UPSC IAS PRELIMS 2019 GS PAPER I DETAILED EXPLANATIONS PART -II, Q 11 TO Q 20

Q 11. The Service Area Approach was implemented under the purview of

(a) Integrated Rural Programme

(b) Lead Bank Scheme

(c) Mahatma Gandhi National Rural Employment Guarantee Scheme

(d) National Skill Development Mission

Answer: b

EXPLANATION

Service area approach is an alternative and improved method of Lead Bank Scheme for deployment of bank credit for rural development. The main idea behind this approach is that every village in the country, however remote, would have an access to banking facilities by providing more of productive lending based on the local conditions and genuine needs of villagers.

This new approach will also promote deposit mobilisation to augument resources for lending and improve recycling of credit, impart developmental thrust to bank credit, enhance field orientation and motivation of bank managers and increase co-operation between bank officials and local developmental agencies.

The Service Area Approach (SAA) was a scheme launched by the RBI in 1989 for an orderly development of the rural areas with the of the country.

Under the SAA, all rural and semi-urban branches of banks were allocated specific villages, generally in geographical difficult areas, the overall development and the credit needs of which were to be taken care of by the respective branches. The concerned bank should meet the banking needs of the service area by creating link between bank credit- production and productivity and income expansion.

Q 12. With reference to the management of minor minerals in India, consider the following statements:

1. Sand is a ‘minor mineral’ according to the prevailing law in the country.

2. State Governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government.

3. State Governments have the power to frame rules to prevent illegal mining of minor minerals.

Which of the statements given above is / are correct?

(a) 1 and 3 only

(b) 2 and 3 only

(e) 3 only

(d) 1, 2 and 3

Answer: (a)

EXPLANATION

In India, the minerals are classified as minor minerals and major minerals.

According to section 3(e) of the Mines and Minerals (Development and Regulation) Act, 1957 “Minor Minerals” means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral. (For the purposes of this Act, the word “minerals” includes all minerals except mineral oils- natural gas and petroleum)

Major minerals are those specified in the first schedule appended in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act 1957) and the common major minerals are Lignite, Coal, Uranium, iron ore, gold etc. It may be noted that there is no official definition for “major minerals” in the MMDR Act. Hence, whatever is not declared as a “minor mineral” may be treated as the major mineral.

The major-minor classification has nothing to do with the quantum /availability of these minerals, though it is correlated with the relative value of these minerals. Further, this classification is based more on their end use, rather than level of production, level of mechanization, export and import etc. (eg. Sand can be a major mineral or a minor mineral depending on where it is used; same is the case for limestone.)

India produces as many as 88 minerals which include 4 fuel minerals, 3 atomic minerals, 26 metallic & non-metallic minerals and 55 minor minerals .

The central government has the power to notify “minor minerals” under section 3 (e) of the MMDR Act, 1957. On the other hand, as per Section 15 of the MMDR Act, 1957 State Governments have complete powers for making Rules for grant of concessions in respect of extraction of minor minerals and levy and collection of royalty on minor minerals.

The power to frame policy and legislation relating to minor minerals is entirely delegated to the State Governments while policy and legislation relating to the major minerals are dealt by the Ministry of Mines under Union /Central Government. Various State Governments have indeed prescribed rules for the grant of mineral concessions in respect of minerals classified as minor minerals under the MMDR Act, 1957. Minor Minerals get specified in the schedule appended in Minor Mineral concession Rules issued by States.

Thus, as opposed to major minerals, the regulatory and administrative jurisdiction of minor minerals falls under the purview of State governments. These include the powers to frame rules, prescribe rates of royalty, contribution to District Mineral Foundation, the procedure for grant of mineral concessions, regulation of their mining, control of illegal mining etc.

In the case of major minerals, States substantially regulate and develop minerals subject to provisions of the MMDR Act, and after prior permissions from the central government.

