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Economic Survey 2016-17 for IAS Prelims: Review of Economic Development II

Feb 8, 2017 17:46 IST

    Economy Survey 2016-17

    For the preparation of UPSC IAS Exam 2017, the Economic Survey Questions are quite important. It has been seen in the previous year IAS Prelims Exams, many questions have been asked directly from the Economic Survey of the respective year. The Economic Survey 2016 17 has been released in the last week of February 2017 and now we have started providing IAS questions based on the Economic Survey.

    Economic Survey 2016-17 for IAS Prelims: Review of Economic Development Set I

    1. As per the ‘International Debt Statistics 2017’ report indicates that India continues to be among the less vulnerable countries in the world. International Debt Statistics 2017 is a publication of which of the following international organisations?
    a. World Bank
    b. International Monetary Fund
    c. World Economic Forum
    d. Asian Development Bank

    Answer: a

    Explanation:

    International Debt Statistics (IDS) 2017 presents statistics and analysis on the external debt and financial flows (debt and equity) for the world’s economies for 2015. This publication provides more than 200 time series indicators from 1970 to 2015 for most reporting countries. International Debt Statistics focuses on financial flows, trends in external debt, and other major financial indicators for developing and advanced economies (data from Quarterly External Debt Statistics and Quarterly Public Sector Debt databases).
    Cross-country comparison of external debt based on the World Bank’s annual publication titled ‘International Debt Statistics 2017’, which contains the external debt data for the year 2015, indicates that India continues to be among the less vulnerable countries. India’s key debt indicators compare well with other indebted developing countries.

    Economic Survey 2016-17 for IAS Prelims: Economic Outlook and Policy Challenges I

    2. Consider the following statements regarding the CSO’s outlook for the Indian Economy for the financial year 2017-18:
    I. The CSO in its first Advance Estimate (AE) has projected that the Indian Economy to grow by 7.1 per cent in the current year.
    II. For 2017-18, it is expected that the growth would return to normal as the new currency notes in required quantities come back into circulation and as follow up actions to demonetisation are taken.

    Which of the following statement(s) is/are correct?
    a. Only I
    b. Only II
    c. Both I and II
    d. Neither I nor II

    Answer: c

    Explanation:

    CSO in its first AE estimated the economy to grow by 7.1 per cent in the current year. However, it has stated that these numbers have been projected taking into account the information for first seven to eight months. It is therefore unlikely to have captured the impact of withdrawal of the high denomination currency. Although it is difficult to precisely pinpoint the impact on GDP, in all likelihood, the growth numbers of GDP, GVA, etc. could be revised downwards in the subsequent revisions to be carried out by the CSO. Inflation could also be lower than what comes out from the implicit GDP deflator underlying the CSO’s first AE for 2016-17.

    For 2017-18, it is expected that the growth would return to normal as the new currency notes in required quantities come back into circulation and as follow up actions to demonetisation are taken. Helping to maintain the momentum of such growth will be factors like possible normal monsoon, an increase in the level of exports following the projected increase in global growth and above all various reform measures taken by the Government to strengthen the economy.

    Economic Survey 2016-17 for IAS Prelims- Fiscal Rules

    3. On account of the volatility of prices of pulses, a committee on ‘Incentivising Pulses Production through Minimum Support Price (MSP) and Related Policies’ was set up. Consider the following statements regarding the committee:
    I. The committee on ‘Incentivising Pulses Production through Minimum Support Price (MSP) and Related Policies’ was set up under the chairmanship of Vivek Debroy, Chief Economic Adviser, which  submitted its    report     on  16th September, 2016.
    II. The committee has recommended that the Government procurement machinery should be on high gear to ensure the procurement of kharif pulses at this season’s announced MSP.

    Which of the following statement(s) is/are correct?
    a. Only I
    b. Only II
    c. Both I and II
    d. Neither I nor II

    Answer: b

    Explanation:

    The price policy of Government for major agricultural commodities seeks to ensure remunerative prices to the farmers to encourage higher investment and production, and to safeguard the interest of consumers by making available supplies at reasonable prices. On account of the volatility of prices of pulses, a committee on ‘Incentivising Pulses Production through Minimum Support Price (MSP) and Related Policies’ was set up under the chairmanship of Dr.   Arvind Subramanian, Chief Economic Adviser, which submitted its report on 16th September, 2016.

