclusive growth” — the mantra of both the Reserve Bank and the UPA government. The argument that the microfinance industry had tried to make was that it was being targeted by politically powerful moneylenders, who had a thriving business until the MFI firms came along. There may or may not be any truth in this, and it is for the government to act against usurious moneylenders. But this certainly cannot be used to justify the way some of the microfinance companies have behaved. This bill will hopefully go a long way in regularising the industry and in laying down guidelines so that the industry is able to fulfil its true objective — of helping the urban and rural poor as well as the disadvantaged. It gives the RBI the power to register microfinance companies and set benchmark and performance standards for the entire industry to follow.
The government’s proposed bill to bring the `22,000-crore microfinance industry under the regulation of a single entity — the Reserve Bank of India — has been widely welcomed, both by the industry and the public at large. In fact, the biggest listed name in the industry welcomed the move and saw its shares jump by 20 per cent on the day the proposed bill was announced. The government has invited comments on the bill from the public and will finalise it after taking these into account. Bringing the industry under one regulator was a long-felt need because if each state has its own rules and regulations, the situation can be pretty chaotic. The Reserve Bank deputy governor, Mr K.C. Chakrabarty, had said a few days earlier: “If we don’t act under a common set of regulations (for the microfinance industry), it won’t be practical to work. Five states having five different laws on the same subject will have practical difficulties for the industry.” Till a Central law is in place, the Andhra-type situation can arise again, and this will nullify whatever the RBI is trying to do to bring some order, he pointed out. AP is a classic example: the state government had passed an ordinance that contained stringent regulations for the industry to follow. Not surprisingly, it was up in arms as it was unable to collect crores of rupees from borrowers. The AP government, however, was not wrong to enact such an ordinance — its move had followed complaints about the use of muscle power against those who had failed to pay back loans, and subsequent suicides by borrowers who could not pay up. There was also a considerable amount of misuse of funds as borrowers in some cases had used the loans to pay back others from whom they had borrowed money, something called “evergreening” in banking terminology. This was far removed from the original concept of microfinance — as developed by its pioneer, Bangladesh’s Nobel Prize-winning Grameen Bank founder Muhammed Yunus, popularly known as the father of microfinance. The industry was accused of borrowing cheap from the banks and lending at exorbitant rates — of between 30 to even 60 per cent. It was not even sure if the borrowers, who were predominantly women, were really made financially independent or were able to have a sustainable business such as vegetable vending, which was the principal objective of microfinancing. It is to be hoped that the new bill will also provide for the independent monitoring of end users of loans — as it is absolutely vital for the borrowers to be made financially stable. Microfinance is in a way the device which can make possible “inclusive growth” — the mantra of both the Reserve Bank and the UPA government. The argument that the microfinance industry had tried to make was that it was being targeted by politically powerful moneylenders, who had a thriving business until the MFI firms came along. There may or may not be any truth in this, and it is for the government to act against usurious moneylenders. But this certainly cannot be used to justify the way some of the microfinance companies have behaved. This bill will hopefully go a long way in regularising the industry and in laying down guidelines so that the industry is able to fulfil its true objective — of helping the urban and rural poor as well as the disadvantaged. It gives the RBI the power to register microfinance companies and set benchmark and performance standards for the entire industry to follow.
We recorded history and we've made history
News of The World,Last Edition,July 10, 2011
Thank you and goodbye
After 168 years, we finally say a sad but very proud farewell to our 7.5m loyal readers
"IT is Sunday afternoon, preferably before the war. The wife is already asleep in the armchair, and the children have been sent out for a nice long walk. You put your feet up on the sofa, settle your spectacles on your nose and open the News of the World."
These are the words of the great writer George Orwell. They were written in 1946 but they have been the sentiments of most of the nation for well over a century and a half as this astonishing paper became part of the fabric of Britain, as central to Sunday as a roast dinner.
An advertisement for our first ever edition on Sunday, October 1, 1843, announced the News of the World as "the novelty of nations and the wonder of the world... as worthy of the mansion as the cottage."
That has informed our journalism through six monarchs and 168 years. We lived through history, we recorded history and we made history - from the romance of our old hot-metal presses right through to the revolution of the digital age.
In our first Christmas Eve edition, for example, on December 24, 1843, we reviewed and told the story of a new novel by a writer published just a week earlier: A Christmas Carol, by Charles Dickens.
Fortunately we gave it a good review and, like us, it became part of a national heritage. In May 1900, we broke the news of the relief of Mafeking on the same evening details first arrived in London, the only newspaper to do so.
We also recorded the death of Queen Victoria, the sinking of the Titanic, two world wars, the 1966 World Cup victory, the first man on the moon, the death of Diana... the list goes on.
But we also recorded and most often revealed the great scandals and celebrity stories of the day. Many of them are recalled in this final edition of the News of the World.
In sport, too, we have led the way with the best, most informed coverage in the country - a tradition we have upheld proudly since 1895, when we published our first soccer report (quickly followed by the first picture album: Famous Footballers 1895-1896, proving that some things never change!)
But we touched people's lives most directly through our campaigns. In the 19th century we crusaded against child labour.
Our more modern campaigns have famously included the fight for Sarah's Law, which has introduced 15 new pieces of groundbreaking legislation - including the crucial right of parents to information about paedophiles living in their area.
This year we forced the government into a U-turn to enshrine the Military Covenant in law.
At Christmas, we delivered toys to the children of every serviceman and woman in Afghanistan.
We forced computer giants to police their sites to protect children.
We railed against cyber- bullying and, of course, we have run our annual Children's Champions Awards, celebrating those heroes who work beyond the call of duty for youngsters.
We praised high standards, we demanded high standards but, as we are now only too painfully aware, for a period of a few years up to 2006 some who worked for us, or in our name, fell shamefully short of those standards.
Quite simply, we lost our way.
Phones were hacked, and for that this newspaper is truly sorry.
There is no justification for this appalling wrong-doing.
No justification for the pain caused to victims, nor for the deep stain it has left on a great history.
Yet when this outrage has been atoned, we hope history will eventually judge us on all our years.
The staff of this paper, to a man and woman, are people of skill, dedication, honour and integrity bearing the pain for the past misdeeds of a few others.
And as a small step on the long road to making some amends, all profits from the sale of this final edition will be split equally between three charities: Barnardo's, the Forces Children's Trust, and military projects at the Queen Elizabeth Hospital Birmingham Charity.
Meanwhile, we welcome and support the Prime Minister's two public inquiries, one into the police handling of the case and another into the ethics and standards of the Press.
But we do not agree that the Press Complaints Commission should be disbanded. Self-regulation does work. But the current make-up of the PCC doesn't work. It needs more powers and more resources. We do not need government legislation.
That would be a disaster for our democracy and for a free Press.
But most of all, on this historic day, after 8,674 editions we'll miss YOU, our 7.5 million readers.
You've been our life. We've made you laugh, made you cry, made your jaw drop in amazement, informed you, enthralled you and enraged you.
You have been our family, and for years we have been yours, visiting every weekend.
Thank you for your support. We'll miss you more than words can express.
Farewell.
Thank you and goodbye
After 168 years, we finally say a sad but very proud farewell to our 7.5m loyal readers
"IT is Sunday afternoon, preferably before the war. The wife is already asleep in the armchair, and the children have been sent out for a nice long walk. You put your feet up on the sofa, settle your spectacles on your nose and open the News of the World."
These are the words of the great writer George Orwell. They were written in 1946 but they have been the sentiments of most of the nation for well over a century and a half as this astonishing paper became part of the fabric of Britain, as central to Sunday as a roast dinner.
An advertisement for our first ever edition on Sunday, October 1, 1843, announced the News of the World as "the novelty of nations and the wonder of the world... as worthy of the mansion as the cottage."
That has informed our journalism through six monarchs and 168 years. We lived through history, we recorded history and we made history - from the romance of our old hot-metal presses right through to the revolution of the digital age.
In our first Christmas Eve edition, for example, on December 24, 1843, we reviewed and told the story of a new novel by a writer published just a week earlier: A Christmas Carol, by Charles Dickens.
Fortunately we gave it a good review and, like us, it became part of a national heritage. In May 1900, we broke the news of the relief of Mafeking on the same evening details first arrived in London, the only newspaper to do so.
We also recorded the death of Queen Victoria, the sinking of the Titanic, two world wars, the 1966 World Cup victory, the first man on the moon, the death of Diana... the list goes on.
But we also recorded and most often revealed the great scandals and celebrity stories of the day. Many of them are recalled in this final edition of the News of the World.
In sport, too, we have led the way with the best, most informed coverage in the country - a tradition we have upheld proudly since 1895, when we published our first soccer report (quickly followed by the first picture album: Famous Footballers 1895-1896, proving that some things never change!)
But we touched people's lives most directly through our campaigns. In the 19th century we crusaded against child labour.
Our more modern campaigns have famously included the fight for Sarah's Law, which has introduced 15 new pieces of groundbreaking legislation - including the crucial right of parents to information about paedophiles living in their area.
This year we forced the government into a U-turn to enshrine the Military Covenant in law.
At Christmas, we delivered toys to the children of every serviceman and woman in Afghanistan.
We forced computer giants to police their sites to protect children.
We railed against cyber- bullying and, of course, we have run our annual Children's Champions Awards, celebrating those heroes who work beyond the call of duty for youngsters.
We praised high standards, we demanded high standards but, as we are now only too painfully aware, for a period of a few years up to 2006 some who worked for us, or in our name, fell shamefully short of those standards.
Quite simply, we lost our way.
Phones were hacked, and for that this newspaper is truly sorry.
There is no justification for this appalling wrong-doing.
No justification for the pain caused to victims, nor for the deep stain it has left on a great history.
Yet when this outrage has been atoned, we hope history will eventually judge us on all our years.
The staff of this paper, to a man and woman, are people of skill, dedication, honour and integrity bearing the pain for the past misdeeds of a few others.
And as a small step on the long road to making some amends, all profits from the sale of this final edition will be split equally between three charities: Barnardo's, the Forces Children's Trust, and military projects at the Queen Elizabeth Hospital Birmingham Charity.
Meanwhile, we welcome and support the Prime Minister's two public inquiries, one into the police handling of the case and another into the ethics and standards of the Press.
But we do not agree that the Press Complaints Commission should be disbanded. Self-regulation does work. But the current make-up of the PCC doesn't work. It needs more powers and more resources. We do not need government legislation.
That would be a disaster for our democracy and for a free Press.
But most of all, on this historic day, after 8,674 editions we'll miss YOU, our 7.5 million readers.
You've been our life. We've made you laugh, made you cry, made your jaw drop in amazement, informed you, enthralled you and enraged you.
You have been our family, and for years we have been yours, visiting every weekend.
Thank you for your support. We'll miss you more than words can express.
Farewell.
Sunday, July 10, 2011
India has potential to see double-digit growth, says OECD
India has potential to see double-digit growth, says OECD
India has the potential to clock double-digit growth in medium term, provided right policies are in place and demographic developments push savings rate higher, according to Paris-based think tank OECD.
"Inclusive growth of 10 % per year is feasible given that demographic developments are set to push up saving, but will only be achieved if the administrative and regulatory barriers facing companies are reduced," OECD's Economic Survey of India released on Tuesday said.
The Indian economy is projected to expand at over 8 % this fiscal.
Speaking on the occasion, Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan said the country is likely to see a growth of about 8.5 % in 2011-12 and has the potential to grow by 9 % annually.
Organisation for Economic Cooperation and Development (OECD) noted that sustainability of growth would depend on increased capital inflows and higher domestic savings.
Calling for further reductions in trade and foreign direct investment barriers, the report said that growth is set to remain strong in the near term on the back of private consumption and investment.
"However, sustaining high growth hinges on sound monetary and fiscal policies," it added.
OECD, a 34-member grouping of mostly industrialised nations, also cautioned against rising inflation and volatile capital inflows.
Regarding price rise, OECD has pitched for "further incremental tightening" since the economy is back on a high-growth trajectory.
Headline inflation rose to 9.06 % in May, a development that is likely to see the Reserve Bank of India further hiking rates.
"Longer term capital inflows can be increased by eliminating remaining controls over direct investment and allowing foreigners to purchase government bonds," OECD said.
Noting that India has been a "stand out performer" in the global economy, OECD Secretary General Angel Gurria said the nation has benefited from reforms.
On India's financial sector, the report said that a small number of "state-owned banks will continue to need capital injections, which could be best done via sales of shares".
