Expected Questions on Economics 2018 – Part 2 (Set - 3) (Download PDF)

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👌 Subhash Chandra Garg Committee to regulate fintech sector - To look into the development and regulation of the financial technology (fintech) sector in India. It will be headed by Economic Affairs Secretary Subhash Garg.

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Expected Questions on Economics 2018 - UPSC IAS Prelims (Part 2) (In English)

Dr. Manishika Jain discusses Expected Questions on Economics 2018 for IAS Prelims Part 2

  • Committee’s objective is to consider various issues relating to development of fintech sector in India.

  • Financial technology (FinTech or fintech) is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services.

  • Members:

    • Electronics and Information Technology Secretary

    • Financial Services Secretary

    • MSME Secretary

    • Chairperson of Central Board of Excise and Customs

    • Deputy Governor of Reserve Bank of India

    • Chief Executive Officer of Unique Identification Authority of India (UIDAI) and Joint Secretary Department of Economic Affairs.

Services PMI Contracts to 47.8 in February 2018

  • Nikkei India Services Business Activity Index contracted at 47.8 in February 2018 compared with 51.7 in January 2018.

  • Reading above 50 implies an expansion while one below 50 denotes a contraction.

  • Contraction shows that activity and new work in services sector declined for the first time since November 2017.

  • 👌 Rates of contraction the fastest since August 2017.

  • Both activity and new work in services sector declined for first time since November 2017.

  • This is for 7th consecutive month that PMI remained above 50 point mark.

  • In December 2017, PMI touched a 60-month high of 54.7.

  • Indian manufacturers remained optimistic towards 12-month outlook for output during February 2018.

👌 Establishment of National Financial Reporting Authority

  • Union Cabinet approved establishment of National Financial Reporting Authority (NFRA) as an independent regulator for the auditing profession.

  • Aims: To tighten regulatory oversight over auditors and plug loopholes.

  • It will be independent from those it regulates for enforcement of auditing standards and ensuring quality of audits.

Composition: NFRA will be 15 members body, consisting of Chairperson, three full-time Members and one Secretary.

Functions:

  • Overarching watchdog for auditing profession.

  • It can debar an erring auditor or auditing firm for up to 10 years besides it can also slap heavy penalties.

👌 Inclusive Internet Index 2018: India ranks 47th

  • India ranked 47th out of 86 countries in Inclusive Internet Index (III) 2018 report.

  • India slipped by 11 positions compared to 36th rank in 2017 (III) report due to low internet usage and poor quality.

  • Report commissioned by Facebook in 2017.

  • Conducted by The Economist Intelligence Unit (EIU).

  • Provides rigorous benchmark of national-level Internet inclusion across four categories:

    • Availability – 62nd rank

    • Affordability – 39th rank

    • Relevance – 37th rank

    • Readiness – 23rd rank

👌 Yes Bank Lists $600 Million MTN Bond on India INX

  • Yes Bank listed $600 million bond issued under its maiden $1 billion MTN (Medium Term Notes) program on Global Securities Market (GSM) of India INX.

  • Bank will use proceeds from this bond to fund bank’s IFSC Banking Unit (IBU) in Gift City.

  • Expand IBU’s rapidly growing business opportunities.

  • Yes Bank’s MTN (medium term note) bonds issuance received overwhelming response from international investors.

  • It has been already listed on London Stock Exchange International Securities Market (LSE ISM) and Singapore Exchange Securities Trading Limited (SGX).

Mauritius Was Largest Source of FDI in India in 2016 - 2017: RBI

  • Mauritius was largest source of foreign investment (FDI) in India.

  • Census yields carry information on market value of foreign liabilities and assets of Indian companies arising on account of FDI, ODI and other investments.

  • 👌 Mauritius was largest source of FDI in India (21.8 % share at market value) followed by USA, UK, Singapore and Japan.

  • Singapore (19.7%) was major ODI destination followed by Netherlands, Mauritius, and US.

  • 18, 667 companies participated in census.

  • 96 % of responding companies were unlisted in March 2017 and most of them had received only inward FDI.

Department of Commerce and CII Inks MoU for Development of Logistics Sector

  • Department of Commerce signed MoU with Confederation of Indian Industry (CII).

  • For setting-up institutional mechanism for the development of Logistics sector in India.

  • Both, will work together for taking logistics sector to global levels both in terms of efficiency and cost.

  • They will follow Commerce Ministry’s roadmap for modernizing logistics sector and bring it at par with the global best.

  • Road map aims to foster focused engagement with the industry.

  • Collaborate with concerned agencies including state Government’s and other related agencies.

