1. Consider the following statements about ‘Organic Farming’:

(1) Organic agriculture is a whole system of farming that restores, maintains and enhances the ecological balance.

(2) Organic agriculture offers a means to substitute costlier agricultural inputs (such as HYV seeds,

chemical fertilizers, pesticides etc.) with locally produced organic inputs that are cheaper and thereby generate good returns on investment.

(3) In January 2016, Kerala became India’s first organic state.

Which of the statements given above is/are incorrect?

(a) 1 only

(b) 3 only

(c) 2 and 3 only

(d) None of the above

Answer: (b) Explanation: Organic agriculture is a whole system of farming that restores, maintains and enhances the ecological balance. Organic agriculture offers a means to substitute costlier agricultural inputs (such as HYV seeds, chemical fertilisers, pesticides etc.) with locally produced organic inputs that are cheaper and thereby generate good returns on investment. Organic agriculture also generates incomes through international exports as the demand for organically grown crops is on a rise. Studies across countries have shown that organically grown food has more nutritional value than chemical farming thus providing us with healthy foods. Since organic farming requires more labour input than conventional farming, India will find organic farming an attractive proposition. Finally, the produce is pesticide-free and produced in an environmentally sustainable way. In January 2016, Sikkim became the first organic state of India. Recently, Sikkim has won FAO’s Future Policy Gold Award.

Source: XI NCERT: Indian Economic Development: Chapter 6: Rural Development Page 110.

2. Consider the following statements regarding subsidies by government:

(1) Subsidies do not allow prices to indicate the actual supply of a good.

(2) The benefits of subsidies are disproportionately appropriated by well-off sections of the society.

(3) The agricultural subsidies in India have given rise to unscientific cropping

patterns.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

Answer: (d) Explanation: Subsidies do not allow prices to indicate the actual supply of a good. E.g., when electricity and water are provided at a subsidized rate or free, they will be used wastefully without any concern for their scarcity. The Economic Survey 2015-16 estimated that the benefits for the small savings schemes and the tax/subsidy policies on cooking gas, railways, power, aviation turbine fuel, gold and kerosene, provide disproportionate benefits to the well-off. The survey found that together these schemes and policies provide a bounty to the well-off of about Rs 1 lakh crore. In context of cropping pattern as fertilizer, irrigation and price subsidy allows the farmer to grow a crop which is not grown in the region before, however the disproportionate price subsidy gives rise to skewed distribution of cropping pattern as the rainfed states are growing water-intensive crops because of their high MSPs. Thus, it gives rise to unscientific cropping pattern.

Source: XI NCERT: Indian Economic Development: Chapter 2: Indian Economy 1950- 1990 Page 27

3. Since 1991, liberalisation in India has led to

(1) Reduction in the role of the RBI from facilitator to regulator of financial sector.

(2) Industrial licensing not being abolished for drugs and pharmaceuticals.

(3) FIIs being allowed to invest in Indian financial markets.

(4) Market determined exchange rates based on the demand and supply of foreign exchange.

Which of the statements given above is/are correct?

(a) 1, 2 and 3 only

(b) 1 and 3 only

(c) 2, 3 and 4 only

(d) 1, 2, 3 and 4

Answer: (c) Explanation: Statement (1) is incorrect-Reforms during liberalization were to reduce the role of RBI from regulator to facilitator of financial sector. This means that financial sector may be allowed to take decisions on many matters without consulting the RBI.

Source: XI NCERT: Indian Economic Development: Chapter 3: Liberalization, Privatization and Globalization: An Appraisal Page 41-41.

4. Match List-I with List-II and select the correct answer using the code given below:

List-I List-II

A. Maharatnas 1. Airport Authority of India

B. Navratnas 2. Steel Authority of India

C. Miniratnas 3. Oil India Ltd.

Codes

A B C

(a) 2 3 1

(b) 1 2 3

(c) 2 1 3

(d) 3 2 1

Answer: (a) Explanation: Navratna was the title given originally to 9 Public Sector Enterprises (PSEs) identified by the Government of India in 1997 as "public sector companies that have comparative advantages", giving them greater autonomy to compete in the global market so as to "support [them] in their drive to become global giants".

PSU companies are divided into three categories:

➢ Maharatna

➢ Navratna

➢ Miniratna

(Category I and Category II) The eligibility criteria laid down by the Government for grant of Maharatna, Navratna and Miniratna status to Central Public Sector Enterprises (CPSEs) are following: Criteria for grant of Maharatna status:- The CPSEs fulfilling the following criteria are eligible to be considered for grant of Maharatna status.

(i) Having Navratna status.

(ii) Listed on Indian stock exchange with minimum prescribed public shareholding under SEBI regulations.

(iii) Average annual turnover of more than Rs. 25,000 crore, during the last 3 years.

(iv) Average annual net worth of more than Rs. 15,000 crore, during the last 3 years.

(v) Average annual net profit after tax of more than Rs. 5,000 crore, during the last 3 years.

(vi) Should have significant global presence/international operations. Criteria for grant of Navratna status:- The Miniratna Category – I and Schedule ‘A’ CPSEs, which have obtained ‘excellent’ or ‘very good’ rating under the Memorandum of Understanding system in three of the last five years, and have composite score of 60 or above in the six selected performance parameters, namely,

(i) net profit to net worth,

(ii) manpower cost to total cost of production/services,

(iii) profit before depreciation, interest and taxes to capital employed,

(iv) profit before interest and taxes to turnover,

(v) earning per share and

(vi) inter-sectoral performance. Criteria for grant of Miniratna status:- The CPSEs which have made profits in the last three years continuously and have positive net worth are eligible to be considered for grant of Miniratna status. There are currently 8 Maharatnas, 16 Navratnas and 60 Miniratnas-I and 15 Miniratna-II.

Source: XI NCERT: Indian Economic Development: Chapter 3: Liberalization, Privatization and Globalization

5. Regarding the International Monetary Fund, which of the following statement is correct?

(a) It can grant loan to any country.

(b) It can grant loan to only developed countries.

(c) It grants loans only to member states.

(d) It can grant loan to the central bank of a country

Answer: (c) Explanation: IMF is an international organization, consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries and thus, grants loan to member states only.

Source: XI NCERT: Indian Economic Development: Chapter 3: Liberalization, Privatization and Globalization