Static Quiz 22 March 2022 (Indian Economy)

Solution: b)
Justification: The real interest rate is the nominal interest rate – inflation rate. For example, if base rates is 5.5% and the CPI inflation rate is 3.4%. Then the real interest rates is said to be 2.1%. A higher real interest rate is good for savers and bad for borrowers. Note, even if nominal interest rates were high e.g. 11%, savers would see a decline in their real value of money if inflation was 12%. This is why the real interest rate is important. Real interest rates can be negative if inflation is higher than nominal interest rates.

Solution: a)
Justification: Statement 1 and 2: It is an end-to-end solution for processing payments, tracking, monitoring, accounting, reconciliation and reporting. It provides the scheme managers a unified platform for tracking releases and monitoring their last mile utilization. Mandatory use of Public Finance Management System (PFMS) will help monitor the flow of funds to beneficiaries of different government welfare schemes. The actual status of utilization of funds by the multiple implementing agencies of the Central and the State Governments can be known.
Statement 3: The Department of Expenditure is administering the PFMS.
It has tremendous potential to improve programme/financial management, reduce the float in the financial systems by enabling ‘just in time’ releases and also the Government borrowings with direct impact on interest costs to the Government.

Solution: c)
Justification: Statement 1: Sanitation, education, drinking water, health etc. come under the category of public goods and services. When provided privately, they often become unaffordable for the poor masses. When they are provided at a lower price, people can afford them and the money that is spare can be spent in the market.
Statement 2: During recession, often the demand for labour goes down and the first ones to be laid off from the job are the contract workers who are usually at the lower rung of the society. If public goods like health, education, drinking water etc. are provided at low cost or free of cost, it gives them a safety net even as they are unemployed. The money saved from spending on these public goods can be used for private consumption

Solution: a)
Justification: Statement 1: It is a RBI conceptualized system driven by National Payments Corporation of India (NPCI). It is a one-stop payment platform for all bills providing an interoperable and accessible “Anytime Anywhere” bill payment service to all customers across India with certainty, reliability and safety of transactions.
Statement 2: BBPS transaction can be initiated through multiple payment channels like Internet, Internet Banking, Mobile, Mobile-Banking, POS (Point of Sale terminal), Mobile Wallets, MPOS (Mobile Point of Sale terminal), Kiosk, ATM, Bank Branch, Agents and Business Correspondents.

Solution: c)
Justification: It aims at simplifying Warehouse Registration Rules, digitizing entire process of registration, monitoring and surveillance as well as creation and management of NWRs in electronic form through two repositories. NWRs are documents issued by warehouses to depositors against commodities deposited in warehouses for which warehouse is bailee. NWRs can be traded, sold, swapped and used as collateral to support borrowing or loans from banks. These receipts were made negotiable under Warehouse (Development and Regulation) Act, 2007 and are regulated by Warehousing Development and Regulatory Authority (WDRA). e-NWR will have no chances of any tempering, mutilation, fudging, loss or damage and also no possibility of any multiple financing. e-NWR will also help to save expenditure in logistics as stocks could be traded through multiple buyers without physical movement and can be even split for partial transfer or withdrawal.