ONGC to Acquire Government’s Entire 51.11 % Stake in HPCL

  • Union Government and state-run oil explorer ONGC clinched deal for acquisition of government’s 51.11 % stake in HPCL.

  • Hindustan Petroleum Corporation for a consideration of Rs. 36, 915 crore.

  • Deal will be closed by end of January 2018.

  • Recently, empowered panel approved price bid for acquisition.

  • All-cash deal will help government to boost its non-debt capital receipts and meet disinvestment target ( Rs. 72, 500 crore).

  • ONGC contributes around 70 % of Indian domestic production of crude oil and natural gas.

👌 ONGC Acquires 10 % Stake in UAE’s Zakum Oilfield

  • Oil and Natural Gas Corporation (ONGC) -led consortium of Indian state oil firms.

  • Acquired 10 % stake in Abu Dhabi’s offshore Lower Zakum Concession for $600 million.

  • Discovered in 1963 and owned and developed by Abu Dhabi National Oil Company.

  • Lower Zakum Oil Field located 84 km north-west of Abu Dhabi Islands.

  • Indian oil and gas companies for first time acquired stake in development of Abu Dhabi’s hydrocarbon resources.

Indian Economy to Grow at 7.4 % in 2018: IMF

  • Latest World Economic Outlook (January 2018 update) released by International Monetary Fund (IMF).

  • India projected to grow at 7.4 % of its GDP in 2018 as against China’s 6.8%.

  • Projection makes India fastest growing major economy following slowdown in 2017 due to demonetization and implementation of goods and services tax.

  • IMF projected India’s GDP growth rate at 7.4 % in 2018 and 7.8 % in 2019.

India’s Richest 1 % Corner 73 % of Wealth Generation: Oxfam Survey

  • Richest 1 % in India cornered 73 % of the wealth generated in country in 2017.

  • Survey shows worrying picture of rising income inequality.

  • Survey released as part of report titled ‘Reward Work, Not Wealth’.

  • Revealing how global economy enables wealthy elite.

  • Globally 82 % of wealth generated in 2017 worldwide went to 1%.

  • While, 3.7 billion people that account for poorest half of population saw no increase their wealth.

Rich-poor Divide Increasing Rapidly: Study

According to World Inequality Report 2018,

In Europe, the increase in inequality increased more moderately while in North America and Asia, the increase was rapid. In the Middle East, Africa, and Brazil, income inequality increase was not registered but it remained at very high levels.

  • Income inequality in India reached historically high levels with share of national income.

  • Ensuing to India’s top 1 % earners touching 22 % in 2014, while share of top 10 % was around 56%.

  • Report released by World Inequality Lab (WIL).

  • An organization that aims to promote research on global inequality dynamics.

  • Since 1980, 27 % of all new income worldwide captured by richest 1 % while, poorest 50 % captured only 13 % of growth.

Amendment to MSME Act to Change Classification Criteria

  • Union Cabinet approved amendment to Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

  • 👌 For classifying MSMEs from current investment in plant and machinery criteria to annual turnover criteria.

  • Purpose of amendment to Section 7 of MSMED Act, 2006:

    • To encourage ease of doing business

    • Make MSME classification norms growth oriented

    • Align them to new indirect tax regime revolving around Goods & Services Tax (GST).

Independent Debt Management Office Must Be Set up

  • NITI Aayog made strong case for setting up independent Debt Management Office.

  • For better servicing of loans that will lead to substantial reduction in India’s interest payment.

  • Currently, government debt including market borrowing is managed by RBI.

  • It will help to resolve issues relating to conflict of interest as RBI decides on key interest rates.

  • One of the top priorities of government for bringing reforms in financial sector.

  • Also, facilitate in better planning and management of domestic and foreign market borrowings of Central Government.

👌 IRFC’s green bonds: India INX lists 1st debt security at IFSC

  • India International Exchange (India INX) listed the Indian Railway Finance Corporation’s (IRFC’s) green bonds on its debt listing platform-Global Securities Market (GSM).

  • IRFC green bonds became first debt security to be listed on exchange at International Financial Services Centre (IFSC) in Gujarat’s GIFT city.

  • India INX’s GSM segment is India’s first debt listing platform.

  • Allows raising funds in any currency of choice by both foreign and Indian issuers from investors across the globe.

  • IRFC is finance arm of Indian Railway.

IMF Lowers India’s Growth Forecast to 6.7%

  • International Monetary Fund (IMF) in its October World Economic Outlook (WEO) lowered India’s economic growth forecast at:

    • 6.7 % in 2017

    • 7.4 % in 2018

  • Slower than 0.5 and 0.3 % points projected earlier by IMF.

