Current based PRELIMS QUESTION 14 July 2020

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1. Consider the following statements with respect to the District Mineral Foundation (DMF).
1. It is a trust set up as a non-profit body, in those districts affected by the mining works, to work for the interest and benefit of persons and areas affected by mining related operations.
2. The Union government launched Pradhan Mantri Khanij Khsetra Kalyana Yojna (PMKKKY) which will be implemented under DMF.
3. Setting up of DMFs in all districts affected by mining related operations was mandated through the Mines and Minerals (Development & Regulation) Amendment Act, 2015.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation-
District Mineral Foundation (DMF)
District Mineral Foundation (DMF) is a trust set up as a non-profit body, in those districts affected by the mining works, to work for the interest and benefit of persons and areas affected by mining related operations. It is funded through the contributions from miners.
Its manner of operation comes under the jurisdiction of the relevant State Government.
MMDR Amendment 2015 requires State Govt. to establish District Mineral Foundation (DMF) as per section 9B, that will be used for development of people and areas affected by mining operation.
GoI launched Pradhan Mantri Khanij Khsetra Kalyana Yojna (PMKKKY) which will be implemented under DMF. Directions were issued under section 20A of MMDR Act to all State to incorporate PMKKKY into rule framed for DMF.
At least 60% of PMKKKY funds will be utilized for high priority areas like:
(i) Drinking water supply;
(ii) Environment preservation and pollution control measures;
(iii) Health care
(iv) Education;
(v) Welfare of women and children;
(vi) Welfare of aged and disabled people;
(vii) Skill development; and
(viii) Sanitation.
Remaining funds will be utilized for works like: (i) physical infrastructure;
(ii) Irrigation;
(iii) Energy and watershed development; and
(iv) Any other measures for enhancing environmental quality in mining district
http://www.arthapedia.in/index.php?title=District_Mineral_Foundation_(DMF)

2. Consider the following statements with respect to the Food Corporation of India (FCI).
1. It is a statutory body set up in 1965 under the Food Corporations Act 1964 in order to fulfill objectives of the Food Policy.
2. It has played a significant role in India’s success in transforming the crisis management oriented food security into a stable security system.
3. FCI is a Public Sector Undertaking, under the Ministry of Consumer Affairs, Food and Public Distribution.
4. It has primary duty to undertake purchase, store, and move/transport, distribute and sell food grains and other foodstuffs.
Which of the following statements is/are correct?
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 1 and 4 only
(d) All of the above
Answer-d
Explanation-
Food Corporation of India
The Food Corporation of India was setup under the Food Corporation Act 1964, in order to fulfill following objectives of the Food Policy:
 Effective price support operations for safeguarding the interests of the farmers.
 Distribution of food grains throughout the country for public distribution system.
 Maintaining satisfactory level of operational and buffer stocks of food grains to ensure National Food Security.
In its 50 years of service to the nation, FCI has played a significant role in India’s success in transforming the crisis management oriented food security into a stable security system. FCI’s Objectives are:
 To provide farmers remunerative prices
 To make food grains available at reasonable prices, particularly to vulnerable section of the society
 To maintain buffer stocks as measure of Food Security
 To intervene in market for price stabilization
Vision
Ensuring Food Security for citizens of the country.
Mission
Efficient procurement at Minimum Support Price (MSP), storage and distribution of food grains.
Ensuring availability of food grains and sugar through appropriate policy instrument; including maintenance of buffer stocks of food grains.
Making food grains accessible at reasonable prices, especially to the weak errand vulnerable sections of the society under PDS.
http://fci.gov.in/aboutUs.php

