UPSC CSE Indian Economy Flashcards

24 sample cards from the Indian Economy deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is an APMC and what is its main function?

   Agricultural Produce Market Committee, a state-government-established body that regulates agricultural markets (mandis) where farmers sell produce to licensed traders through auctions.

2. What is e-NAM in agricultural marketing?

   The electronic National Agriculture Market, launched in 2016, is an online trading platform networking APMC mandis to create a unified national market for agricultural commodities.

3. What is contract farming?

   An arrangement where farmers produce agricultural commodities under a pre-agreed contract (price, quantity, quality) with a buyer/agribusiness firm before the production season.

4. What is the role of the Food Corporation of India (FCI)?

   FCI (established 1965) procures foodgrains at MSP, maintains buffer stocks, and distributes grains through the Public Distribution System (PDS) for food security.

5. What is the Model APLM Act (2017) intended to reform?

   The Model Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 aimed to liberalize agri-marketing, allow private markets, single license validity across the state, and reduce APMC monopoly.

6. When was the Reserve Bank of India established and when was it nationalized?

   The RBI was established in 1935 (under the RBI Act, 1934) and was nationalized in 1949.

7. What is monetary policy and what is its primary objective in India?

   Monetary policy is the RBI's use of instruments to control money supply and credit; its primary objective is price stability (controlling inflation) while keeping in mind the objective of growth.

8. What is the inflation target set for the RBI under the flexible inflation targeting framework?

   4% CPI inflation, with a tolerance band of +/- 2% (i.e., 2% to 6%), set under the amended RBI Act since 2016.

9. What is the Monetary Policy Committee (MPC), and how many members does it have?

   The MPC is a 6-member committee (3 from RBI including the Governor as chair, and 3 external members appointed by the government) responsible for setting the policy repo rate to achieve the inflation target.

10. Define the Repo Rate and the Reverse Repo Rate.

    Repo rate is the rate at which the RBI lends short-term funds to banks against securities; reverse repo rate is the rate at which the RBI borrows from banks (absorbing liquidity).

11. What is the Cash Reserve Ratio (CRR)?

    The percentage of a bank's Net Demand and Time Liabilities (NDTL) that it must keep as cash reserves with the RBI; it earns no interest.

12. What is the Statutory Liquidity Ratio (SLR)?

    The minimum percentage of NDTL that a bank must maintain in the form of liquid assets such as cash, gold, or approved government securities (held by the bank itself).

13. What is the Marginal Standing Facility (MSF)?

    A facility under which scheduled commercial banks can borrow overnight funds from the RBI against approved securities (including dipping into SLR) at a rate above the repo rate, for emergency liquidity.

14. Distinguish between quantitative and qualitative tools of monetary policy.

    Quantitative tools (e.g., CRR, SLR, repo rate, OMO) affect the overall volume of credit/money supply; qualitative (selective) tools (e.g., margin requirements, moral suasion, credit rationing) direct credit to specific sectors.

15. What are Open Market Operations (OMO)?

    The buying (to inject liquidity) and selling (to absorb liquidity) of government securities by the RBI in the open market to control money supply.

16. Define financial inclusion.

    The process of ensuring access to appropriate, affordable, and timely financial services and products (banking, credit, insurance, pensions) to all sections of society, especially the weaker and low-income groups.

17. What is the Pradhan Mantri Jan Dhan Yojana (PMJDY) and when was it launched?

    Launched in 2014, PMJDY is a national mission for financial inclusion providing universal access to basic bank accounts (zero balance), RuPay debit cards, overdraft facility, and accident/life insurance cover.

18. What does the JAM Trinity stand for, and what is its purpose?

    JAM stands for Jan Dhan accounts, Aadhaar, and Mobile numbers; the trinity enables Direct Benefit Transfer (DBT) of subsidies, reducing leakages and middlemen.

19. What is the Unified Payments Interface (UPI), and who operates it?

    UPI is a real-time, instant inter-bank payment system enabling fund transfers via mobile, operated by the National Payments Corporation of India (NPCI); it was launched in 2016.

20. Name the three social security/insurance schemes launched in 2015 to promote financial inclusion.

    Pradhan Mantri Jeevan Jyoti Bima Yojana (life insurance), Pradhan Mantri Suraksha Bima Yojana (accident insurance), and Atal Pension Yojana (pension).

21. What are Payments Banks and one key restriction on them?

    Payments Banks (recommended by the Nachiket Mor Committee) are differentiated banks for financial inclusion; they can accept deposits (up to a limit, currently Rs 2 lakh per customer) but cannot lend or issue credit cards.

22. What is the Insolvency and Bankruptcy Code (IBC) and in which year was it enacted?

    The IBC, enacted in 2016, is a unified framework for time-bound resolution of insolvency of corporates, partnerships, and individuals, adjudicated through the NCLT, to address the problem of bad loans/NPAs.

23. What is a Non-Performing Asset (NPA)?

    A loan or advance on which interest or principal payment has remained overdue for 90 days or more; it is classified as a sub-standard, doubtful, or loss asset.

24. What was the major indirect tax reform introduced in 2017, and what does it subsume?

    The Goods and Services Tax (GST), launched on 1 July 2017, a destination-based unified indirect tax that subsumed multiple central and state taxes (excise, service tax, VAT, etc.) under 'One Nation, One Tax.'

What this deck covers

Indian Economy flashcards FAQ