Question Discussion & Solution

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 Minimum reserve system.

Key Points

India Currency System:

• In terms of section 22 of the reserve bank of india act, the RBI has been given the statutory function of notes issue on a monopoly basis.
• The note issue in india was originally based upon the " Proportional Reserve System ".
• When it becomes difficult to maintain the re-serve proportionately.
• It was replaced by " Minimum Reserve Systems ".

• According to the RBI amendment act of 1957, the bank should now maintain a minimum reserve of Rs.200 crore worth of gold coins.
• The gold bullion and foreign securities of which the value of gold coin and bullion should be not less than Rs.115 crore. 

The correct answer is Walra.

 Key Points

• Jhum cultivation also called Walra and burn agriculture is a form of crop-growing farming activity.
  • In the North-East states, agriculture is primarily based on Jhum cultivation.
  • It is an agricultural system where a farming community slashes secondary forests on a planned location, burns the slash, and cultivates the land for a limited number of years.
  • The land is then left unused and the farming community moves to the next location to repeat the process till they return back to the starting point.
  • It has frequently been claimed that jhum has led to the loss of valuable natural resources of the region.
  • The practice involves clearing vegetative/forest cover on slopes of hills, drying and burning it before the onset of monsoon, and cropping on it thereafter. 

Additional Information

• The shifting agriculture practiced by the tribes belonging to Dungarpur and Banswara districts in south Rajasthan.
• During May and June, the existing vegetation is cleared by burning.
  • Then grains are shown before the monsoon arrives.
  • Thus cultivating a patch of land for a few years, they move to a new patch of land and the cycle continues.
  • Once the place is left after harvesting, it remains unattended for 10-20 years to have its vegetation back.
  • It is believed that soil fertility is restored during this fallow period.

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 Cooperative farming.

Key Points

• Efficiency and effectiveness are two wings of Productivity.
• These two are essential for a productive industry.
• Low productivity occurs due to lack of adequate machinery, lack of finances for farmers, lack of good quality seeds and fertilizers and ownership of land.
• Other factors include:
  • Inadequate inputs availability
  • Sub-division and fragmentation of land holdings
  • Poor finance and marketing facilities
• The co-operatives and other institutional agencies have not been able to eliminate the village money-lenders.
• Storage facilities for farmers are not still available to preserve their agricultural products for a better price.