3. Consider the following statements regarding the Fiscal Responsibility and Budget Management (FRBM) Act.
1. The objective of the Act is to ensure inter-generational equity in fiscal management, long run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in fiscal operation of the Government.
2. The FRBM rule specifies reduction of fiscal deficit to 3% of the GDP by 2008-09 with annual reduction target of 0.3% of GDP per year by the Central government.
3. It is now mandatory for the Central government to take measures to reduce fiscal deficit, to eliminate revenue deficit and to generate revenue surplus in the subsequent years.
Which of the following statements is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation-
Fiscal Responsibility and Budget Management (FRBM) Act
FRBM became an Act in 2003. The objective of the Act is to ensure inter-generational equity in fiscal management, long run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in fiscal operation of the Government.
The Government notified FRBM rules in July 2004 to specify the annual reduction targets for fiscal indicators. The FRBM rule specifies reduction of fiscal deficit to 3% of the GDP by 2008-09 with annual reduction target of 0.3% of GDP per year by the Central government. Similarly, revenue deficit has to be reduced by 0.5% of the GDP per year with complete elimination to be achieved by 2008-09. It is the responsibility of the government to adhere to these targets. The Finance Minister has to explain the reasons and suggest corrective actions to be taken, in case of breach.
FRBM Act provides a legal institutional framework for fiscal consolidation. It is now mandatory for the Central government to take measures to reduce fiscal deficit, to eliminate revenue deficit and to generate revenue surplus in the subsequent years. The Act binds not only the present government but also the future Government to adhere to the path of fiscal consolidation. The Government can move away from the path of fiscal consolidation only in case of natural calamity, national security and other exceptional grounds which Central Government may specify.
Further, the Act prohibits borrowing by the government from the Reserve Bank of India, thereby, making monetary policy independent of fiscal policy. The Act bans the purchase of primary issues of the Central Government securities by the RBI after 2006, preventing monetization of government deficit. The Act also requires the government to lay before the parliament three policy statements in each financial year namely Medium Term Fiscal Policy Statement; Fiscal Policy Strategy Statement and Macroeconomic Framework Policy Statement.
To impart fiscal discipline at the state level, the Twelfth Finance Commission gave incentives to states through conditional debt restructuring and interest rate relief for introducing Fiscal Responsibility Legislations (FRLs). All the states have implemented their own FRLs.
Implementation
Amendments to FRBM Act
Amendments to the FRBM Act were introduced subsequent to the recommendations of 13th Finance Commission.
Concept of “Effective Revenue Deficit” and “Medium Term Expenditure Framework” statement are the two important features of amendment to FRBM Act in the direction of expenditure reforms. Effective Revenue Deficit is the difference between revenue deficit and grants for creation of capital assets. This will help in reducing consumptive component of revenue deficit and create space for increased capital spending. Effective revenue deficit has now become a new fiscal parameter. “Medium-term Expenditure Framework” statement will set forth a three-year rolling target for expenditure indicators.
As per the amendments in 2012, the Central Government has to take appropriate measures to reduce the fiscal deficit, revenue deficit and effective revenue deficit to eliminate the effective revenue deficit by the 31st March, 2015 and thereafter build up adequate effective revenue surplus and also to reach revenue deficit of not more than 2 % of Gross Domestic Product by the 31st March, 2015 and thereafter as may be prescribed by rules made by the Central Government.
Further, the Central Government may entrust the Comptroller and Auditor-General of India to review periodically as required, the compliance of the provisions of FRBM Act and such reviews shall be laid on the table of both Houses of Parliament.
Vide the Finance Act 2015, the target dates for achieving the prescribed rates of effective deficit and fiscal deficit were further extended. The effective revenue deficit which had to be eliminated by March 2015 will now need to be eliminated only after 3 years i.e., by March 2018. The 3% target of fiscal deficit to be achieved by 2016-17 has now been shifted by one more year to the end of 2017-18.
N K Singh Committee Review of FRBM
Government constituted the Committee in May, 2016 under the Chairmanship of Shri N.K. Singh, former Revenue and Expenditure Secretary and former Member of Parliament. The Committee consisted of Dr. Urjit R. Patel, Governor, Reserve Bank of India (RBI), Shri Sumit Bose, former Finance Secretary, Dr. Arvind Subramanian, Chief Economic Adviser and Dr. Rathin Roy, Director, National Institute of Public Finance & Policy (NIPFP) as members.
The Committee had wide ranging Terms of Reference (ToR) to comprehensively review the existing FRBM Act in the light of contemporary changes, past outcomes, global economic developments, and best international practices and to recommend the future fiscal framework and roadmap for the country. Subsequently, the Terms of Reference were enlarged to seek the Committee’s views on certain recommendations of the Fourteenth Finance Commission and the Expenditure Management Commission. These primarily related to strengthening the institutional framework on fiscal matters as well as certain issues connected with new capital expenditures in the budget. Committee submitted its report in January 2017.
https://dea.gov.in/sites/default/files/FRBM%20Act%202003%20and%20FRBM%20Rules%202004.pdf
http://www.arthapedia.in/index.php?title=Fiscal_Responsibility_and_Budget_Management_(FRBM)_Act