  • In April 2017 forecast, IMF revised upwards India’s growth performance for 2016 to 7.1 % as opposed to 6.8%.

  • India will regain fastest growing major economy tag next year.

  • When it is forecast to grow 7.4%, slower than earlier estimate of 7.7 % but higher than China’s 6.5%.

ABD Lowers India’s GDP Forecast to 6.7 % for 2017 - 18

  • Asian Development Bank (ADB) in its Asian Development Outlook Supplement lowered India’s economic growth forecast for FY 2017 - 18 by 0.3 % to 6.7 % from earlier 7%.

  • Reasons cited for this downward revision of growth forecast of largest economy South Asia are:

    • lingering effect of demonetisation,

    • transitory challenges to Goods and Services Tax (GST)

    • weather-related risks to agriculture

  • ADB revised downwards India’s gross domestic product (GDP).

  • Outlook for next fiscal beginning from March 2018 to 7.3 % from 7.4%.

  • Mainly because of rising global crude oil prices and soft growth in private sector investment.

Logistics Sector Gets Infrastructure Status

  • Union Finance Ministry granted Infrastructure Status to Logistics sector.

  • Logistics Infrastructure included by insertion of new item in a renamed category of ‘Transport and Logistics’.

  • Inclusion of “Logistics Sector” in the Harmonized Master List of Infrastructure Sub-sectors considered in the 14th Institutional Mechanism (IM).

  • Proposal was mooted by the Commerce Ministry.

  • Approved by Finance Ministry.

Logistics Infrastructure means and includes:

  • Multi-modal Logistics Park comprising Inland Container Depot (ICD)

  • Cold Chain Facility

  • Warehousing Facility

👌 SEBI to Bring Initial Coin Offerings Using Crypto Currencies under Its Lens

Refer -

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Bitcoin: Creation, Circulation, Usage, Problems & Advantages - Currency of Internet

Dr. Manishika Jain explains tCreation, Circulation, Usage, Problems & Advantages of Bitcoins - Cryptocurrency

  • Capital market regulator Securities and Exchange Board of India (SEBI) planning to bring Initial Coin Offerings (ICO) under its existing legal framework.

  • In recent times, popularity of crypto currencies increased rapidly.

  • Number of entities looking at raising funds through ICO.

  • Crypto currencies like bitcoin, ethereum and such offerings have been under government radar for long time.

FSDC Sub-Committee Reviews Financial Events of Country

  • Sub-Committee of Financial Stability and Development Council (FSDC) reviewed major global and domestic developments.

  • That could impose country’s financial stability.

  • Sub-committee meeting headed by Reserve Bank of India (RBI) Governor Urjit Patel.

  • Sub-Committee of the FSDC discussed:

    • Set up National Centre for Financial Education (NCFE)

    • Operationalize information utilities registered by IBBI

    • Share data among regulators.

    • Implement status of Legal Entity Identifier (LEI).

  • 👌 Its recommendations on:

    • FinTech and digital innovations

    • Shadow banking implementation group - shadow banking system is the group of financial intermediaries facilitating the creation of credit across global financial system but whose members are not subject to regulatory oversight.

    • Stewardship Code were also discussed – part of UK company law concerning principles that institutional investors are expected to follow.

India’s First Electronic Manufacturing Cluster to Be Set up in Andhra Pradesh

  • India’s first Electronic Manufacturing Cluster (EMC) - Andhra Pradesh.

  • EMC designed and developed to provide facilities and amenities for manufacturing mobiles and allied products.

  • In 2012, Ministry of Electronics and Information Technology (MeiTY) announced about setting up EMC in India, with grant-in-aid for establishing such clusters.

  • It will be involved in manufacturing of accessories to mobile phones and other related electronic equipment.

  • EMC will generate around 50, 000 jobs every year.

India’s First-ever FDI in Fertilizer Sector: Yara Acquires Tata Chemicals Urea Plant

  • 👌 Norwegian fertilizer giant Yara International announced completion of its acquisition of Tata Chemicals’.

  • 1.2 million tons per annum production capacity urea plant at Babrala in Uttar Pradesh.

  • Rs. 2, 682-crore acquisition deal includes transfer of all assets and liabilities (including working capital) relating to Babrala unit.

  • It marks first foreign direct investment (FDI) in India’s highly regulated urea sector.

  • Yara is headquartered in Oslo, Norway.

SEBI Inks Pact with ESMA for Information Exchange on CCPs

  • Markets regulator Securities and Exchange Board of India (SEBI) entered into a MoU with European Securities and Markets Authority (ESMA).

