UPSC Static Quiz – Economy : 6 December 2024

UPSC Static Quiz – Economy : 6 December 2024 We will post 5 questions daily on static topics mentioned in the UPSC civil services preliminary examination syllabus. Each week will focus on a specific topic from the syllabus, such as History of India and Indian National Movement, Indian and World Geography, and more.We are excited to bring you our daily UPSC Static Quiz, designed to help you prepare for the UPSC Civil Services Preliminary Examination. Each day, we will post 5 questions on static topics mentioned in the UPSC syllabus. This week, we are focusing on Indian and World Geography.

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• Question 1 of 5 1. Question Which of the following kind of projects would be classified as major irrigation projects in India? Flow diversion structures Tanks Groundwater pumping Network of canals Select the correct answer code: a) 1, 3 b) 1, 2, 3 c) 1, 4 d) 3, 4 Correct Solution: c) Irrigation projects are classified in different ways, however, in the Indian context it is usually classified as follows: Based on Cultural Command Area (CCA) Major Irrigation Projects: The area envisaged to be covered under irrigation is of the order over 10000 hectares (CCA>10,000 ha). This type of project consists of huge storage reservoirs, flow diversion structures and a large network of canals. These are often multi-purpose projects serving other aspects like flood control and hydro power. Medium Irrigation Projects: Projects having CCA less than 10,000 ha but more than 2,000 ha are classified as medium irrigation projects. These are also multi-purpose surface water projects. Medium size storage, diversion and distribution structures are the main components of this type of project. Minor Irrigation Projects: Projects having CCA less than or equal to 2,000 ha are termed as a minor irrigation project. The main sources of water are tanks, small reservoirs and groundwater pumping. A number of minor irrigation projects may exist individually within the command area of a major or medium irrigation project. Incorrect Solution: c) Irrigation projects are classified in different ways, however, in the Indian context it is usually classified as follows: Based on Cultural Command Area (CCA) Major Irrigation Projects: The area envisaged to be covered under irrigation is of the order over 10000 hectares (CCA>10,000 ha). This type of project consists of huge storage reservoirs, flow diversion structures and a large network of canals. These are often multi-purpose projects serving other aspects like flood control and hydro power. Medium Irrigation Projects: Projects having CCA less than 10,000 ha but more than 2,000 ha are classified as medium irrigation projects. These are also multi-purpose surface water projects. Medium size storage, diversion and distribution structures are the main components of this type of project. Minor Irrigation Projects: Projects having CCA less than or equal to 2,000 ha are termed as a minor irrigation project. The main sources of water are tanks, small reservoirs and groundwater pumping. A number of minor irrigation projects may exist individually within the command area of a major or medium irrigation project.

#### 1. Question

Which of the following kind of projects would be classified as major irrigation projects in India?

• Flow diversion structures

• Groundwater pumping

• Network of canals

Select the correct answer code:

• b) 1, 2, 3

Solution: c)

Irrigation projects are classified in different ways, however, in the Indian context it is usually classified as follows:

Based on Cultural Command Area (CCA)

• Major Irrigation Projects: The area envisaged to be covered under irrigation is of the order over 10000 hectares (CCA>10,000 ha). This type of project consists of huge storage reservoirs, flow diversion structures and a large network of canals. These are often multi-purpose projects serving other aspects like flood control and hydro power.

• Medium Irrigation Projects: Projects having CCA less than 10,000 ha but more than 2,000 ha are classified as medium irrigation projects. These are also multi-purpose surface water projects. Medium size storage, diversion and distribution structures are the main components of this type of project.

• Minor Irrigation Projects: Projects having CCA less than or equal to 2,000 ha are termed as a minor irrigation project. The main sources of water are tanks, small reservoirs and groundwater pumping. A number of minor irrigation projects may exist individually within the command area of a major or medium irrigation project.

