UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today’s subject quiz on Economy to check your progress. Come back tomorrow to solve the International Relations Quiz.

Consider the following statements:

Statement 1: India registered a 38 per cent surge in imports of finished steel in 2023-24.

Statement 2: India’s steel industry faces a threat from predatory imports.

Which one of the following is correct in respect of the above statements?

(a) Both Statement 1 and Statement 2 are correct and Statement 2 is the correct explanation for Statement 1.

(b) Both Statement 1 and Statement 2 are correct and Statement 2 is not the correct explanation for Statement 1.

(c) Statement 1 is correct but Statement 2 is incorrect.

(d) Statement 1 is incorrect but Statement 2 is correct.

Explanation

— The Indian steel industry has expressed concern over India becoming a net importer of steel in 2023-24, saying it is a “warning signal” for the country which strives to become Atmanirbhar.

— As per the steel ministry’s Joint Plant Committee, India has registered a 38 per cent surge in imports of finished steel to 8.319 million tonnes (MnT) over 6.022 MnT imported during the preceding 2022-23 fiscal. Hence, statement 1 is correct.

— “The growth in predatory imports from China poses a significant challenge to Atmanirbharta in steel. “The country’s status as a net importer is a warning signal to our march towards Atmnirbharta (self-reliance),” stated Alok Sahay, secretary general of the Indian Steel Association (ISA).

— The “lesser duty rule” benefits importers. It must be withdrawn and disclosed immediately so that China or any other steel-surplus country does not take advantage of India’s growing momentum to promote their own steel mills while India suffers from a lack of steel capacity expansion,” Sahay added.

— Ranjan Dhar, Chief Marketing Officer – ArcelorMittal Nippon Steel, said India’s steel industry faces threat from predatory imports. Restricting steel imports is crucial to safeguard investments and ensure robust GDP growth. Hence, statement 2 is correct.

Both Statement 1 and Statement 2 are correct and Statement 2 is the correct explanation for Statement 1.

Therefore, option (a) is the correct answer

Consider the following statements:

1. This port is ideal for the development of a new port where a natural depth of 20 Meters is available at a distance of about 4.5 nautical miles.

2. Development of this port has been conceived under the Sagarmala Programme.

3. This port will be developed as a deep draught Port to cater to large containers.

4. The Jawaharlal Nehru Port Authority (JNPA) and Maharashtra Maritime Board will jointly implement this port with a shareholding of 74% and 26% respectively.

The above mentioned statements refer to:

(a) Tarapur port

(b) Trombay port

(c) Vadhvan Port

(d) Ratnagiri Port

Explanation

— A 32-km long road connecting the proposed Vadhvan Port in Maharashtra’s Palghar district to the national highway 48 has been approved by the Union cabinet, the Jawaharlal Nehru Port Authority (JNPA) said.

— The Arabian coast at Vadhvan, located north of Mumbai, is excellent for developing a new port due to its natural depth of 20 metres at a distance of around 4.5 nautical miles.

— The JNPA is building the Vadhvan Port. JNPA and the Maharashtra Maritime Board will jointly implement this port, with 74% and 26% ownership, respectively.

— The development of a port in Vadhvan was planned as part of the Sagarmala Programme, a government initiative to supplement port-led development and coast-line development in order to contribute to India’s progress.

— The goal is to expand and develop Green Field Ports to meet the growing traffic demand of Major Ports on the West Coast.

— The new Vadhvan port will have a deep draught to accommodate large container, bulk, and crude vessels.

— A natural water depth of 20 metres is available at a distance of 10 kilometres, while a 15 metre contour is available at 6 kilometres from the shore, allowing next-generation vessels to travel safely and dock.

Therefore, option (c) is the correct answer.

(Other Source: http://www.jnport.gov.in)

The windfall tax is associated with:

(a) Iron and steel export

(b) Real estate

(c) Sale of goods and services

(d) Crude oil

Explanation

— Earlier this year, the government cut windfall tax on domestically produced crude oil to Rs 8,400 per tonne from Rs 9,600 per tonne.

— A windfall tax is a levy imposed by governments on specific industries when economic conditions allow them to generate significantly higher-than-average profits.

— Windfall taxes are primarily applied against enterprises in the targeted industry that have gained the most from the economic windfall, which are typically commodity-based businesses.

— The tax is levied in the form of Special Additional Excise Duty (SAED).

— The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.

Therefore, option (d) is the correct answer.

