Money Market: UPSC Previous Year Questions (Indian Economy)

Explanation

Central Public Sector Enterprises (CPSEs) encompasses those Government companies in which the direct holding of the Central Government is 51 per cent or more and subsidiaries of such Government companies. The Statutory Corporations set up under Statutes enacted by the Parliament and other companies owned or controlled, directly or indirectly by the Central Government are also categorized as CPSEs.

Statement 1 is incorrect: External debt is the portion of a country’s debt that is borrowed from foreign lenders, including commercial banks, governments, or international financial institutions. The primary objectives of disinvestment in CPSEs are to raise resources for development, reduce fiscal deficits, and promote wider ownership of CPSEs through public participation rather than repaying external debt.

Statement 2 is incorrect: In many cases, the government retains management control by holding a majority stake (more than 50%) even after partial disinvestment. However, in strategic disinvestments, management control may be transferred to private entities. Disinvestment policy is often categorized into strategic disinvestment (selling a majority stake with management control) and minority stake sales. Air India’s strategic disinvestment in 2021 is a notable instance where management control was fully transferred.

Explanation

The Mega Food Park Scheme, launched in 2008-09, aims to significantly enhance the food processing industry by increasing value and reducing food waste throughout the supply chain, particularly for perishable goods. This initiative is over-seen by the Ministry of Food Processing Industries. The scheme is executed by a Special Purpose Vehicle (SPV), a corporate entity registered under the Companies Act, 2013. Based on a "Cluster" approach, the scheme focuses on developing advanced support infrastructure in specific agricultural or horticultural zones. This infrastructure is designed to enable the establishment of modern food processing units on industrial plots within the park, supported by a well-established supply chain.

Statement 1 is correct: Through a cluster-based approach, mega food parks build cutting-edge infrastructure facilities for food processing along the value chain from farm to market with strong forward and backward connections.

Statement 2 is correct: The Scheme is aimed at providing a method for connecting agricultural production to the market by bringing together producers, processors, and retailers in order to maximise value addition, focused processing of perishable items, reduce wastage, boost farmers’ incomes, and create jobs, particularly in the rural sector.

Statement 3 is incorrect: A Mega Food Park normally includes cold chain, collection centres, primary processing centres, central processing centres, and about 25 to 30 fully completed plots for entrepreneurs to build food processing units. While the entrepreneurs are supported to establish food processing units, providing emerging and eco-friendly food processing technologies is not an stated objective of promoting Mega Food Parks.