(Prelims) IAS General Studies – 2011 (Part 10)

91. The authorization for the withdrawal of funds from the consolidated fund of India must come from ?

(a) The president of India.

(b) The parliament of India.

(c) The prime minister of India.

(d) The union finance minister.

Answer: b

92. All revenues received by the union government by way of taxes and other receipts for the conduct of government business are credited to the ?

(a) Contingency fund of India.

(b) Public account.

(c) Consolidated fund of India.

(d) Deposits and advances fund.

Answer: c

The accounts of Government are kept in three parts: (Each state also have its own 3 types of funds)

1. Consolidated Funds of India

• All revenues received by the Government by way of taxes like Income Tax, Central Excise, Customs and other receipts flowing to the Government in connection with the conduct of Government business i.e. Non-Tax Revenues are credited into the Consolidated Fund constituted under Article 266 (1) of the Constitution of India.
• Similarly, all loans raised by the Government by issue of Public notifications, treasury bills (internal debt) and loans obtained from foreign governments and international institutions (external debt) are credited into this fund. All expenditure of the government is incurred from this fund and no amount can be withdrawn from the Fund without authorization from the Parliament.

2. Contingency Funds of India

• The Contingency Fund of India records the transactions connected with Contingency Fund set by the Government of India under Article 267 of the Constitution of India. The corpus of this fund is Rs. 500 crore.(In 2005, it was raised from 50 to Rs 500 crore.)
• Advances from the fund are made for the purposes of meeting unforeseen expenditure which are resumed to the Fund to the full extent as soon as Parliament authorizes additional expenditure. Thus, this fund acts more or less like an imprest account of Government of India and is held on behalf of President by the Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs.

3. Public Account

• In the Public Account constituted under Article 266 (2) of the Constitution, the transactions relate to debt other than those included in the Consolidated Fund of India.
• The transactions under Debt, Deposits and Advances in this part are those in respect of which Government incurs a liability to repay the money received or has a claim to recover the amounts paid. The transactions relating to `Remittance’ and `Suspense’ shall embrace all adjusting heads. The initial debits or credits to these heads will be cleared eventually by corresponding receipts or payments.
• The receipts under Public Account do not constitute normal receipts of Government. Parliamentary authorization for payments from the Public Account is therefore not required.

93. Micro-finance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under micro- finance is/are :

1. Credit facilities.

2. Savings faculties.

3. Insurance facilities.

4. Fund transfer faculties.

Select the correct answer using the codes given the lists ?

(a) 1 only.

(b) 1 and 4 only.

(c) 2 and 3 only.

(d) 1,2 ,3 and 4.

Answer: d

• Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are: (1) relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group.
• For some, microfinance is a movement whose object is “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers.”

94. Southeast Asia has captivated the attention of global community over space and time as a geostrategically significant region. Which among the following is the most convincing explanation for this global perspective ?

(a) It was the hot theater during the second world war.

(b) Its location between the Asian powers of china and India.

(c) It was the arena of superpower confrontation during the cold war period.

(d) Its location between the pacific and Indian oceans and its preeminent maritime character.

Answer: d

95. A company marketing food products advertises that its items do not contain trans-fats. What does this campaign signify to the customers ?

1. The food products are not made out of hydrogenated oils.

2. The food products are not made out of animal fats/oils.

3. The oils used are not likely to damage the cardiovascular health of the consumers.

Which of the statements given above is/are correct ?

(a) 1 only.

(b) 2 and 3 only.

(c) 1 and 3 only.

(d) 1,2 and 3.

Answer: c

• Trans fats, or trans-unsaturated fatty acids are a type of unsaturated fats which are uncommon in nature but became commonly produced industrially from vegetable fats for use in margarine, snack food, packaged baked goods and frying fast food. A type of trans fat occurs naturally in the milk and body fat of ruminants (such as cattle and sheep) at a level of 2–5% of total fat.
• Fats contain long hydrocarbon chains, which can either be unsaturated, i.e. have double bonds, or saturated, i.e. have no double bonds. In nature, unsaturated fatty acids generally have cis (as opposed to trans) configurations. In food production, liquid cis-unsaturated fats such as vegetable oils are hydrogenated to produce saturated fats, which have more desirable physical properties, e.g. they melt at a desirable temperature (30–40 °C). Partial hydrogenation of the unsaturated fat converts some of the cis double bonds into trans double bonds by an isomerization reaction with the catalyst used for the hydrogenation, which yields a trans fat.
• Although trans fats are edible, consumption of trans fats has shown to increase the risk of coronary heart disease in part by raising levels of the LDL (Low-density lipoprotein, so-called “bad cholesterol”), lowering levels of the HDL (“good cholesterol”), increasing triglycerides in the bloodstream and promoting systemic inflammation.

96. Among the following who are eligible to benefit from the “mahatma Gandhi national rural employment guarantee act” ?

(a) Adult members of only the scheduled caste and scheduled tribe households.

(b) Adult members of below poverty line (BPL) households.’

(c) Adult members of households of all backward communities.

(d) Adult members of any household.

Answer: d

97. With reference to look east policy of India , consider the following statements ?

1. India wants to establish itself as an important regional player in the east Asian regional player in the east Asian affairs.