Source:Press Trust Of India, New Delhi, June 14, 2011
India has the potential to clock double-digit growth in medium term, provided right policies are in place and demographic developments push savings rate higher, according to Paris-based think tank OECD.
"Inclusive growth of 10 % per year is feasible given that demographic developments are set to push up saving, but will only be achieved if the administrative and regulatory barriers facing companies are reduced," OECD's Economic Survey of India released on Tuesday said.
The Indian economy is projected to expand at over 8 % this fiscal.
Speaking on the occasion, Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan said the country is likely to see a growth of about 8.5 % in 2011-12 and has the potential to grow by 9 % annually.
Organisation for Economic Cooperation and Development (OECD) noted that sustainability of growth would depend on increased capital inflows and higher domestic savings.
Calling for further reductions in trade and foreign direct investment barriers, the report said that growth is set to remain strong in the near term on the back of private consumption and investment.
"However, sustaining high growth hinges on sound monetary and fiscal policies," it added.
OECD, a 34-member grouping of mostly industrialised nations, also cautioned against rising inflation and volatile capital inflows.
Regarding price rise, OECD has pitched for "further incremental tightening" since the economy is back on a high-growth trajectory.
Headline inflation rose to 9.06 % in May, a development that is likely to see the Reserve Bank of India further hiking rates.
"Longer term capital inflows can be increased by eliminating remaining controls over direct investment and allowing foreigners to purchase government bonds," OECD said.
Noting that India has been a "stand out performer" in the global economy, OECD Secretary General Angel Gurria said the nation has benefited from reforms.
On India's financial sector, the report said that a small number of "state-owned banks will continue to need capital injections, which could be best done via sales of shares".
Source:Press Trust Of India, New Delhi, June 14, 2011
Wednesday, July 6, 2011
Answer to Question sent by Rituparna of Garia by sms
Rituparna's Question: Can any one get selected in the IAS if he/she has little knowledge of Economics/Indian Economics?
Answer: Probably not.
If you scan through the question papers of both Prelims and the Mains of the last five years, you will find that Indian Economics has become the Most Important Subject these days, both in the Prelims and in the Mains. This year 33 questions out of 100 in the GS Prelims are from Indian Economics. Therefore, if you do not study Indian Economics with special emphasis, there is little chance that you can make it.
Secondly, in the Mains, it is much more difficult. Last year, out of 600 marks GS Mains questions, 140-150 marks questions were from Indian Economics. Here, you need to express yourself by writing, that too within strict word limit. Economics, being a technical subject, you need to use technical terms like deflation, fiscal policy, speculative bubble, fiscal consolidation etc properly. A mere narration or description in your own non-technical words may not be appropriate for Economics. Since economics is given nearly 25% weight in GS Mains questions, it is almost impossible to get through the Mains without scoring reasonably high marks in economics.
Thirdly, if you see the English Essay papers of the previous years, you will find that several topics are from economics.
Fourthly, at the interview, you will definitely be asked questions on the recent trends in the Indian economics.
Therefore, study methodically, write more, get it checked.
Answer: Probably not.
If you scan through the question papers of both Prelims and the Mains of the last five years, you will find that Indian Economics has become the Most Important Subject these days, both in the Prelims and in the Mains. This year 33 questions out of 100 in the GS Prelims are from Indian Economics. Therefore, if you do not study Indian Economics with special emphasis, there is little chance that you can make it.
Secondly, in the Mains, it is much more difficult. Last year, out of 600 marks GS Mains questions, 140-150 marks questions were from Indian Economics. Here, you need to express yourself by writing, that too within strict word limit. Economics, being a technical subject, you need to use technical terms like deflation, fiscal policy, speculative bubble, fiscal consolidation etc properly. A mere narration or description in your own non-technical words may not be appropriate for Economics. Since economics is given nearly 25% weight in GS Mains questions, it is almost impossible to get through the Mains without scoring reasonably high marks in economics.
Thirdly, if you see the English Essay papers of the previous years, you will find that several topics are from economics.
Fourthly, at the interview, you will definitely be asked questions on the recent trends in the Indian economics.
Therefore, study methodically, write more, get it checked.
Monday, July 4, 2011
Is India going off track or staying on course?
"What slowdown?" asks Amit Kinariwala (46), smiling, as he reels off his recent destinations — Ethiopia, Nigeria, Lebanon and Egypt — and talks of three signed contracts. "There's a lot of business out there." As the Bangalore-based MD of Everett Middleware Consulting, a Dutch company specialising in identity and access management, Kinariwala believes there is much business to be wrung out of a global economic slowdown. "There's money abroad and in India, where we just won a big contract, but companies have to see value," he says, "Then they will spend."
Deepening global gloom does bring opportunities; the IT sector alone hopes to add some 225,000 jobs this year, and India reported its highest ever exports for the year ended March 2011. For millions of Indians not skilled enough, however, the last 12 months of high prices, particularly of food and manufactured products, have eroded incomes. That has slowed consumption and corporate spending and sparked a series of slowdown cycles.
On Wednesday, the Prime Minister emerged from his cocoon of silence to predict that inflation will slow to 6.5% by March 2012. Even if that happens — many warn of even higher prices instead — it is clear India needs radical changes beyond current challenges.
First, the immediate problems. At 7.8%, the growth of India's GDP from Jan to March 2011 was the lowest in five quarters. It could get worse. "Growth is expected to moderate to 7.5% in 2011-12," says Rajiv Malik, senior economist at Singapore broking and research firm CLSA. The manufacturing sector — it accounts for 80% of industrial output — grew at 5.5%, the slowest in 18 months. The latest data for factory output, for April, reveal that growth fell from last year by more than half, from 13.1% to 6.3%.
Slow manufacturing hurts corporate profits and employment prospects at India's 160,000-odd factories, employing about 110 million people. With such gloominess, the Bombay Stock Exchange's Sensex has fallen 9.8% so far this year, closing Friday at 18,763 points, shutting down a major avenue for raising money. Six companies have withdrawn plans for share offerings, three public sector companies (including giants ONGC and Steel Authority of India) have postponed disinvestments, and 42 companies are waiting for an opportune time to sell shares.
The RBI's strategy: Raise interest rates to mop up money, slow the economy and lower inflation. It's working — partially. But inflation is at its highest in 16 years. This is also undermining the poverty gains of the last decade. The 9.6% inflation (based on wholesale prices) of 2010-11, bad as it is, hides soaring food prices. Over the last year, milk has become costlier by 16%, prices of eggs, meat and fish by 20% and fruits by 22%.
In April, the Asian Development Bank warned that with poorer households spending up to a sixth of their income on food, a 10% increase in food prices can send 10 million Indians (three-fourths from rural areas) into poverty; a 20% rise could increase the rural poor by 45.6 million and urban poor by 13.3 million.
Exacerbating these problems are petrol, diesel, cooking gas and kerosene hikes, enough to boost inflation by 1%. "Due to these hikes, inflation could be close to 10% by July," says C Rangarajan, Chairman of the PM's Economic Advisory Council.
For some weeks, inflation in non-food articles, such as cotton textiles and minerals, has been 20%-25%. Higher fuel prices won't help. Without tax cuts for petroleum products last month, things may have been worse, but this sets off another vicious cycle that will leave the government poorer by Rs 49,000 crore for 2011-12. So, less money for the things India needs to reduce poverty-social-welfare and infrastructure. India lauds itself for escaping the worst effects of the economic meltdown in 2008, but figures quoted by Planning Commission Deputy Chairman Montek Ahluwalia in a journal article in May showed that 33 million people were added to the ranks of the poor within two years.
There is no current data available, but inflation is likely pushing millions who had just climbed out of poverty (measured at the ability to spend $1.25 a day) back in, worsening India's worry under — and unemployment. So far, the government has made no progress with major policy reforms, stalled since 2004.
This picture reveals, according to data released by the government 10 days ago, that even during the rosiest years of growth, between 2004-05 to 2009-10, when growth averaged 8.43%, the economy generated no more than 2 million jobs for the 55 million people who joined the workforce. This low employment comes at a time when every sector is short of skilled workers — from masons to teachers to waiters to engineers — a reflection of an education system that is not imparting skills the economy needs.
"Deeper social disparities should never be viewed as the inevitable price of rapid growth, and more egalitarian outcomes in education, health, and gender should not be considered "second-stage" reforms," writes Ejaz Ghani, economic advisor to the World Bank and author of The Poor Half Billion in South Asia, in a new blog post. Or, as the newly revealed ravages of the meltdown indicate, growth alone can't create and sustain a new India. So, companies and the middle-class are asking tough questions of the present reform-less business environment.
"Business confidence has seen a decline since September 2010, not surprising, given the corruption, environmental and governance issues that stalled all policy action during the winter session of Parliament, which is reflected in (declining) corporate fixed capital spends," says Anand Mahindra Managing Director of the Rs 57,000-crore Mahindra Group, spread across 18 industries. Mahindra says he intends to launch new models "to generate excitement" despite a sharp fall in auto sales.
The invisible army
Mahindra and India Inc are the visible, aggressively global, flag-bearers of an emerging nation, but they are, in a sense, incidental to its future, which appears to lie in the dank tanneries of Mumbai's Dharavi slum township, in the room-sized waste-recycling units of outer Delhi, in 30 million small, micro and medium enterprises. Put together, these grubby factories contribute to half of India's factory output, 45% of exports and employ more than 60 million people (India's high-profile service sector employs no more than 33 million). "Their investments, collectively, are more than that of the government as well as that of the private corporate sector," economist and former J&K Bank Chairman Haseeb Drabu wrote this month in Mint.
Least recognised is the ailing agriculture sector, which employs half of India's population, about 600 million people, produces no more than 15% of GDP and lives from monsoon to monsoon. A good monsoon this year may reduce food prices and keep the economy stable, but India's agriculture will remain one of the least productive in the emerging world — about 64% of the world average. In 1977, Indian and Chinese farmers harvested about the same amount of wheat. By 2009, wheat yields in China were 1.7 times more than India, according to UN data.
Galloping food prices are linked to agricultural problems. Uncertain agriculture and rising prices are a global issue, but India's small, failing farms can't keep pace with growing demand.
With reforms stalled, these unheralded engines of entrepreneurship and employment bear the brunt of corruption, crumbling infrastructure and discrimination (small, medium units get less than a tenth of commercial credit).
The push for new reform comes most recently from India's ally, itself under economic strain.
"India is at the point now where future growth will depend on the success of the next wave of reform," US Treasury Secretary Timothy Geithner said this week in Washington D.C., particularly seeking finance-sector reform. In response, finance minister Pranab Mukherjee said reforms of banking, insurance and pension-fund sectors were now in Parliament, awaiting consensus.
These reforms are vital to finance the $1 trillion — the value of the national GDP — India will require over the next five years to overhaul its collapsing infrastructure, which, if built, could potentially catalyse every sector, from farm to factory.
As our top 5 reforms sheet indicates (alongside), India needs not just reforms in diverse areas but a governance makeover. Unless that begins, a cycle of upturns and slowdowns will continue — with more of new India's people sliding back to the old.
Jairam kanojia (50) laundry man (Delhi)
"Whatever I earn is spent on food and essentials"
Jairam Kanojia, 50, earns his keep as a laundry man in a local society in west Delhi's Paschim Vihar. For the past two decades, his daily routine has more or less followed a set pattern: fire the charcoal, heat the iron and "press" clothes for residents of the Meera Bagh Housing Society.
But the last year-and-a-half has been different and difficult.
Pummelled by soaring prices of most food items, Kanojia is struggling to make both ends meet for a family of eight. "Whatever I earn is spent on food,
household items, school fees and other expenses. I have two young daughters and I end up saving nothing for their marriage."
The earnings from ironing clothes alone do not suffice. Till about 18 months ago, Kanojia used to earn about Rs 5,000 a month. Today he earns more, but is poorer. Skyrocketing food prices have forced him to dabble in odd jobs.
Untrained in any other skill, Kanojia now-a-days cleans vehicles in the same society to earn an extra buck, which still leaves him with a deficit at the end of the month. Costlier essential items leave him with no extra money to fulfil life’s bigger aspirations: educating his children for a better life. "I also dream of giving the best education to my children," he says in a choked voice.
— Himani Chandna Gurtoo
Dilip Mark Mendens, 41 Entrepreneur (Bangalore)
"I'd love to have a driver, two cars"
Mendens is momentarily rueful. He had a full-time staff of 45, worked all day, locking up the office every night and lived it up in pubs and restaurants, as his annual turnover reached Rs 4 crore by 2007. A former courier boy, Mendens embodied the opportunities of the flat world.
