General Knowledge(GK) (or) General Awareness

Correct Answer :   Minimum reserve ratio

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The reserve requirement (or cash reserve ratio) is a central bank regulation that sets the minimum reserves each commercial bank must hold (rather than lend out) of customer deposits and notes. These required reserves are normally in the form of cash stored physically in a bank vault (vault cash) or deposits made with a central bank. The required reserve ratio is sometimes used as a tool in monetary policy, influencing the country’s borrowing and interest rates by changing the amount of funds available for banks to make loans with. The main objective of minimum reserves is the stabilisation of money market rates. Minimum reserves allow credit institutions to smooth out fluctuations in liquidity such as those caused by the demand for banknotes.

Correct Answer :   Total productive income

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National income measures the monetary value of the flow of output of goods and services produced in an economy over a period of time. National Income is the total economic activity (production of finished goods and services calculated in monetary value) within the economic territory of a country by its residents during the year of accounting. In other words National Income of a country is the Net National Product at factor cost.

Correct Answer :   Proportional fiduciary system

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In terms of Section 22 of the Reserve Bank of India Act, the RBI has been given the statutory function of note issue on a monopoly basis. The note issue in India was originally based upon “Proportional Reserve System”. When it became difficult to maintain the re-serve proportionately, it was replaced by “Minimum Reserve System“. According to the RBI Amendment Act of 1957, the bank should now maintain a minimum reserve of Rs.200 crore worth of gold coins, gold bullion and foreign securities of which the value of gold coin and bullion should be not less than Rs.115 crore.

Correct Answer :   purchase and sale of Government securities by the R.B.I.

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Open Market Operations (OMO) is the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. Purchases inject money into the banking system and stimulate growth while sales of securities do the opposite. OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.

Correct Answer :   The Reserve Bank of India

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Credit Control is an important tool used by Reserve Bank of India, a major weapon of the monetary policy used to control the demand and supply of money (liquidity) in the economy. Central Bank administers control over the credit that the commercial banks grant. Such a method is used by RBI to bring “Economic Development with Stability”. It means that banks will not only control inflationary trends in the economy but also boost economic growth which would ultimately lead to increase in real national income with stability.

Correct Answer :   Maharashtra

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The Employment Guarantee Scheme (EGS) underlying the National Rural Employment Guarantee Act is by far one of the largest social safety-net programmes launched anywhere in the developing world. Maharashtra became the first state in India to guarantee work in 1979 following a severe drought. The EGS began in 1972 during the drought period. However, it received statutory basis in 1977 when the Maharashtra Legislative Assembly unanimously voted it as a law of the land. The law became operative from January 26, 1979 with the consent of the President of India.

Correct Answer :   TCS

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Tata Consultancy Services (TCS) is India’s top software services exporter. TCS is part of the Tata Group conglomerate that also manufactures cars and steel, and serves customers including Citigroup Inc and BP Plc. It is one of India’s most valuable companies and is the largest India-based IT services company by 2012 revenues.

Correct Answer :   Stamp duty

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The Constitution of India has a number of other provisions relevant to stamp duties. Of these, Article 246 and the Seventh Schedule are relevant in regard to the legislative power to levy Stamp duties. Article 268 states that stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied by the Government of India but shall be collected (a) in the case where such duties are leviable within any Union Territory, by the Government of India, and (b) in other cases, by the States within which such duties are respectively leviable. It further states that proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India, but shall be assigned to that State.

Correct Answer :   Goa

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Generally, per capita income is the indicator of progress of any country. According to World Development Report 2009, the per capita income of India was $950. Goa has the highest per capita income in India. Goa leads the country with per capita income of Rs. 1,92,652. Delhi comes in second after Goa with PCI of Rs. 1,75,812 followed by Chandigarh (1,28,634 – 2011) & Haryana (1,09,227).

Note : According to recent data given by Ministry of Statistics and Programme Implementation, Goa has highest NSDP per capita among 33 Indian states and union territories. NSDP per capita of Goa is estimated at 224,138 Indian rupees in 2013-14 at current prices. Ranking of Delhi is two with per capita income around of 212,219 INR. Sikkim is at third, Chandigarh is at forth and Puducherry is fifth richest economy of India. Bihar, Uttar Pradesh, Manipur, Assam, and Jharkhand is top 5 poorest state in terms of nsdp per capita. These five states have net state domestic product per capita below Rs. 50,000.

Correct Answer :   sum of budget deficit and Government’s market borrowings and liabilities

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The fiscal deficit is the difference between the government’s total expenditure and its total receipts (excluding borrowing). The elements of the fiscal deficit are (a) the revenue deficit, which is the difference between the government’s current (or revenue) expenditure and total current receipts (that is, excluding borrowing) and (b) capital expenditure. The fiscal deficit can be financed by borrowing from the Reserve Bank of India (which is also called deficit financing or money creation) and market borrowing (from the money market that is mainly from banks).