Question Discussion & Solution

The correct answer is 2002 AD.

Key Points 

• Rajasthan Renewable Energy Corporation-
  • Established - 9 August 2002 AD
  • Headquarter - Jaipur
  • This entity was the result of the Rajasthan State Power Corporation Ltd merger with the Rajasthan Energy Development Agency.
  • This entity does work in the field of renewable energy production and capacity building.
  • This entity was awarded the IIMA power award.

Key Points

• Rajasthan Renewable Energy Corporation Limited (RRECL) was formed in August 2002 by amalgamating the erstwhile REDA (Rajasthan Energy Development Agency) and Rajasthan Rajya Vidyut Nigam Limited (RSPCL).
• The corporation is registered under the Companies Act 1956.
• RRECL is acting as a state nodal.
• Agency to promote and develop non-conventional energy sources in the State and as State Designated Agency (SDA) to implement the provisions of Energy Conservation Act 2001 in the State 

Additional Information

• Rajasthan State Power Corporation Ltd. was established in 2002 AD.
• Rajasthan Energy Development Agency was established on 21 January 1985 AD.

The correct answer is Department for Promotion of Industry and Internal Trade.

Key Points

• Department for Promotion of Industry and Internal Trade is the nodal department for the formulation of the policy on Foreign Direct Investment (FDI).
  • It is a central government department under the Ministry of Commerce and Industry.
  • It controls the maintenance and management of data on inward FDI into India.
  • The Department for Promotion of Industry and Internal Trade plays a vital role in the liberalization and rationalization of the FDI policy.

 Additional Information

The correct answer is All of the above.

Key Points

• Meaning of Economic Reforms:
  • Economic reforms refer to the fundamental changes that were launched in 1991 with the plan of liberalising the economy and quickening its rate of economic growth.
  • The Narasimha Rao Government, in 1991, started the economic reforms in order to rebuild internal and external faith in the Indian economy.
  • The reforms intended at bringing in larger cooperation of the private sector in the growth method of the Indian economy.
  • Policy changes were proposed with regard to technology up-gradation, industrial licensing, removal of restrictions on the private sector, foreign investments, and foreign trade.
  • The essential features of the economic reforms are – Liberalisation, Privatisation, and Globalisation, commonly known as LPG.
• Need for Economic Reforms
  • Poor performance of the industrial sector. Hence statement 1 is correct.
  • Adverse balance of payments. Hence statement 2 is correct.
  • The rise in the fiscal deficit. Hence statement 3 is correct.
  • Inflation. Hence statement 4 is correct.
  • The Gulf War

The correct answer is Sales tax.

Key Points

• The principal source of State's own tax revenues is a sales tax which accounts for about 60 percent of the total.
• The taxation system in India is such that the taxes are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as the Municipality and the Local Governments.
• To run the government and manage the affairs of a state, money is required. So the government imposes taxes in many forms on the incomes of individuals and companies.
• Broadly taxes are divided into two categories:
  • Direct Taxes
  • Indirect Taxes
• Indirect Taxes:
  • The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax such as sales tax, a specific tax, value-added tax (VAT), or goods and services tax (GST) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer).
  • The intermediary later files a tax return and forwards the tax proceeds to the government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by the government from the persons (legal or natural) on which it is imposed.
  • Excise duty, value-added tax, and sales tax are included under the GST.

The correct answer is Cash reserve ratio.

Key Points

• The Cash Reserve Ratio (CRR) refers to the share of Net Demand and Time Liabilities that banks have to hold as balances with the RBI.
• The objective of CRR is to keep inflation under control.
• During high inflation in the economy, the central bank raises the CRR to lower the bank’s loanable funds.
• The current Cash Reserve Ratio is 4.00% (as of June 2021).
• The current Reverse repo rate is 3.35% (as of June 2021).
• The Central bank has the authority to regulate monetary policies.
• The Ministry of Finance has the authority to regulate fiscal policies.

Additional Information

• Marginal Standing facility:
  • MSF is a facility under which scheduled commercial banks can borrow an additional amount of overnight money from the RBI by dipping into their SLR portfolio up to a limit at a penal rate of interest. 
  • This provides a safety wall against unanticipated liquidity shocks to the banking system.
  • The MSF is a scheme launched by RBI in 2011-12.
  • Under MSF banks can borrow funds up to 1% of their net demand and time liability.
  • The minimum amount for which RBI receives application is Rs. 1 crore and afterwards in multiples of rupees 1 crore.
• ​SLR is a kind of reserve that commercial banks need to maintain before crediting their money to borrowers.
  • Regulating the SLR rates is a component of RBI's monetary policy.
  • Reserve Bank of India sets the limit for banks (under Banking Regulation Act, 1949) to hold a certain proportion of their assets as SLR.
• Repo Rate:- It is a rate at which the central bank (RBI) lends money to its clients against the government securities.
• Reverse Repo- It is the rate at which the central bank (RBI) borrows money from its clients.
  • Reverse Repo is used in India as a tool in which banks will give their surplus fund to RBI for a short-term period and earn money.
  • The repo rate is always higher than the reverse repo rate.
  • Repo and Reverse repo rates are decided by the Monitory policy committee (MPC) of RBI.