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 Residential hostel.

• Under the Rajasthan Ambedkar DBT Voucher Yojana, Students will be provided facility of residential hostels.

Key Points

• Ambedkar DBT Voucher Scheme
  • Under this scheme, the state government will provide vouchers for residential facilities to the students studying in various reserved categories of colleges of Rajasthan to stay away from their homes in urban areas. 
  • Chief Minister Ashok Gehlot has approved the proposal to implement Ambedkar DBT Voucher Scheme for SC, ST, OBC, MBC, and EWS students.
  • Under the scheme, the beneficiary students will be given Rs. 7 thousand per month for the residential facility at the divisional headquarters and Rs. 5 thousand per month for other district headquarters.
  • Under this scheme, 5000 students will be provided vouchers on a merit basis for 10 months.
  • Only those students will be able to take advantage of Rajasthan Ambedkar DBT Voucher Yojana, who live in urban areas away from their homes to get an education.

The correct answer is Option 4.

Key Points

• The new industrial policy, announced by the government on 23 July 1991 had initiated a bigger process of economic reforms in the country, seriously
  motivated towards the structural readjustment naturally obliged to ‘fulfil’ IMF conditions.
• The major highlights of the policy are as follows:
  • De-reservation of the Industries. Hence, statement 1 is correct.
  • De-licencing of the Industries. Hence, statement 3 is correct.
    • There are only five industries that carry the burden of compulsory licensing-
      • Aerospace and defence-related electronics
      • Gun powder, industrial explosives, and detonating fuse
      • Dangerous chemicals
      • Tobacco, cigarette and related products
      • Alcoholic drinks
  • Abolition of the monopolistic and restrictive trade practices (MRTP) Limit. Hence, statement 2 is correct.
  • Promotion to Foreign Investment.
  • Foreign Exchange Regulation Act (FERA) Replaced by the Foreign Exchange Management Act (FEMA). Hence, statement 4 is incorrect.

The correct answer is 1 only

Key Points

• Small Industries Development Bank of India (SIDBI)
  • SIDBI is the principal development financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprises (MSME) sector in India.
  • It was established on April 2, 1990, through an Act of Parliament (thus, it is a statutory body).
  • It is headquartered in Lucknow, Uttar Pradesh.
  • SIDBI aims to facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system across the country. Hence statement 1 is correct.
  • It coordinates functions of institutions engaged in similar activities.
  • Currently, the shares of SIDBI are held by Central Government and 29 other institutions including public sector banks (PSBs), insurance companies owned and controlled by Central Government.

• Functions of SIDBI:
  • It aims at emerging as a single-window to meet the developmental and financial needs of MSMEs in order to make them globally competitive, strong, vibrant and to protect the institution as a customer-friendly financial body. 
  • It also aims at enhancing the wealth of shareholders through the modern technology platform.
  • It is involved in the promotion and development of the MSME sector.
  • It is the principal institution for the development, promotion and financing of the MSME sector and for the coordination of functions of the institutions engaged in similar activities.
  • SIDBI retained its position in the top 30 Development Banks of the World in the ranking of The Banker, London.
     
• Note: Statement 2 is not correct, because SIDBI does not provide all type of loan to the agriculture sector.