1. A Non-Performing Asset of a non-agricultural loan book shall be a loan or advance where___:
Ans: Interest and/or installment of principal remain overdue for 90 days in respect of term loan
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?
Ans: Residential projects
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?
Ans: Regulatory jurisdictional fight between SEBI and IRDA
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?
Ans: 1, 2 and 3
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?
Ans: All of the above
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?
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?
Ans: Taxation of software Development Centres & IT Sector
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?
Ans: A bond with a varying interest rate and has lower yield than fixed interest rate bond
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?
Ans: They are charged the same for all income groups
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___?
Ans: To boost big ticket investments and untangle red-tapism
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.