UPSC IAS PRELIMS 2019 GS PAPER I DETAILED EXPLANATIONS PART -I, Q 1 TO Q 10

Q 1. With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements

1. AIIB has more than 80 member nations.

2. India is the largest shareholder in AIIB.

3. AIIB does not have any members from outside Asia.

Which of the statements given above is / are correct?

(a) 1 only

(b) 2 and 3 only

(c). 1 and 3 only

(d) 1, 2 and 3

Answer: (a)

HINTS- 1. The bank currently has 70 members as well as 27 prospective members from around the world.

2.India is the second largest shareholder in AIIB . Largest shareholder is China.

3.There are many Non- Asian countries such as Argentina,Austria,Belgium,Canada,United Kingdom,etc.

Q 2. What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

(a) To lessen the Government of India’s perennial burden of fiscal deficit and current account deficit

(b) To support the infrastructure projects of Central and State Governments

(c) To act as independent regulator in case of applications for loans of Rs. 50 crore or more

(d) To aim at faster resolution of stressed assets of Rs. 50 crore or more which are-under consortium lending

Answer: (d)

HINTS- Nearly two dozen lenders, led mostly by state-run banks, signed the inter-creditor agreement (ICA) framework in July 2018 to speed up the resolution of stressed assets which are under Rs 500 crore bracket.

The framework is part of the Project Sashakt (or the report on bad bank ), drafter by the Sunil Mehta (non-executive chairman of PNB) committee .

The inter-creditor agreement will serve as a platform for banks and financial institutions, which are fighting a toxic mount of bad loans that is sniffing at 12 per cent of the system now, to come together and take concerted efforts towards resolving dud loans under Rs 500 crore.

It will also enable lenders to move expeditiously and protects the interest of all the lenders.

18 public sector banks led by the State Bank, three private sector banks and the Exim Bank signed the framework. Other lenders will also sign the agreement after getting their board approvals.

The objective is to resolve stressed assets fast, and will primarily focus on NPAs in the Rs 50 crore-500 crore bracket as well as in the Rs 500-2,000 crore ticket size, which will be dealt separately though.

The framework will deal separately with stressed assets of over Rs 2,000 crore.

Under the framework, the lead lender shall be authorised to formulate the resolution plan, which shall be presented to the other lenders for their approval.

The decision making shall be by way of approval of majority lenders, that is, the lenders with 66 per cent share in the aggregate exposure. Once a resolution plan is approved by the majority, it shall be binding on all the lenders that are a party to the inter-creditor agreement.

The framework also has a provision for dissenting lenders, which gives them an option to buy the asset or if they want they can sell it at a 15 per cent discount.

Q 3. The Chairman of public sector banks are selected by the

(a) Banks Board Bureau

(b) Reserve Bank of India

(c) Union Ministry of Finance

(d) Management of concerned bank

Answer: (a)

HINTS- Banks Board Bureau (BBB) is an autonomous body of the Government of India tasked to improve the governance of Public Sector Banks, recommend selection of chiefs of government owned banks and financial institutions and to help banks in developing strategies and capital raising plans. In February 2016, the NDA government approved the proposal for setting up BBB and it started functioning from April 2016. The BBB works as step towards governance reforms in Public Sector Banks (PSBs) as recommended by P.J. Nayak Committee.

Bhanu Pratap Sharma is the new Chairman of the Mumbai based Bureau. It is housed in RBI’s Central Office in Mumbai. The BBB was the part of Indradhanush Plan of government.

Q 4. Consider the following statements:

1. Petroleum and Natural Gas Regulatory Board (PNGRB) is the first regulatory body set up by the Government of India.

2. One of the tasks of PNGRB is to, ensure competitive markets for gas.

3. Appeals against the decisions of PNGRB go before the Appellate Tribunals for Electricity.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Answer: b

HINTS- The Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under The Petroleum and Natural Gas Regulatory Board Act, 2006  notified via Gazette Notification dated 31st March, 2006.

The Act provide for the establishment of Petroleum and Natural Gas Regulatory Board to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas and to promote competitive markets and for matters connected therewith or incidental thereto.

Further as enshrined in the act, the board has also been mandated to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas so as and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country.

The following are five major financial regulatory bodies in India:-

(A) Statutory Bodies via parliamentary enactments:

1.Reserve Bank of India : Reserve Bank of India is the apex monetary Institution of India. It is also called as the central bank of the country.

The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.

The preamble of the reserve bank of India is as follows:

“…to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”

2.Securities and Exchange Board of India : SEBI Act, 1992 : Securities and Exchange Board of India (SEBI) was first established in the year 1988 as a non-statutory body for regulating the securities market. It became an autonomous body in 1992 and more powers were given through an ordinance. Since then it regulates the market through its independent powers.

3.Insurance Regulatory and Development Authority : The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India and is based in Hyderabad (Andhra Pradesh). It was formed by an Act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is “to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.”

(B) Part of the Ministries of the Government of India :

4. Forward Market Commission India (FMC) : Forward Markets Commission (FMC) headquartered at Mumbai, is a regulatory authority which is overseen by the Ministry of Consumer Affairs, Food and Public Distribution, Govt. of India. It is a statutory body set up in 1953 under the Forward Contracts (Regulation) Act, 1952 This Commission allows commodity trading in 22 exchanges in India, out of which three are national level.

5. PFRDA under the Finance Ministry : Pension Fund Regulatory and Development Aulthority : PFRDA was established by Government of India on 23rd August, 2003. The Government has, through an executive order dated 10th October 2003, mandated PFRDA to act as a regulator for the pension sector. The mandate of PFRDA is development and regulation of pension sector in India.

