BPSC Prelims 2023 Economy Questions with Solutions

Explanation

The Special Economic Zones (SEZ) Act, 2005, was enacted with several key objectives. These include the generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities. All three points mentioned in the question – generation of additional economic activity, promotion of exports of goods and services, and creation of employment – are direct and primary objectives of the SEZ Act, 2005.

Explanation

The Minimum Support Price (MSP) is a crucial policy measure adopted by the Government of India to improve the system of agricultural marketing. It provides a guaranteed price for certain crops to farmers, protecting them from market price fluctuations and ensuring a remunerative income. This directly influences farmers' marketing decisions and provides a stable market for their produce. While the maintenance of buffer stock also involves government procurement and affects marketing, MSP is the policy measure that directly sets a price floor for agricultural produce, fundamentally improving market conditions for farmers.

Explanation

The S. V. S. Raghavan Committee was constituted by the Government of India in 1999 to review the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969. The committee recommended the repeal of the MRTP Act and the enactment of a new law to promote competition and prevent anti-competitive practices. These recommendations directly led to the enactment of the Competition Act, 2002, which replaced the MRTP Act.

Explanation

The correct matching of revolutions with their associated products is as follows: Grey Revolution is linked to Fertilizers, Pink Revolution is associated with Onion production (and also prawns and pharmaceuticals), Silver Revolution refers to the production of eggs (and poultry), and Red Revolution corresponds to Tomato and meat production. Thus, the sequence a-4, b-1, c-3, d-2 correctly pairs the revolutions with their respective sectors.

Explanation

The Eighth Five-Year Plan (1992-1997) was primarily focused on human resource development, encompassing areas such as education, health, and skill development. The First, Third, and Fifth Five-Year Plans had different primary objectives, such as agriculture and irrigation, self-reliance, and poverty eradication, respectively. Therefore, none of the options A, B, or C specifically focused on Human Resource Development.

Explanation

According to data released by the Department for Promotion of Industry and Internal Trade (DPIIT), Karnataka received the highest Foreign Direct Investment (FDI) equity flow during the period of April to September 2022. This was largely driven by significant investments in the state's computer software and hardware sector. Gujarat and other states received lower inflows during this specific period.

Explanation

The Liberalized Exchange Rate Management System (LERMS) was a pivotal reform announced by the then Finance Minister Dr. Manmohan Singh in the Union Budget of 1992–1993. This system introduced a dual exchange rate mechanism, allowing for a partial convertibility of the rupee, which was a significant step towards a market-determined exchange rate regime in India.

Explanation

The National Sample Survey Office (NSSO), now part of the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation, is the primary government agency responsible for conducting large-scale sample surveys in India. These surveys include household consumption expenditure surveys, which collect the essential data needed to estimate the poverty line and assess poverty levels across the country.

Explanation

According to provisional data released by the Ministry of Commerce Industry, India's overall trade balance (merchandise and services combined) for December 2022 was recorded as a deficit of US(-) 11.98 billion. This figure represents the net sum of merchandise trade and services trade balances, indicating that the total value of imports exceeded the total value of exports for that month.

Explanation

As per the Periodic Labour Force Survey (PLFS) annual report for 2020-2021, Bihar registered one of the lowest Female Workforce Participation Rates (FWPR) in the country. Specifically, the FWPR for females aged 15 years and above in Bihar was recorded as 4% in rural areas and 6.5% in urban areas based on the Current Weekly Status (CWS) approach. These figures highlight the significant challenge in female employment in the state during that period.

Explanation

Purnia district in Bihar has historically been a significant hub for jute cultivation and industry. Due to its fertile plains and suitability for growing jute, Purnia developed a substantial number of jute processing units and mills. Consequently, it holds the distinction of having the maximum number of jute industries among the districts listed, making it a key center for the jute sector in the state.

Explanation

The Bihar Economic Survey 2021-22 reported that the Gross State Domestic Product (GSDP) of Bihar grew by 2.5% in 2020-2021. This figure reflects the economic performance of the state during that fiscal year, as officially documented in the economic survey.

Explanation

Both statements A and B are correct for the Bihar economy. The growth rate of 2.5% in 2020-21 was indeed one of the lowest in India, especially during the COVID-19 impacted year. Furthermore, Bihar's economy has a significant reliance on the primary sector, particularly agriculture, making it true that the state primarily produces primary goods. Given that at least two statements are correct, option D is the appropriate answer.