    Major recommendations of the committee were as:

    • Government procurement machinery should be on high gear to ensure the procurement of kharif pulses at this season’s announced MSP.
    • To ensure effective procurement, a High Level Committee comprising Ministers of Finance, Agriculture, and Consumer Affairs and Principal Secretary to PM should be constituted. There should be weekly reporting by procurement agencies on the ground with physical verification of procurement.
    • Eliminate export ban on pulses and stock limits; at the very least limits on wholesalers should be eliminated. The greater the limits on procurement by the government, the greater the urgency to take these actions to en sure that market prices stabilize above the MSP. The worst case scenario for farmers is weak procurement and stock limits which force farmers to sell most of their output at market prices that are well below MSP.

    Complete study material of ECONOMIC SURVEY 2016-17

    4. Consider the following statements regarding the initiatives taken by the government to facilitate investment and ease of doing business in the country:
    I. The Government has liberalized and simplified the foreign direct investment (FDI) policy in sectors like defence, railway infrastructure, construction and pharmaceuticals, etc.
    II. Many new initiatives have been taken up by the Government to facilitate investment and ease of doing business in the country such as Make-in-India, Invest India, Start Up India and e-biz Mission Mode Project under the National e-Governance Plan.
    III. Measures to facilitate ease of doing business include online application for Industrial License and Industrial Entrepreneur Memorandum through 24x7 for entrepreneurs; simplification of application forms for Industrial Licence and Industrial Entrepreneur Memorandum.

    Which of the following statement(s) is/are correct?
    a. Only I
    b. I and II
    c. II and III
    d. All of the above

    Answer: d

    Explanation:

    The Government has liberalized and simplified the foreign direct investment (FDI) policy in sectors like defence, railway infrastructure, construction and pharmaceuticals, etc.
    Many new initiatives have been taken up by the Government to facilitate investment and ease of doing business in the country such as Make-in-India, Invest India, Start Up India and e-biz Mission Mode Project under the National e-Governance Plan.

    Many new initiatives have been taken up by the Government to facilitate investment and ease of doing business in the country.  Noteworthy among them are initiatives such as Make-in-India, Invest India, Start Up India and e-biz Mission Mode Project under the National e-Governance Plan.  Measures to facilitate ease of doing business include online application for Industrial License and Industrial Entrepreneur Memorandum through 24x7 for entrepreneurs; simplification of application forms for Industrial Licence and Industrial Entrepreneur Memorandum.

    Union Budget 2017 Questions for IAS Exam

    5. ‘The Baltic Dry index’ is an economic indicator of which of the following aggregates of an economy?
    a. Shipping and trade
    b. Unemployment rate of an economy
    c. GDP growth of an economy
    d. Per-capita income of an economy

    Answer: a

    Explanation:

    The Baltic Dry Index (BDI) is created by the London-based Baltic Exchange that measures changes in the cost to transport various raw materials. It is also known as a shipping and trade index. The exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery, or speed. The Baltic Dry Index is a composite of three sub-indices that measure different sizes of dry bulk carriers, or merchant ships: Capesize, Panamax and Supramax.

    Any variation in the Baltic Dry Index can provide investors insight into the trends of global supply and demand. It is often considered a leading indicator of future economic growth if the index is rising or contraction if the index is falling because the goods shipped are raw, pre-production material, which is typically an area with very low levels of speculation. It is because the supply of large carriers tends to remain very tight, with long lead times and high production costs, the index can also experience high levels of volatility if global demand increases or drops off suddenly. The Baltic Exchange also functions as a maker of markets in freight derivatives, a type of forward contract known as forward freight agreements (FFAs) traded over the counter (OTC).

    Current Affairs Quizzes for IAS Prelims 2017- January 2017

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