APPSC Group-I Prelims 2004

378 questions from the 2004 papers, each with the official answer and an explanation.

A question repeated across years is listed once, under one of the years it appeared.

81. Q81Polity in the news: new committees, commissions of inquiry and cases in the courts

    In which of the following High Courts did 25 out of a total of 28 judges go on leave on April 19, 2004, without stating any reason, in an unprecedented manner, regarding the Indian President, the Chief Justice of India, Amitava Ghose, and the Lok Sabha?

    • aPunjab-Haryana High CourtAnswer
    • bPatna High Court
    • cCalcutta High Court
    • dKerala High Court
    ›Explanation

    Option A is correct because on 19th April 2004, 25 out of 28 judges of the Punjab and Haryana High Court went on collective casual leave following an internal confrontation with their Chief Justice, B. K. Roy. Option B: Patna High Court was not the high court where judges staged a mass casual leave strike. Option C: Calcutta High Court did not witness a mass leave en masse by judges in April 2004. Option D: Kerala High Court was completely unrelated to this unprecedented judicial protest.

82. Q82Polity in the news: new committees, commissions of inquiry and cases in the courts

    Which of the following committees recently recommended not to continue the National Savings Certificates and Kisan Vikas Patra schemes?

    • aRaja Chelliah Committee
    • bKelkar Committee
    • cRakesh Mohan CommitteeAnswer
    • dNarasimham Committee
    ›Explanation

    Option C is correct because the Advisory Committee on Administered Interest Rates and Other Issues Related to National Small Savings Fund, chaired by Rakesh Mohan, recommended the discontinuation of schemes like Kisan Vikas Patra and National Savings Certificates. Option A: Raja Chelliah Committee was tasked with comprehensive tax reforms, not administered interest rates on small savings. Option B: Kelkar Committee focused on fiscal consolidation and direct and indirect tax reforms. Option D: Narasimham Committee focused on structural reforms in the banking and financial sector.

83. Q83STATE POLITY: how the state itself is governed

    How many times has President's Rule been declared in Andhra Pradesh until now?

    • aFour times
    • bFive times
    • cThree times
    • dTwo timesAnswer

    Official answer shown. The explanation is under review.

84. Q84What an economy is measured by

    The National Income in India is estimated by the

    • aIndian Standards Institution
    • bIndian Statistical Institute
    • cCentral Statistical OrganisationAnswer
    • dNational Council of Applied Economic Research
    ›Explanation

    Option C is correct because the Central Statistical Organisation (now the National Statistical Office under the Ministry of Statistics and Programme Implementation) is the designated official agency in India responsible for measuring and estimating national income. Option A: It is wrong because the Indian Standards Institution (now Bureau of Indian Standards) deals with product standards and quality certification, not macroeconomic accounting. Option B: It is wrong because the Indian Statistical Institute is an autonomous academic and research institution, not the government statistical body that compiles official accounts. Option D: It is wrong because the National Council of Applied Economic Research is an independent non-profit economic research think-tank.

85. Q85What an economy is measured by

    At the present rate of growth, India is expected to overtake China by

    • a2050
    • b2015
    • c2005
    • d2035Answer
    ›Explanation

    Option D is correct because benchmark long-term macroeconomic projections made during the period estimated that India's sustained growth rate would enable it to overtake China by around 2035. Option A: The year 2050 was identified in long-range BRICS projections as the horizon where India might surpass the United States, rather than China. Option B: The year 2015 was too early for India to surpass China under any reputable long-term growth projection model. Option C: The year 2005 was already past or immediate relative to the release of these long-term comparative growth forecasts.