His human resource consultancy, Ascro Transatlantic Pvt Ltd, provided staff, entry level to senior management, to 40 clients, including multinationals. When the world economy melted down in 2008, his turnover tumbled 99.8% to Rs 5 lakh.
Mendens had to give up his office, and "settle" his 45 employees in other jobs. This time, as Bangalore grows jittery again, he’s prepared. "I foresee a bust, no way India will escape," he says.
He works out of his father's home and is happy with five clients — one markets holistic healing, another trade fairs. "What I do now is very satisfying," says Mendens, who now begins his work day leisurely after a game of squash and ends at home with his children or a drink at the local Catholic Club. He doesn't miss the expensive nightlife, but it would be nice to have that driver.
— Samar Halarnkar
Gopal Gupta (28) Public Relations executive (Mumbai)
"With rising EMIs, I don't have money to get married"
He has drastically reduced socialising, postponed his vacation plans and even shelved matrimony.
Seven hikes in his equated monthly installment (EMI) over the last one year have hit public relations executive Gopal Gupta hard.
Over the last year, Gupta, 28, employed with a public relations firm in Mumbai, has seen his EMI rise from Rs 12,500 to Rs 15,800 (a hike of 26%).
These days Gupta resides with his mother and younger brother at Bandra. Last year, when the going wasn't as tough, he had purchased a house on Mira Road and was thinking of moving in there. But that looks like a distant dream now. "My plans have gone for a toss. Another hike in the EMI will leave me with no option but to sell the home I bought last year as I won't be able to service it from my current salary," says a dejected Gupta.
He cannot even contemplate changing jobs for a better compensation package, as a new job will bring with it, its own set of uncertainties.
In the last two months, owing to rising EMIs and expenses, Gupta has stopped going to clubs with friends and even quietly excused himself from joining his friends on a Lonavala and Khandala trip.
Worse, the quagmire of EMIs and rising inflation has forced him to defer his marriage plans at least for this year and also affected his higher education dreams.
"Under family pressure, I was thinking of getting married this year, but now I can't plan marriage because of rising
outflows. I have also not been able to save for my higher studies," adds Gupta.
"My salary has been revised only once in a year but the expenses and EMIs have seen several revisions."
— Sandeep Singh
Answers beyond fighting inflation
We asked 5 people with varied experience of India's growth story to make sense of the present jitters. The bottom line: the economy will come through, but sweeping, new reforms are essential.
C Rangarajan Chairman, PM's Economic Advisory Council
Use all policy tools to tame inflation
Controlling inflation is a priority concern of the government. What started as food inflation has become more generalised. However, food inflation is coming down. More particularly, the rise in the prices of foodgrains has been modest in the current year.
We must use all policy instruments —interventions in the foodgrains market and fiscal and monetary policies — to bring down inflation to a more acceptable level.
The fuel price hike has become inevitable. Crude prices have risen sharply. Domestic prices of petroleum products must reflect this. Subsidies on petroleum products must also be contained to prevent the fiscal deficit from rising. The fuel hike may add to inflation by a little over half a percentage point.
India's growth rate in 2011-12 will be in the range of 8 to 8.5 %. This is due to a variety of circumstances. The process of recovery in the advanced economies is slow. Domestically, the investment sentiment is weak. Nevertheless, a growth rate above 8 % must be considered respectable and high in the current world situation. Revenue targets are in nominal terms. The nominal income may still grow at the rate implicit in the budget estimates.
Even as revenue targets are achieved, we need to keep a watch on expenditures so that the fiscal deficit is contained at the budgeted level. This will also help in taming inflation.
Anand Mhaindra Vice Chairman, Mahindra Group
Strike a labour, income security balance
The economy is likely to see slower growth (this year), but this will be more in the nature of a moderation (7.5%-7.7% GDP growth) rather than a slump. Prevailing inflation rates, to my mind, are the bigger threat at present. To increase supply capacities, we need higher investment rates, but instead what we saw last year was a sharp decline in capital expenditure — public and private.
Private consumer expend, by the way, was fairly robust last year right through Q4 (January to March, 2011). Business confidence has seen a decline since September 2010. However, we're a noisy democracy, and the noise always signals the first step towards resolution. The issues raised in the last few months are important, and I now see steps being taken towards resolution, which makes me hopeful. Note, the government has submitted 32 bills for enactment or amendment this (coming) session (of Parliament). The three things government must do to keep growth on track and reinfuse confidence into business are the Land Acquisition Bill — stalling many infrastructure and industry projects; rationalise environmental clearances; and labour regulation reforms. We need to make a beginning in labour reforms. We have one of the most restrictive labour security regulations in the world, and this is limiting both labour employment and industrial growth. We need reforms here that strike the right balance between income security and flexibility in labour hours employed.
Rajiv Kumar Secretary General, Ficci
Time to implement structural reforms
The slowdown in the economy is now evident. It is reflected in the steep decline in investment growth rate, which slowed down to 0.4% in March 2011 as compared to more than 15% in March 2010.
If that was not enough evidence, there is a downturn in the investment cycle, which had driven Indian economic growth since 2003-04.
Private consumption is also beginning to be affected by higher costs of borrowing. The slowdown should not be a surprise as it has been policy induced. The Reserve Bank of India, in its pursuit of lower inflation, has raised interest rates by 275 basis points in 10 steps during the last 12 months.
But monetary policy on its own will not suffice to achieve macro stability along with rapid growth and fiscal policy will also have to play its due role. Moreover, given that inflation is largely a result of supply shortages, it is imperative that structural reforms are implemented to remove supply-side bottlenecks and expand production capacity.
The current policy regime appears to be based on the assumption that increasing consumption demand through large scale transfer payments will suffice for rapid growth.
With lack of private corporate investment, production capacities are not keeping pace with demand, thereby resulting in persistent inflation.
Ajay Shah Professor, National Institute for Public Finance and Policy
Need to restore confidence of investors
Firm databases, which are the most reliable element of Indian statistics, show a mixed picture. On one hand, the Jan-Feb-March 2011 quarter showed moderately good performance for sales and profit. But the CMIE 'Capex' data, where we measure new project announcements, has been reporting difficult times from mid 2010 onwards. New project announcements by foreigners and by the government have dropped sharply. New project announcements by the Indian private sector have also dropped a bit.
The behaviour of the private sector may reflect reduced optimism about the future. The behaviour of the government directly influences investment in the economy. In either event, these patterns are likely to give a slowdown in investment.
In one element, difficulty is already visible: capital goods imports have not had robust and sustained growth after the crisis. Investment makes up a large slice of Indian GDP.
These two factors (public investment and the optimism that shapes private investment) thus have a strong impact upon business cycle conditions. Monetary policy is, and should be, absorbed in the fight against inflation.
Fiscal policy has little room to manoeuvre given India's chronic fiscal crisis. Finding a way out of this dark situation thus rests on only one lever: economic and governance reforms, that will restore confidence of domestic and foreign investors.
Bharat Ramaswamy, Economist
Reform agriculture and invest in R&D
When you talk of long-term reform, there is a very simple fact: Over the last 20 years, except for one year, the amount of grain the government buys is larger than the amount it dispenses through the public-distribution system (PDS), which was never reformed. So, you build mountains of grain, then you try and get rid off them through targeted subsidies. This kind of regime is no longer stabilising foodgrain prices, as it was meant to.
At the same time, our agricultural productivity is one of the lowest in emerging markets. Our R&D system, one of the largest in the world, has failed. We have fallen so far behind, it's shameful.
Market reforms — agricultural pricing, opening of retail — are very important, but there is a lot of basic R&D to be done, which the private sector will not do. Agricultural extension has collapsed, and the Centre has shown no leadership. Mr (Sharad) Pawar (Union agriculture minister), keeps telling us agriculture is a state subject, but R&D is completely in central hands. Innumerable experts have reviewed this and all have said almost exactly the same thing. Similarly, the Kaushik Basu committee on inflation has recommended reforms in agricultural markets in opening of retail. The Vaidyanathan committee told us what to do to about irrigation productivity. We know what needs to be done. But there is no strategic thinking, no urgency. The Vajpayee government did a lot to reform agriculture, but there's been nothing since.
(Source: Hindustan Times,July 02, 2011, by Samar Halarnkar and Gaurav Choudhury)
Deepening global gloom does bring opportunities; the IT sector alone hopes to add some 225,000 jobs this year, and India reported its highest ever exports for the year ended March 2011. For millions of Indians not skilled enough, however, the last 12 months of high prices, particularly of food and manufactured products, have eroded incomes. That has slowed consumption and corporate spending and sparked a series of slowdown cycles.
On Wednesday, the Prime Minister emerged from his cocoon of silence to predict that inflation will slow to 6.5% by March 2012. Even if that happens — many warn of even higher prices instead — it is clear India needs radical changes beyond current challenges.
First, the immediate problems. At 7.8%, the growth of India's GDP from Jan to March 2011 was the lowest in five quarters. It could get worse. "Growth is expected to moderate to 7.5% in 2011-12," says Rajiv Malik, senior economist at Singapore broking and research firm CLSA. The manufacturing sector — it accounts for 80% of industrial output — grew at 5.5%, the slowest in 18 months. The latest data for factory output, for April, reveal that growth fell from last year by more than half, from 13.1% to 6.3%.
Slow manufacturing hurts corporate profits and employment prospects at India's 160,000-odd factories, employing about 110 million people. With such gloominess, the Bombay Stock Exchange's Sensex has fallen 9.8% so far this year, closing Friday at 18,763 points, shutting down a major avenue for raising money. Six companies have withdrawn plans for share offerings, three public sector companies (including giants ONGC and Steel Authority of India) have postponed disinvestments, and 42 companies are waiting for an opportune time to sell shares.
The RBI's strategy: Raise interest rates to mop up money, slow the economy and lower inflation. It's working — partially. But inflation is at its highest in 16 years. This is also undermining the poverty gains of the last decade. The 9.6% inflation (based on wholesale prices) of 2010-11, bad as it is, hides soaring food prices. Over the last year, milk has become costlier by 16%, prices of eggs, meat and fish by 20% and fruits by 22%.
In April, the Asian Development Bank warned that with poorer households spending up to a sixth of their income on food, a 10% increase in food prices can send 10 million Indians (three-fourths from rural areas) into poverty; a 20% rise could increase the rural poor by 45.6 million and urban poor by 13.3 million.
Exacerbating these problems are petrol, diesel, cooking gas and kerosene hikes, enough to boost inflation by 1%. "Due to these hikes, inflation could be close to 10% by July," says C Rangarajan, Chairman of the PM's Economic Advisory Council.
For some weeks, inflation in non-food articles, such as cotton textiles and minerals, has been 20%-25%. Higher fuel prices won't help. Without tax cuts for petroleum products last month, things may have been worse, but this sets off another vicious cycle that will leave the government poorer by Rs 49,000 crore for 2011-12. So, less money for the things India needs to reduce poverty-social-welfare and infrastructure. India lauds itself for escaping the worst effects of the economic meltdown in 2008, but figures quoted by Planning Commission Deputy Chairman Montek Ahluwalia in a journal article in May showed that 33 million people were added to the ranks of the poor within two years.
There is no current data available, but inflation is likely pushing millions who had just climbed out of poverty (measured at the ability to spend $1.25 a day) back in, worsening India's worry under — and unemployment. So far, the government has made no progress with major policy reforms, stalled since 2004.
This picture reveals, according to data released by the government 10 days ago, that even during the rosiest years of growth, between 2004-05 to 2009-10, when growth averaged 8.43%, the economy generated no more than 2 million jobs for the 55 million people who joined the workforce. This low employment comes at a time when every sector is short of skilled workers — from masons to teachers to waiters to engineers — a reflection of an education system that is not imparting skills the economy needs.
"Deeper social disparities should never be viewed as the inevitable price of rapid growth, and more egalitarian outcomes in education, health, and gender should not be considered "second-stage" reforms," writes Ejaz Ghani, economic advisor to the World Bank and author of The Poor Half Billion in South Asia, in a new blog post. Or, as the newly revealed ravages of the meltdown indicate, growth alone can't create and sustain a new India. So, companies and the middle-class are asking tough questions of the present reform-less business environment.
"Business confidence has seen a decline since September 2010, not surprising, given the corruption, environmental and governance issues that stalled all policy action during the winter session of Parliament, which is reflected in (declining) corporate fixed capital spends," says Anand Mahindra Managing Director of the Rs 57,000-crore Mahindra Group, spread across 18 industries. Mahindra says he intends to launch new models "to generate excitement" despite a sharp fall in auto sales.