(Other Source: http://www.investopedia.com)

Consider the following activities:

1. Horticulture and allied activities

2. Purchase of agricultural implements and machinery

3. Installation of Solar Agriculture Pumps

4. Purchase of land for agricultural purposes for marginal farmers.

How many of the above activities are covered under priority sector lending for individual farmers?

(a) Only one

(b) Only two

(c) Only three

(d) All four

Explanation

— The Reserve Bank has expanded the scope of priority sector lending to include start-ups funding up to Rs 50 crore, and loans to farmers for installation of solar plants and compressed biogas plants.

— The Priority Sector Lending (PSL) guidelines have been comprehensively reviewed and revised to align it with emerging national priorities and bring sharper focus on inclusive development.

— Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual farmers, providing banks keep disaggregated data on such loans]. and farmer-owned enterprises engaged directly in agriculture and related activities such as dairy, fishing, animal husbandry, poultry, beekeeping, and sericulture. This will include:

(i) Crop loans include those for conventional and non-traditional plantations, horticulture, and related activities.

(ii) Medium and long-term loans for agriculture and allied activities (e.g., purchases of agricultural implements and machinery, as well as developmental loans for related businesses).

(iii) Loans for pre- and post-harvest tasks, such as spraying, harvesting, grading, and transporting their own farm produce.

(iv) Loans made to troubled farmers by non-institutional lenders.

(v) Loans using the Kisan Credit Card Scheme.

(vi) Small and marginal farmers receive loans to purchase agricultural land.

(vii) Loans can be secured against agricultural produce (including warehouse receipts) for up to 12 months, with a maximum of up to ₹75 lakh for NWRs/eNWRs and up to ₹50 lakh for non-NWR warehouse revenues.

(viii) Farmers can get loans to install stand-alone solar agriculture pumps or to solarise grid-connected agriculture pumps.

(ix) Loans to farmers for the installation of solar power plants on barren/fallow land or on their own agricultural land.

Therefore, option (d) is the correct answer.

(Other Source: http://www.rbi.org.in)

With reference to the Domestic Systemically Important Banks (D-SIBs), consider the following statements:

1. Systemically Important Banks (SIBs) are perceived as banks that are ‘Too Big To Fail (TBTF)’.

2. A D-SIB in the lower bucket attracts a higher capital charge and a D-SIB in the higher bucket attracts a lower capital charge.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Explanation

— The Reserve Bank of India (RBI) retained the State Bank of India, HDFC Bank and ICICI Bank as Domestic Systemically Important Banks (D-SIBs).

— Systemically Important Banks (SIBs) are perceived as banks that are ‘Too Big To Fail (TBTF)’ and their continued functioning is crucial for the uninterrupted availability of essential banking services to the real economy. Hence, statement 1 is correct.

— The regulator had issued the framework for dealing with D-SIBs in July 2014. Since 2015, the RBI has been disclosing the names of the banks classified as D-SIBs every year.

— While SBI and ICICI Bank were designated as D-SIBs by the Reserve Bank in 2015 and 2016, HDFC Bank was added to the list in 2017. The current version is based on data collected from banks as of March 31, 2024.

— Banks are classified into distinct categories based on their systemic importance score. The RBI has classified SBI into bucket 4, HDFC Bank in bucket 3, and ICICI Bank in bucket 1.

— A D-SIB must meet additional common equity requirements depending on the bucket in which it is put. The additional capital requirement ranges from 0.20 percent to 0.80 percent of risk weighted assets, depending on which bucket D-SIBs are plotted in.

— The RBI stated that SBI’s additional common equity tier 1 (CET1) requirement as a percentage of Risk Weighted Assets (RWAs) is 0.80%. The additional fund requirement for HDFC Bank is 0.40 percent, whereas for ICICI Bank it is 0.20 percent.

— If a foreign bank with a branch in India is a Global Systemically Important Bank (G-SIB), it must maintain an additional CET1 capital surcharge in India proportionate to its Risk Weighted Assets (RWAs) in India, i.e., additional CET1 buffer prescribed by the home regulator (amount) multiplied by India RWA as per consolidated global Group books divided by total consolidated global Group RWA.

— D-SIBs are segregated into different buckets based on their systemic importance scores, and subject to loss absorbency capital surcharge in a graded manner depending on the buckets, in which they are placed. A D-SIB in the lower bucket attracts lower capital charge and a D-SIB in higher bucket attracts a higher capital charge. Hence, statement 2 is not correct.

Therefore, option (a) is the correct answer.

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Daily subject-wise quiz – International Relations (Week 83)

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