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Q1

Which one of the following releases the 'Index of Economic Freedom' periodically? 

 

Q2

The supply and distribution of which of the following commodities are controlled by the Essential Commodities Act (ECA), 1955?

1. Seeds of fruits and vegetables

2. Raw Jute and jute textiles

3. Drugs

4. Petroleum and its products, including petrol

Select the correct answer using the code given below:

 

Q3

With reference to the National Pharmaceutical Pricing Authority (NPPA), consider the following statements:

1. It works under the Ministry of Health and Family Welfare.

2. It is responsible for the enforcement of the Drugs Prices Control Order. 

Which of the statements given above is/are correct?

 

Q4

Which of the following functions are performed by the Food Corporation of India?

1. Procurement of foodgrains from farmers

2. Announcement of Minimum Support Prices 

3. Maintenance of buffer stock of foodgrains 

4. Distribution of foodgrains to consumers through the Public Distribution System

Select the correct answer using the code given below:

 

Q5

With reference to the Indian economy, the term 'Central Issue Price (CIP)' denotes

 

Q6

With reference to Targeted Public Distribution System (TPDS), consider the following statements:

1. This is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments.

2. In this system, the Central Government is responsible for procurement, allocation and transportation of foodgrains while the States/UTs are responsible for the identification of eligible beneficiaries.

Which of the statements given above is/are correct?

 

Q7

 Regarding Minimum Support Price (MSP), consider the following statements:

1. It is announced at the beginning of the sowing season.

2. The international price situation is not considered while determining the Minimum Support Price (MSP).

Which of the statements given above is/are correct?

 

Q1.

Which one of the following releases the 'Index of Economic Freedom' periodically? 

 

a) The World Economic Forum
b) The Organisation for Economic Co-operation and Development
c) The International Monetary Fund
d) None of the above
Solution : d)
Unattempted. Explanation :-

The Index of Economic Freedom is an annual guide published by The Heritage Foundation, Washington. 

The Index of Economic Freedom is based on 12 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom:

  1. Rule of Law (property rights, government integrity, judicial effectiveness)
  2. Government Size (government spending, tax burden, fiscal health)
  3. Regulatory Efficiency (business freedom, labor freedom, monetary freedom)
  4. Open Markets (trade freedom, investment freedom, financial freedom)

India’s economic freedom score is 55.2, making its economy the 129th freest in the 2019 Index. Its overall score has increased by 0.7 point, with a strong increase in the score for judicial effectiveness outpacing a decline in monetary freedom. India is ranked 31st among 43 countries in the Asia–Pacific region, and its overall score is below the regional and world averages.

Source) Economic Survey 2019-20; Chapter 4; Page number 68

https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/echap04_vol1.pdf

https://www.heritage.org/index/country/india

 

Q2.

The supply and distribution of which of the following commodities are controlled by the Essential Commodities Act (ECA), 1955?

1. Seeds of fruits and vegetables

2. Raw Jute and jute textiles

3. Drugs

4. Petroleum and its products, including petrol

Select the correct answer using the code given below:

 

a) 1, 2 and 3 only
b) 3 and 4 only
c) 1, 2 and 4 only
d) 1, 2, 3 and 4
Solution : d)
Unattempted. Explanation :-

Essential Commodities Act (ECA), 1955 was enacted to control the production, supply and distribution of, and trade and commerce in, certain goods considered as essential commodities. 

The major commodity groups included in the Act are:

  1. Petroleum and its products, including petrol, diesel, kerosene, Naphtha, solvents etc
  2. Food stuff, including edible oil and seeds, vanaspati, pulses, sugarcane and its products like, khandsari and sugar, rice paddy
  3. Raw Jute and jute textiles
  4. Drugs- prices of essential drugs are still controlled by the Drug Price Control Orders (DPCO). The Drugs Prices Control Order (DPCO) is an order issued under Sec. 3 of the Essential Commodities Act (ECA), 1955 that seeks to regulate the prices of pharmaceutical drugs.
  5. Fertilisers- the Fertiliser Control Order prescribes restrictions on transfer and stock of fertilizers
  6. apart from prices
  7. Onion and Potato
  8. Seeds of food crops, fruits and vegetables, cattle fodder, Jute seeds and Cotton seeds

Source)

https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/echap04_vol1.pd

Q3.

With reference to the National Pharmaceutical Pricing Authority (NPPA), consider the following statements:

1. It works under the Ministry of Health and Family Welfare.

2. It is responsible for the enforcement of the Drugs Prices Control Order. 

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
Solution : b)
Unattempted. Explanation :-

Statement 1 is incorrect. The National Pharmaceutical Pricing Authority (NPPA)was constituted vide Government of India Resolution dated 29th August, 1997 as an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers.

