PRELIMS मतलब MAD

Answer – (b)

Explanation:

Statement 1 is correct: Almost more than half of the total oilseeds area is confined to rainfed farming and is cultivated mostly by marginal and small farmers in India. Majority of the oilseeds are cultivated under a rainfed ecosystem (70%).

The area under oilseeds has experienced a deceleration in general, and this is due to their relative lower profitability against competing crops like maize, cotton, chickpea etc., under the prevailing crop growing and marketing situations.

Statement 2 is not correct: There are two major sources of Oilseeds which are Primary and Secondary. Primary oilseed sources are Rapeseed-Mustard, Groundnut, Soybean, Sunflower, and Sesamum. Cottonseed, Rice Bran, and Tree Borne Oils are examples of secondary sources.

Statement 3 is correct: India is heavily reliant on imports which account for 57% of its domestic demand for edible oils.

Answer – (c)

Explanation:

About Domestic Systemically Important Banks (D-SIBs): They are perceived as banks that are ‘Too Big To Fail (TBTF)’ and their continued functioning is crucial for the uninterrupted availability of essential banking services to the real economy.

Statement 1 is correct: They are required to maintain additional common equity based on the bucket list they are placed.

The additional capital requirement ranges from 0.20 percent to 0.80 percent of risk weighted assets, depending upon the bucket D-SIBs are plotted into.

The additional common equity tier 1 (CET1) requirement as a percentage of Risk Weighted Assets (RWAs) for SBI is 0.80 per cent. The additional fund requirement for HDFC Bank is 0.40 per cent, and that for ICICI Bank is 0.20 per cent.

Statement 2 is correct: In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB) then it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its Risk Weighted Assets (RWAs) in India.

It means additional CET1 buffer prescribed by the home regulator amount multiplied by India RWA as per consolidated global Group books divided by total consolidated global Group RWA.

Statement 3 is correct: The Reserve Bank of India (RBI) recently retained the State Bank of India, HDFC Bank and ICICI Bank as Domestic Systemically Important Banks (D-SIBs).

Answer – (d)

Explanation:

Statement 1 is not correct: Fiscal deficit refers to the difference between total expenditure and the sum of revenue receipts and non-debt receipts.

It indicates how much the Government is spending in net terms. It is reflective of the total borrowing requirement of the Government.

Statement 2 is not correct: Primary deficit is the difference between fiscal deficit and interest payments.

Statement 3 is not correct: Effective Revenue Deficit is the difference between Revenue Deficit and Grant-in-Aid for Creation of Capital Assets.

Revenue deficit is derived by deducting capital expenditure from fiscal deficits.

Additional information: Effective Capital Expenditure (Eff-Capex) refers to the sum of Capital Expenditure and Grants-in-Aid for Creation of Capital Assets.

Answer – (a)

Explanation:

Statement 1 is correct: The International Bank for Reconstruction and Development (IBRD) is a global development cooperative owned by 189 member countries.

It is the largest development bank in the world and supports the World Bank Group’s mission by providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries. It was created in 1944 to help Europe rebuild after World War II.

Statement 2 is not correct: The International Finance Corporation (IFC) aims to improve the lives of people in developing countries by investing in private sector growth.

The International Development Association (IDA) is the part of the World Bank that helps low-income countries. It was established in 1960 and complements the World Bank’s original lending arm which is International Bank for Reconstruction and Development (IBRD). IDA lends money on concessional terms.

IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).

Statement 3 is not correct: The Multilateral Investment Guarantee Agency (MIGA) is a member of the World Bank Group. The mandate of the MIGA is to promote cross-border investment in developing countries by providing guarantees, political risk insurance and credit enhancement, to investors and lenders.

Answer – (b)

Explanation:

About Balance of Payments (BoP): It refers to the economic transactions of an economy with the rest of the world for a specific period. The compilation and dissemination of BoP data is the prime responsibility of RBI. BoP can be broadly divided into two accounts namely current account and capital account.

About Current Account: It measures the transfer of real resources goods, services, income and transfers between an economy. The current account is further subdivided into merchandise account and invisibles account. The merchandise account consists of transactions relating to exports and imports of goods.

In the invisible account, there are three broad categories namely, (a) non-factor services such as travel, transportation, insurance and miscellaneous services; (b) transfers which do not involve any value in exchange, and (c) income which includes compensation of employees and investment income.

About Capital Account: It reflects the net changes in financial claims on the rest of the world. It can be broadly broken up into two categories namely, (a) non-debt flows such as direct and portfolio investments, and (b) debt flows such as external assistance, commercial borrowings, non-resident deposits, etc.

Hence option (b) is the correct answer.