7 & 8 FEB CURRENT AFFAIRS (MCQ)

Q1. If the Cash Reserve Ratio (CRR) is increased, it may lead to which of the following

1. Lesser availability of loanable funds with the banks
2. Immediate foreign institutional investment flows in the economy
3. Reduction in fiscal deficit of the government Select the correct answer code: a) 1 Only
   b) 1 and 2
   c) 1 and 3
   d) None of the above

Solution : a)
Explanation :-
• CRR is one of the major weapons in the RBI’s arsenal that allows it to maintain a desired level of inflation, control the money supply, and also liquidity in the economy. The lower the CRR, the higher liquidity with the banks, which in turn goes into investment and lending and vice-versa. Higher CRR can also negatively impact the economy as lesser availability of loanable funds, in turn, slows down investment. It thereby reduces the supply of money in the economy.
• Fiscal deficit depends on government’s receipts and expenditures. CRR does not have a direct bearing on fiscal deficit.

Q2. Light pollution can have which of the following effects on the ecology and biodiversity?

1. It adversely affects the migration of birds that navigate using the stars.
2. It is known to disturb the reproductive cycles of some animals.
3. It disturbs circadian rhythms in humans affecting the sleep pattern. Select the correct answer code: a) 1 Only
   b) 2 and 3
   c) 1 and 3
   d) 1, 2 and 3

Solution : d)
Explanation :-
• Light pollution is excessive brightness that causes visual discomfort.
• Skyglow is the brightening of the night sky over inhabited areas. It is caused by cluttered, bright, excessive and confusing groupings of light sources.
• It affects the reproductive cycles of those animals that depend on sensing light movements or seasonal movements to reproduce. Since birds migrate using star light, it can confuse them, and even disorient night-flying insects.
• Excessive blue light emitted from LEDs directly affects sleep pattern in Human by suppressing the production of the hormone melatonin, which mediates the sleepwake cycle in humans.

Q3. Consider the following statements with respect to Zero Coupon Bonds

1. These are non-interest bearing bonds issued by the Central government specifically to a particular institution.
2. These are a type of recapitalization bonds that are not tradable and not transferable. Which of the statement(s) given above is/are correct? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : c)
Explanation :-
• The Central Government has used financial innovation to recapitalise Punjab & Sind Bank by issuing the lender Rs 5,500-crore worth of non-interest bearing bonds valued at par.
• The funds raised through issuance of these instruments are being deployed to capitalise the state-run bank.
• These are a variation of the recapitalisation bonds issued earlier to public sector banks.
• These are special types of zero coupon bonds issued by the government after proper due diligence and these are issued at par.
Zero Coupon Bonds
• A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.
About the recent bond
• Unlike the previous tranches of recapitalisation bonds which carried interest and were sold to different banks, these bonds have a maturity of 10-15 years and issued specifically to a particular institution. (In this case, Punjab & Sind Bank).
• It is limited only for a specified period and only those banks, whosoever is specified, can invest in them, nobody else.
• It is not tradable and it is not transferable.
• Since these bonds are not tradable, the lender has kept them in the HTM bucket, not requiring it to book any mark-to-market gains or losses from these bonds.

Q4. Consider the following statements.

1. India has become the first country in the world to have its independent regional navigation satellite system recognised by the International Maritime Organisation (IMO).
2. The Indian Regional Navigation Satellite System(IRNSS) will be used to assist in the navigation of ships in ocean waters within the area of approximately 1,500 km from the Indian boundary.
   Which of the above statements is/are correct? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : b)
Explanation :-
• India became the fourth country in the world to have its independent regional navigation satellite system recognised by the International Maritime Organisation (IMO) as a part of the World Wide Radio Navigation System (WWRNS).
• The IRNSS is an independent regional navigation satellite system developed by India. It is designed to provide accurate position information service to assist in the navigation of ships in the Indian Ocean waters. It could replace the US-owned Global Positioning System (GPS) in the Indian Ocean extending up to approximately 1500 km from the Indian boundary.

Q5. Consider the following statements with reference to the Monetary Policy Committee (MPC):

1. The committee comprises three officials of the RBI and three external members nominated by the Governor of RBI.
2. The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC.
3. The committee is answerable to the RBI if the inflation exceeds the range prescribed for three consecutive months.
   Which of the statements given above is/are correct? a) 1 Only
   b) 2 Only
   c) 1 and 3
   d) 1, 2 and 3

Solution : b)
Explanation :-
The committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
Hence Statement 1 is incorrect
The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute
MPC which will bring more transparency and accountability in fixing India’s Monetary Policy Hence Statement 2 is correct
The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months
Hence Statement 3 is incorrect

Q6. With respect to The Paris Agreement, consider the following statements:

1. The Paris Agreement is the first truly global commitment to fight the climate crisis.
2. The main aim is to keep global temperature rise this century well below 2 degrees Celsius above pre-industrial levels.
3. India is a signatory to the agreement but not ratified it.
   Which of the statements given above is/are correct? a) 1 Only
   b) 1 and 2 only
   c) 2 and 3 only
   d) 1, 2 and 3

Solution : b)
Explanation :-
• The Paris Agreement is the first truly global commitment to fight the climate crisis.
Hence Statement 1 is correct
• The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.
Hence Statement 2 is correct
• India has signed and ratified the agreement.
Hence Statement 3 is incorrect

Q7. Consider the following statements:

1. Charging customs duty on an import is violation of ‘principle of national treatment’ of World Trade Organization (WTO).
2. The ‘principle of national treatment’ shall apply to foreign and domestic goods but not to foreign and domestic services.
   Which of the statements given above is/are NOT CORRECT? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : c)
Explanation :-
• Charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax.
Hence Statement 1 is incorrect.
• The ‘principle of national treatment’ shall apply to foreign and domestic goods, foreign and domestic services, and to foreign and local trademarks, copyrights and patents. Hence Statement 2 is incorrect.

Q8. FDI Regulatory Restrictiveness Index’ is published by which of the following organizations? a) UNCTAD
b) IMF
c) WEF
d) OECD

Solution : d)
Explanation :-
‘FDI Regulatory Restrictiveness Index’ is published The Organization for Economic Cooperation and Development (OECD)
The FDI Regulatory Restrictiveness Index (FDI Index) measures statutory restrictions on foreign direct investment.

Q9. Consider the following statements with respect to The Advertising Standards Council of India.

1. It was mandated to maintain public’s confidence in Advertising and to ensure the protection of the interests of consumers.
2. It is a statutory autonomous body set up by an Act of Parliament.
3. It functions under the control of the Ministry of Information and Broadcasting. Which of the statement(s) given above is/are correct? a) 1 Only
   b) 1 and 2 only
   c) 2 and 3 only
   d) None of the above

Solution : a)
Explanation :-
• Ministry of Information and Broadcasting has recently issued an advisory on Advertisements on Online gaming, fantasy sports and others.
• It has asked all the broadcasters that the guidelines issued by the Advertising Standards Council of India, ASCI are complied with.
Advertising Standards Council of India (ASCI)
• It is a self-regulatory voluntary organization of the Advertising Industry established in 1985 to maintain and enhance the public’s confidence in Advertising.
• It is committed to the cause of Self-Regulation in Advertising, ensuring the protection of the interests of consumers.
• ASCI was formed with the support of all four sectors connected with Advertising, viz. Advertisers, Advertising Agencies, Media (including Broadcasters and the Press) and others like PR Agencies, Market Research Companies etc.
• The Consumer Complaints Council is ASCI’s heart and soul.
• It is the dedicated work put in by this group of highly respected people that has given tremendous impetus to the work of ASCI and the movement of self- regulation in the advertising.

Q10. Consider the following statements with respect to the proglacial lakes

1. These are formed by the retreating glaciers, usually resulting in the formation of lakes at their tips.
2. A majority of the glaciers in the Himalayas are known to be receding, all leading to the formation of several proglacial lakes. Which of the above statement/s is/are correct? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : c) Explanation :- Solution:
• Retreating glaciers usually result in the formation of lakes at their tips, called proglacial lakes, often bound only by sediments and boulders.
o A majority of the glaciers in the Himalayas are known to be receding, all leading to the formation of several proglacial lakes.
Q11. Tapovan Vishnugad hydro power plant, recently in news, is located in the Indian state/UT of
a) Uttar Pradesh
b) Jammu & Kashmir
c) Assam
d) Uttarakhand

Solution : d)
Explanation :-
An early survey of the damage caused by the recent glacier break and flood to Uttarakhand’s Tapovan Vishnugad hydro power plant shows the dam has been completely washed off.

Q12. Consider the following statements with respect to the one person company (OPC)

1. The concept was introduced in the Companies Act of 2013, based on the recommendation of the Injeti Srinivas committee.
2. These companies can be contrasted with private companies, which require a minimum of two members to get going.
   Which of the above statement/s is/are correct? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : b)
Explanation :-
About an one-person company:
• A one-person company is a company that can be formed by just one person as a shareholder.
• These companies can be contrasted with private companies, which require a minimum of two members to get going.
o However, for all practical purposes, these are like private companies.
• Earlier mechanism: A person could get into business through a sole proprietorship mode, and this is a path that is still available.
• Difference between a single-person company and sole proprietorship:
o In the eyes of law:
 For the former, the person and the company are considered separate legal entities.
 In sole proprietorship, the owner and the business are considered the same.
o When it comes to the liability of the individual member or owner:
 In a one-person company, the sole owner’s liability is limited to that person’s investment.
 In a sole proprietorship set-up, the owner has unlimited liability as they are not considered different legal entities.
• Is OPCs a new idea? – No:
o J.J. Irani Committee Report on Company Law: Based on its recommendations (submitted its recommendations in 2005), the concept was introduced in the Companies Act of 2013.
 Need: Will provide a framework for small enterprises that would contribute significantly to the Indian economy, without burdened them with the same level of compliance requirements as large public-listed companies.
 The law on one-person companies, therefore, exempted such companies from many procedural requirements. For instance, such a company does not need to conduct an annual general meeting, etc.
 However, there were criticisms that some rules governing a one-person company were restrictive in nature.