The invisible army
Mahindra and India Inc are the visible, aggressively global, flag-bearers of an emerging nation, but they are, in a sense, incidental to its future, which appears to lie in the dank tanneries of Mumbai's Dharavi slum township, in the room-sized waste-recycling units of outer Delhi, in 30 million small, micro and medium enterprises. Put together, these grubby factories contribute to half of India's factory output, 45% of exports and employ more than 60 million people (India's high-profile service sector employs no more than 33 million). "Their investments, collectively, are more than that of the government as well as that of the private corporate sector," economist and former J&K Bank Chairman Haseeb Drabu wrote this month in Mint.
Least recognised is the ailing agriculture sector, which employs half of India's population, about 600 million people, produces no more than 15% of GDP and lives from monsoon to monsoon. A good monsoon this year may reduce food prices and keep the economy stable, but India's agriculture will remain one of the least productive in the emerging world — about 64% of the world average. In 1977, Indian and Chinese farmers harvested about the same amount of wheat. By 2009, wheat yields in China were 1.7 times more than India, according to UN data.
Galloping food prices are linked to agricultural problems. Uncertain agriculture and rising prices are a global issue, but India's small, failing farms can't keep pace with growing demand.
With reforms stalled, these unheralded engines of entrepreneurship and employment bear the brunt of corruption, crumbling infrastructure and discrimination (small, medium units get less than a tenth of commercial credit).
The push for new reform comes most recently from India's ally, itself under economic strain.
"India is at the point now where future growth will depend on the success of the next wave of reform," US Treasury Secretary Timothy Geithner said this week in Washington D.C., particularly seeking finance-sector reform. In response, finance minister Pranab Mukherjee said reforms of banking, insurance and pension-fund sectors were now in Parliament, awaiting consensus.
These reforms are vital to finance the $1 trillion — the value of the national GDP — India will require over the next five years to overhaul its collapsing infrastructure, which, if built, could potentially catalyse every sector, from farm to factory.
As our top 5 reforms sheet indicates (alongside), India needs not just reforms in diverse areas but a governance makeover. Unless that begins, a cycle of upturns and slowdowns will continue — with more of new India's people sliding back to the old.
Jairam kanojia (50) laundry man (Delhi)
"Whatever I earn is spent on food and essentials"
Jairam Kanojia, 50, earns his keep as a laundry man in a local society in west Delhi's Paschim Vihar. For the past two decades, his daily routine has more or less followed a set pattern: fire the charcoal, heat the iron and "press" clothes for residents of the Meera Bagh Housing Society.
But the last year-and-a-half has been different and difficult.
Pummelled by soaring prices of most food items, Kanojia is struggling to make both ends meet for a family of eight. "Whatever I earn is spent on food,
household items, school fees and other expenses. I have two young daughters and I end up saving nothing for their marriage."
The earnings from ironing clothes alone do not suffice. Till about 18 months ago, Kanojia used to earn about Rs 5,000 a month. Today he earns more, but is poorer. Skyrocketing food prices have forced him to dabble in odd jobs.
Untrained in any other skill, Kanojia now-a-days cleans vehicles in the same society to earn an extra buck, which still leaves him with a deficit at the end of the month. Costlier essential items leave him with no extra money to fulfil life’s bigger aspirations: educating his children for a better life. "I also dream of giving the best education to my children," he says in a choked voice.
— Himani Chandna Gurtoo
Dilip Mark Mendens, 41 Entrepreneur (Bangalore)
"I'd love to have a driver, two cars"
Mendens is momentarily rueful. He had a full-time staff of 45, worked all day, locking up the office every night and lived it up in pubs and restaurants, as his annual turnover reached Rs 4 crore by 2007. A former courier boy, Mendens embodied the opportunities of the flat world.
His human resource consultancy, Ascro Transatlantic Pvt Ltd, provided staff, entry level to senior management, to 40 clients, including multinationals. When the world economy melted down in 2008, his turnover tumbled 99.8% to Rs 5 lakh.
Mendens had to give up his office, and "settle" his 45 employees in other jobs. This time, as Bangalore grows jittery again, he’s prepared. "I foresee a bust, no way India will escape," he says.
He works out of his father's home and is happy with five clients — one markets holistic healing, another trade fairs. "What I do now is very satisfying," says Mendens, who now begins his work day leisurely after a game of squash and ends at home with his children or a drink at the local Catholic Club. He doesn't miss the expensive nightlife, but it would be nice to have that driver.
— Samar Halarnkar
Gopal Gupta (28) Public Relations executive (Mumbai)
"With rising EMIs, I don't have money to get married"
He has drastically reduced socialising, postponed his vacation plans and even shelved matrimony.
Seven hikes in his equated monthly installment (EMI) over the last one year have hit public relations executive Gopal Gupta hard.
Over the last year, Gupta, 28, employed with a public relations firm in Mumbai, has seen his EMI rise from Rs 12,500 to Rs 15,800 (a hike of 26%).
These days Gupta resides with his mother and younger brother at Bandra. Last year, when the going wasn't as tough, he had purchased a house on Mira Road and was thinking of moving in there. But that looks like a distant dream now. "My plans have gone for a toss. Another hike in the EMI will leave me with no option but to sell the home I bought last year as I won't be able to service it from my current salary," says a dejected Gupta.
He cannot even contemplate changing jobs for a better compensation package, as a new job will bring with it, its own set of uncertainties.
In the last two months, owing to rising EMIs and expenses, Gupta has stopped going to clubs with friends and even quietly excused himself from joining his friends on a Lonavala and Khandala trip.
Worse, the quagmire of EMIs and rising inflation has forced him to defer his marriage plans at least for this year and also affected his higher education dreams.
"Under family pressure, I was thinking of getting married this year, but now I can't plan marriage because of rising
outflows. I have also not been able to save for my higher studies," adds Gupta.
"My salary has been revised only once in a year but the expenses and EMIs have seen several revisions."
— Sandeep Singh
Answers beyond fighting inflation
We asked 5 people with varied experience of India's growth story to make sense of the present jitters. The bottom line: the economy will come through, but sweeping, new reforms are essential.
C Rangarajan Chairman, PM's Economic Advisory Council
Use all policy tools to tame inflation
Controlling inflation is a priority concern of the government. What started as food inflation has become more generalised. However, food inflation is coming down. More particularly, the rise in the prices of foodgrains has been modest in the current year.
We must use all policy instruments —interventions in the foodgrains market and fiscal and monetary policies — to bring down inflation to a more acceptable level.
The fuel price hike has become inevitable. Crude prices have risen sharply. Domestic prices of petroleum products must reflect this. Subsidies on petroleum products must also be contained to prevent the fiscal deficit from rising. The fuel hike may add to inflation by a little over half a percentage point.
India's growth rate in 2011-12 will be in the range of 8 to 8.5 %. This is due to a variety of circumstances. The process of recovery in the advanced economies is slow. Domestically, the investment sentiment is weak. Nevertheless, a growth rate above 8 % must be considered respectable and high in the current world situation. Revenue targets are in nominal terms. The nominal income may still grow at the rate implicit in the budget estimates.
Even as revenue targets are achieved, we need to keep a watch on expenditures so that the fiscal deficit is contained at the budgeted level. This will also help in taming inflation.
Anand Mhaindra Vice Chairman, Mahindra Group
Strike a labour, income security balance
The economy is likely to see slower growth (this year), but this will be more in the nature of a moderation (7.5%-7.7% GDP growth) rather than a slump. Prevailing inflation rates, to my mind, are the bigger threat at present. To increase supply capacities, we need higher investment rates, but instead what we saw last year was a sharp decline in capital expenditure — public and private.
Private consumer expend, by the way, was fairly robust last year right through Q4 (January to March, 2011). Business confidence has seen a decline since September 2010. However, we're a noisy democracy, and the noise always signals the first step towards resolution. The issues raised in the last few months are important, and I now see steps being taken towards resolution, which makes me hopeful. Note, the government has submitted 32 bills for enactment or amendment this (coming) session (of Parliament). The three things government must do to keep growth on track and reinfuse confidence into business are the Land Acquisition Bill — stalling many infrastructure and industry projects; rationalise environmental clearances; and labour regulation reforms. We need to make a beginning in labour reforms. We have one of the most restrictive labour security regulations in the world, and this is limiting both labour employment and industrial growth. We need reforms here that strike the right balance between income security and flexibility in labour hours employed.
Rajiv Kumar Secretary General, Ficci
Time to implement structural reforms
The slowdown in the economy is now evident. It is reflected in the steep decline in investment growth rate, which slowed down to 0.4% in March 2011 as compared to more than 15% in March 2010.
If that was not enough evidence, there is a downturn in the investment cycle, which had driven Indian economic growth since 2003-04.
Private consumption is also beginning to be affected by higher costs of borrowing. The slowdown should not be a surprise as it has been policy induced. The Reserve Bank of India, in its pursuit of lower inflation, has raised interest rates by 275 basis points in 10 steps during the last 12 months.
But monetary policy on its own will not suffice to achieve macro stability along with rapid growth and fiscal policy will also have to play its due role. Moreover, given that inflation is largely a result of supply shortages, it is imperative that structural reforms are implemented to remove supply-side bottlenecks and expand production capacity.
The current policy regime appears to be based on the assumption that increasing consumption demand through large scale transfer payments will suffice for rapid growth.
With lack of private corporate investment, production capacities are not keeping pace with demand, thereby resulting in persistent inflation.
Ajay Shah Professor, National Institute for Public Finance and Policy
Need to restore confidence of investors
Firm databases, which are the most reliable element of Indian statistics, show a mixed picture. On one hand, the Jan-Feb-March 2011 quarter showed moderately good performance for sales and profit. But the CMIE 'Capex' data, where we measure new project announcements, has been reporting difficult times from mid 2010 onwards. New project announcements by foreigners and by the government have dropped sharply. New project announcements by the Indian private sector have also dropped a bit.
The behaviour of the private sector may reflect reduced optimism about the future. The behaviour of the government directly influences investment in the economy. In either event, these patterns are likely to give a slowdown in investment.
In one element, difficulty is already visible: capital goods imports have not had robust and sustained growth after the crisis. Investment makes up a large slice of Indian GDP.
These two factors (public investment and the optimism that shapes private investment) thus have a strong impact upon business cycle conditions. Monetary policy is, and should be, absorbed in the fight against inflation.
Fiscal policy has little room to manoeuvre given India's chronic fiscal crisis. Finding a way out of this dark situation thus rests on only one lever: economic and governance reforms, that will restore confidence of domestic and foreign investors.
Bharat Ramaswamy, Economist
Reform agriculture and invest in R&D
When you talk of long-term reform, there is a very simple fact: Over the last 20 years, except for one year, the amount of grain the government buys is larger than the amount it dispenses through the public-distribution system (PDS), which was never reformed. So, you build mountains of grain, then you try and get rid off them through targeted subsidies. This kind of regime is no longer stabilising foodgrain prices, as it was meant to.
At the same time, our agricultural productivity is one of the lowest in emerging markets. Our R&D system, one of the largest in the world, has failed. We have fallen so far behind, it's shameful.
Market reforms — agricultural pricing, opening of retail — are very important, but there is a lot of basic R&D to be done, which the private sector will not do. Agricultural extension has collapsed, and the Centre has shown no leadership. Mr (Sharad) Pawar (Union agriculture minister), keeps telling us agriculture is a state subject, but R&D is completely in central hands. Innumerable experts have reviewed this and all have said almost exactly the same thing. Similarly, the Kaushik Basu committee on inflation has recommended reforms in agricultural markets in opening of retail. The Vaidyanathan committee told us what to do to about irrigation productivity. We know what needs to be done. But there is no strategic thinking, no urgency. The Vajpayee government did a lot to reform agriculture, but there's been nothing since.
(Source: Hindustan Times,July 02, 2011, by Samar Halarnkar and Gaurav Choudhury)
Tuesday, June 14, 2011
Waiting to hear your experience
How did you perform at the Prelims? Could you answer questions on Indian Economics? Please share your experience with me.Please write to me.
Friday, June 10, 2011
Good Luck
Wishing GOOD LUCK to my 200 plus students who will be appearing in the UPSC Civil Services (Preliminary)Examination this Sunday.
GOOD WISHES to my students who will be facing WBCS Interviews next week.
SM
GOOD WISHES to my students who will be facing WBCS Interviews next week.
