Daily Current Affairs (MCQ) | Date 19.02.22

Daily Current Affairs (MCQ) | Date 19.02.22

Daily Current Affairs (MCQ) | Date 19.02.22

Q1. Consider the following statements about the Special Economic Zone (SEZ) in India

1. The government sought to use SEZs to redress the infrastructural and bureaucratic challenges to export oriented manufacturing
2. There is no statutory backing to SEZ policy

Which of the above is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Answer : a

Why is the Question ?

Special Economic Zones:
The Special Economic Zones Act will be replaced with a new legislation that will enable the states to become partners in ‘Development of Enterprise and Service Hubs’. This will cover all large existing and new industrial enclaves to optimally utilise available infrastructure and enhance competitiveness of exports.

Background:
The Indian government had long used export processing zones (EPZs) to promote exports. In fact, Asia’s first EPZ was established in 1965 at Kandla, Gujarat state. While these EPZs had a similar structure to SEZs, the government began to establish SEZs in 2000 under the Foreign Trade Policy.

The government sought to use SEZs to redress the infrastructural and bureaucratic challenges that were seen to have limited the success of EPZs. The government’s SEZs are structured closely on China’s successful model. They are designed to encourage domestic and foreign investment, boost India’s exports, and create new employment opportunities.
The Special Economic Zone Act, 2005 further amended the country’s SEZ policy. Many EPZs were converted to SEZs.
Incentives for setting up in an Indian SEZ
Some incentives for setting up a sourcing or manufacturing platform within an Indian SEZ include:
1. Duty free import and domestic procurement of goods for the development, operation, and maintenance of your company/SEZ unit;
2. 100 percent income tax exemption on export income for first five years, 50 percent for five years thereafter, and 50 percent of the export profit reinvested in the business for the next five years (Sunset Clause for Units will become effective from April 1, 2020);
3. Exemption from the goods and services tax (GST) and levies imposed by state government (supplies to SEZs are zero rated under the IGST Act, 2017, meaning they are not taxed);
4. Exemption from Minimum Alternate Tax (MAT);
5. Single window clearances for all state and federal government approvals;
6. Exemption in electricity duty and tax on sale of electricity by certain states in India;
7. Presence of customs officer in the SEZs to facilitate and expedite the trade processes; and
8. Some states also offer land to SEZ developers at concessional rates to promote industries in accordance with the state’s prevailing Industrial Policy.

Q2. To enable domestic manufacturing of high growth electronic items, customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing. As announced in the budget 2022-23 which of the following electronics goods will be promoted for domestic manufacturing?

1. Wearable devices
2. Hearable devices
3. Electronic smart metres

Select the correct answer using the codes given below

a. 1 and 2 only
b. 2 and 3 only
c. 1 and 3 only
d. 1, 2 and 3

Answer : d

Why is the Question ?

Electronics
Electronic manufacturing has been growing rapidly. Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart metres. Duty concessions are also being given to parts of the transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. This will enable domestic manufacturing of high growth electronic items.

Q3. Consider the following statements about the Gross domestic product (GDP) calculation methodology currently prevalent in India

1. The current base year for GDP calculation is 2011-2012
2. Only the factory level database is used for GDP calculation in India

Which of the above is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Answer : a

Why is the Question ?

The difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015
1. Change of base year from 2004-2005 to 2011-2012
2. Replacing Factor Cost with Market Prices: India will measure GDP by the gross value added (GVA) method – a way of calculating GDP at basic prices instead of at factor cost.
3. The industry-wise estimates will be presented as gross value added (GVA) at basic prices while GDP at market prices will be referred to simply as GDP
4. Broadening of the database: Previous data was sampled from the Annual Survey of Industries (ASI), which comprised about two lakh factories. But the new database draws data from the Ministry of Corporate Affairs (MCA21) where more than five lakh odd companies registered. In simple terms, while the earlier data gave only a factory-level picture, the new data looks at the enterprise level.

5. Also, the new database is much more comprehensive covering financial institutions and regulatory bodies likeSEBI, PFRDA, and IRDA. Local organisations and institutions are well represented in this series.
6. The new method is statistically more robust since it estimates more indicators such as consumption, employment, and the performance of enterprises, and incorporates factors that are more responsive to current changes.
7. Earlier data only included value-added in farm produce but the new data includes value addition in Livestock as well.

Q4. Gross Domestic Product (GDP) is the total money value of final goods and services produced

1. Within territories of a country in a given year
2. By only citizens of the country

Which of the above is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

Answer : a

Why is the Question ?

Gross Domestic Product (GDP) is the total money value of final goods and services produced in the economic territories of a country in a given year. GDP stands for the total value of goods and services produced inside the territory of India irrespective of who produced it – whether by Indians or foreigners.

Q5. Which of the following statements is correct about the Gross National Product (GNP)?

a. The value of goods and services produced within a country's borders, by citizens and non-citizens
b. The value of goods and services produced only by a country's citizens but both domestically and abroad
c. GNP is the most commonly used by global economies to compare their economies with other economies
d. GNP limits its interpretation of the economy to the geographical borders of the country

Answer : b

Why is the Question ?

Gross domestic product (GDP) and gross national product (GNP) are both widely used measures of a country's aggregate economic output. GDP measures the value of goods and services produced within a country's borders, by citizens and non-citizens alike. GNP measures the value of goods and services produced by only a country's citizens but both domestically and abroad. GDP is the most commonly used by global economies. The United States abandoned the use of GNP in 1991, adopting GDP as its measure to compare itself with other economies.
Gross domestic product (GDP) is the value of a nation's finished domestic goods and services during a specific time period. A related but different metric, the gross national product (GNP), is the value of all finished goods and services owned by a country's
residents over a period of time.
Both GDP and GNP are two of the most commonly used measures of a country's economy, both of which represent the total market value of all goods and services produced over a defined period.
There are differences between how each one defines the scope of the economy. While GDP limits its interpretation of the economy to the geographical borders of the country, GNP extends it to include the net overseas economic activities performed by its nationals.