86. Q86What an economy is measured by

    ......... is not a feature of a developing economy

    • aHigh rate of unemployment
    • bHigh rate of population growth
    • cHigh rate of capital formationAnswer
    • dWidespread poverty
    ›Explanation

    Option C is correct because developing economies typically face low per capita income and low savings, which causes a low rate of capital formation rather than a high one. Option A: High rates of unemployment and underemployment are persistent characteristics of developing economies. Option B: High population growth resulting from declining mortality alongside high fertility is typical of developing economies. Option D: Widespread poverty resulting from inadequate national income is a standard feature of developing economies.

87. Q87What an economy is measured by

    The three states which had Human Development Indicators higher than those of China but lower than those of Mexico, according to a Reserve Bank of India study, are

    • aPunjab, Gujarat and Kerala
    • bMaharashtra, Kerala and Karnataka
    • cKerala, Karnataka and Andhra Pradesh
    • dKerala, Maharashtra and PunjabAnswer
    ›Explanation

    Option D is correct because the Reserve Bank of India study comparing subnational human development indices found that Kerala, Maharashtra, and Punjab achieved scores placing them above China but below Mexico. Option A: Gujarat did not meet the threshold score placing it above China in that comparative assessment. Option B: Karnataka had an indicator value lower than China's benchmark in the study. Option C: Andhra Pradesh and Karnataka both recorded indices lower than China.

88. Q88What an economy is measured by

    The maximum number of people in India work in the ......... sector.

    • aPrimaryAnswer
    • bSecondary
    • cTertiary
    • dNone of the above
    ›Explanation

    Option A is correct because the primary sector, specifically agriculture and allied activities, remains the largest employer in India, engaging close to 45 to 50 percent of the total workforce. Option B: The secondary sector accounts for roughly a quarter of the total workforce. Option C: The tertiary sector produces the highest share of output but employs fewer people than agriculture. Option D: An answer is available since the primary sector employs the largest share of workers.

89. Q89Planning, reform and the shape of policy

    At the end of the VII Plan in 1990, the total number of Public Sector Undertakings (PSUs) in India stood at 244. How many PSUs were there at the commencement of the First Five Year Plan?

    • a1. 10
    • b2. 5Answer
    • c3. 23
    • d4. 41
    ›Explanation

    Option B is correct because at the start of the First Five Year Plan in 1951, there were only 5 central public sector undertakings in India. Option A: 1. 10 is double the number of public enterprises that existed at the start of 1951. Option C: 3. 23 was the number of public sector enterprises reached near the end of the Second Plan. Option D: 4. 41 represents the count reached during later stages of industrial development in the 1960s.

90. Q90Planning, reform and the shape of policy

    The phenomenon known as 'Green Revolution' began to manifest itself during the

    • aII Five Year Plan
    • bIII Five Year Plan
    • cAnnual Plans (1966-69)Answer
    • dIV Five Year Plan
    ›Explanation

    Option C is correct because the Green Revolution in India was launched in 1966 with the introduction of High Yielding Varieties of seeds during the period of the Annual Plans, often referred to as the Plan Holiday. Third Five Year Plan: 1961 to 1966 Three Annual Plans: 1966 to 1969 Launch of High Yielding Varieties Programme: Kharif 1966 Fourth Five Year Plan: 1969 to 1974 Option A: II Five Year Plan is incorrect because the Second Plan focused on heavy industrialization and preceded the adoption of dwarf wheat varieties. Option B: III Five Year Plan is incorrect because the Third Plan ended in March 1966 before the nationwide breakthrough in high-yielding seed adoption began. Option D: IV Five Year Plan is incorrect because the Green Revolution had already manifested and achieved initial success during the 1966-1969 interregnum before the Fourth Plan started.

91. Q91Planning, reform and the shape of policy

    Socialistic pattern of the system comes about through

    • aFree economy
    • bMixed economyAnswer
    • cPublic sector
    • dPrivate sector
    ›Explanation

    Option B is correct because the socialistic pattern of society adopted by the Indian Parliament in 1954 and enshrined in the Second Five Year Plan was implemented through a mixed economy where the state occupies the commanding heights while allowing the private sector to operate. Option A: Free economy relies exclusively on market forces and private enterprise, leading to concentration of wealth rather than socialistic equity. Option C: Public sector is an instrument within the economy, but the systemic framework established was a mixed economy combining both public and private sectors. Option D: Private sector is driven primarily by private profit rather than socialistic redistribution.