SM
Wednesday, June 8, 2011
Answers to Q/A Final Session
1c 31a
2a 32b
3d 33b
4a 34d
5b 35b
6b 36d
7d 37a
8b 38b
9b 39b
10c 40a
11b 41d
12c 42b
13a 43c
14a 44a
15d 45b
16a 46a
17b 47b
18a 48d
19b 49d
20d 50d
21a 51c
22c 52a
23a 53d
24b 54c
25c 55a
26c 56c
27b 57a
28d 58c
29d 59d
30d 60c
2a 32b
3d 33b
4a 34d
5b 35b
6b 36d
7d 37a
8b 38b
9b 39b
10c 40a
11b 41d
12c 42b
13a 43c
14a 44a
15d 45b
16a 46a
17b 47b
18a 48d
19b 49d
20d 50d
21a 51c
22c 52a
23a 53d
24b 54c
25c 55a
26c 56c
27b 57a
28d 58c
29d 59d
30d 60c
Monday, June 6, 2011
Question and Answer Final Session--Indian Economics
1. The Supreme Court imposed a nation-wide ban on the manufacture and use of which of the following insecticides?
a) Chlorpyrifos; b) Abamectin; c) Endosulfan; d) Cypermethrin;
2. Who is the Chairman of Prime Minister’s Economic Advisory Council (PMEAC) ?
a) C. Rangarajan; b)Koushik Basu; c)Prabhat Patnaik; d) None of these
3. A proposed port in Gujarat, will relocate to a new site more than 15 years after it was conceived because the nation’s biggest oil explorer said it wouldn’t move an undersea gas pipeline, making the project unviable. Name the port.
a) Mundra Port, b)Sikka Port, c) Dahej Port; d) Vansi Borsi Port
4. Top diplomats from eight Arctic countries met at which of the following places very recently to set down rules for opening the vast region to fishing, tourism, oil and mineral exploration as global warming melts the ice
a) Nuuk; b) Geneva; c) Marrakesh; d) None of these
5. Hyundai is a MNC from which country?
a) Taiwan; b) South Korea; c) Thailand; d) Japan;
6. Which city is Europe's main bullion market?
a) Rome; b) Zurich; c) Berlin; d) London;
7. Baygon is a product of:
a) Reckitt and Colman; b) Hindustan Unilever; c) Reckitt Benckiser; d) Bayer;
8. The brand of spices owned by Dabur is:
a) Catch b) Homemade c) Everest d) MDH
9. What is common to Tractor, Apex, Utsav and Touchwood?
a) Soap brands b) Paint brands c) Heavy vehicle brands d) Plywood
10. The brands Eno and Horlicks belong to:
a) Nestle b) HUL c) Glaxo Smithkline d) Procter and Gamble
11. What is the name of McDonald's clown mascot?
a) Mack; b) Ronald; c) Goofy; d) Snoopy
12. United Nations Climate Change Conference 2010 is officially referred to as the … session of the Conference of Parties to the United Nations Framework Convention on Climate Change.
a) 18th; b) 17th; c) 16th; d) 15th;
13. Where was first the Asia–Europe Meeting (ASEM) summit held?
a) Thailand; b) Malaysia; c) India; d) Pakistan;
14. With which company would you associate Partha S. Bhattacharyya?
a) Coal India Limited; b) NTPC; c) IOC; d) Bharat Electronics Limited
15. Who has been awarded the Nobel Economics Prize2010?
a) Peter Granger; b) Jilly Cooper; c) Dale Mortensen; d) None of these
16. Jaitapur nuclear power plant is in which city?
a) Ratnagiri; b) Nagpur; c) Pune; d) Mumbai;
17. Srikumar Banerjee is associated with which of the following?
a) Atomic Energy Commission; b) Bhaba Atomic Research Centre; c) Defence Research And Development Organisation; d) None of these
18. Pallavan Double Plus and Pallavan Muthusaram RD are deposit schemes that belong to …
a) Indian Bank; b) Bank of Baroda; c) State Bank of India; d) Allahabad Bank
19. Department of Agricultural Research and Education comes under the Ministry of …
a) Commerce and Industry; b) Agriculture; c) Commerce and Industry; d) Food Processing Industries
20. An insurance plan, ‘JiyoFit’, has been launched by …
a) HDFC standard life; b) Bharti AXA; c) LIC; d) Bajaj Allianz
21. Where is the National Institute of Smart Government located?
a) Hyderabad; b) Mumbai; c) Pune; d) Chennai;
22. The Integrated Education for Disabled Children scheme was launched in …
a) 1954; b) 1965; c) 1974; d) 1991;
23. When was the Rural Electrification Corporation Limited incorporated as a Company under Companies Act, 1956?
a) 1969; b) 1971; c) 1989; d) 1991
24. In which country would you buy things using Lira?
a) Germany; b) Italy; c) USA; d) Myanmar;
25. Which one of the following countries is not a member of ASEAN?
a) Vietnam; b) Brunei Darussalam; c) Bangladesh; d) Myanmar;
26. Match List I (Person) with List II (Organisation/Area of Work) and select the correct answer using the code given below the lists:
List I List II
(Person) (Organisation/Area of Work)
A. Chanda Kochhar 1. Advertising
B. Amrita Patel 2. Banking
C. Indra Nooyi 3. Dairy Development
D. Piyush Pandey 4. PepsiCo
Code:
A B C D
a) 2 1 4 3
b) 4 3 2 1
c) 2 3 4 1
d) 4 1 2 3
27. What is Medecins Sans Frontieres (MSF)?
a) An agency formed by the International Olympic Committee (IOC) to check misuse of drugs by sportspersons;
b) A non-governmental organization whish specializes in international humanitarian aid and emergency medical assistance;
c) An organization to develop applications of nanotechnology in medicine;
d) An organization of medical practitioners funded by the European Union which carries out research against spread of AIDS;
28. Which of the following countries is not a member of the Nordic Council?
a) Norway; b) Denmark; c) Iceland; d) United Kingdom
29. Which of the following countries is the first country in the world to propose a carbon tax
for its people to address global warming?
a) Australia; b) Germany; c) Japan; d) New Zealand;
30. In the context of governance, consider the following:
1. Encouraging Foreign Direct Investment inflows
2. Privatization of higher educational Institutions
3. Down-sizing of bureaucracy
4. Selling/offloading the shares of Public Sector Undertakings
Which of the above can be used as measures to control the fiscal deficit in India?
(a) 1, 2 and 3; (b) 2, 3 and 4; (c) 1, 2 and 4; (d) 3 and 4 only
31. Who of the following shall cause every recommendation made by the Finance
Commission to be laid before each House of Parliament?
a) The President of India; b) The Speaker of Lok Sabha; c) The Prime Minister of India;
d) The Union Finance Minister
32. Which one of the following is responsible for the preparation and presentation of
Union Budget to the Parliament?
a) Department of Revenue; b) Department of Economic Affairs; c) Department of Financial
Services (d) Department of Expenditure
33. Which one of the following authorities makes recommendation to the Governor of a State
as to the principles for determining the taxes and duties which may be appropriated by the
Panchayats in that particular State?
a) District Planning Committees; b) State Finance Commission; c) Finance Ministry of that
State; d) Panchayati Raj Ministry of that State
34. Which one of the following is not related to United Nations?
a) Multilateral Investment Guarantee Agency; b) International Finance Corporation; (c) International Centre for Settlement of Investment Disputes; (d) Bank for International Settlements
35. The United Nations Framework Convention on Climate Change (UNFCCC) is an international treaty drawn at
(a) United Nations Conference on the Human Environment, Stockholm, 1972; (b) UN Conference on Environment and Development, Rio de Janeiro, 1992; (c) World Summit on Sustainable Development, Johannesburg, 2002; (d) UN Climate Change Conference, Copenhagen 2009
36. With reference to the United Nations Convention on the Rights of the Child, consider the following:
1. The Right to Development
2. The Right to Expression
3. The Right to Recreation
Which of the above is/are the Rights of the child?
a) 1 only; b) 1 and 3 only; c) 2 and 3 only; d) 1, 2 and 3
37. The International Development Association a lending agency, is administered by the
(a) International Bank for Reconstruction and Development
(b) International Fund for Agricultural Development
(c) United Nations Development Programme
(d) United Nations Industrial Development Organization
38. In India, the ports are categorized as major and non-major, ports. Which one of the following is a non-major port?
(a) Kochi (Cochin) (b) Dahej; (c) Paradip ; (d) New Mangalore
39. The Dul Hasti Power Station is based on which one of the following rivers?
(a) Beas; (b) Chenab; (c) Ravi; (d) Sutlej;
40. Which one among the following South Asian countries has the highest population density?
(a) India; (b) Nepal; (c) Pakistan; (d) Sri Lanka
41. Consider the following statements:
1. Infant mortality rate takes into account the death of infants within a month after birth.
2. Infant mortality rate is the number of infant deaths in a particular year per 100 live births during that year.
Which of the above statements is/are correct?
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2
42. Which of the following pairs in respect of current power generation in India is/are correctly matched?
(Rounded Figure)
1. Installed electricity : 100000 MW Generation capacity
2. Electricity generation : 660 billion kWh
Select the correct answer using the code given below:
Codes:
(a) 1 only ; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2;
43. As per India’s National Population Policy, 2000, by which one of the following years is it our long-term objective to achieve population stabilization?
(a) 2025 (b) 2035 (c) 2045 (d) 2055
44. Which one amongst the following has the largest livestock population in the world?
(a) Brazil; (b) China; (c) India; (d) USA
45. For India, China, the UK and the USA, which one of the following is the correct sequence of the median age of their populations?
(a) China< India < UK < USA; (b) India < China < USA < UK; (c) China < India < USA < UK; (d) India < China < UK < USA;
46. Where are Tapovan and Vishnugarh Hydroelectric Project located?
(a) Madhya Pradesh; (b) Uttar Pradesh; (c) Uttarakhand; (d) Rajasthan
47. Which two countries follow China and India in the descreasing order of their populations?
(a) Brazil and USA; b) USA and Indonesia; (c) Canada and Malaysia; (d) Russia and Nigeria
48. Which of the following are public sector undertakings of the Government of India?
1. Balmer Lawrie and Company Ltd.
2. Dredging Corporation of India
3. Educational Consultants of India Ltd.
Select the correct answer using the code given below: Codes:
(a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3
49. Consider the following statements with reference to Indira Gandhi National Old Age
Pension Scheme (IGNOAPS):
1. All persons of 60 years or above belonging to the households below poverty line in rural areas are eligible.
2. The Central Assistance under this Scheme is at the rate of ` 300 per month per beneficiary. Under the Scheme, States have been urged to give matching amounts.
Which of the statements given above is/are correct?
(a) 1 only; (b) 2 only ; (c) Both 1 and2; (d) Neither 1 nor 2
50. What is the name of the scheme which provides training and skills to women in traditional and nontraditional trades?
(a) Kishori Shakti Yojna; (b) Rashtriya Mahila Kosh; (c) Swayamsiddha; (d) Swawlamban
100. What does S & P 500 relate to? (a) Supercomputer
(b) A new technique in e-business
(c) A new technique in bridge building
(d) An index of stocks of large companies
51. The term “Prisoner’s Dilemma” is associated with which one of the following? (a) A technique in glass manufacture
(b) A term used in shipping industry
(c) A situation under the Game Theory
(d) Name of a supercomputer
52. Consider the following statements:
1. Clean Development Mechanism (CDM) in respect of carbon credits is one of the
Kyoto Protocol Mechanisms.
2. Under the CDM, the projects handled pertain only to the Annex-I countries.
Which of the statements given above is/are correct?
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2
53. Which one of the following Union Ministries is implementing the Biodiesel Mission
(as Nodal Ministry)?