Q 5. With reference to communication technologies, what is/are the difference / differences between LTE (Long-Term Evolution) and VoLTE (Voice over Long-Term Evolution)?

1. LTE ‘is commonly marketed as 3G and VoLTE is commonly marketed as advanced 3G.

2. LTE is data-only technology and VoLTE is voice-only technology.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer: d

HINTS- LTE is commonly marketed as “4G LTE and Advance 4G”, but it does not meet the technical criteria of a 4G wireless service.LTE is also commonly known as 3.95G.

Voice over long-term evolution (Voice over LTE/VoLTE) is a technology specification that defines the standards and procedures for delivering voice communication and data over 4G LTE networks. It is one method for creating, provisioning and managing high-speed voice, video and messaging services on a 4G wireless network for mobile and portable devices.

VoLTE primarily works on IP-based networks and only supports packet switching. The data received from a circuit-switched cellular network such as the Global System for Mobile Communications (GSM) or a Code Division Multiple Access (CDMA) network will be converted into network packets before being broadcast.

The services that can be provisioned using VoLTE include video calling, voice calling, and multimedia streaming and sharing services.

Q 6. Which of the following statements is / are correct regarding the Maternity Benefit ‘ (Amendment) Act, 2017?

1. Pregnant women are entitled for three months pre-delivery and three months post-delivery paid leave.

2. Enterprises with creches must allow the mother minimum six creche visits daily.

3. Women with two children get reduced entitlements.

Select the correct answer using the code given below.

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

Answer: (c)

HINTS- Maternity Benefit ‘ (Amendment) Act, 2017

Key Amendments

1.Increased Paid Maternity Leave:

The Maternity Benefit Amendment Act has increased the duration of paid maternity leave available for women employees from the existing 12 weeks to 26 weeks. Under the Maternity Benefit Amendment Act, this benefit could be availed by women for a period extending up to a maximum of 8 weeks before the expected delivery date and the remaining time can be availed post childbirth. For women who are expecting after having 2 children, the duration of paid maternity leave shall be 12 weeks (i.e., 6 weeks pre and 6 weeks post expected date of delivery).

2.Maternity leave for adoptive and commissioning mothers:

Maternity leave of 12 weeks to be available to mothers adopting a child below the age of three months from the date of adoption as well as to the “commissioning mothers”. The commissioning mother has been defined as biological mother who uses her egg to create an embryo planted in any other woman.

3.Work from Home option:
The Maternity Benefit Amendment Act has also introduced an enabling provision relating to “work from home” for women, which may be exercised after the expiry of the 26 weeks’ leave period. Depending upon the nature of work, women employees may be able to avail this benefit on terms that are mutually agreed with the employer.

4.Crèche facility:
The Maternity Benefit Amendment Act makes crèche facility mandatory for every establishment employing 50 or more employees.Women employees would be permitted to visit the crèche 4 times during the day (including rest intervals)

The Maternity Benefit Amendment Act makes it mandatory for employers to educate women about the maternity benefits available to them at the time of their appointment.

Q 7. Which one of the following is not a sub-index of the World Bank’s ‘Ease of Doing Business Index’?

(a) Maintenance of law and order

(b) Paying taxes

(c) Registering property

(d) Dealing with construction permits

Answer: a

HINTS- A nation’s ranking on the index is based on the average of 10 subindices:

1.Starting a business – Procedures, time, cost and minimum capital to open a new business
2.Dealing with construction permits – Procedures, time and cost to build a warehouse
3.Getting electricity – procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse
4.Registering property – Procedures, time and cost to register commercial real estate
5.Getting credit – Strength of legal rights index, depth of credit information index
6.Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
7.Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
8.Trading across borders – Number of documents, cost and time necessary to export and import
9.Enforcing contracts – Procedures, time and cost to enforce a debt contract
10.Resolving insolvency – The time, cost and recovery rate (%) under bankruptcy proceeding

Q 8. In India,’extended producer responsibility’ was introduced as an important feature in which of the following?

(a) The Bio-medical Waste (Management and Handling) Rules, 1998

(b) The Recycled plastic (Manufacturing and Usage) Rules, 1999

(c) The e-Waste (Management and Handling) Rules, 2011

(d) The Food Safety and Standard Regulations, 2011

Answer: c

HINTS-

The E-Waste (Management and Handling) Rules, 2011 introduced the concept of EPR for the first time in India which made all the producers of electronic goods responsible for the waste production management.

The EPR is a policy approach under which producers are given a significant responsibility—financial or physical—for the treatment or disposal of post-consumer products.

In the amended new E-Waste Rules 2016, the EPR authorisation has been made Central Pollution Control Board’s responsibility with pan India implementation, diverting from the responsibility of SPCBs.

Q 9. The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

(a) transportation cost only

(b) interest cost only

(c) procurement incidentals and distribution cost

(d) procurement incidentals and charges for godowns

Answer: c

Components of economic cost of foodgrains incurred by the Food Corporation of India Source: FCI Annual Reports (various issues) 

Q 10. In the context of any country, which one of the following would be considered as part of its social capital?

(a) The proportion of literates in the population

(b) The stock of its buildings, other infrastructure and machines

(c) The size of population in the working age group

(d) The level of mutual trust and harmony in the society

Answer: (d)

HINTS- Social capital broadly refers to those factors of effectively functioning social groups that include such things as interpersonal relationships, a shared sense of identity, a shared understanding, shared norms, shared values, trust, cooperation, and reciprocity.