Explanation

The Kirit Parikh Committee submitted a report on gas pricing, recommending a path towards complete pricing freedom for natural gas from January 1, 2026. This committee was tasked with reviewing the existing gas pricing formula to ensure a fair price for both producers and consumers. Their recommendations aimed at rationalizing gas prices and boosting domestic production.

Explanation

Collins Dictionary declared "Permacrisis" as its word of the year for 2022. This term is defined as an extended period of instability and insecurity. It was chosen to reflect the prevailing sense of living through an ongoing series of crises, including political instability, the cost-of-living crisis, and the lingering effects of the pandemic and geopolitical conflicts.

Explanation

According to the Economic Survey for Bihar for the year 2019-2020, Sheohar district recorded the lowest per capita income among all districts in the state. This finding highlighted the significant economic disparities within Bihar, with Sheohar consistently identified as one of the least developed regions based on this economic indicator.

Explanation

In the Business Reforms Action Plan (BRAP) 2020 report, released by the Department for Promotion of Industry and Internal Trade (DPIIT), Bihar secured the 26th rank among 36 states and union territories. The BRAP framework evaluates states on the extent of implementation of business reform recommendations across various sectors. Among the given options (23rd, 24th, 25th), none reflects the actual 26th rank, making option E (None of the above) the correct answer.

Explanation

All three statements regarding the sugar industry in India are largely true. Statement A is correct because sugarcane is a bulky, weight-losing raw material, meaning the processing reduces its weight significantly, making mills often located near cane fields. Statement B is correct as Maharashtra has indeed emerged as a leading sugar producer, often competing with or surpassing Uttar Pradesh due to favorable conditions and higher yields. Statement C is also correct, as Uttar Pradesh consistently ranks among the top two sugar-producing states in the country. Therefore, 'More than one of the above' is the correct option.

Explanation

Statement 1 is correct: Rohtas district is known to have India's largest pyrites deposits, particularly in the Amjhore region. Statement 2 is correct: Limestone is extensively found in the Kaimur plateau region, which includes Kaimur (Bhabhua) and Rohtas districts, and also in parts of Munger district. Statement 3 is correct: Recent geological surveys have indicated significant gold reserves in the Jamui district of Bihar, particularly in the Sono area. Since all three statements are correct, "More than one of the above" is the appropriate answer.

Explanation

Bihar's economy is largely agrarian, and cereal production, particularly rice and wheat, is a cornerstone of its agriculture. Consequently, the processing of these cereals, including rice mills and flour mills, forms the most widespread and dominant segment among the agro-based industries in the state. While industries related to sugarcane and pulses also exist, their scale and prevalence are generally less than that of the cereal-based industry.

Explanation

Let the length of the rectangle be 'l' and the width be 'w'. The area of a rectangle is given by the formula A = l w. Given A = 30 cm², so l w = 30. The perimeter of a rectangle is given by the formula P = 2 (l + w). Given P = 26 cm, so 2 (l + w) = 26, which simplifies to l + w = 13. We now need to find two numbers whose product is 30 and whose sum is 13. These numbers are 10 and 3. Thus, the sides of the rectangle are 10 cm and 3 cm.

Explanation

The marked price (MP) of the item is ₹400. A 10% discount is offered on the marked price. Discount amount = 10% of ₹400 = (10/100) * 400 = ₹40. Price after discount = Marked Price - Discount = ₹400 - ₹40 = ₹360. GST (Goods and Services Tax) is charged at 10% on this discounted price. GST amount = 10% of ₹360 = (10/100) * 360 = ₹36. The final price of the item is the price after discount plus the GST amount. Final Price = ₹360 + ₹36 = ₹396.

Explanation

Let the total property Reshma has be represented by 1 unit. She donates one-fourth (1/4) of her property to charity. The remaining property is 1 - 1/4 = 3/4. This remaining 3/4 of the property is then divided equally among her three children. Therefore, each child receives (3/4) / 3 = (3/4) multiplied by (1/3) = 1/4 of the total property. Each child gets one-fourth of the property.

Explanation

Linen is obtained from the fibres of the flax plant, one of the oldest cultivated crops. Coir is a natural fibre extracted from the outer husk of the coconut. Mohair is the fine, silky fibre obtained from the hair of the Angora goat, valued for its lustre and durability. Down refers to the soft, fluffy under-feathers of birds such as ducks and geese, widely used in insulation. The correct match is therefore a-1, b-3, c-2, d-4.