(a) Ministry of Agriculture; (b) Ministry of Science and Technology; (c) Ministry of New and Renewable Energy; (d) Ministry of Rural Development
54. Which one of the following is not a member of the Shanghai Cooperation Organization?
(a) Russia; (b) Kazakhstan; (c) Ukraine; (d) Uzbekistan
55. Recently the Cabinet Committee on Economic Affairs (CCEA) approved the commencement of an Integrated Action Plan (IAP) in
(a) 60 Naxal hit districts; (b) 80 Naxal hit districts; (c) 50 Naxal hit districts; (d) 40 Naxal hit districts;
56. Which of the following statements is correct?
Fiscal Responsibility and Budget Management Act (FRBM Act) concerns
Fiscal deficit only; b) Revenue deficit only; c) Both fiscal and revenue deficit; d) neither fiscal deficit nor revenue deficit;
57. In which state is the Rajiv Gandhi National Institute of Youth Development located?
a) Tamil Nadu; b) Karnataka; c) Himachal Pradesh; d) Uttaranchal
58. Where is Davos—the venue of annual meeting of World Economic Forum, located?
France; b) Germany; c) Switzerland; d) Luxembourg
59. What is the Universal Product Code (UPC) adopted
a) Fire safety code in buildings; b) Earthquake-resistant building code; c) Bar code; d) Against adulteration in eatables;
60. With reference to the steel industry in India in the recent times, consider the following statements:
1. Vizag Steel Plant (RINL) has been declared Mini Ratna.
2. Merger of IISCO with SAIL has been completed. Which of the statements given above is/are correct?
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2;
a) Chlorpyrifos; b) Abamectin; c) Endosulfan; d) Cypermethrin;
2. Who is the Chairman of Prime Minister’s Economic Advisory Council (PMEAC) ?
a) C. Rangarajan; b)Koushik Basu; c)Prabhat Patnaik; d) None of these
3. A proposed port in Gujarat, will relocate to a new site more than 15 years after it was conceived because the nation’s biggest oil explorer said it wouldn’t move an undersea gas pipeline, making the project unviable. Name the port.
a) Mundra Port, b)Sikka Port, c) Dahej Port; d) Vansi Borsi Port
4. Top diplomats from eight Arctic countries met at which of the following places very recently to set down rules for opening the vast region to fishing, tourism, oil and mineral exploration as global warming melts the ice
a) Nuuk; b) Geneva; c) Marrakesh; d) None of these
5. Hyundai is a MNC from which country?
a) Taiwan; b) South Korea; c) Thailand; d) Japan;
6. Which city is Europe's main bullion market?
a) Rome; b) Zurich; c) Berlin; d) London;
7. Baygon is a product of:
a) Reckitt and Colman; b) Hindustan Unilever; c) Reckitt Benckiser; d) Bayer;
8. The brand of spices owned by Dabur is:
a) Catch b) Homemade c) Everest d) MDH
9. What is common to Tractor, Apex, Utsav and Touchwood?
a) Soap brands b) Paint brands c) Heavy vehicle brands d) Plywood
10. The brands Eno and Horlicks belong to:
a) Nestle b) HUL c) Glaxo Smithkline d) Procter and Gamble
11. What is the name of McDonald's clown mascot?
a) Mack; b) Ronald; c) Goofy; d) Snoopy
12. United Nations Climate Change Conference 2010 is officially referred to as the … session of the Conference of Parties to the United Nations Framework Convention on Climate Change.
a) 18th; b) 17th; c) 16th; d) 15th;
13. Where was first the Asia–Europe Meeting (ASEM) summit held?
a) Thailand; b) Malaysia; c) India; d) Pakistan;
14. With which company would you associate Partha S. Bhattacharyya?
a) Coal India Limited; b) NTPC; c) IOC; d) Bharat Electronics Limited
15. Who has been awarded the Nobel Economics Prize2010?
a) Peter Granger; b) Jilly Cooper; c) Dale Mortensen; d) None of these
16. Jaitapur nuclear power plant is in which city?
a) Ratnagiri; b) Nagpur; c) Pune; d) Mumbai;
17. Srikumar Banerjee is associated with which of the following?
a) Atomic Energy Commission; b) Bhaba Atomic Research Centre; c) Defence Research And Development Organisation; d) None of these
18. Pallavan Double Plus and Pallavan Muthusaram RD are deposit schemes that belong to …
a) Indian Bank; b) Bank of Baroda; c) State Bank of India; d) Allahabad Bank
19. Department of Agricultural Research and Education comes under the Ministry of …
a) Commerce and Industry; b) Agriculture; c) Commerce and Industry; d) Food Processing Industries
20. An insurance plan, ‘JiyoFit’, has been launched by …
a) HDFC standard life; b) Bharti AXA; c) LIC; d) Bajaj Allianz
21. Where is the National Institute of Smart Government located?
a) Hyderabad; b) Mumbai; c) Pune; d) Chennai;
22. The Integrated Education for Disabled Children scheme was launched in …
a) 1954; b) 1965; c) 1974; d) 1991;
23. When was the Rural Electrification Corporation Limited incorporated as a Company under Companies Act, 1956?
a) 1969; b) 1971; c) 1989; d) 1991
24. In which country would you buy things using Lira?
a) Germany; b) Italy; c) USA; d) Myanmar;
25. Which one of the following countries is not a member of ASEAN?
a) Vietnam; b) Brunei Darussalam; c) Bangladesh; d) Myanmar;
26. Match List I (Person) with List II (Organisation/Area of Work) and select the correct answer using the code given below the lists:
List I List II
(Person) (Organisation/Area of Work)
A. Chanda Kochhar 1. Advertising
B. Amrita Patel 2. Banking
C. Indra Nooyi 3. Dairy Development
D. Piyush Pandey 4. PepsiCo
Code:
A B C D
a) 2 1 4 3
b) 4 3 2 1
c) 2 3 4 1
d) 4 1 2 3
27. What is Medecins Sans Frontieres (MSF)?
a) An agency formed by the International Olympic Committee (IOC) to check misuse of drugs by sportspersons;
b) A non-governmental organization whish specializes in international humanitarian aid and emergency medical assistance;
c) An organization to develop applications of nanotechnology in medicine;
d) An organization of medical practitioners funded by the European Union which carries out research against spread of AIDS;
28. Which of the following countries is not a member of the Nordic Council?
a) Norway; b) Denmark; c) Iceland; d) United Kingdom
29. Which of the following countries is the first country in the world to propose a carbon tax
for its people to address global warming?
a) Australia; b) Germany; c) Japan; d) New Zealand;
30. In the context of governance, consider the following:
1. Encouraging Foreign Direct Investment inflows
2. Privatization of higher educational Institutions
3. Down-sizing of bureaucracy
4. Selling/offloading the shares of Public Sector Undertakings
Which of the above can be used as measures to control the fiscal deficit in India?
(a) 1, 2 and 3; (b) 2, 3 and 4; (c) 1, 2 and 4; (d) 3 and 4 only
31. Who of the following shall cause every recommendation made by the Finance
Commission to be laid before each House of Parliament?
a) The President of India; b) The Speaker of Lok Sabha; c) The Prime Minister of India;
d) The Union Finance Minister
32. Which one of the following is responsible for the preparation and presentation of
Union Budget to the Parliament?
a) Department of Revenue; b) Department of Economic Affairs; c) Department of Financial
Services (d) Department of Expenditure
33. Which one of the following authorities makes recommendation to the Governor of a State
as to the principles for determining the taxes and duties which may be appropriated by the
Panchayats in that particular State?
a) District Planning Committees; b) State Finance Commission; c) Finance Ministry of that
State; d) Panchayati Raj Ministry of that State
34. Which one of the following is not related to United Nations?
a) Multilateral Investment Guarantee Agency; b) International Finance Corporation; (c) International Centre for Settlement of Investment Disputes; (d) Bank for International Settlements
35. The United Nations Framework Convention on Climate Change (UNFCCC) is an international treaty drawn at
(a) United Nations Conference on the Human Environment, Stockholm, 1972; (b) UN Conference on Environment and Development, Rio de Janeiro, 1992; (c) World Summit on Sustainable Development, Johannesburg, 2002; (d) UN Climate Change Conference, Copenhagen 2009
36. With reference to the United Nations Convention on the Rights of the Child, consider the following:
1. The Right to Development
2. The Right to Expression
3. The Right to Recreation
Which of the above is/are the Rights of the child?
a) 1 only; b) 1 and 3 only; c) 2 and 3 only; d) 1, 2 and 3
37. The International Development Association a lending agency, is administered by the
(a) International Bank for Reconstruction and Development
(b) International Fund for Agricultural Development
(c) United Nations Development Programme
(d) United Nations Industrial Development Organization
38. In India, the ports are categorized as major and non-major, ports. Which one of the following is a non-major port?
(a) Kochi (Cochin) (b) Dahej; (c) Paradip ; (d) New Mangalore
39. The Dul Hasti Power Station is based on which one of the following rivers?
(a) Beas; (b) Chenab; (c) Ravi; (d) Sutlej;
40. Which one among the following South Asian countries has the highest population density?
(a) India; (b) Nepal; (c) Pakistan; (d) Sri Lanka
41. Consider the following statements:
1. Infant mortality rate takes into account the death of infants within a month after birth.
2. Infant mortality rate is the number of infant deaths in a particular year per 100 live births during that year.
Which of the above statements is/are correct?
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2
42. Which of the following pairs in respect of current power generation in India is/are correctly matched?
(Rounded Figure)
1. Installed electricity : 100000 MW Generation capacity
2. Electricity generation : 660 billion kWh
Select the correct answer using the code given below:
Codes:
(a) 1 only ; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2;
43. As per India’s National Population Policy, 2000, by which one of the following years is it our long-term objective to achieve population stabilization?
(a) 2025 (b) 2035 (c) 2045 (d) 2055
44. Which one amongst the following has the largest livestock population in the world?
(a) Brazil; (b) China; (c) India; (d) USA
45. For India, China, the UK and the USA, which one of the following is the correct sequence of the median age of their populations?
(a) China< India < UK < USA; (b) India < China < USA < UK; (c) China < India < USA < UK; (d) India < China < UK < USA;
46. Where are Tapovan and Vishnugarh Hydroelectric Project located?
(a) Madhya Pradesh; (b) Uttar Pradesh; (c) Uttarakhand; (d) Rajasthan
47. Which two countries follow China and India in the descreasing order of their populations?
(a) Brazil and USA; b) USA and Indonesia; (c) Canada and Malaysia; (d) Russia and Nigeria
48. Which of the following are public sector undertakings of the Government of India?
1. Balmer Lawrie and Company Ltd.
2. Dredging Corporation of India
3. Educational Consultants of India Ltd.
Select the correct answer using the code given below: Codes:
(a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3
49. Consider the following statements with reference to Indira Gandhi National Old Age
Pension Scheme (IGNOAPS):
1. All persons of 60 years or above belonging to the households below poverty line in rural areas are eligible.
2. The Central Assistance under this Scheme is at the rate of ` 300 per month per beneficiary. Under the Scheme, States have been urged to give matching amounts.
Which of the statements given above is/are correct?
(a) 1 only; (b) 2 only ; (c) Both 1 and2; (d) Neither 1 nor 2
50. What is the name of the scheme which provides training and skills to women in traditional and nontraditional trades?
(a) Kishori Shakti Yojna; (b) Rashtriya Mahila Kosh; (c) Swayamsiddha; (d) Swawlamban
100. What does S & P 500 relate to? (a) Supercomputer
(b) A new technique in e-business
(c) A new technique in bridge building
(d) An index of stocks of large companies
51. The term “Prisoner’s Dilemma” is associated with which one of the following? (a) A technique in glass manufacture
(b) A term used in shipping industry
(c) A situation under the Game Theory
(d) Name of a supercomputer
52. Consider the following statements:
1. Clean Development Mechanism (CDM) in respect of carbon credits is one of the
Kyoto Protocol Mechanisms.
2. Under the CDM, the projects handled pertain only to the Annex-I countries.
Which of the statements given above is/are correct?
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2
53. Which one of the following Union Ministries is implementing the Biodiesel Mission
(as Nodal Ministry)?
