1. A Non-Performing Asset of a non-agricultural loan book shall be a loan or advance where___:

[A]Interest and/or installment of principal remain overdue for 90 days in respect of term loan
[B]The debtor is declared insolvent
[C]Payment of interest/installment of principal has been irregular
[D]All of the above

Ans: Interest and/or installment of principal remain overdue for 90 days in respect of term loan

Explanation

NPA of a non-agricultural loan book is a loan/advance wherein interest/installment of principal remains overdue for 90 days. These NPAs causes capital formation for banks thereby reducing the lending capacity of banks undermining growth. In India recently there has been an increase in NPAs, especially of public sector banks.

2. Which one of the following is the new sub-category of the commercial real estate sector (CRE) as per the latest RBI directive?

[A]Residential projects
[B] Commercial projects
[C] Industrial projects
[D] SEZ projects

Ans: Residential projects

Explanation

The new RBI directive which follows the monetary policy statement of 2013-14 has carved out a sub-sector of ‘Commercial real estate sector (CRE)-residential housing’ to boost investments in residential housing sector by altering the risk weight, which is currently 0.75% reduced from the previous 1%.

3. Though ULIPs (Unit Linked Insurance Plan) are considered to be a better investment vehicle it has failed to capture the imagination of the retail investors in India because of which of the following reasons?

[A]Regulatory jurisdictional fight between SEBI and IRDA
[B]They don’t offer better tax benefits
[C]They offer lesser returns compared to traditional insurance policies
[D]All of the above

Ans: Regulatory jurisdictional fight between SEBI and IRDA

Explanation

There have been regulatory jurisdictional issues between SEBI and IRDA (Insurance Regulatory and Development Authority). ULIP though an insurance policy is aimed at better returns through investment in Equity market has been the bone of contention between SEBI and IRDA, because of which there have been reluctance in its promotion and investments.

4. The Shome committee which was appointed to look into the guidelines of General Anti Avoidance Rules (GAAR) has recommended retrospective application of tax law only in rarest of rare cases. Which of the following recommendation/s is/are made by this panel?

1.To correct anomalies in the statues of Tax laws,
2.To protect the tax base from abusive tax planning schemes with a purpose to avoid tax
3.To correct technical/procedural defects that impairs a substantive law

Choose the correct option from the codes given below:
[A]1 only
[B]2 only
[C]3 only
[D]1, 2 and 3

Ans: 1, 2 and 3

Explanation

The Parthasarathi Shome committee appointed by PM Manmohan Singh to look into GAAR provisions had recommended all the above 3 points for retrospective application of tax laws for a stable and non-adversarial tax regime.

5. Recently the Cabinet Committee on Economic Affairs (CCEA) has deferred its decision on Accelerated Irrigation Benefit Programme (AIBP) for the 12th five year plan (FYP), because of which of the following reasons?

[A]Because of non-approval by Planning commission
[B]Reports suggesting underutilization of full potential of irrigation projects created under 10th FYP
[C]To readdress changing nature of irrigation requirements
[D]All of the above

Ans: All of the above

Explanation

The CCEA has deferred its decision on Accelerated Irrigation Benefit Programme (AIBP) for the 12th five year plan (FYP) which is a programme to support states to improve the irrigation infrastructure so as to increase the share of agricultural contribution to the GDP

6.  What is the current share of manufacturing sector in GDP?

[A]14.5%
[B]16%
[C]18%
[D]21%

Ans: 16%

Explanation

The current share of manufacturing sector in GDP is 16% and the govt has come up with a new policy aiming to increase this share to 25% by 2025

7.  Which one of the following was the purpose of appointment of Rangachary committee?

[A]Taxation of software Development Centres & IT Sector
[B]Taxation of Biotechnology and Pharmacy sector
[C]Taxation of MSME sector
[D]None of the above

Ans: Taxation of software Development Centres & IT Sector

Explanation

Rangachary committee was appointed by PM in July 2012 to look into taxation of IT sector and the panel had submitted its report in September, 2012, suggesting parameters to identify contract R&D services provider with insignificant risk and application of profit split method

8. Which of the following best defines a floating-rate bond?

[A]A bond with a fixed interest rate and has better yield than varying interest rate bond
[B]A bond with a fixed interest rate and has lower yield than varying interest rate bond
[C]A bond with a varying interest rate and has better yield than fixed interest rate bond
[D]A bond with a varying interest rate and has lower yield than fixed interest rate bond

Ans: A bond with a varying interest rate and has lower yield than fixed interest rate bond

Explanation

Floating rate bonds have variable interest rate and protect investors against a rise in interest rates (which have an inverse relationship with bond prices). They also carry lower yields than fixed notes of the same maturity.

9. Why the Indirect taxes are termed regressive taxing mechanisms?

[A]They are charged at higher rates than direct taxes
[B]They are charged the same for all income groups
[C]They are charged the same for all income groups
[D]None of the above is a correct reason

Ans: They are charged the same for all income groups

Explanation

The indirect taxes like VAT etc are paid by everyone if they buy any product irrespective of financial conditions. Direct taxing is considered the most progressive taxing mechanisms because they justify the income levels of the people

10. The Cabinet Committee on Investments has been set-up to address which of the following___?

[A]To submit a report on the hurdles creating bottle-necks on the economy
[B]To boost big ticket investments and untangle red-tapas
[C]To fast track disinvestment in PSUs
[D]To attract foreign investment into India to attract foreign investment into India

Ans: To boost big ticket investments and untangle red-tapism

Explanation

The Cabinet committee on investments was set-up to clear lakhs of crores of projects with huge private investments held up in various ministries for approvals such as environmental clearance and other departmental clearance. It aims at removing the red-tapism and provides a one-stop –shop for all investment requirements and clearance.