Explanation

The G20 is an intergovernmental forum comprising 19 countries and the European Union, which collectively represents a significant portion of the world's economic output and population. Its member countries account for approximately 85% of the global Gross Domestic Product (GDP). Furthermore, these nations combined are home to about two-thirds of the world population. However, they represent around 75-80% of global trade, not just 50%.

Explanation

The Global Gender Gap Report is an annual report published by the World Economic Forum (WEF). This report measures gender equality across four key dimensions: economic participation and opportunity, educational attainment, health and survival, and political empowerment. It provides a comprehensive framework for assessing the progress and challenges in closing gender gaps worldwide.

Explanation

India signed the Economic Cooperation and Trade Agreement (ECTA) with Australia. This comprehensive bilateral trade agreement was signed in April 2022 and came into force on December 29, 2022. The ECTA aims to boost trade in goods and services, enhance investment, and strengthen the overall economic relationship between the two countries.

Explanation

Among the given options, Pound Sterling (GBP) is generally considered the costliest or strongest currency when compared against the US Dollar or Euro. As of 2023, the exchange rate for one Pound Sterling typically exceeded that of one Euro and one US Dollar. For instance, one Pound Sterling usually trades for more US Dollars than one Euro does, indicating its higher value in the global currency market.

Explanation

The Foreign Exchange Reserves (FER) of the Reserve Bank of India (RBI) include all the components mentioned. These typically consist of four major categories. Firstly, Foreign Currency Assets (FCAs), which are holdings of various foreign currencies. Secondly, Gold reserves, held by the central bank. Thirdly, Special Drawing Rights (SDRs), which are an international reserve asset created by the International Monetary Fund (IMF). Finally, Other Reserve Assets, which primarily include India's Reserve Tranche Position (RTP) with the IMF. All these components collectively constitute the nation's foreign exchange reserves, providing a buffer against economic shocks and supporting external sector stability.

Explanation

All the statements provided about ‘Rules of Origin’ are correct. Rules of Origin are indeed the criteria used to determine the national source or 'economic nationality' of a product, which is crucial in international trade. They are vital for customs agencies to ascertain the applicable regulations, tariffs, and duties, as trade agreements often offer preferential treatment based on origin. Furthermore, these rules are essential for compiling accurate trade statistics, allowing for proper tracking of imports and exports by country of origin. Their importance fundamentally stems from the fact that duties, restrictions, and various trade policy measures are often dependent on the source of imported goods.

Explanation

The infant mortality rate (IMR) is defined as the number of deaths of infants under one year of age per 1000 live births, making statement 1 incorrect as it specifies 10000 live births. Historically, India's IMR in 1950 was indeed very high, around 189.6 per 1000 live births, which makes statement 2 correct. As per the Sample Registration System (SRS) Bulletin for 2019, the infant mortality rate for India was 30, confirming statement 3. Statement 4 is incorrect because, according to the SRS Bulletin 2019, Madhya Pradesh recorded the highest IMR at 46, not Uttar Pradesh (which was 41).

Explanation

Human capital formation is primarily a process focused on developing the skills, knowledge, and capabilities of individuals through investments in education, training, and healthcare. This development enhances their productive capacity and contributes to economic growth. Therefore, statement 1, "The development of human capital," accurately captures the core essence of human capital formation. Statements 2, 3, and 4 refer to the utilization, administration, and assessment of human capital, respectively, which are subsequent or related processes but not the fundamental definition of its formation.

Explanation

Insolvency refers to a financial state where an individual or entity is unable to meet their financial obligations or pay debts as they become due. Bankruptcy, on the other hand, is a legal process initiated when an insolvent debtor cannot repay their debts, leading to the liquidation or reorganization of assets under court supervision. Therefore, statements 1, 2, and 3 incorrectly define or distinguish between insolvency and bankruptcy. Statement 4 is correct: the Insolvency and Bankruptcy Board of India (IBBI) is indeed the key regulatory body established under the Insolvency and Bankruptcy Code, 2016, to oversee insolvency and bankruptcy proceedings in India.

Explanation

The Industrial Policy Resolution was adopted in the year 1956. This landmark policy was instrumental in shaping India's industrial landscape by emphasizing the public sector's role and establishing a framework for planned industrial development. It classified industries into three categories, delineating the extent of state participation and private sector involvement, and laid the foundation for the mixed economy model, aiming for a socialist pattern of society.

