The 2019 Codex
Questions 61 to 70 (Set A)
The Service Area Approach was implemented under the purview of
The Secret Whisper
Official Key: (b) Lead Bank Scheme
Introduced in April 1989, the Service Area Approach (SAA) was an evolutionary upgrade to the Lead Bank Scheme (initiated in 1969 based on the Gadgil and Nariman recommendations). Under SAA, each semi-urban or rural commercial bank branch was designated a contiguous "service area" of roughly 15 to 25 villages to cater planned credit disbursements directly to those rural households.
Route: [REALM 241: Lead Bank Scheme]The Cluster Anchor
The State Quarry
With reference to the management of minor minerals in India, consider the following statements:
1. Sand is a 'minor mineral' according to the prevailing law in the country.
2. State Governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government.
3. State Governments have the power to frame rules to prevent illegal mining of minor minerals.
The Secret Whisper
Official Key: (a) 1 and 3 only
Statement 1 is True: Under Section 3(e) of the Mines and Minerals (Development and Regulation) Act (MMDR Act), 1957, ordinary sand, gravel, and building stones are legally defined as "minor minerals".
Statement 2 is False: Section 15 of the MMDR Act vests the power to make rules for regulating the grant of quarry leases/mining leases of minor minerals entirely with the State Governments, not the Central Government.
Statement 3 is True: Section 23C of the MMDR Act explicitly empowers State Governments to make rules for preventing illegal mining, transportation, and storage of minor minerals.
Route: [REALM 127: Mining Governance & Law]Consider the following statements:
1. Most of India's external debt is owed by governmental entities.
2. All of India's external debt is denominated in US dollars.
The Secret Whisper
Official Key: (d) Neither 1 nor 2
Statement 1 is False: Non-government commercial debt accounts for the vast majority (nearly 80%) of India's external debt. This includes commercial borrowings, NRI deposits, and short-term trade credit; sovereign (government) debt is barely 20%.
Statement 2 is False: The extreme word "All" is a classic warning sign. While the US dollar is the largest component (~50%), India's external debt is also denominated in the Indian Rupee, SDR, Japanese Yen, Euro, and other currencies.
Route: [REALM 180: External Debt & External Vulnerability]The Sovereign Slice
The Balance Sheet Ledger
Which of the following is not included in the assets of a commercial bank in India?
The Secret Whisper
Official Key: (b) Deposits
From a bank's perspective, an asset is anything that yields income or is owed to the bank (Advances/Loans generate interest, Investments earn returns, and Money at Call is short-term lending to other banks). In contrast, customer Deposits are the bank's greatest liability, because the bank owes that money back to depositors on demand.
Route: [REALM 126: Banking: Meaning & Functions]In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis?
1. The foreign currency earnings of India's IT sector
2. Increasing the government expenditure
3. Remittances from Indians abroad
The Secret Whisper
Official Key: (b) 1 and 3 only
A currency crisis (sharp, uncontrollable depreciation of the Rupee) is avoided when there is a strong and steady inflow of foreign exchange.
Statements 1 and 3: IT service exports and diaspora remittances bring billions of foreign dollars directly into India's current account, bolstering forex reserves and stabilizing the Rupee.
Statement 2: Higher government expenditure typically widens the fiscal deficit, spurs inflation, and can worsen the current account deficit, increasing (rather than decreasing) the risk of a currency crisis.
Route: [REALM 181: Foreign Exchange Reserves] & [REALM 174: Foreign Exchange Market]The Forex Reservoir
The Detached Pillar
Which one of the following suggested that the Governor should be an eminent person from outside the State and should be a detached figure without intense political links or should not have taken part in politics in the recent past?
The Secret Whisper
Official Key: (c) Sarkaria Commission (1983)
To preserve the federal balance and insulate the Governor's office from becoming a partisan tool of the Union government, the Sarkaria Commission on Centre-State Relations (1983-1988) laid down classic appointment criteria: the appointee should be an eminent person in some walk of life, outside the state, a detached figure without intimate political connections, and not an active politician in the recent past.
Route: [REALM 92: Governor & Federalism] & [REALM 93: Governor's Appointment]Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?
The Secret Whisper
Official Key: (d) Participatory Note
Participatory Notes (P-Notes or Offshore Derivative Instruments) allow foreign high-net-worth investors or hedge funds to invest in Indian securities without directly registering with SEBI. Instead, registered Foreign Portfolio Investors (FPIs) buy the shares in India and issue corresponding P-Notes to the overseas clients abroad, passing on the dividends and capital gains.
Route: [REALM 171: FPI in India] & [REALM 123: Financial Assets]The Derivative Bridge
The Dual Authority
Consider the following statements:
1. As per law, the Compensatory Afforestation Fund Management and Planning Authority exists at both National and State levels.
2. People's participation is mandatory in the compensatory afforestation programmes carried out under the Compensatory Afforestation Fund Act, 2016.
The Secret Whisper
Official Key: (a) 1 only
Statement 1 is True: The Compensatory Afforestation Fund Act, 2016 establishes the National CAMPA authority at the Union level and a State CAMPA authority in each State and Union Territory.
Statement 2 is False: One of the chief criticisms leveled by tribal rights activists against the CAF Act, 2016 and its rules was that it did not make people's participation or Gram Sabha consent mandatory for compensatory afforestation projects, often encroaching upon community forest rights.
Route: [REALM 196: Forest & Biodiversity Legal Governance]In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.?
1. Ad Hoc Committees set up by the Parliament
2. Parliamentary Department Related Standing Committees
3. Finance Commission
4. Financial Sector Legislative Reforms Commission
5. NITI Aayog
The Secret Whisper
Official Key: (a) 1 and 2
Statutory independent regulators (like TRAI, IRDAI, CERC) report directly to Parliament through their annual reports. Parliamentary oversight is conducted through:
- Department-Related Standing Committees (DRSCs): E.g., the Standing Committee on Communications reviews TRAI, while the Standing Committee on Energy reviews CERC.
- Parliamentary Ad Hoc Committees: Joint Parliamentary Committees (JPCs) or ad hoc inquiry bodies set up for specialized investigation.
The Finance Commission simply recommends tax devolutions; the FSLRC was a temporary reform commission; and NITI Aayog is an executive think-tank, not an institutional reviewer of independent regulators.
Route: [REALM 143: Parliamentary Committees] & [REALM 127: Regulatory Governance]The Committee Eye
The Planning Arc
With reference to India's Five-Year Plans, which of the following statements is/are correct?
1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.
2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.
The Secret Whisper
Official Key: (a) 1 and 2 only
Statement 1 is True: The Second Plan (1956-61), based on the famous Mahalanobis model, focused decisively on heavy industry, machine building, and the substitution of imported capital goods.
Statement 2 is True: In response to the Hazari and Dutt Committee findings on monopolies, the Fourth Plan (1969-74) explicitly adopted the goal of curbing the concentration of economic power (spurring the MRTP Act of 1969 and bank nationalization).
Statement 3 is False: The Fifth Plan (1974-79) centered on *Garibi Hatao* (Poverty eradication) and self-reliance. The financial sector was formally integrated as an explicit core sector much later (in the post-1991 plans, particularly the Eighth Plan).
Route: [REALM 12: Five-Year Plans: Historical Overview]