Question Discussion & Solution

The Issue Department of the RBI:

• The Issue Department is concerned with the proper and efficient management of the note issue.
• For the conduct of monetary transactions, the country has been divided into 14 circles of issue, each having an Office of Issue — the branch of the Issue Department.
• Each branch of the Issue Department consists of: (i) the General Department and (ii) the Cash Department, controlled by the currency officer.
  • The General Department deals with resource operations, i.e., arrangement of supply of notes and coins from the presses and Government Mints.
  • The Cash Department deals with cash transactions.
• ​The RBI Offices, where Issue Department is functioning, offer the facility to members of the public to exchange their notes including soiled and mutilated notes and coins including uncurrent or worn-out coins.
• The Bank is committed to providing exchange facilities free of cost at its counters during business hours.
• The Issue Department of the RBI maintains a Minimum Reserve System against the printing of notes.
• Under the Minimum Reserve System, the RBI has to maintain a minimum reserve of Rs. 200 crores, Rs. 115 crores should be in the form of gold coins and the rest in the form of foreign currencies.
• After maintaining the minimum reserve, the RBI can print any number of currency notes as per the requirement of the economy, except one rupee note.
• Since the one rupee note is issued by the Ministry of Finance but is distributed by the RBI through commercial banks. 

Therefore, the Issue Department of the RBI maintains a Minimum Reserve System against the printing of notes.

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.

The correct answer is 7 April 2013.

• Mukhyamantri Nishulk Jaanch Yojna (MNJY) was launched on 7 April 2013.

Key Points

Mukhyamantri Nishulk Jaanch Yojna (MNJY):

Additional Information

• Mukhyamantri Nishulk Jaanch Yojna (MNJY):
  • This scheme is not only to make the tests available free of cost but through this scheme, strengthening of the medical services has been done at all the state hospitals of Rajasthan.
  • The main aim of the scheme is to strengthen the existing laboratories and other diagnostic facilities in all public health institutions.
  • The scheme has been implemented uniformly across all districts of the State.
  • The benefits of the scheme have been extended to the entire population of 7 Crore.

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.