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Economic Survey 2016-17 for IAS Prelims: Economic Outlook and Policy Challenges Part 3

Feb 13, 2017 14:43 IST

    Economy Survey chapter 1 quiz

    The Economic Survey of India is an annual document of the Ministry of Finance, Government of India. The Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget.

    Union Budget 2017 Questions for IAS Exam

    IAS Questions contain an exclusive section specially designed from the economic survey 2016-2017. Economic survey 2016-17 is important for IAS aspirants because it contains previous 12 month’s complete reviews of the macroeconomics of the government.

    Current Affairs Quizzes for January 2017

    Here, we provide exclusive questions on Economic Survey 2017 which can prove to be extremely helpful in IAS Prelims 2017 preparation.

    1. Consider the following measures taken by the Government to curtail food Inflation and restore price stability:

    1) Creation of buffer stock of pulses through domestic procurement and imports.
    2) The announcement of lower Minimum Support Prices so as to incentivize production.
    3) Imposition of 20 per cent duty on export of sugar.

    Which of the above statements is correct?

    a. 1 and 2
    b. 2 and 3
    c. 1 and 3
    d. 1, 2 and 3

    Answer: c

    Explanation:

    Astute food management and price monitoring by the Government helped to contain inflation, especially food inflation. A number of measures have been taken by the Government to control inflation and restore price stability. The steps taken include:

    • Increased allocation for Price Stabilization Fund to check volatility of prices of essential commodities, in particular of pulses.
    • The Creation of buffer stock of pulses through domestic procurement and imports.
    • The announcement of higher Minimum Support Prices so as to incentivize production.
    • Issuance of advisory to States/UTs to take strict action against hoarding and black marketing under the Essential Commodities Act.
    • Imposition of 20 per cent duty on export of sugar.
    • Imposition of minimum export price (MEP) on potato.
    • Reduction in import duty on potatoes, wheat and palm oil.

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

    2. Price-monitoring by the Government helped to contain inflation, especially food inflation. What was the inflation target fixed by the Government for the period beginning from 2016 to 2021?

    a. 4 percent with a tolerance level of +/- 2 percent
    b. 3 percent with a tolerance level of +/- 2 percent
    c. 4 percent with a tolerance level of +/- 1 percent
    d. 3 percent with tolerance level of +/- 1 percent

    Answer: a

    Explanation:

    Inflation remained under control for the third successive financial year. The average Consumer Price Index (CPI) inflation declined from 5.9 percent in 2014-15 to 4.9 percent in 2015-16.The average inflation based on Wholesale Price Index (WPI) declined to (-) 2.5 per cent in 2015-16 from 2.0 percent in 2014-15.

    Astute food management and price monitoring by the Government helped to contain inflation, especially food inflation. A number of measures have been taken by the Government to control inflation and restore price stability.

    The Government, in consultation with the RBI, fixed an inflation target of 4 percent with a tolerance level of +/- 2 percent for the period beginning on 5th August 2016 to 31st March 2021.

    3. Consider the following statement regarding the performance of the Industrial sector based on the Index of Industrial Production (IIP):

    1) The production of manufacturing sector declined.
    2) The use-based categories, basic goods, intermediate goods and consumer durable goods have attained positive growth.
    3) Capital goods and consumer non-durable goods sectors witnessed tremendous growth.

    Which of the above statements is correct?

    a. 1 and 2
    b. 2 and 3
    c. 1 and 3
    d. 1, 2 and 3

    Answer: a

    Explanation:

    The performance of the industrial sectors based on the Index of Industrial Production (IIP) comprising mining, manufacturing and electricity reveals a modest growth of 0.4 per cent during April-November 2016-17 as compared to 3.8 percent during the same period of 2015-16.

    As per the sectoral classification, the production of manufacturing sector declined by 0.3 per cent during April-November 2016-17. The electricity and mining sectors registered growth rates of 5.0 per cent and 0.3 per cent respectively, during April-November 2016-17.

    Among the use-based categories, basic goods, intermediate goods and consumer durable goods have attained positive growth while capital goods and consumer non-durable goods sectors witnessed a contraction during April-November 2016-17.

    Economic Outlook and Policy Challenges Part 1

    4. The Reserve Bank of India amended Act provides for a statutory basis for the constitution of an empowered Monetary Policy Committee (MPC). Consider the following statements regarding the constitution of the MPC:

    1) Three members from the RBI, including the RBI Governor, one Deputy Governor of RBI and one officer of the RBI would be the ex-officio members of the Committee.
    2) Another three members would be appointed by the RBI Governor himself.

    Which of the above statements is correct?

    a. Only 2
    b. Only 1
    c. 1 and 2
    d. Neither 1 nor 2

    Answer: b

    Explanation:

    The Government amended the Reserve Bank of India Act 1934 in the current financial year. The amended Act provides for inflation target to be set by the Government, in consultation with the Reserve Bank of India, once in every five years and further provides a statutory basis for the constitution of an empowered Monetary Policy Committee (MPC).

    As per the constitution of the MPC, three members from the RBI, including the RBI Governor, one Deputy Governor of RBI and one officer of the RBI would be the ex-officio members of the Committee and another three members would be appointed by the Government. So far the MPC has already held two meetings.

    5. Consider the following statements regarding the eight core infrastructure supportive industries:

    1) The eight core infrastructure supportive industries are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.
    2) The eight core infrastructure supportive industries have a total weight of nearly 50 percent in the Index of Industrial Production (IIP).
    3) The eight core infrastructure supportive industries registered a cumulative growth of 4.9 percent.

    Which of the above statements is correct?

    a. 1 and 2
    b. 2 and 3
    c. 1 and 3
    d. 1, 2 and 3

    Answer: c

    Explanation:

    The eight core infrastructure supportive industries, viz. Coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity that have a total weight of nearly 38 per cent in the IIP registered a cumulative growth of 4.9 per cent during April-November, 2016-17 as compared to 2.5 per cent during April-November, 2015-16.

    The production of refined products, fertilisers, steel, electricity and cement increased substantially, while the production of crude oil, natural gas declined during April- November 2016-17. Coal production attained lower growth during the same period.

    All Quizzes on Economic Survey 2016- 2017

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