92. Q92Planning, reform and the shape of policy

    The long term objective of development in India is

    • aHigh standard of living
    • bSocial Justice
    • cEconomic self-reliance
    • dAll the aboveAnswer
    ›Explanation

    Option D is correct because India's planned development was designed with multifaceted long-term goals that include raising per capita income to improve living standards, ensuring equitable distribution of wealth through social justice, and achieving self-reliance. Option A: High standard of living is only one dimension of developmental objectives and not comprehensive on its own. Option B: Social Justice is an essential pillar of Indian planning but omits the material and structural goals of growth and self-reliance. Option C: Economic self-reliance is a key strategy to avoid external dependency, but it does not represent the entirety of development objectives.

93. Q93Planning, reform and the shape of policy

    By the end of the Seventh Plan in 1990, the number of Public Sector Undertakings (PSUs) in the country was 244. How many undertakings were there at the beginning of the First Plan?

    • a10
    • b5Answer
    • c23
    • d41
    ›Explanation

    Option B is correct because at the commencement of the First Five Year Plan in 1951, there were only 5 central public sector enterprises with an aggregate investment of 29 crore rupees. Start of First Plan in 1951: 5 public sector undertakings End of Seventh Plan in 1990: 244 public sector undertakings Option A: 10 is incorrect as it overstates the initial number of PSUs existing in 1951. Option C: 23 is incorrect because this number reflects later expansion during the early plans, not the beginning of the First Plan. Option D: 41 is incorrect as this level was reached during subsequent plan periods.

94. Q94Planning, reform and the shape of policy

    During the Tenth Five-Year Plan period, states were divided into groups A, B, C and D for providing financial resources for plan expenditure in the states. In which of these groups was Andhra Pradesh included?

    • aA
    • bBAnswer
    • cC
    • dD
    ›Explanation

    Option B is correct because the Planning Commission classified non-special category states into groups based on their fiscal health and resource mobilization capacity during the Tenth Five Year Plan, placing Andhra Pradesh in Group B. Group A comprised states with relatively sound fiscal positions Group B included middle-tier non-special category states like Andhra Pradesh Group C and Group D consisted of states facing severe fiscal deficits and structural distress Option A: Group A consisted of states that had comparatively superior fiscal health and minimal revenue deficit stress. Option C: Group C contained states requiring deeper debt restructuring and lower baseline plan outlays. Option D: Group D was reserved for states with the most acute fiscal deterioration.

95. Q95Planning, reform and the shape of policy

    When were the National Rural Employment Programme and the Rural Landless Employment Guarantee Programme launched?

    • aDuring the Fifth Five-Year Plan period
    • bDuring the Sixth Five-Year Plan periodAnswer
    • cDuring the Seventh Five-Year Plan period
    • dDuring the Ninth Five-Year Plan period
    ›Explanation

    Option B is correct because both the National Rural Employment Programme and the Rural Landless Employment Guarantee Programme were initiated during the Sixth Five-Year Plan to generate wage employment in rural areas. Sixth Five-Year Plan duration: 1980 to 1985 Launch of National Rural Employment Programme: October 1980 Launch of Rural Landless Employment Guarantee Programme: August 1983 Option A: During the Fifth Five-Year Plan period is incorrect because the Fifth Plan ran from 1974 to 1979, prior to the rollout of these two programmes. Option C: During the Seventh Five-Year Plan period is incorrect because these programmes were merged into the Jawahar Rozgar Yojana during the Seventh Plan in 1989. Option D: During the Ninth Five-Year Plan period is incorrect as these schemes operated much earlier in the 1980s.