(a) Ministry of Agriculture; (b) Ministry of Science and Technology; (c) Ministry of New and Renewable Energy; (d) Ministry of Rural Development
54. Which one of the following is not a member of the Shanghai Cooperation Organization?
(a) Russia; (b) Kazakhstan; (c) Ukraine; (d) Uzbekistan
55. Recently the Cabinet Committee on Economic Affairs (CCEA) approved the commencement of an Integrated Action Plan (IAP) in
(a) 60 Naxal hit districts; (b) 80 Naxal hit districts; (c) 50 Naxal hit districts; (d) 40 Naxal hit districts;
56. Which of the following statements is correct?
Fiscal Responsibility and Budget Management Act (FRBM Act) concerns
Fiscal deficit only; b) Revenue deficit only; c) Both fiscal and revenue deficit; d) neither fiscal deficit nor revenue deficit;
57. In which state is the Rajiv Gandhi National Institute of Youth Development located?
a) Tamil Nadu; b) Karnataka; c) Himachal Pradesh; d) Uttaranchal
58. Where is Davos—the venue of annual meeting of World Economic Forum, located?
France; b) Germany; c) Switzerland; d) Luxembourg
59. What is the Universal Product Code (UPC) adopted
a) Fire safety code in buildings; b) Earthquake-resistant building code; c) Bar code; d) Against adulteration in eatables;
60. With reference to the steel industry in India in the recent times, consider the following statements:
1. Vizag Steel Plant (RINL) has been declared Mini Ratna.
2. Merger of IISCO with SAIL has been completed. Which of the statements given above is/are correct?
(a) 1 only; (b) 2 only; (c) Both 1 and 2; (d) Neither 1 nor 2;
Friday, May 20, 2011
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ICSA 2011 GS Indian Econ Q & A Session--III, Dated 12 May, 2011
Question and Answer Session
Indian Economics
1.What was the HDI of India in 2010?
a)0.547 ; b) 0.572; c) 0.519; d) 0.527
2. Central Government started making a special contribution for development of social service in the North East starting from which of the following year?
a) 2005-06; b) 2006-07; c) 2007-08; d) 2008-09
3.Of the total central government expenditure, the expenditure on social services,rural development and PMGSY in 2009-10 revised estimate contributed to
a) 14.77%; b) 18.32%; c) 18.44%; d) 19.27%
4. Of the social services expenditure of the central government in 2009-10 revised estimate, the share of education was
a) 43.9%; b) 42.4%; c) 45.0%; d) 43.0%
5. The average proportion of the households availing banking facilities in India is
a) 31.8%; b) 35.8%; c) 37.5%; 29.7%
6. How much money has been allocated to Sarva Shiksha Abhiyan in the Union Budget 2011-12
a) Rs.21000 ; b) Rs.18000; c) Rs. 15000; d) None of these
7. The number of Particularly Vulnerable Tribal Groups (PVTGs) earlier known as Primitive Tribal Groups (PTGs) is
a) 35 ; b) 55; c) 75; d) 95
8. Sen (1976) proposed an index of poverty that considers
a) the number of poor only;
b) the number of poor and the depth of their poverty;
c) the number of poor, the depth of their poverty, and the distribution of poverty within the group;
d) none of these
9. The main points of the criticism of the concept of poverty line include a) application of the same poverty line in all the states, which imply the absence of price differentials across the states;
(b) use of a fixed consumption basket over time;
(c) uniform consumption basket for all the states;
d) all of these;
10. In which of the following years Asia's first EPZ set up in Kandla
a) 1965; b)1969; c) 1972; d) 1975
11. The Special Economic Zones Act was passed in
a)2000; b)2002; c)2005; d) 2007
12. Which of the following is not an objective of the SEZ Act?
(a) generation of additional revenue for the government;
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
13. The inter-ministerial SEZ Board of Approval (BoA) consists of
a) 5 members; b) 10 members; c) 12 members; d) 19 members;
14. The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment does not include
a) Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
b) 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
c) Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
d) Borrowing from the commercial banks of the country by any SEZ unit upto US $ 500 million in a year without any collateral security.
15. In which of the following years exports from the SEZs recorded highest growth rate?
a) 2006-07; b) 2007-08; c)2008-09; d)2009-10;
16. India’s only SEZ specializing in animation and gaming is located at
a) Bengaluru; b) Trivandrum; c) Rajarhat; d) Gurgaon;
17. Moser Baer SEZ is located at
a) Mysore; b) Gurgaon; c) Greater Noida; d) Coimbatore;
18. Since independence, in how many years, inflation rate in India have been above 15 percent?
a) 22 ; b) 15; c)6; d)4;
19. The average inflation during 1951-2005 is estimated to be
a) 6.5%; b) 8.5%; c) 10.5%; d) 12.5%
20. Which of the following statements is not correct?
a) The “headline inflation” covers the entire set of goods and services included in the general index.
b) The “core inflation” otherwise known as “underlying inflation” ignores the volatile items in the general index.
c) Headline inflation reflects not only the effect of demand pressures but also supply shocks which impart transitory noise and bias to the index.
d) The concept of “core” inflation became popular much before the adoption of the “inflation targeting” framework by several central banks.
21. Inflation targeting as a framework for operating monetary policy has almost acquired a sort of cult status ever since _________ formulated it for the first time in early 1990s
a) Reserve Bank of India; b) Central Bank of Europe; c) Reserve Bank of New Zealand; d) None of these.
22. NAIRU stands for
a) Non-accelerating Inflation Rate of Unemployment; b) National Average of Industrial Rate of Unemployment; c) National All India Radio Union; d) None of these
23. The grant of money in aid or support to institutions which is asked to provide loans to farmers at below market rates by the government is known as
a) subvention b) subsidy c) monetization d) none of these
24. Which among the following facts about BRIC is/are true?
a)BRIC countries account for 42 percent of the world's population
b)BRIC Countries account for 14.6 percent of global Gross Domestic Product (GDP)
c)BRIC countries account for 12.8 percent of the global trade volume.
d) All are true
25.Recently Bindeshwar Pathak of Sulabh International was honored by Intergovernmental Renewable Energy Organization at the United Nations headquarters in New York . He was presented this honor for _________?
a) Running public toilets in India;
b) Developing low cost toilet technology to produce energy out of human excreta;
c) Uplifting the socio-economic and environmental status of poor;
d) For popularizing solar technology in the rural areas;
26. Reserve Bank constituted a Working Group to Review the Operating Procedure of Monetary Policy in India under the Chairmanship of
a) A. Vaidyanathan; b) Ashok Chawla; c) Deepak Mohanty; d) Dr. Rakesh Mohan
27. The Task Force on Revival of Rural Co-operative Credit Institutions set up by the RBI is headed by a) Prof. A. Vaidyanathan; b) Ashok Chawla; c) Dr. Rakesh Mohan; d) None of these
28. As per Monetary Policy Statement of RBI, Repo Rate has been increased to
a) 6.75%; b) 7.25%; c) 6%; d) None of these
29. What does MSME stand for?
a) Medium, Small and Micro Enterprises; b) Modern Small and Micro Enterprises; c) Micro, Small and Medium Enterprises; d) None of these
30. What does BCBS stand for?
a) Basel Committee on Banking Supervision; b) Broadbased Core Banking System; c) Business Class Banking Software; d) None of these
For Answers, visit this Blog on or after 21 May, 2011
Indian Economics
1.What was the HDI of India in 2010?
a)0.547 ; b) 0.572; c) 0.519; d) 0.527
2. Central Government started making a special contribution for development of social service in the North East starting from which of the following year?
a) 2005-06; b) 2006-07; c) 2007-08; d) 2008-09
3.Of the total central government expenditure, the expenditure on social services,rural development and PMGSY in 2009-10 revised estimate contributed to
a) 14.77%; b) 18.32%; c) 18.44%; d) 19.27%
4. Of the social services expenditure of the central government in 2009-10 revised estimate, the share of education was
a) 43.9%; b) 42.4%; c) 45.0%; d) 43.0%
5. The average proportion of the households availing banking facilities in India is
a) 31.8%; b) 35.8%; c) 37.5%; 29.7%
6. How much money has been allocated to Sarva Shiksha Abhiyan in the Union Budget 2011-12
a) Rs.21000 ; b) Rs.18000; c) Rs. 15000; d) None of these
7. The number of Particularly Vulnerable Tribal Groups (PVTGs) earlier known as Primitive Tribal Groups (PTGs) is
a) 35 ; b) 55; c) 75; d) 95
8. Sen (1976) proposed an index of poverty that considers
a) the number of poor only;
b) the number of poor and the depth of their poverty;
c) the number of poor, the depth of their poverty, and the distribution of poverty within the group;
d) none of these
9. The main points of the criticism of the concept of poverty line include a) application of the same poverty line in all the states, which imply the absence of price differentials across the states;
(b) use of a fixed consumption basket over time;
(c) uniform consumption basket for all the states;
d) all of these;
10. In which of the following years Asia's first EPZ set up in Kandla
a) 1965; b)1969; c) 1972; d) 1975
11. The Special Economic Zones Act was passed in
a)2000; b)2002; c)2005; d) 2007
12. Which of the following is not an objective of the SEZ Act?
(a) generation of additional revenue for the government;
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
13. The inter-ministerial SEZ Board of Approval (BoA) consists of
a) 5 members; b) 10 members; c) 12 members; d) 19 members;
14. The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment does not include
a) Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
b) 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
c) Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
d) Borrowing from the commercial banks of the country by any SEZ unit upto US $ 500 million in a year without any collateral security.
15. In which of the following years exports from the SEZs recorded highest growth rate?
a) 2006-07; b) 2007-08; c)2008-09; d)2009-10;
16. India’s only SEZ specializing in animation and gaming is located at
a) Bengaluru; b) Trivandrum; c) Rajarhat; d) Gurgaon;
17. Moser Baer SEZ is located at
a) Mysore; b) Gurgaon; c) Greater Noida; d) Coimbatore;
18. Since independence, in how many years, inflation rate in India have been above 15 percent?
a) 22 ; b) 15; c)6; d)4;
19. The average inflation during 1951-2005 is estimated to be
a) 6.5%; b) 8.5%; c) 10.5%; d) 12.5%
20. Which of the following statements is not correct?
a) The “headline inflation” covers the entire set of goods and services included in the general index.
b) The “core inflation” otherwise known as “underlying inflation” ignores the volatile items in the general index.
c) Headline inflation reflects not only the effect of demand pressures but also supply shocks which impart transitory noise and bias to the index.
d) The concept of “core” inflation became popular much before the adoption of the “inflation targeting” framework by several central banks.
21. Inflation targeting as a framework for operating monetary policy has almost acquired a sort of cult status ever since _________ formulated it for the first time in early 1990s
a) Reserve Bank of India; b) Central Bank of Europe; c) Reserve Bank of New Zealand; d) None of these.
22. NAIRU stands for
a) Non-accelerating Inflation Rate of Unemployment; b) National Average of Industrial Rate of Unemployment; c) National All India Radio Union; d) None of these
23. The grant of money in aid or support to institutions which is asked to provide loans to farmers at below market rates by the government is known as
a) subvention b) subsidy c) monetization d) none of these
24. Which among the following facts about BRIC is/are true?
a)BRIC countries account for 42 percent of the world's population
b)BRIC Countries account for 14.6 percent of global Gross Domestic Product (GDP)
c)BRIC countries account for 12.8 percent of the global trade volume.
d) All are true
25.Recently Bindeshwar Pathak of Sulabh International was honored by Intergovernmental Renewable Energy Organization at the United Nations headquarters in New York . He was presented this honor for _________?
a) Running public toilets in India;
b) Developing low cost toilet technology to produce energy out of human excreta;
c) Uplifting the socio-economic and environmental status of poor;
d) For popularizing solar technology in the rural areas;
26. Reserve Bank constituted a Working Group to Review the Operating Procedure of Monetary Policy in India under the Chairmanship of
a) A. Vaidyanathan; b) Ashok Chawla; c) Deepak Mohanty; d) Dr. Rakesh Mohan
27. The Task Force on Revival of Rural Co-operative Credit Institutions set up by the RBI is headed by a) Prof. A. Vaidyanathan; b) Ashok Chawla; c) Dr. Rakesh Mohan; d) None of these
28. As per Monetary Policy Statement of RBI, Repo Rate has been increased to
a) 6.75%; b) 7.25%; c) 6%; d) None of these
29. What does MSME stand for?
a) Medium, Small and Micro Enterprises; b) Modern Small and Micro Enterprises; c) Micro, Small and Medium Enterprises; d) None of these
30. What does BCBS stand for?
a) Basel Committee on Banking Supervision; b) Broadbased Core Banking System; c) Business Class Banking Software; d) None of these
For Answers, visit this Blog on or after 21 May, 2011
ICSA 2011 GS Indian Econ Q & A Session--III, Dated 7 May, 2011
1. Using which of the following approaches NSSO collects data on employment and unemployment in India
(a) Usual Status; (b) Current Weekly Status; (c) Current Daily Status; (d) All of these
2. The proportion of the country’s population that is engaged actively in the labour market either by working or by seeking work is known as
(a) Work Participation Rate;
(b) Labour Force Participation Rate; (c) Unemployment Rate;
(d) None of these
3. Under Current Daily Status, a person is considered employed for the full day if he/she worked during the day for
(a) at least 8 hours; (b) at least 6 hours; (c) at least 4 hours; (d) None of these
4. In which of the following age groups, CDS unemployment rate of urban female was the highest
in 2004-2005
(a) 15-19 ; (b) 20-24 ; (c) 25-29; (d)30-34
5. Which of the following categories of workers are considered to be self-employed
a) Own account workers; b) Employers; c) Helpers; d) All of these.