2. India wants to plug the vacuum created by the termination of cold war.

3. India wants to restore the historical and cultural ties with its neighbors in southeast and east Asia.

Which of the statements given above is/are correct ?

(a) 1 only.

(b) 1 and 3 only.

(c) 3 only.

(d) 1,2 and 3. 

Answer: b

• India’s Look East policy represents its efforts to cultivate extensive economic and strategic relations with the nations of Southeast Asia in order to bolster its standing as a regional power and a counterweight to the strategic influence of the People’s Republic of China. Initiated in 1991, it marked a strategic shift in India’s perspective of the world. It was developed and enacted during the government of Prime Minister P.V. Narasimha Rao and rigorously pursued by the successive administrations of Atal Bihari Vajpayee and Manmohan Singh.
• The present prime minister of India Narendra Modi has strengthened this policy into Act East policy

98. When the annual budget is not passed by the lok sabha ?

(a) The budget is modified and presented again.

(b) The budget is referred to the rajya sabha for suggestions.

(c) The union finance minister is asked to resign.

(d) The prime minister submits the resignation of council of ministers.

Answer: d

99. Under the constitution of India, which one of the following is not a fundamental duty ?

(a) To vote in public elections.

(b) To develop the scientific temper.

(c) To safeguard public property.

(d) To abide by the constitution and respect its ideals. 

Answer: a

The Fundamental Duties noted in the constitution are as follows: (Article 51 A)

It shall be the duty of every citizen of India:

1. to abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem;
2. to cherish and follow the noble ideals which inspired our national struggle for freedom;
3. to uphold and protect the sovereignty, unity and integrity of India;
4. to defend the country and render national service when called upon to do so;
5. to promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious, linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of women;
6. to value and preserve the rich heritage of our composite culture;
7. to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures;
8. to develop the scientific temper, humanism and the spirit of inquiry and reform;
9. to safeguard public property and to abjure violence;
10. to strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement;
11. who is a parent or guardian to provide opportunities for education to his child or ward, as the case may be, between the age of six and fourteen years

100. With reference to the finance commission of India, which of the following statements is correct ?

(a) It encourages the inflow of foreign capital for infrastructure development.

(b) It facilities the proper distributor of finances among the public section undertakings.

(c) It ensures transparency in financial administration.

(d) None of the statements (a), (b) and (c) given above is correct in his context.

Answer: d

All about Finance Commission:

What is the Finance Commission?

• The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves.
• Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the centre and the States respectively and equalization of all public services across the States.

What are the functions of the Finance Commission?

It is the duty of the Commission to make recommendations to the President as to:

• the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds;
• the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
• the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;
• any other matter referred to the Commission by the President in the interests of sound finance.

The Commission determines its procedure and have such powers in the performance of their functions as Parliament may by law confer on them.

Who appoints the Finance Commission and what are the qualifications for Members?

• The Finance Commission is appointed by the President under Article 280 of the Constitution.   As per the provisions contained in the Finance Commission [Miscellaneous Provisions] Act, 1951 and The Finance Commission (Salaries & Allowances) Rules, 1951, the Chairman of the Commission is selected from among persons who have had experience in public affairs, and the four other members are selected from among persons who–
  (a) are, or have been, or are qualified to be appointed as Judges of a High Court; or
  (b) have special knowledge of the finances and accounts of Government; or
  (c) have had wide experience in financial matters and in administration; or
  (d) have special knowledge of economics

How are the recommendations of Finance Commission implemented?

The recommendations of the Finance Commission are implemented  as under:-

• Those to be implemented by an order of the President: The recommendations relating to distribution of Union Taxes and Duties and Grants-in-aid fall in this category.
• Those to be implemented by executive orders:  The recommendations in respect of sharing of Profit Petroleum, Debt Relief, Mode of Central Assistance, etc. are implemented by executive orders. (Think Yourself: What is difference between executive order and Presidential order?)

When was the first Commission appointed and how many Commissions have been appointed so far?

• The First Finance Commission was constituted vide Presidential Order dated 22.11.1951 under the chairmanship of Shri K.C. Neogy on 6th April, 1952.  Fourteen Finance Commissions (14th under Y V reddy) have been appointed so far at intervals of every five years.

Is the Finance Commission unique to India?

• Most federal systems resolve the vertical and horizontal imbalances through mechanisms similar to the Finance Commission. For example Australia and Canada.

What is the composition of the Fourteenth Finance Commission?

• The Fourteenth Finance Commission has been set up under the Chairmanship of Dr. Y.V.Reddy [Former Governor Reserve Bank of India].  Other Members of the Commission are Ms. Sushma Nath [ Former Union Finance Secretary ], Dr. M.Govinda Rao [ Director, National Institute for Public Finance and Policy, New Delhi ), Dr. Sudipto Mundle, Former Acting Chairman, National Statistical Commission. Prof Abhijit Sen (Member, Planning Commission) is the part-time Member of the Fourteenth Finance Commission.  Shri Shri Ajay Narayan Jha is the Secretary, Fourteenth Finance Commission.

 What is the tenure of the Fourteenth Finance Commission?

• The Finance Commission is required to give its report by 31st October, 2014. Its recommendations will cover the five year period commencing from 1st April, 2015. (It has given report and implemented)

      Previous Page (Part 9)