96. Q96Population, poverty and work

    Use of 'calories', which give the energy content of food intake, to measure poverty in India was first put forward by

    • aAmartya Sen
    • bT.N. Srinivasan
    • cArundhati Roy
    • dDandekar and RathAnswer
    ›Explanation

    Option D is correct because V.M. Dandekar and Nilakantha Rath made the first systematic assessment of poverty in India using a minimum daily energy intake standard in their landmark 1971 study, Poverty in India. Option A: Amartya Sen pioneered the capability approach and poverty indices rather than introducing the calorie intake criterion. Option B: T.N. Srinivasan contributed extensively to poverty and inequality measurement later as part of official planning committees. Option C: Arundhati Roy is an author and social activist, not an economist involved in official poverty measurement methodologies.

97. Q97Population, poverty and work

    Which of the following types of unemployment can occur even in a situation of full employment?

    • aStructural unemployment
    • bFunctional unemploymentAnswer
    • cCyclical unemployment
    • dDisguised unemployment

    Official answer shown. The explanation is under review.

98. Q98Population, poverty and work

    How many days of work have been guaranteed by the UPA Government's National Common Minimum Programme, to one able-bodied person in every rural, urban, poor and lower middle class household?

    • a100 days in a yearAnswer
    • b240 days in a year
    • c200 days in a year
    • d150 days in a year
    ›Explanation

    Option A is correct because the United Progressive Alliance government's National Common Minimum Programme committed to enacting a legal guarantee providing at least 100 days of wage employment each year to rural households, which led to the passage of MGNREGA. Option B: 240 days per year was never the promised statutory entitlement under the programme. Option C: 200 days per year exceeds the baseline statutory guarantee. Option D: 150 days per year is an extended provision restricted to notified drought or natural calamity areas, not the standard guarantee.

99. Q99Population, poverty and work

    In how many 'most poor districts' did the UPA Government decide to start 'Food for Work Programmes' during the year 2004-05?

    • a1. 150Answer
    • b2. 400
    • c3. 350
    • d4. 75
    ›Explanation

    Option A is correct because the National Food for Work Programme was launched in November 2004 in 150 identified most backward districts of the country to generate wage employment and enhance food security. November 2004: Launch of National Food for Work Programme Target coverage: 150 most backward districts Option B: 400 districts is far higher than the initial number of districts chosen for the launch. Option C: 350 districts is an incorrect figure not matching the government notification. Option D: 75 districts is an undercount of the districts identified by the Planning Commission.

100. Q100Population, poverty and work

     The National Common Minimum Programme of the Progressive United Alliance (UPA) government promised to provide how many days of work to unemployed members belonging to rural, urban poor, and lower-middle-class families in the country?

     • a100 days in a yearAnswer
     • b240 days in a year
     • c200 days in a year
     • d150 days in a year
     ›Explanation

     Option A is correct because the National Common Minimum Programme of the UPA government explicitly promised a legal guarantee of at least 100 days of employment to every rural household. National Common Minimum Programme release: May 2004 Guaranteed employment pledged: 100 days per year Resulting legislation: MGNREGA passed in 2005 Option B: 240 days in a year is far above the target committed in the policy document. Option C: 200 days in a year is incorrect because the commitment specified 100 days. Option D: 150 days in a year is incorrect as the baseline pledge was 100 days.

101. Q101Population, poverty and work

     In how many districts, most affected by poverty, did the Progressive United Alliance (UPA) government decide to launch "Food for Work" programs in the year 2004-05?

     • a150Answer
     • b400
     • c350
     • d75
     ›Explanation

     Option A is correct because the National Food for Work Programme was launched in November 2004 across 150 identified most backward districts of India to provide wage employment and food security. Option B: 400 greatly exceeds the 150 backward districts designated for the initial launch. Option C: 350 overstates the targeted district count. Option D: 75 is half the actual number of districts selected for implementation.