Q13. Consider the following statements:

1. Section 144 CrPC cannot be used to order Internet shutdowns.
2. Shutdowns and website blocking, both are controlled by the same agency, the Department of Telecommunications. Which of the above statements is/are correct? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : b)
Explanation :-
Internet shutdown
• Shutdowns and website blocking, both are controlled by the same agency, the Department of Telecommunications.
• Section 69A of IT Act, along with the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009 provide for a mechanism to block information from public access through any computer resource by a direction from the Central Government or any officer specially authorized in this behalf.
• The rules for suspending telecommunication services, which include voice, mobile internet, SMS, landline, fixed broadband, etc, are the Temporary Suspension of Telecom Services (Public Emergency or Public Safety) Rules, 2017.
• These Rules derive their powers from the Indian Telegraph Act of 1885, Section 5(2) of which talks about interception of messages in the “interests of the sovereignty and integrity of India”.
• Under the 2017 Rules, directions to “suspend the telecom services shall not be issued except by an order made by the Secretary to the Government of India in the Ministry of Home Affairs in the case of Government of India or by the Secretary to the State Government in-charge of the Home Department in the case of a State Government (hereinafter referred to as the competent authority)…”. E.g. in Delhi’s case since it is a Union Territory, it would have to be authorised by the Home Ministry itself.
• 24 hours deadline: in case the confirmation does not come from a competent authority, the orders shall cease to exist within a period of 24 hours.
• Clear reasons for such orders need to be given in written, and need to be forwarded to a Review Committee by the next working day.
• This direction is only to be given when the officer deems it necessary or expedient, and ‘in the interest of sovereignty and integrity of India.
• The final order given for such blocking to a Government agency, or intermediary has to have its reasons recorded in writing as stated under Section 69A(1) of the IT Act.
• However, section 144 CrPC has often been used to clamp down on telecommunication services and order Internet shutdowns. Statement 1 is incorrect.

Q14. Ka-226T utility helicopters, to be jointly manufactured locally by India and which of the following country?
a) U.S.A
b) Israel
c) Japan
d) Russia

Solution : d)
Explanation :-
The total indigenous content of the Ka-226T utility helicopters, to be jointly manufactured locally by India and Russia with Transfer of Technology (ToT), is between 27%-33%, said Chairman and MD of Hindustan Aeronautics Limited (HAL) R. Madhavan.
• The final deal is held up as the Russian proposal of 62% indigenous content in assembled helicopters falls short of the tender requirement of 70%.
• The Ka-226T is meant to replace the ageing and obsolete Cheetah and Chetak fleet of the Army and Air Force and the total technical life of these will start finishing from 2023 onwards.
• The helicopters would be manufactured by India Russia Helicopters Limited (IRHL) — a joint venture between HAL and Russian Helicopters.
• In 2015, India and Russia had concluded an Inter-Governmental Agreement (IGA) for at least 200 Ka-226T twin engine utility helicopters estimated to cost over $1 billion with 60 helicopters to be directly imported and remaining 140 manufactured locally.
• The first helicopter would be delivered within 36 months from the signing of the contract.
• As per the Russian proposal, the localisation plan would be spread over four phases, beginning with 3.3% indigenisation for 35 helicopters, going up to 15% for next 25 helicopters, 35% for 30 helicopters in Phase 3 and eventually to 62.4% indigenisation in Phase 4 for the last 50 helicopters.
• Hence, option (d) is the correct answer.

Q15. With reference to the Startup India Seed Fund Scheme (SISFS), consider the following statements:

1. Startup India Seed Fund Scheme (SISFS) has been approved for the period of next four years starting from 2021-22.
2. The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.
   Which of the statements given above is/are correct? a) 1 Only
   b) 2 Only
   c) Both 1 and 2
   d) Neither 1 nor 2

Solution : c)
Explanation :-
Startup India Seed Fund Scheme (SISFS) has been approved for the period of next four years starting from 2021-22.
• It will be implemented with effect from 1st April 2021.
• The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.
• Rs. 945 Crore corpus will be divided over the next 4 years for providing seed funding to eligible startups through eligible incubators across India.
• The scheme is expected to support about 3600 startups.
• Hence both statements are correct.