  • MoU signed for exchange of information concerning Central Counterparties (CCPs) under European Markets Infrastructure Regulation (EMIR).

  • CCPs are entities that help facilitate clearing and settlement activities.

  • MoU establishes cooperation arrangements.

  • It including exchange of information regarding CCPs.

  • Established and authorized or recognized in India by SEBI.

  • Applied for EU recognition under EMIR.

Reliance Industries Market Capitalization Hits Rs. 5 Lakh Crore Mark

  • Mukesh Ambani-led Reliance Industries Limited (RIL) for the first time in its trading history crossed Rs. 5 lakh crore in market capitalisation.

  • Market cap of RIL stood at Rs. 5, 04, 458.09 on BSE (Bombay Stock Exchange).

  • RIL is 2nd firm to cross Rs. 5 lakh crore in market capitalization.

  • RIL’s highest market cap in its lifetime and also presently it is the most valued company on the bourses.

  • Tata Consultancy Service (TCS) was first company to hit Rs. 5 lakh crore in market capitalisation milestone in July 2014.

  • It is the second most valuable company in terms of market-capitalisation.

India to Import Crude Oil from US for First Time

  • India, the world’s 3rd largest oil importer. First time it will import crude oil from the United States.

  • 👌 Indian Oil Corp (IOC) bought 1.6 million barrels of US Mars crude.

  • 4, 00, 000 barrels of Western Canadian Select that will be delivered onboard a Very Large Crude Carrier.

  • Import will take place after IOC gets the carrier in October 2017 from Petro China.

  • Oil will be loaded off the US Gulf Coast.

  • India will be the latest Asian country to buy US crude after Japan, South Korea, Thailand, Australia, China and Taiwan.

👌 Reliance Jio Launches World’s Longest 100Gbps Submarine Cable System

  • Mukesh Ambani led Reliance Jio Infocomm launched the Asia-Africa-Europe (AAE-1) submarine cable system.

  • It is claimed to be world’s longest 100Gbps technology-based submarine system.

  • Stretches for over 25, 000km from Marseille, France to Hong Kong.

  • 21 cable landings across Asia and Europe.

  • This project is a combination of leading telecom service providers from Europe, the Middle East and Asia.

  • Jio will continue to offer its customers the most exceptional high speed internet and digital service experience.

India’s Largest Municipal Bond Program Launched

  • Pune Municipal Corporation (PMC) became the first municipal corporation in India to tap money through municipal bonds in 14 years.

  • This is the first-ever mobilization of debt capital by a municipal corporation on the BSE BOND platform.

  • 10-year bonds will be used by the Pune Municipal Corporation (PMC) for Rs. 2, 300-crore water project.

  • Scheme aimed at providing water 24×7 for all residents of Pune.

Reliance Defence Inks Pact with Serbia’s Yugoimport to Manufacture Ammunition in India

  • Anil Ambani’s Reliance Defence Ammunition entered into a strategic partnership with Serbia’s state-run Yugoimport to manufacture ammunition in India.

  • Reliance Defence Ammunition is a subsidiary of Reliance Infrastructure.

  • It will be set up a Greenfield facility for the production of ammunition.

  • Joint venture is expected to target business opportunities worth Rs. 20, 000 crore from Indian armed forces in the next 10 years.

  • Two companies will work jointly in the field of ammunition amongst others.

BMI Research: India One of Top 5 Consumer Markets in Asia

  • A Fitch group company India is among the top 5 consumer markets in Asia.

  • Offering retailers the strongest consumer spending growth of an average of 6.1 % over the next 5 years.

  • Other four countries are China, Sri Lanka, Vietnam and Indonesia.

  • BMI research founded in 1984 Business Monitor International and later in 2014 was acquired by Fitch Group.

  • Firm performs industry and financial market analysis in 24 industries and 200 global markets.

  • As per the report, the real consumer spending growth in 2017 will be 6.2%.

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Expected Questions on Economics 2018 - UPSC IAS Prelims (Part 2) (In Hindi)

Dr. Manishika Jain discusses Expected Questions on Economics 2018 for IAS Prelims Part 2

👌 implies important for Objective Questions/MCQ

📝 implies important for Subjective Questions

📹 implies covered in Videos or Upcoming Videos

- Published/Last Modified on: May 11, 2018

Economy

Monthy-updated, fully-solved, large current affairs-2019 question bank(more than 2000 problems): Quickly cover most-important current-affairs questions with pointwise explanations especially designed for IAS, NTA-NET, Bank-PO and other competetive exams.