102. Q102Agriculture in the Indian economy

     Crop insurance is the monopoly of

     • aNational Insurance Corporation
     • bGeneral Insurance CorporationAnswer
     • cLife Insurance Corporation
     • dNABARD
     ›Explanation

     Option B is correct because historically, the General Insurance Corporation of India (GIC) was designated as the sole implementing agency with a monopoly over the Comprehensive Crop Insurance Scheme (CCIS) and the National Agricultural Insurance Scheme (NAIS) until the creation of the Agriculture Insurance Company of India (AIC). Option A: Does not exist under this exact title as a monopoly provider of crop insurance in India. Option C: Is restricted by mandate to underwriting life insurance and pension products, not agricultural crop risks. Option D: Serves as a developmental refinance bank and does not directly underwrite or execute insurance policies.

103. Q103Industry in the Indian economy

     What is the current investment limit in Small Scale Industry ?

     • aRs. 20 lakhs
     • bRs. 60 lakhs
     • cRs. 100 lakhsAnswer
     • dRs. 300 lakhs
     ›Explanation

     Option C is correct because under the traditional Small Scale Industry classification revised in 1999-2000, the statutory ceiling on investment in plant and machinery was fixed at Rs. 100 lakhs. Option A: Rs. 20 lakhs was the historical limit for tiny industrial units, not general small scale industries. Option B: Rs. 60 lakhs was an earlier investment ceiling from the mid-1980s that was subsequently raised. Option D: Rs. 300 lakhs was briefly introduced in 1997 before the government rolled it back to Rs. 100 lakhs in 1999.

104. Q104Industry in the Indian economy

     Which of the following Public Sector Undertakings are not contributing to profits and are running on losses ?

     • aHindustan Fertilizers and Chemicals Corporation of India.Answer
     • bVSNL and Food Corporation of India
     • cNTPC and Indian Oil Corporation
     • dONGC and Bharat Coking Coal
     ›Explanation

     Option A is correct because central public sector undertakings in the fertilizer and chemical space, such as Hindustan Fertilizer Corporation Limited, have historically suffered continuous operational losses and erosion of net worth. Option B: VSNL maintained a strong record of profitability before its disinvestment. Option C: NTPC and Indian Oil Corporation generate substantial profits and hold Maharatna status. Option D: ONGC is a leading profit-earning enterprise among Indian central public sector undertakings.

105. Q105Industry in the Indian economy

     How much money did the 2004-05 Budget envisage to raise by continuing the policy of disinvestment?

     • aRs. 15,000 crores
     • bRs. 5,000 crores
     • cRs. 4,000 croresAnswer
     • dRs. 9,000 crores
     ›Explanation

     Option C is correct because the Union Budget 2004-05 presented by Finance Minister P. Chidambaram earmarked a disinvestment receipt target of Rs. 4,000 crores. Disinvestment target in Budget 2004-05: Rs. 4,000 crores Option A: It is incorrect because Rs. 15,000 crores was far above the modest disinvestment target set in 2004-05. Option B: It is incorrect because Rs. 5,000 crores was not the budget estimate for that year. Option D: It is incorrect because Rs. 9,000 crores was not the allocated disinvestment target in the 2004-05 budget.

106. Q106Industry in the Indian economy

     Which pair of the Public Sector Undertakings (PSU) mentioned below are running at losses to achieve profits?

     • aHindustan Fertilizers and Fertilizer Corporation of IndiaAnswer
     • bVSNL and Bharat Operator Company
     • cNTPC and Indian Oil Corporation
     • dONGC and Bharat Coking Coal
     ›Explanation

     Option A is correct because Hindustan Fertilizer Corporation Limited and the Fertilizer Corporation of India Limited are chronic loss-making central public sector undertakings that were declared sick and placed under revival and restructuring schemes. Option B: VSNL was a consistently profitable public enterprise prior to its disinvestment. Option C: NTPC and Indian Oil Corporation are highly profitable Maharatna central public sector enterprises. Option D: ONGC is one of the most profitable Maharatna central public sector enterprises in India.