Explanation

Statement 1 is correct as one of the key Production-Linked Incentive (PLI) schemes was launched to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components. Statement 3 is incorrect because the incentive offered under the PLI scheme for large-scale electronics manufacturing is typically between 4% and 6% on incremental sales over the base year, for a period of five years, not an average of 8% for six years. Statement 4 is correct as the PLI scheme for IT Hardware specifically targets products such as laptops, tablets, all-in-one PCs, servers, and Ultra-Small Form Factor (USFF) devices. Therefore, statements 1 and 4 are correct.

Explanation

Stagflation is an economic condition characterized by slow economic growth (stagnation), high unemployment, and rising prices (inflation). High inflationary pressures, as mentioned in statement 1, are a direct component. A decline in industrial production and sluggish economic growth, as in statement 2, represent the "stagnation" aspect. A decrease in aggregate demand and consumer spending (statement 3) can contribute to the stagnation by slowing economic activity and increasing unemployment, even if prices are rising due to supply-side factors. Finally, an appreciation of the domestic currency (statement 4) can reduce export competitiveness, leading to decreased demand for domestic goods, slower growth, and potential job losses, thereby contributing to the stagnation component. All four factors can contribute to or be symptoms of stagflation.

Explanation

As per the Economic Survey 2022-23, India has continued to be an attractive destination for Foreign Direct Investment (FDI). Statement 2 is correct, as FDI inflows generally increased compared to pre-pandemic levels, reflecting India's robust economic fundamentals. Statement 4 is also correct, as the Economic Survey acknowledged that a weak global economic situation and geopolitical uncertainties could lead to a moderation in FDI inflows, despite India's relative resilience. Statement 1 is not an accurate general description of FDI trends or causes, and statement 3 is incorrect because FDI inflows naturally fluctuate and do not typically increase rapidly without any decrease over many financial years.

Explanation

Non-plan expenditures of the Central Government refer to the recurring expenditures that are not tied to specific plan projects or schemes. These include essential government outlays such as interest payments on government borrowings, defense expenditures, subsidies, salaries and pensions, and grants to states and union territories. Interest payments constitute a major and unavoidable part of the government's non-plan expenditure, making statement A correct.

Explanation

Globalization has significantly impacted India by expanding its trade in goods and services and attracting greater flows of Foreign Direct Investment (FDI), making statements A and B true. However, regarding India's trade balance, while exports have certainly grown, imports have generally increased at a comparable or often faster pace, leading to persistent trade deficits. Therefore, the statement that the "Increase in exports is greater than increase in imports" is generally not true for India in the context of globalization.

Explanation

Statement 1 is correct as the fiscal deficit of the Union Government indeed reached 9.2 percent of GDP during the pandemic year FY21 (2020-21), reflecting increased government spending and revenue shortfalls. Statement 2 is incorrect because the fiscal deficit for FY22 (2021-22) actually moderated to 6.7 percent of GDP, not 7.7 percent. Statement 3 is also incorrect as revenue collection, particularly tax revenues, showed robust growth in FY21 and FY22, rebounding strongly after the initial pandemic impact. Thus, only statement 1 is accurate.

Explanation

Initially, Ramesh and Suresh each own 100 square yards of land. Ramesh acquires 10% of Suresh's land, which is 10% of 100 = 10 square yards. Ramesh's land becomes 100 + 10 = 110 square yards, and Suresh's land becomes 100 - 10 = 90 square yards. After two years, Ramesh sells back 10% of his current total plot to Suresh. This is 10% of 110 = 11 square yards. Ramesh's final land is 110 - 11 = 99 square yards. Suresh's final land is 90 + 11 = 101 square yards. Therefore, Suresh's land (101 square yards) is more than Ramesh's land (99 square yards).

Explanation

The statement mentions that 160 out of 200 runs were made by spinners, meaning 80% of the runs came from spinners. Conclusion 1 states "80% of the team consisted of spinners." This is not necessarily true. While spinners scored 80% of the runs, this doesn't imply that 80% of the players in the team were spinners. A few high-scoring spinners could achieve this percentage. We cannot infer the number of players from the runs scored. Conclusion 2 states "The opening batsmen were spinners." The statement provides no information about the batting order or who the opening batsmen were. It only mentions that spinners made a certain number of runs, which does not specify their position in the batting lineup. Since neither conclusion can be logically derived from the given statement, neither follows.