Q 13. Consider the following statements:

1. Most of India’s external debt is owed by governmental entities.

2. All of India’s external debt is denominated in US dollars.

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: a

EXPLANATION

India’s external debt is held in multiple currencies, the largest of which is the United States dollar. As on 31 December 2017, 48.2% of the country’s debt was held in U.S. dollars. The rest of the debt is held in Indian rupees (37.3%), special drawing rights (5.7%), Japanese yen (4.6%), Euros (3.2%) and other currencies (1%).

Q 14. Which of the following is not included in the assets of a commercial bank in India?

(a) Advances

(b) Deposits

(e) Investments

(d). Money at call and short notice

Answer: b

EXPLANATION

Q 15. In the context of India, which of the following factors is/are contributor/ contributors to reducing the risk of a currency crisis?

1. The foreign currency earnings of India’s IT sector

2. Increasing the government expenditure

3. Remittances from Indians abroad

Select the correct answer using the code given below.

(a) 1 only

(b) 1 and 3 only

(c) 2 only

(d) 1, 2 and 3

Answer: b

EXPLANATION

Remittances from abroad are a vital  yet often under-appreciated source of funding for India. Without that support, the nation’s deficit “would have placed it alongside the likes of Turkey and Argentina two countries that have suffered a currency crisis.

India received $69 billion in overseas remittances last year, equivalent to almost 3 per cent of GDP. Without that inflow from an estimated 20 million nationals abroad, India’s current-account deficit would have been around 5 per cent of GDP at mid-year, rather than 2 per cent.

Q 16. Which one of the following suggested that the Governor should be an eminent person from outside the State and should be a detached figure without intense political links or should not have taken part in politics in the recent past?

(a) First Administrative Reforms Commission (1966)

(b) Rajamannar Committee (1969)

(c) Sarkaria Commission (1983)

(d) National Commission to Review the Working of the Constitution (2000)

Answer: c

EXPLANATION

The Union Government appointed Sarkaria Commission to suggest ways and means to improve Centre-State relations in 1983 .The Sarkaria Commission finally submitted its report in the year 1988.

Q 17. Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

(a) Certificate of Deposit

(b) Commercial Paper

(c) Promissory Note

(d) Participatory Note

Answer: d

EXPLANATION

Participatory notes also referred to as P-Notes, or PNs, are financial instruments required by investors or hedge funds to invest in Indian securities without having to register with the Securities and Exchange Board of India (SEBI). P-Notes are among the group of investments considered to be Offshore Derivative Investments (ODIs).

Q 18. Consider the following statements

1. As per law, the Compensatory Afforestation Fund Management and Planning Authority exists at both National and State levels.

2. People’s participation is mandatory in the compensatory afforestation programmes carried out under the Compensatory Afforestation Fund Act, 2016.

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: c

EXPLANATION

The Act envisages (i) establishing the National Compensatory Afforestation Fund and a State Compensatory Afforestation Fund for each of the states; (ii) receiving funds (from user agency) in national level and state level Funds for compensatory afforestation, net present value of forest and other project specific payments; (iii) spending the monies thus collected primarily for afforestation to compensate for loss of forest cover, regeneration of forest ecosystem, wildlife protection and infrastructure development and (iv) establishing the national and state level fund management authorities to manage respective Funds.

A major factor in implementation of the provisions of CAMPA is direct participation of the community, which will be of vital importance while actual implementation at ground level.

Q 19. In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.?

1. Ad Hoc Committees set up by the Parliament

2. Parliamentary Department Related Standing Committees

3. Finance Commission

4. Financial Sector Legislative Reforms Commission

5. NITI Aayog

Select the correct answer using the code given below.

(a) 1 and 2

(b) 1, 3 and 4

(c) 3, 4 and 5

(d) 2 and 5

Answer:(a)

Q 20. With reference to India’s Five-Year Plans, which of the following statements is/are correct?

1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.

2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.

3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.

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: (b)