Important Concepts in Economy: UPSC Previous Year Questions (Indian Economy)

Explanation

As per the 1991 Census, the literacy rates for the mentioned Union Territories were:

Pondicherry (Puducherry): 74.91% Delhi: 76.09% Andaman & Nicobar Islands: 73.74% Chandigarh: 78.73% Dadra & Nagar Haveli: 39.45%

Explanation

National Income refers to the total monetary value of all final goods and services produced by a country’s residents within a specific period, usually a year.

Option (b) is correct: NNP at factor cost is the total income earned by factors of production owned by a country’s residents. This is also called National Income (NI). It excludes indirect taxes (like GST) and adds subsidies granted by the government from NNP at market price. NNP(FC) =NNP(MP) -(Indirect Taxes)+(Subsidies) Options (a), (c) and (d) are incorrect:

NNP at market price is the total market value of all final goods and services produced by the residents of a country (both within and outside the domestic boundary) after adjusting for depreciation. This measure reflects the monetary worth of the economy’s output, including taxes and subsidies. NNP(MP)=GNP(MP)-Depreciation Net Domestic Product (NDP) at Market Price is the net value of all final goods and services produced within the domestic territory of a country after accounting for depreciation. This measure focuses on the domestic economy only (excludes foreign factor earnings). It includes indirect taxes and excludes subsidies. NDP(MP)=GDP(MP)-Depreciation Net Domestic Product (NDP) at Factor Cost is the total factor earnings from goods and services produced within a country’s borders. NDP at factor cost focuses solely on production within domestic boundaries and reflects the true earnings of factors without tax distortions. NDP(FC)=NDP(MP)-(Indirect Taxes)+ (Subsidies)

Explanation

A is matched with 4: Dr. C. Rangarajan headed the Disinvestment Commission in the 1990s, which was tasked with recommending strategies for the disinvestment of shares in Public Sector Enterprises (PSEs) to improve efficiency and reduce the fiscal burden on the government. B is matched with 2: The Omkar Goswami Committee was formed to examine the issue of industrial sickness and suggest measures for the revival of sick industries. It focused on identifying the causes of industrial sickness and recommending policy interventions. C is matched with 1: Dr. Raja Chelliah chaired the Tax Re-forms Committee in the early 1990s, which laid the foundation for India’s tax reforms. The committee recommended simplifying the tax structure, broadening the tax base, and reducing tax rates to promote economic growth. D is matched with 3: The R.N. Malhotra Committee was constituted in 1993 to recommend reforms in the insurance sector. Its recommendations led to the opening up of the insurance sector to private players and the establishment of the Insurance Regulatory and Development Authority (IRDA).