107. Q107Industry in the Indian economy

     Which does not allow 100% foreign investment is....

     • aExport Processing Zones
     • bSpecial Economic ZonesAnswer
     • cIndustrial Areas
     • dIndustrial Estates

     Official answer shown. The explanation is under review.

108. Q108Money, banking and financial markets

     What is meant by ‘Bank Rate’ ?

     • aThe rate at which commercial banks lend
     • bThe rate at which commercial banks accept deposits
     • cThe rate at which the Reserve Bank lends to the commercial banksAnswer
     • dNone of the above
     ›Explanation

     Option C is correct because the Bank Rate is the standard rate under Section 49 of the Reserve Bank of India Act at which the Reserve Bank of India lends long-term funds to commercial banks or rediscounts bills of exchange. Option A: the rate at which commercial banks lend to customers is their lending rate, such as MCLR or the repo-linked lending rate. Option B: the rate at which commercial banks accept deposits from the public is the deposit rate. Option D: this is incorrect because the correct definition is stated in Option C.

109. Q109Money, banking and financial markets

     Consider the following statements: a. Reserve Bank of India was nationalized on 26 January, 1950 b. The borrowing programme of the Government of India is handled by the Department of Expenditure, Ministry of Finance Which of the statements given above is/are correct?

     • aa only
     • bb only
     • cBoth a and b
     • dNeither a nor bAnswer
     ›Explanation

     Option D is correct because both statements are incorrect; the Reserve Bank of India was nationalised on January 1, 1949, and government market borrowing is handled by the Budget Division under the Department of Economic Affairs. RBI nationalisation date: January 1, 1949 Constitution of India commencement: January 26, 1950 Nodal division for government borrowing: Budget Division, Department of Economic Affairs Option A: falsely accepts statement a, which confuses the nationalisation date with Republic Day in 1950. Option B: falsely accepts statement b, which names the Department of Expenditure instead of the Department of Economic Affairs. Option C: incorrectly affirms both statements despite their factual errors.

110. Q110Money, banking and financial markets

     What is 'Bank Rate'?

     • aThe interest rate charged by commercial banks on loans
     • bThe interest rate kept by commercial banks on deposits
     • cThe interest rate at which the Reserve Bank lends to commercial banksAnswer
     • dNone of the above
     ›Explanation

     Option C is correct because the Bank Rate is the official rate at which the Reserve Bank of India provides long-term loans and rediscounts commercial bills for commercial banks. Option A: the rate commercial banks charge their customers is called the retail lending rate or base rate, not the Bank Rate. Option B: the rate commercial banks pay on customer deposits is the deposit interest rate. Option D: this is incorrect because an accurate definition is provided in Option C.

111. Q111Money, banking and financial markets

     Which of the following committees recommended the discontinuation of National Savings Certificates and Kisan Vikas Patra Schemes recently?

     • aRaja Chellaiah Committee
     • bKelkar CommitteeAnswer
     • cRakesh Mohan Committee
     • dNarasimhan Committee
     ›Explanation

     Option B is correct because the Kelkar Committee on fiscal consolidation recommended phasing out and discontinuing high-cost small savings schemes such as Kisan Vikas Patra and National Savings Certificates to curb distortions in interest rates and reduce government debt servicing costs. Option A: Raja Chellaiah Committee dealt with reforms in the direct and indirect tax systems, not small savings schemes. Option C: Rakesh Mohan Committee advised on infrastructure development, railway restructuring, and liquidity management rather than postal small savings. Option D: Narasimhan Committee focused on structural reforms in commercial banking, capital adequacy, and non-performing assets.

