1. Consider the following with respect to Corporate Social Responsibility (CSR) under the Companies Act, 2013:
(1) All listed companies have to spend 2% of their profits under CSR.
(2) Expenditure incurred under CSR by companies is tax-deductible.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (d) Explanation: The CSR provision was first introduced in the Companies Act, 2013 as a quasi-mandatory philanthropic approach. As per Section 135 of the Companies Act, 2013 and rules issued thereunder, CSR norms are applicable on companies which have (a) net worth of Rs 500 Crore or more; (b) turnover of Rs 1000 Crore or more; or (c) net profit of Rs 5 Crore or more. So, statement (1) is not correct. A high-level committee led by Corporate Affairs Secretary Injeti Srinivas has proposed to make corporate social responsibility (CSR) expenditure tax-deductible and allow companies to carry forward the unspent balance for 3-5 years. Currently, only in expenditures like a donation to NGO or for family planning, expenditure on a skill development project, etc. are deductible under some provisions of the Income Tax Act. However, in general, CSR expenditure is not tax-deductible. So, statement (2) is not correct. Therefore, the correct answer is (d).
2. Which of the following statements is not correct about LEADS Index 2019?
(a) The Ministry of Commerce and Industry prepares the Index.
(b) Gujarat has topped the Index both in 2018 and 2019.
(c) It is a perception-based assessment of logistics across States and UTs.
(d) It measures the performance of the State Governments in logistics efficiency.
Answer: (d) Explanation: The LEADS Index is an effort by the commerce and industry ministry to establish a baseline of performance in the logistics sector based on the perception of users and stakeholders at the state level. So, option (a) is correct. Gujarat has one again topped this perception-based index of the mobility of goods and efficiency of the logistics chain, closely followed by Punjab and Andhra Pradesh. Top 3 positions have remained the same for both the edition of 2018 and 2019. So, option (b) is correct. The Index is based on the analysis of perception about nine parameters, including infrastructure, quality of logistics, services, timeliness of cargo delivery, regulatory process and safety of cargo. So, option (c) is correct. The Index provides the basis for stakeholder engagement, discussions and evolving action plan by various agencies. It is not an index of the performance of the State Government but may be used to assess the status of logistics efficiency in each State. So, option (d) is not correct. Therefore, the correct answer is (d).
3. Consider the following statements with regard to India s performance in Ease of Doing
Business Report 2020 (EoDB) of the World Bank:
(1) India has remained among the ten most improved economies for four years in a row.
(2) Among all metrics, India ranks lowest in Enforcing Contracts .
(3) Among all metrics, the most significant improvement was seen in Resol ing Insol enc .
(4) There was no deterioration of ranking in any metrics.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 and 4 only
(d) 1, 2 and 3 only
Answer: (b) Explanation: Sustained business reforms over the past several years has helped India jump 14 places to move to 63rd position in global Ease of Doing Business rankings. India, for the third year in a row, is among the top 10 economies that improved the most. So, statement (1) is not correct. While there has been substantial progress, India still lags in areas such as enforcing contracts (163rd) and registering property (154th). It takes 58 days and costs on average 7.8% of a proper value to register it, more prolonged and at a higher cost than among OECD high-income economies. Moreover, it takes 1,445 days for a company to resolve a commercial dispute through a local first-instance court, almost three times the average time in OECD high-income economies. So, statement (2) is correct. India saw the most significant jump in ranking in re ol ing insolvency" category, to 52nd rank from 108th, on the back of implementation of the Insolvency and Bankruptcy Code, while its ranking improved substantially in Dealing with Construction Permits (to 27th from 52nd) and Trading across Borders" (to 68th from 80th). So, statement (3) is correct.
Compared with last year, India ranking deteriorated on two parameters -- pro ec ing minority investors" (from 7th to 13th position) and ge ing electricity" (from 22nd to 25th) -- and remained unchanged in enforcing contracts" at 163rd. So, statement (4) is not correct. Therefore, the correct answer is (b).
4. Which of the following statements is correct regarding Urban Cooperative Banks (UCBs)?
(a) Deposits in these banks are covered under the benefit of Deposit Insurance.
(b) RBI has no supervisory powers over the UCBs.
(c) UCBs can lend money only for non-agricultural purposes.
(d) Most of the UCBs are multi-branch banks spread across States.
Answer: (a) Explanation: The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. In 1968, UCBS were extended the benefits of Deposit Insurance. Under the current bank deposit insurance scheme in case of an unlikely bank failure deposits up to 1 lakh is insured and paid back to the depositor. So, option (a) is correct. Concerns regarding the professionalism of urban cooperative banks gave rise to the view that they should be better regulated. Large cooperative banks with paid-up share capital and reserves of Rs.1 lakh was brought under the purview of the Banking Regulation Act 1949 with effect from 1st March 1966 and within the ambit of the Reserve Bank s supervision. Banking related functions (viz. licensing, area of operations, interest rates etc.) were to be governed by RBI and registration, management, audit and liquidation, etc. governed by State Governments as per the provisions of respective State Acts. So, option (b) is not correct. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. Today, their scope of operations has widened considerably. So, option (c) is not correct. A feature of the urban banking movement has been its heterogeneous character and its uneven geographical spread with most banks concentrated in the states of Gujarat, Karnataka, Maharashtra, and Tamil Nadu. While most banks are unit-banks without any branch network, some of the large banks have established their presence in many states when at their behest multi-state banking was allowed in 1985. So, option (d) is not correct. Therefore, the correct answer is (a).
5. Consider the following Committees and their purpose:
Committee : Purpose
1. Aruna Sundararajan : State and district accounts Committee
2. Ravindra H Dholakia Committee : Promote ease of doing business in the telecom sector
3. UK Sinha Committee : Review of MSME sector
Which of the pairs given above is/are correctly matched?
(a) 1 only
(b) 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (b) Explanation: The telecom sector has been undergoing financial stress for a long time. The reduction of levies and fees, including licence fee, SUC and universal service levy, has been a long-standing demand of the industry, along with a review of the definition of aggregated gross revenue. A committee headed by Telecom Secretary Aruna Sundararajan was constituted in June 2019 to review levies, including spectrum usage charge (SUC), and promote ease of doing business in the telecom sector. So, pair (1) is not matched correctly. The government had extended the tenure of Ravindra Dholakia-led committee on the state, district accounts to June 25, 2019. It was constituted to review the concepts, definitions, classifications, data conventions, data sources and data requirements for preparation of SDP and DDP and suggest state-level annual benchmark surveys because of the next base year revision of national accounts. So, pair (2) is not matched correctly.
A Reserve Bank of India (RBI) committee has suggested a 5,000 crore stressed asset fund for domestic micro, small and medium enterprises (MSMEs) in relief to small businesses hurt by demonetisation, the goods and services tax and an ongoing liquidity crunch. The committee to study the problems faced by MSMEs was chaired by U.K. Sinha, former chairman of the Securities and Exchange Board of India. So, pair (3) is matched correctly. Therefore, the correct answer is (b)