Statement 2 is correct. National Pharmaceutical Pricing Authority (NPPA) is responsible for fixing and revising the prices of pharmaceutical products as well as the enforcement of the DPCO. The Government of India has amended the DPCO several times and most recently in 2013. 

Until 2013, DPCO specified the price ceiling using the cost-based pricing method in which the ceiling price was calculated as a multiple of the cost that it took producers to promote and distribute a pharmaceutical drug. This multiple referred to as the Maximum Allowable Post-manufacturing Expenses (MAPE) was set at 50 per cent for formulations imported into India and at 100 per cent for indigenously manufactured formulations.

Source) http://www.nppaindia.nic.in/en/about-us/about-nppa/

https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/echap04_vol1.pd

Q4.

Which of the following functions are performed by the Food Corporation of India?

1. Procurement of foodgrains from farmers

2. Announcement of Minimum Support Prices 

3. Maintenance of buffer stock of foodgrains 

4. Distribution of foodgrains to consumers through the Public Distribution System

Select the correct answer using the code given below:

 

a) 2 only
b) 1, 3 and 4 only
c) 3 only
d) 1, 2 and 4 only
Solution : b)
Unattempted. Explanation :-

The Food Corporation of India (FCI) was set up in 1965 under the Food Corporations Act, 1964 with the primary duty to purchase, store, move/transport, distribute and sell foodgrains and other foodstuffs. The main objectives of FCI are 

(a) procurement of foodgrains from farmers at Minimum Support Prices (MSP) announced by the Government; Thus, FCI does not announce the MSP. 

(b) distribution of foodgrains to consumers through PDS, particularly the vulnerable sections of society at affordable prices; and 

(c) maintenance of buffer stock of foodgrains for food security and price stability. 

Source) https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/echap04_vol1.pdf

Q5.

With reference to the Indian economy, the term 'Central Issue Price (CIP)' denotes

 

a) The price at which the government makes these food grains available to states.
b) The price at which subsidized commodities are sold at Fair Price Shops.
c) The difference between the procurement cost of FCI and the MSP.
d) The floor price of the agriculture commodities for which a Minimum Support Price has not been decided by the government.
Solution : a)
Unattempted. Explanation :-

Central Issue Price (CIP) is the price at which the government makes the foodgrains procured by the Food Corporation of India available to states. The states fix the retail price to be charged at fair price shops. The state government's responsibility in PDS is operational.

Source)

http://fci.gov.in/sales.php?view=41

Q6.

With reference to Targeted Public Distribution System (TPDS), consider the following statements:

1. This is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments.

2. In this system, the Central Government is responsible for procurement, allocation and transportation of foodgrains while the States/UTs are responsible for the identification of eligible beneficiaries.

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
Solution : c)
Unattempted. Explanation :-

Both the statements are correct. 

Targeted Public Distribution System (TPDS) is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments. 

The Central Government is responsible for procurement, allocation and transportation of foodgrains upto the designated depots of the Food Corporation of India. The operational responsibilities for allocation and distribution of foodgrains within the States/UTs, identification of eligible beneficiaries, issuance of ration cards to them and supervision over and monitoring of functioning of Fair Price Shops (FPSs) rest with the concerned State/UT Governments.

Source) Economic Survey 2019-20; chapter 4; Page number 83

https://pib.gov.in/newsite/PrintRelease.aspx?relid=157984

Q7.

 Regarding Minimum Support Price (MSP), consider the following statements:

1. It is announced at the beginning of the sowing season.

2. The international price situation is not considered while determining the Minimum Support Price (MSP).

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
Solution : a)
Unattempted. Explanation :-

Statement 1 is correct. The Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. The minimum support prices are announced by the Government of India at the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). 

Statement 2 is incorrect. The international price situation of a commodity or group of commodities is taken into account while determining the MSP.

The other factors are:

  1. Cost of production
  2. Changes in input prices
  3. Input-output price parity
  4. Trends in market prices
  5. Demand and supply
  6. Inter-crop price parity
  7. Effect on industrial cost structure
  8. Effect on cost of living
  9. Effect on general price level
  10. Parity between prices paid and prices received by the farmers
  11. Effect on issue prices and implications for subsidy

Source)

http://vikaspedia.in/agriculture/market-information/minimum-support-price

https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/echap04_vol1.pdf