Solution: c)

Irrigation projects are classified in different ways, however, in the Indian context it is usually classified as follows:

Based on Cultural Command Area (CCA)

• Question 2 of 5 2. Question Consider the following statements regarding the Primary Agricultural Credit Societies (PACS). PACS are village-level cooperative credit societies serving as the last link in a three-tier cooperative credit structure Since PACS are cooperative bodies with individual farmers as members, they are involved in short-term lending. Which of the above statements is/are correct? a) 1 only b) 2 only c) Both 1 and 2 d) Neither 1 nor 2 Correct Solution: c) PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level. Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deal directly with farmers. Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS. PACS are involved in short term lending or what is known as crop loan. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc. Incorrect Solution: c) PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level. Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deal directly with farmers. Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS. PACS are involved in short term lending or what is known as crop loan. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc.

#### 2. Question

Consider the following statements regarding the Primary Agricultural Credit Societies (PACS).

• PACS are village-level cooperative credit societies serving as the last link in a three-tier cooperative credit structure

• Since PACS are cooperative bodies with individual farmers as members, they are involved in short-term lending.

Which of the above statements is/are correct?

• c) Both 1 and 2

• d) Neither 1 nor 2

Solution: c)

PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level.

Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deal directly with farmers.

Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS.

PACS are involved in short term lending or what is known as crop loan. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc.

Solution: c)

PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level.

Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deal directly with farmers.

Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS.

PACS are involved in short term lending or what is known as crop loan. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc.

• Question 3 of 5 3. Question Consider the following statements regarding Open Market Sale Scheme (OMSS). Under the Open Market Sale Scheme, the Food Corporation of India (FCI) from time to time sells surplus food grains from the central pool in the open market to traders, bulk consumers and retail chains. The main objective of OMSS is to curb food grain inflation. States are not allowed to procure food grains through the OMSS. How many of the above statements are incorrect? a) Only one b) Only two c) All three d) None Correct Solution: a) Statement 3 is incorrect. Under the Open Market Sale Scheme, the FCI from time to time sells surplus food grains from the central pool especially wheat and rice in the open market to traders, bulk consumers, retail chains and so on at pre-determined prices. The Corporation does this through e-auctions where open market bidders can buy specified quantities at the prices set at the start of a cycle and revised routinely. Usually, states are also allowed to procure food grains through the OMSS without participating in the auctions, for their needs beyond what they get from the central pool to distribute to NFSA beneficiaries. The idea is to activate the OMSS during the lean season, the time between harvests, to improve and regulate domestic supply and availability of the two grains and bring down their prices in the open market; essentially making the scheme a measure to curb food grain inflation. Incorrect Solution: a) Statement 3 is incorrect. Under the Open Market Sale Scheme, the FCI from time to time sells surplus food grains from the central pool especially wheat and rice in the open market to traders, bulk consumers, retail chains and so on at pre-determined prices. The Corporation does this through e-auctions where open market bidders can buy specified quantities at the prices set at the start of a cycle and revised routinely. Usually, states are also allowed to procure food grains through the OMSS without participating in the auctions, for their needs beyond what they get from the central pool to distribute to NFSA beneficiaries. The idea is to activate the OMSS during the lean season, the time between harvests, to improve and regulate domestic supply and availability of the two grains and bring down their prices in the open market; essentially making the scheme a measure to curb food grain inflation.

#### 3. Question

Consider the following statements regarding Open Market Sale Scheme (OMSS).

• Under the Open Market Sale Scheme, the Food Corporation of India (FCI) from time to time sells surplus food grains from the central pool in the open market to traders, bulk consumers and retail chains.

• The main objective of OMSS is to curb food grain inflation.

• States are not allowed to procure food grains through the OMSS.

How many of the above statements are incorrect?

• a) Only one

• b) Only two

• c) All three

Solution: a)

Statement 3 is incorrect.

Under the Open Market Sale Scheme, the FCI from time to time sells surplus food grains from the central pool especially wheat and rice in the open market to traders, bulk consumers, retail chains and so on at pre-determined prices. The Corporation does this through e-auctions where open market bidders can buy specified quantities at the prices set at the start of a cycle and revised routinely. Usually, states are also allowed to procure food grains through the OMSS without participating in the auctions, for their needs beyond what they get from the central pool to distribute to NFSA beneficiaries.

The idea is to activate the OMSS during the lean season, the time between harvests, to improve and regulate domestic supply and availability of the two grains and bring down their prices in the open market; essentially making the scheme a measure to curb food grain inflation.

Solution: a)

Statement 3 is incorrect.

