Economics 1 Marks Question

Greater inflow of investment.

'De-reservation' refers to allowing large-scale industries to produce those goods and services which were produced only by small-scale industries.

If the multinational companies outsource many services to countries like India because of cheap manpower, then this would result in loss of employment opportunities in the countries where the companies are located. The value being violated by the multinational companies is that of self-dependence.

The Union Finance Minister.

In order to improve efficiency, infuse professionalism and enable Public Sector Undertakings (PSU) to compete more effectively in the liberalised global environment, and the government declared nine PSUs as navaratnas in 1996.

Foreign Institutional Investors.

Voice-based business process and banking services are the two services outsourced in India.

Two reasons responsible for the initiation of economic reforms in India are:

1. Increase in fiscal deficit.
2. Unfavourable Balance of Payments.

Tariffs are imposed to make imports from foreign countries relatively expensive than domestic goods. This discourage imports and protect domestically produced goods.

They refer to all the restrictions on imports by a government in the form of taxes.

Disinvestment refers to a deliberate sale of a part of the capital stock of a company to raise resources and change the equity and/ or management structure of a company.

They refer to all the restrictions on imports by a government in the form other than taxes, like restrictions on quantity and quality of goods imported.

The drawbacks of privatisation are:

1. Socialistic pattern of society is disturbed.
2. Privatisation leads to disparity in incomes.

Fiscal policy refers to all the planned actions of a government in mobilising financial resources, for meeting its expenditure and regulating the economic activities in a country.

A severe financial crisis due to unsustainable fiscal deficit, fall in foreign exchange reserves and inability to pay interest to international lenders forced Indian Government to borrow from international organisations.

WTO is a rule-based trading regime, whose purpose is to enlarge production and trade of goods and services, by ensuring optimum utilisation of world resources and to protect the environment.

The two measures taken under privatisation are:

1. Withdrawal of the government from ownership and management of public sector companies.
2. Outright sale of public sector companies.

New Economic Policy is called the policy of economic reforms since, it seeks to remove the inefficiencies in the economic system.

Government has decided to retain the 'Navratnas' in the public sector since they are profit making and help the government to raise financial resources for themselves.

The main objective behind demonetisation is to weed out black money and counterfeit notes from the system. It also aimed at fighting tax evasion, curbing inflation, eliminating terror funding and promoting cashless economy.

Government expenditure began to exceed its revenue by very large margins. This was the main cause to make the government unsustainable.

A cashless society is a society in which purchases of goods or services are made by credit cards or electronic funds transferral rather than with cash or cheques.

It refers to the exchange of goods and services/ trade between two countries.

Automatic approval was granted for direct foreign investment upto 51% in a wide range of industries.

'Dual GST' is required as India is a federal republic, GST should be implemented simultaneously by the Central Government and the State Government (CGST and SGST).

As a form of economic activity, outsourcing has intensified in recent times on account of the growth of faster modes of communication, especially in the field of Information Technology (IT).

Reserves of foreign currency are called "foreign exchange reserves".

Consumers have access to more variety of goods and services thereby positively impacting the consumer sovereignty.

It implies shedding of the ownership or management of a government-owned enterprise.

1. It was an attempt to India corruption free.
2. It was expected to curb black money.

Tariff and non-tariff barriers restrict the free flow of trade between two countries. Therefore, these barriers should be removed to promote globalisation.

The indirect taxes subsumed under GST are excise duty, service tax, value added tax, custom duty etc.

GST Council.

World Trade Organisation (WTO) facilitates bilateral and multilateral trade agreements.

The government needs to generate funds to implement various policies and to meet its general administration expenses.

Devaluation of rupee implies lowering the value of our currency (rupee) in relation to other currencies of the world.

It refers to direct tax paid by companies on the profits made by them.

SGST and CGST.

Globalisation is an outcome of the set of various policies aiming at transforming the world towards greater inter dependence and integeration.

On November 8, 2016, demonetisation was implemented in India with its announcement by the Prime Minister Narendra Modi's address to the nation at 20:15 IST.

It means to withhold a part of shareholding of the PSU by the government to enable it to enjoy future profit. Golden share depends on individual cases. Presently it is 26% for PSUS.

The institutions that engage in mobilisation and allocation of savings like commercial banks, developmental banks and investment institutions are known as financial institutions.

Goods and Services Tax (GST).

Even though the revenues were low in 1980s, the government had to overshoot them to meet problems like unemployment, poverty and population explosion.

India's demonetisation is unprecedented in international economic history in the sense that it combined secrecy and suddenness amidst normal economic and political conditions.

Demonetisation is the economic policy wherein the legal status of a currency unit is cancelled and new one comes into circulation.

It refers to trade between a country and more than two countries.

GST was implemented on 1st July 2017.

Structural reforms are also referred to as ‘microeconomic structural adjustment measures' as they are targeted at specific sectors of the economy. These measures are related to the changes made in industrial policy, trade policy, public sector policy, price policy and tariff policy.

	Tariff barriers	Non-tariff barriers
(i)	It refers to thr tax imposed on the imports by the county to protect its domestic industries.	It refers to the restriction other than taxes. imposed on imports by the country.
(ii)	It included custom duties, export - import duties.	It includes quotes and licenes.
(iii)	It is imposed on the physical units (like per tonne) or on value of the goods imported.	It is imposed on the quantity and quality of the goods imported.