6. As per NSSO estimate, the percentage of urban work force who were self-employed in 2004-05 is
a) 45.4 % ; b) 54.5%; c) 60.2%; d) 39.9%
7. What percentage of rural female workers is engaged in agriculture in 2004-05?
a) 66.2% b) 84.1% c) 81.4; d)71.2%
8. In which of the following states, the percentage of regular employment to total employment is less than 10%
a) Uttar Pradesh ; b) Himachal Pradesh; c) Madhya Pradesh; d) Andhra Pradesh
9. The labour productivity of Japan is approximately _____ times of that in India
a) 4 ; b) 6; c) 8 d) 12
10. Which of the following countries has the highest level of labour productivity ?
a) United Kingdom ; b) Australia; c) United States of America; d) Germany
11. Unorganised sector workers are covered by
(a) The Maternity Benefits Act, 1961; (b) The Payment of Gratuity Act, 1972; (c) The Employees’ State Insurance Act,1948; (d) None of these
12. As per NSSO estimate, the share of unorganised sector in total employment is
(a) 66% ; (b) 76%; (c) 84%; (d)94%
13. Match the columns:
Column A Column B
(A) Wall Street Crash (i) 2008
(B) Black Monday (ii) 2000
(C) Dot-com bubble (iii) 1987
(D) Stock Market Crash (iv) 1929
(a) A-i; B-ii; C-iii; D-iv; (b) A-iv; B-iii; C-ii; D-i; (c) A-ii; B-i; C-iv; D-iii; (d) A-iv; B-ii; C-iii; D-i;
14. Match the columns:
Column A Column B
(A) SSE Composite (i) Czech Republic
(B) Case 30 (ii) Pakistan
(C) KSE 100 (iii) Egypt
(D) PX Index (iv) China
(a) A-i; B-ii; C-iii; D-iv;
(b) A-iv; B-iii; C-ii; D-i;
(c) A-ii; B-i; C-iv; D-iii;
(d) A-iv; B-ii; C-iii; D-i;
15. SEBI headquarters is located at
(a) New Delhi; (b) Chennai; (c) Bengaluru; (d) Mumbai
16. Who was the first Chairman of SEBI?
(a) S.A.Dave; (b) G.V.Ramkrishna; (c)S.S.Nadkarni; (d) D.R.Mehta
17. The percentage of a year’s real GDP that must be forgone to reduce inflation by 1 percentage point is
known as
(a) Phillips Ratio; (b) GDP Deflator; (c) Sacrifice Ratio; (d) None of these
18. Major schemes in Elementary Education include
(a) Sarva Shiksha Abhiyan;
(b) Sarva Shiksha Abhiyan, Mid-Day Meals in Schools;
(c) Sarva Shiksha Abhiyan, Mid-Day Meals in Schools, Mahila Samakhya;
(d) Sarva Shiksha Abhiyan, Mid-Day Meals in Schools, Mahila Samakhya, Infrastructure Development in Minority Institutions;
19. Sarva Shiksha Abhiyan was launched in
(a) 2001-02; (b) 2000-01; (c) 1999-2000; (d) None of these
20. AIE stands for
(a) All India Education ; (b) Alternative and Innovative Education; (c) Appropriate Indian
English; (d) None of these
21. What was the national average dropout rate in 2007-08
(a) 43.03%; (b) 44.04%; (c) 45.05%; (d) 46.06%;
22. Rashtriya Madhyamik Shiksha Abhiyan (RMSA) is a major scheme launched in March, 2009 with the objectives of
(a) making secondary education of good quality available,
(b) accessible and affordable to all young persons in the age group 15-16 years,
(c) achieving a GER of 75 per cent in secondary education in a period of five years,
(d) all the above
23. "MARG Swarnabhoomi" is a mega infrastructure project with world class telecommunication facilities. MARG Limited (integrated infrastructure company) signed an MOU with which of the following India's telecommunication giants for this project ?
(a)Tata Indicom; (b)BSNL; (c) Bharti Airtel; (d) None of these
24. In which of the following states the World Bank-assisted National Cyclone Risk Management Project(NCRMP) is being implemented?
(a)West Bengal; (b) Orissa; (c)Andhra Pradesh; (d) Tamil Nadu;
25. Union Government has suggested all states in the country to adopt Water and Sanitation Management Organisation (WASMO) model for achieving drinking water security through community participation used by which state?
(a)Maharastra; (b) Gujarat; (c)Rajasthan; (d) West Bengal
26. Recently which Insurance company has launched a micro-insurance scheme 'Grameen Shakti' in the
Northeastern States?
(a)ICICI Prudential; (b)SBI Life Insurance; (c) LIC; (d) NIC
27. The Asian Development Bank (ADB) sanctioned a soft loan for khadi development in the country. What was the amount of the Loan?
(a)Rs. 750 crore; (b)Rs. 500 Crore; (c)Rs. 450 Crore; (d) Rs.200 Crore
28.Biocon Limited, India's pioneering biotechnology company, has recently launched the Biocon Cell for Innovation Management (BCIM) to promote innovation in business in which of the following Prestigious Business School of the country ?
(a)Indian Institute of Management , Ahmadabad; (b)Indian School of Business , Hyderabad; (c)Indian Institute of Foreign Trade , New Delhi; (d) None of these
29. "Harit Rajasthan' which is a flagship programme of Chief Minister of Rajasthan Ashok Gehlot is a scheme to _________?
(a) provide irrigation from canals to the desert areas of the state; (b) planting of saplings over vacant lands (c) hand pumps & tube well facilities in areas lacking drinking water; (d) none of these;
30. "Arogya Sri" is a Insurance coverage programme for poor people , under the aegis of the state government of ________?
(a) Gujarat ; (b) Andhra Pradesh; (c)Karnataka; (d) Jharkhand.
For Answers, visit this Blog on or after 21 May, 2011
(a) Usual Status; (b) Current Weekly Status; (c) Current Daily Status; (d) All of these
2. The proportion of the country’s population that is engaged actively in the labour market either by working or by seeking work is known as
(a) Work Participation Rate;
(b) Labour Force Participation Rate; (c) Unemployment Rate;
(d) None of these
3. Under Current Daily Status, a person is considered employed for the full day if he/she worked during the day for
(a) at least 8 hours; (b) at least 6 hours; (c) at least 4 hours; (d) None of these
4. In which of the following age groups, CDS unemployment rate of urban female was the highest
in 2004-2005
(a) 15-19 ; (b) 20-24 ; (c) 25-29; (d)30-34
5. Which of the following categories of workers are considered to be self-employed
a) Own account workers; b) Employers; c) Helpers; d) All of these.
6. As per NSSO estimate, the percentage of urban work force who were self-employed in 2004-05 is
a) 45.4 % ; b) 54.5%; c) 60.2%; d) 39.9%
7. What percentage of rural female workers is engaged in agriculture in 2004-05?
a) 66.2% b) 84.1% c) 81.4; d)71.2%
8. In which of the following states, the percentage of regular employment to total employment is less than 10%
a) Uttar Pradesh ; b) Himachal Pradesh; c) Madhya Pradesh; d) Andhra Pradesh
9. The labour productivity of Japan is approximately _____ times of that in India
a) 4 ; b) 6; c) 8 d) 12
10. Which of the following countries has the highest level of labour productivity ?
a) United Kingdom ; b) Australia; c) United States of America; d) Germany
11. Unorganised sector workers are covered by
(a) The Maternity Benefits Act, 1961; (b) The Payment of Gratuity Act, 1972; (c) The Employees’ State Insurance Act,1948; (d) None of these
12. As per NSSO estimate, the share of unorganised sector in total employment is
(a) 66% ; (b) 76%; (c) 84%; (d)94%
13. Match the columns:
Column A Column B
(A) Wall Street Crash (i) 2008
(B) Black Monday (ii) 2000
(C) Dot-com bubble (iii) 1987
(D) Stock Market Crash (iv) 1929
(a) A-i; B-ii; C-iii; D-iv; (b) A-iv; B-iii; C-ii; D-i; (c) A-ii; B-i; C-iv; D-iii; (d) A-iv; B-ii; C-iii; D-i;
14. Match the columns:
Column A Column B
(A) SSE Composite (i) Czech Republic
(B) Case 30 (ii) Pakistan
(C) KSE 100 (iii) Egypt
(D) PX Index (iv) China
(a) A-i; B-ii; C-iii; D-iv;
(b) A-iv; B-iii; C-ii; D-i;
(c) A-ii; B-i; C-iv; D-iii;
(d) A-iv; B-ii; C-iii; D-i;
15. SEBI headquarters is located at
(a) New Delhi; (b) Chennai; (c) Bengaluru; (d) Mumbai
16. Who was the first Chairman of SEBI?
(a) S.A.Dave; (b) G.V.Ramkrishna; (c)S.S.Nadkarni; (d) D.R.Mehta
17. The percentage of a year’s real GDP that must be forgone to reduce inflation by 1 percentage point is
known as
(a) Phillips Ratio; (b) GDP Deflator; (c) Sacrifice Ratio; (d) None of these
18. Major schemes in Elementary Education include
(a) Sarva Shiksha Abhiyan;
(b) Sarva Shiksha Abhiyan, Mid-Day Meals in Schools;
(c) Sarva Shiksha Abhiyan, Mid-Day Meals in Schools, Mahila Samakhya;
(d) Sarva Shiksha Abhiyan, Mid-Day Meals in Schools, Mahila Samakhya, Infrastructure Development in Minority Institutions;
19. Sarva Shiksha Abhiyan was launched in
(a) 2001-02; (b) 2000-01; (c) 1999-2000; (d) None of these
20. AIE stands for
(a) All India Education ; (b) Alternative and Innovative Education; (c) Appropriate Indian
English; (d) None of these
21. What was the national average dropout rate in 2007-08
(a) 43.03%; (b) 44.04%; (c) 45.05%; (d) 46.06%;
22. Rashtriya Madhyamik Shiksha Abhiyan (RMSA) is a major scheme launched in March, 2009 with the objectives of
(a) making secondary education of good quality available,
(b) accessible and affordable to all young persons in the age group 15-16 years,
(c) achieving a GER of 75 per cent in secondary education in a period of five years,
(d) all the above
23. "MARG Swarnabhoomi" is a mega infrastructure project with world class telecommunication facilities. MARG Limited (integrated infrastructure company) signed an MOU with which of the following India's telecommunication giants for this project ?
(a)Tata Indicom; (b)BSNL; (c) Bharti Airtel; (d) None of these
24. In which of the following states the World Bank-assisted National Cyclone Risk Management Project(NCRMP) is being implemented?
(a)West Bengal; (b) Orissa; (c)Andhra Pradesh; (d) Tamil Nadu;
25. Union Government has suggested all states in the country to adopt Water and Sanitation Management Organisation (WASMO) model for achieving drinking water security through community participation used by which state?
(a)Maharastra; (b) Gujarat; (c)Rajasthan; (d) West Bengal
26. Recently which Insurance company has launched a micro-insurance scheme 'Grameen Shakti' in the
Northeastern States?
(a)ICICI Prudential; (b)SBI Life Insurance; (c) LIC; (d) NIC
27. The Asian Development Bank (ADB) sanctioned a soft loan for khadi development in the country. What was the amount of the Loan?
(a)Rs. 750 crore; (b)Rs. 500 Crore; (c)Rs. 450 Crore; (d) Rs.200 Crore
28.Biocon Limited, India's pioneering biotechnology company, has recently launched the Biocon Cell for Innovation Management (BCIM) to promote innovation in business in which of the following Prestigious Business School of the country ?
(a)Indian Institute of Management , Ahmadabad; (b)Indian School of Business , Hyderabad; (c)Indian Institute of Foreign Trade , New Delhi; (d) None of these
29. "Harit Rajasthan' which is a flagship programme of Chief Minister of Rajasthan Ashok Gehlot is a scheme to _________?
(a) provide irrigation from canals to the desert areas of the state; (b) planting of saplings over vacant lands (c) hand pumps & tube well facilities in areas lacking drinking water; (d) none of these;
30. "Arogya Sri" is a Insurance coverage programme for poor people , under the aegis of the state government of ________?
(a) Gujarat ; (b) Andhra Pradesh; (c)Karnataka; (d) Jharkhand.
For Answers, visit this Blog on or after 21 May, 2011
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