• Question 4 of 5 4. Question Through which of the following ways Minimum support prices (MSP) can be guaranteed? By forcing buyers to pay MSP. Government agencies buying the entire marketable produce of farmers offered at MSP. Price deficiency payments (PDP) How many of the above statements is/are correct? a) Only one b) Only two c) All three d) None Correct Solution: c) How can MSP be guaranteed? There are two conventional ways. The first is to force buyers to pay MSP. Sugar mills are required, by law, to pay cane growers a “fair and remunerative” or “state advised” price within 14 days of purchase. But this approach risks implementation hurdles (recurrent cane payment arrears are proof), or worse, the private trade choosing to not buy at all. The second is for government agencies to buy the entire marketable produce of farmers offered at MSP. That is unsustainable, both physically and fiscally. But there’s a third option: price deficiency payments (PDP). It entails the government not physically purchasing or stocking any crop, and simply paying farmers the difference between the market price and MSP, if the former is lower. Such payment would be on the quantity of crop they sell to the private trade. Incorrect Solution: c) How can MSP be guaranteed? There are two conventional ways. The first is to force buyers to pay MSP. Sugar mills are required, by law, to pay cane growers a “fair and remunerative” or “state advised” price within 14 days of purchase. But this approach risks implementation hurdles (recurrent cane payment arrears are proof), or worse, the private trade choosing to not buy at all. The second is for government agencies to buy the entire marketable produce of farmers offered at MSP. That is unsustainable, both physically and fiscally. But there’s a third option: price deficiency payments (PDP). It entails the government not physically purchasing or stocking any crop, and simply paying farmers the difference between the market price and MSP, if the former is lower. Such payment would be on the quantity of crop they sell to the private trade.

#### 4. Question

Through which of the following ways Minimum support prices (MSP) can be guaranteed?

• By forcing buyers to pay MSP.

• Government agencies buying the entire marketable produce of farmers offered at MSP.

• Price deficiency payments (PDP)

How many of the above statements is/are correct?

• a) Only one

• b) Only two

• c) All three

Solution: c)

How can MSP be guaranteed?

There are two conventional ways.

The first is to force buyers to pay MSP. Sugar mills are required, by law, to pay cane growers a “fair and remunerative” or “state advised” price within 14 days of purchase. But this approach risks implementation hurdles (recurrent cane payment arrears are proof), or worse, the private trade choosing to not buy at all.

The second is for government agencies to buy the entire marketable produce of farmers offered at MSP. That is unsustainable, both physically and fiscally.

But there’s a third option: price deficiency payments (PDP). It entails the government not physically purchasing or stocking any crop, and simply paying farmers the difference between the market price and MSP, if the former is lower. Such payment would be on the quantity of crop they sell to the private trade.

Solution: c)

How can MSP be guaranteed?

There are two conventional ways.

The second is for government agencies to buy the entire marketable produce of farmers offered at MSP. That is unsustainable, both physically and fiscally.

• Question 5 of 5 5. Question The Government undertakes which of the following measures to ensure continuous availability of vegetables like Onions to consumers at affordable prices? Imposition of export duty Targeted release of stocks Procurement for buffer stock How many of the above statements is/are correct? a) Only one b) Only two c) All three d) None Correct Solution: c) The measures taken by the government such as procurement for the buffer, targeted release of stocks and imposition of export duty will benefit farmers and consumers by assuring remunerative prices to onion farmers while ensuring continuous availability to consumers at affordable prices. Incorrect Solution: c) The measures taken by the government such as procurement for the buffer, targeted release of stocks and imposition of export duty will benefit farmers and consumers by assuring remunerative prices to onion farmers while ensuring continuous availability to consumers at affordable prices.

#### 5. Question

The Government undertakes which of the following measures to ensure continuous availability of vegetables like Onions to consumers at affordable prices?

• Imposition of export duty

• Targeted release of stocks

• Procurement for buffer stock

How many of the above statements is/are correct?

• a) Only one

• b) Only two

• c) All three

Solution: c)

The measures taken by the government such as procurement for the buffer, targeted release of stocks and imposition of export duty will benefit farmers and consumers by assuring remunerative prices to onion farmers while ensuring continuous availability to consumers at affordable prices.

Solution: c)

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