1. Which of the following statements are correct about India s East Coast Economic Corridor (ECEC)?
(1) It is India s first coastal economic corridor.
(2) Asian Development Bank is the lead partner in this project.
(3) It extends from Kolkata to Mahe in Puducherry.
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
Answer: (a) Explanation: India and Asian Development Bank (ADB) have been partnering on the economic corridor approach for some time now. Economic Corridor Development contributes to and stimulates economic development along the route. The economic corridor approach involves leveraging infrastructure connectivity and developing urban areas as growth centres and gateways, to unlock the full potential of markets.
The ECEC is a multimodal, regional maritime corridor. It is India s first coastal corridor. It aims to transform the region into a top investment destination through infrastructure planning, project implementation, investment, and policy support. So, statement (1) is correct. India-ADB partnership has yielded useful lessons on Economic Corridor Development (ECD), through their joint work on the East Coast Economic Corridor (ECEC). ADB, in September 2016, approved $625 million in finance to develop the Vizag-Chennai Industrial Corridor (VCIC) in Andhra Pradesh and plans to invest another $1.5 billion to the connecting Chennai-Kanyakumari Industrial Corridor (CKIC) in Tamil Nadu. VCIC and CKIC are parts
of ECEC. ADB country partnership strategy (CPS) (2018 2022) for India projects about $5 billion commitment for economic corridor development over the five years. So, statement (2) is correct. ECEC extends about 2,500 kilometres from Kolkata to Kanyakumari and covers four states of Andhra Pradesh, Tamil Nadu, Odisha, and West Bengal. So, statement (3) is not correct. Therefore, the correct answer is (a).
2. Which of the following statements are the problems associated with agricultural credit
(1) High proportion of short-term loans as compared to long-term loans.
(2) Diversion of agricultural loans for non-agricultural purposes.
(3) Higher proportion of loans to allied agricultural sectors.
(4) Bulk of loans cornered by big landholders.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 1, 2 and 3 only
(c) 1, 2 and 4 only
(d) 2, 3 and 4 only
Answer: (c) Explanation: The Reserve Bank of India had announced the constitution of the Internal Working Group (IWG) to Review Agricultural Credit in its Statement on Development and Regulatory Policies dated February 07, 2019, during the Sixth Bi-monthly Monetary Policy Review, 2018-19. The IWG submitted its report in September 2019. The report showed the proportion of short-term crop loans to crop-related investment credit, 51:49 in the year 2000, drastically changed to 75:25 in 2018. The report blamed the prompt repayment scheme introduced in 2009-10, wherein farmers got an additional three per cent subsidy on interest for short-term crop loans, for tilting the balance against investment credit. The report says the flow of investment credit is essential for the long-term sustainability of the sector. So, statement (1) is correct.
The report found that in some states, credit disbursal to the farm sector was higher than their agricultural gross domestic (GDP) product. This indicated the possibility of diversion of credit for non-agricultural purposes. Kerala, Tamil Nadu, Telangana, Karnataka and Punjab came in this category. In Kerala and Tamil Nadu, according to the report, agricultural credit was almost 180 per cent more than the average agriculture GDP of the state in the years 2015, 2016 and 2017. So, statement (2) is correct.
The report also notes the neglect of banks to the allied sector - livestock, fisheries, dairying and forestry. Between 2014 and 2016, the allied sector contributed significantly to the agricultural output, with a share of 38-42 per cent. However, its share in total agricultural credit extended by banks to all was only six to seven per cent. So, statement (3) is not correct.
Though small and marginal farmers constituted 86.2 per cent of total operated holdings and have 47.3 per cent share in the operated area, only 40.9 per cent of them were covered by scheduled commercial banks. Out another way, the bulk of loans disbursed by commercial banks, which formed the majority of farm credit, was cornered by big landholders. So, statement (4) is correct. Therefore, the correct answer is (c).
3. Which of the following statements most appropriately describes the cobweb phenomenon, sometimes in the news?
(a) Quantity supplied by producers depends on prices in previous production periods.
(b) A person stuck in poverty is not able to move out due to low investments in health and education.
(c) Bond prices respond more to short-term news than long-term fundamentals.
(d) Prices of agricultural products depend on demand-supply conditions rather than the cost of inputs.
Answer: (a) Explanation: Cobweb cycle, in economics, refers to fluctuations occurring in markets in which the quantity supplied by producers depends on prices in previous production periods. The cobweb cycle is characteristic of industries in which a large amount of time passes between the decision to produce something and its arrival on the market. It occurs most commonly in agriculture because the decision of what to produce in the coming year is often based on the results of the previous year. For example, if corn prices are particularly high in a given year, more farmers will choose to plant corn the next year to take advantage of the high price. This increased supply, however, will lead to lower prices.
In India, extreme volatility in the prices of some food commodities has, in recent years, been hurting producers as well as consumers, while also disrupting certain economic activities. The so-called Cobweb phenomenon is becoming more apparent, leading to a price- production spiral. This has been witnessed in India, especially in pulses, where India recorded a rise in pulses production by 40% in 2017 compared to 2016 due to high prices of pulses in 2016.
So, statement (a) is correct and statements (b), (c) and (d) are not correct. Therefore, the correct answer is (a).
4. The report The State of the World s Children 2019 Children, Food and Nutrition has been released by the
(a) United Nations Children s Fund
(b) United Nations Educational, Scientific and Cultural Organization
(c) Bill and Melinda Gates Foundation
(d) World Bank
Answer: (a) Explanation: The Report The State of the World Children 2019 Children, Food and Nutrition has been brought out by the United Nations Children s Fund (UNICEF). The 2019 edition of The State of the World Children (SOWC) examines the issue of children, food and nutrition, providing a fresh perspective on a rapidly evolving challenge.
Despite progress in the past two decades, one-third of children under age 5 are malnourished stunted, wasted or overweight while two-thirds are at risk of malnutrition and hidden hunger because of the poor quality of their diets. At the centre of this challenge is a broken food system that fails to provide children with the diets they need to grow healthy.
This report also provides new data and analyses of malnutrition in the 21st century and outlines recommendations to put children rights at the heart of food systems. So, statement (a) is correct and statements (b), (c) and (d) are not correct. Therefore, the correct answer is (a).
5. Which of the following statements is not correct with respect to Nutrient Based Subsidy (NBS) for fertilisers in India?
(a) Subsidy is payable as per nutrient basis.
(b) The Centre provides NBS on non-urea fertilisers.
(c) Companies availing NBS have the freedom to fix the MRP of fertilisers.
(d) The subsidy is paid through DBT directly in the account of the consumers.
Answer: (d) Explanation: Nutrient Based Subsidy has been implemented with effect from April 01, 2010. Under the NBS Policy, a fixed rate of subsidy (in Rs. per Kg basis) is announced on nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) by the Government on an annual basis. So, statement (1) is correct. The government fixes the maximum retail price of urea and it reimburses manufacturers the differences between the MRP and production cost. The Centre also provides nutrient- based subsidy (NBS) on non-urea fertilisers. So, statement (2) is correct.
MRP of P&K fertilisers has been left open and fertiliser manufacturers/marketers are allowed to fix the MRP at reasonable rates. In effect, the domestic prices are determined by the demand-supply mechanism. So, statement (3) is correct. Under NBS, the subsidy is paid to fertiliser companies and not the consumers. The NBS is passed on to the farmers through the fertiliser industry, as the companies reduce the price due to the subsidy. The payment of NBS to the manufacturers/importers of P&K fertilisers is released as per the procedure notified by the Department. So, statement (4) is not correct. Therefore, the correct answer is (d)