112. Q112The named institutions: public sector undertakings, banks and their brands

     Which one of the following pairs is not correctly matched ? Project Company

     • aIntegrated Steel Plant at Jajapur (Orissa) Steel Authority of IndiaAnswer
     • bPower Plant at Jamnagar (Gujarat) Essar Power
     • cNabinagar Power Plant (Bihar) Indian Railways
     • dKayamkulam Power Plant (Kerala) National Thermal Power Corporation
     ›Explanation

     Option A is correct because the integrated steel plant located in the Kalinganagar industrial complex of Jajpur district, Odisha, was developed by Tata Steel and Neelachal Ispat Nigam Limited, not the Steel Authority of India. Option B: The Jamnagar power plant is correctly associated with and run by Essar Power. Option C: The Nabinagar Power Plant in Bihar was built by Bhartiya Rail Bijlee Company Limited, a joint venture of Indian Railways and NTPC. Option D: The Rajiv Gandhi Combined Cycle Power Plant at Kayamkulam in Kerala is owned and operated by NTPC.

113. Q113The named institutions: public sector undertakings, banks and their brands

     Industrial Credit and Investment Corporation of India Ltd. (ICICI) was the second all-India special industrial financial institution to be set up in the country in 1955. Which was the first?

     • aIndustrial Development Bank of India (IDBI)
     • bSmall Industries Development Bank of India (SIDBI)
     • cIndustrial Finance Corporation of India (IFCI)Answer
     • dNational Small Industries Corporation Ltd. (NSIC)
     ›Explanation

     Option C is correct because the Industrial Finance Corporation of India was the first specialized development finance institution created at the all-India level, established on 1 July 1948 under the IFCI Act. IFCI established: 1 July 1948 ICICI established: 5 January 1955 Option A: Industrial Development Bank of India was established later, in 1964. Option B: Small Industries Development Bank of India was established much later, in 1990. Option D: National Small Industries Corporation Ltd. was formed in 1955, primarily as a commercial agency rather than a premier financial institution.

114. Q114The named institutions: public sector undertakings, banks and their brands

     Which Indian bank has the advertising slogan "Big Your - All the Way"?

     • aIDBI
     • bReserve Bank of India
     • cState Bank of IndiaAnswer
     • dICICI Bank
     ›Explanation

     Option C is correct because the State Bank of India adopted the widely known slogan With You - All The Way, which is misspelled in the question as Big Your - All the Way. Option A: IDBI uses the promotional slogan Bank Aisa Dost Jaisa. Option B: Reserve Bank of India is India's central bank and does not use commercial advertising taglines like retail banks. Option D: ICICI Bank uses the slogan Hum Hai Na, Khayal Aapka.

115. Q115The named institutions: public sector undertakings, banks and their brands

     Industrial Credit and Investment Corporation of India Limited (ICICI) was the second All India Special Industrial Financial Institution established in the country in 1955. What was the first institution?

     • aIndustrial Development Bank of India (IDBI)
     • bSmall Industries Development Bank of India (SIDBI)
     • cIndustrial Finance Corporation of India (IFCI)Answer
     • dNational Small Industries Corporation Limited (NSIC)
     ›Explanation

     Option C is correct because the Industrial Finance Corporation of India (IFCI) was established in 1948 as the first All India Development Financial Institution to cater to the long-term finance needs of the industrial sector. IFCI establishment: 1948 ICICI establishment: 1955 NSIC establishment: 1955 IDBI establishment: 1964 SIDBI establishment: 1990 Option A: IDBI was established in 1964 as a subsidiary of the RBI, long after IFCI and ICICI. Option B: SIDBI was established in 1990 to facilitate and finance MSMEs, much later than IFCI. Option D: NSIC was established in 1955 to promote micro and small enterprises, not as the primary first all-India industrial development finance institution.

