Daily GK Challenge

More practice: Indian Economy & Banking Awareness

5 more SSC CGL questions from the same chapter, with step-by-step solutions. Try each one, then reveal the answer.

1. Q1medium

   Which committee, set up in 1991, recommended major reforms of India's banking and financial system?

   • ARaja Chelliah Committee
   • BMalhotra Committee
   • CKelkar Committee
   • DNarasimham Committee
   Show answer & solution

   Correct answer: (D) Narasimham Committee

   M. Narasimham chaired the Committee on the Financial System in 1991. A second Narasimham Committee in 1998 dealt with banking sector reforms. Raja Chelliah's committee (1991) covered tax reforms, R.N. Malhotra's (1993) covered insurance, and Vijay Kelkar's task forces covered tax and fiscal policy. So the answer is the Narasimham Committee.

2. Q2medium

   Which of the following taxes was subsumed into the Goods and Services Tax (GST)?

   • ABasic Customs Duty
   • BStamp Duty
   • CService Tax
   • DExcise duty on alcoholic liquor for human consumption
   Show answer & solution

   Correct answer: (C) Service Tax

   GST replaced central indirect taxes such as central excise (largely), service tax and additional customs duties (CVD/SAD), and state taxes such as VAT, entry tax and luxury tax. Basic customs duty is still levied on imports. Stamp duty and excise on alcohol for human consumption stay with the states. So the tax that was subsumed is Service Tax.

3. Q3medium

   Which Five-Year Plan of India was based on the P.C. Mahalanobis model and stressed rapid industrialisation, especially heavy industries?

   • AFirst Plan (1951–56)
   • BSecond Plan (1956–61)
   • CThird Plan (1961–66)
   • DFifth Plan (1974–79)
   Show answer & solution

   Correct answer: (B) Second Plan (1956–61)

   The First Plan followed the Harrod-Domar model and focused on agriculture and irrigation. The Second Plan followed the Mahalanobis model and focused on heavy and basic industries. The Bhilai, Durgapur and Rourkela steel plants were set up during it. So the answer is the Second Plan (1956–61).

4. Q4hard

   As per the RBI's measures of money supply, which of the following is included in M4 but NOT in M3?

   • ACurrency with the public
   • BDemand deposits with banks
   • CTime deposits with banks
   • DTotal deposits with the post office savings organisation
   Show answer & solution

   Correct answer: (D) Total deposits with the post office savings organisation

   M1 = currency with the public + demand deposits with banks + other deposits with RBI. M3 = M1 + time deposits with banks, so the first three options are all inside M3. M4 = M3 + total post office deposits (excluding National Savings Certificates). So the item in M4 but not in M3 is total deposits with the post office savings organisation.

5. Q5hard

   Under the RBI's priority sector lending norms, what share of Adjusted Net Bank Credit (ANBC) must domestic scheduled commercial banks (other than Regional Rural Banks and Small Finance Banks) lend to the priority sector?

   • A40%
   • B18%
   • C32%
   • D75%
   Show answer & solution

   Correct answer: (A) 40%

   The overall priority sector target for domestic scheduled commercial banks is 40% of ANBC or of the credit equivalent of off-balance-sheet exposure, whichever is higher. 18% is only the agriculture sub-target within that 40%. Regional Rural Banks have a much higher target of 75%. So the answer is 40%.