4. Consider the following statements regarding the Kudumbashree Mission.
1. It is the poverty eradication and women’s empowerment program implemented by the State Poverty Eradication Mission (SPEM) of the Government of Kerala.
2. It was set up in 1997 in response to the policy shift in ensuring devolution of powers to the Panchayat Raj Institutions (PRIs) and the People’s Plan Campaign (PPC).
3. It typically addresses certain forms of violence and harassment, ranging from violence in the public domain, trafficking due to extreme poverty, or distress migration, rape/ sexual assault and child sexual abuse etc
Which of the following statements is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation-
Kudumbashree Mission
Kudumbashree is the poverty eradication and women’s empowerment program implemented by the State Poverty Eradication Mission (SPEM) of the Government of Kerala. In Malayalam, ‘Kudumbashree’ means ‘prosperity of the family’. Kudumbashree was set up in 1997 by the Kerala State Government in response to the policy shift in ensuring devolution of powers to the Panchayat Raj Institutions (PRIs) in Kerala, and the People’s Plan Campaign (PPC), which attempted to democratize and decentralize planning, budgeting and overall governance.
Kudumbashree is the women empowerment and poverty eradication program, framed and enforced by the State Poverty Eradication Mission (SPEM) by the Government of Kerala in 1998.
First tier is made up of neighborhood group (NG) and they are directly elected.
Second tier is made up of Area Development Societies (ADS) which are elected at the level of NG.
Third tier comprises of community development society (CDS) which are elected at the level of ADS.
Majority of the members are women belonging to below poverty line.
Reservation has been given to Dalit and Adivasi women.
Activities performed by kudumbashree.
 Organic farming of vegetables.
 Activities related to Poultry and dairy.
 Catering and tailoring to its members.
 Training courses in women’s rights, knowledge of constitution.
 Training in skills to set up micro enterprise.
 Training in banking practices
https://www.icrw.org/wpcontent/uploads/2018/11/Kudumbashree-Model-Documentation.pdf

5. Consider the following statements with reference to the Defence Research and Development Organisation (DRDO).
1. It was formed in 1958 from the amalgamation of the Technical Development Establishment (TDEs) of the Indian Army and the Directorate of Technical Development & Production (DTDP) with the Defence Science Organisation (DSO).
2. It should be restructured in a leaner organisation as suggested by the committee chaired by P. Rama Rao.
3. It is the R&D wing of Ministry of Home, Govt of India, with a vision to empower India with cutting-edge defence technologies and a mission to achieve self-reliance in critical defence technologies and systems.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-b
Explanation
Defence Research and Development Organisation (DRDO)
DRDO is the R&D wing of Ministry of Defence, Govt of India, with a vision to empower India with cutting-edge defence technologies and a mission to achieve self-reliance in critical defence technologies and systems, while equipping our armed forces with state-of-the-art weapon systems and equipment in accordance with requirements lay down by the three Services.
DRDO’s pursuit of self-reliance and successful indigenous development and production of strategic systems and platforms such as Agni and Prithvi series of missiles; light combat aircraft, Tejas; multi-barrel rocket launcher, Pinaka; air defence system, Akash; a wide range of radars and electronic warfare systems; etc., have given quantum jump to India’s military might, generating effective deterrence and providing crucial leverage.
“Balasya Mulam Vigyanam”—the source of strength is science-drives the nation in peace and war.
DRDO has firm determination to make the nation strong and self-reliant in terms of science and technology, especially in the field of military technologies.
DRDO was formed in 1958 from the amalgamation of the then already functioning Technical Development Establishment (TDEs) of the Indian Army and the Directorate of Technical Development & Production (DTDP) with the Defence Science Organisation (DSO).
DRDO was then a small organisation with 10 establishments or laboratories. Over the years, it has grown multi-directionally in terms of the variety of subject disciplines, number of laboratories, achievements and stature.
Today, DRDO is a network of more than 50 laboratories which are deeply engaged in developing defence technologies covering various disciplines, like aeronautics, armaments, electronics, combat vehicles, engineering systems, instrumentation, missiles, advanced computing and simulation, special materials, naval systems, life sciences, training, information systems and agriculture.
Several major projects for the development of missiles, armaments, light combat aircrafts, radars, electronic warfare systems etc are on hand and significant achievements have already been made in several such technologies.
https://drdo.gov.in/about-drdo