116. Q116Public finance and the budget

     The Kelkar Committee is related to

     • aDirect Taxes
     • bIndirect Taxes
     • cBoth Direct and Indirect TaxesAnswer
     • dCustoms and Tariffs
     ›Explanation

     Option C is correct because the Task Force on Direct and Indirect Taxes, headed by Vijay L. Kelkar in 2002, comprehensively submitted reform recommendations for both direct taxes and indirect taxes. Option A: Describing it as only related to direct taxes ignores the Task Force's equally significant recommendations on indirect taxes such as excise and customs. Option B: Describing it as only related to indirect taxes overlooks the committee's major direct tax proposals regarding personal and corporate tax simplification. Option D: Customs and tariffs formed only one component of indirect taxes addressed by the committee, not the entire scope.

117. Q117Public finance and the budget

     Among the tax revenues of the Union Government, the most important source is

     • aIncome tax
     • bCentral Excise duty
     • cCustoms duty
     • dCorporate taxAnswer
     ›Explanation

     Option D is correct because corporate tax has traditionally served as the single largest contributor to the gross tax revenue collected by the Union Government. Option A: Income tax paid by individuals has historically yielded lower total collections than direct corporate tax. Option B: Central excise duty applies to selected goods and provides less revenue than direct taxes. Option C: Customs duties generate a significantly smaller share of gross central tax receipts compared to corporate tax.

118. Q118Public finance and the budget

     Which of the following is not a recommendation of the task force on direct taxes under the chairmanship of Dr. Vijay L. Kelkar in the year 2002?

     • aAbolition of Wealth Tax
     • bIncrease in the exemption limit of personal income to Rs. 1.20 lakh for widowAnswer
     • cElimination of standard deduction
     • dExemption from tax on dividends and capital gains from the listed equity
     ›Explanation

     Option B is correct because the Vijay Kelkar Task Force recommended raising the basic exemption limit to Rs. 1.50 lakh for senior citizens and widows, not Rs. 1.20 lakh. Kelkar Task Force general exemption limit recommendation: Rs. 1.00 lakh Kelkar Task Force exemption limit for widows and senior citizens: Rs. 1.50 lakh Option A: The task force explicitly recommended the abolition of wealth tax due to poor compliance and high collection costs. Option C: The elimination of standard deduction was recommended alongside lowering tax rates and widening base exemption limits. Option D: The committee recommended exempting dividends from domestic companies and long-term capital gains on listed equities to spur capital formation.

119. Q119Public finance and the budget

     What is the budgetary allocation for Defence for the year 2004-05?

     • aRs. 15,000 crores
     • bRs. 77,000 croresAnswer
     • cRs. 26,000 crores
     • dRs. 89,000 crores
     ›Explanation

     Option B is correct because the Union Budget for 2004-05 presented by Finance Minister P. Chidambaram earmarked 77,000 crore rupees for defence expenditure, raising it from 65,300 crore rupees in the previous financial year. Budget 2003-04 Defence BE: 65,300 crore rupees Budget 2004-05 Defence BE: 77,000 crore rupees Capital outlay within Defence: 33,483 crore rupees Revenue outlay within Defence: 43,517 crore rupees Option A: Rs. 15,000 crores is far below India's national defence spending in 2004-05. Option C: Rs. 26,000 crores does not cover even the capital acquisition segment of the 2004-05 defence budget. Option D: Rs. 89,000 crores is substantially higher than the actual 2004-05 allocation.

120. Q120Public finance and the budget

     Expenditure of defence is an item of

     • aPublic investment
     • bPrivate investment
     • cPrivate consumption
     • dPublic consumptionAnswer
     ›Explanation

     Option D is correct because defence expenditure covers the running and operational costs of the armed forces (such as salaries, rations, fuel, and equipment maintenance) that are consumed by the state to provide national security as a public good. Option A: It is incorrect because the bulk of defence spending consists of current consumption expenditure rather than economic, asset-generating public investment. Option B: It is incorrect because defence is an exclusive state sovereign function, entirely outside the scope of private entities. Option C: It is incorrect because the government incurs this expenditure for collective public protection, not private individuals for household consumption.