Current based PRELIMS QUESTION 6 FEB 2020

1/Consider the following statements regarding Life Insurance Corporation of India (LIC).

  1. LIC was nationalized in 1969 by the act of parliament.
  2. LIC has it’s headquarter in Delhi.

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

Answer-d

Explanation

LIC is a State owned by Government which was nationalized in 1956 by the act of parliament.

Provides Life Insurance, Health Insurance

HQ: Mumbai

Motto: “Yogakshemam Vahamyaham” (Adopted from Gita, meaning “I carry what you require”.)

 

2.Which of the following statement is correct in reference to Dividend Distribution Tax (DDT)?

(a) DDT is a tax levied on dividends that a company pays to its shareholders out of its profits.

(b) DDT is taxable at the end, and is deducted at the time of the company distributing dividends.

(c) Dividend Distribution Tax to be levied at the hands of the receiving shareholder.

(d) This tax has to be paid to the government within 30 days of the dividend declaration, distribution or payment whichever is earliest.

Answer-a

Explanation

The Dividend Distribution Tax is a tax levied on dividends that a company pays to its shareholders out of its profits. The Dividend Distribution Tax, or DDT, is taxable at source, and is deducted at the time of the company distributing dividends. The dividend is the part of profits that the company shares with its shareholders. The law provides for the Dividend Distribution Tax to be levied at the hands of the company, and not at the hands of the receiving shareholder. However, an additional tax is imposed on the shareholder, who receives over Rs. 10 lakh in dividend income in a financial year.

The tax has to be paid to the government within 14 days of the dividend declaration, distribution or payment whichever is earliest. If DDT is not paid within the given time period, interest at a rate of 1 per cent per month or part thereof starts getting accumulated till the amount is paid.

3.Consider the following statements with respect to crowding out effect.

1.Crowding out effect refers to how increased government spending, for which it must borrow more money, tends to reduce private spending.

2.A high magnitude of the crowding out effect may even lead to higher income in the economy.

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

Answer-a

Explanation

Sometimes, government adopts an expansionary fiscal policy stance and increases its spending to boost the economic activity. This leads to an increase in interest rates. Increased interest rates affect private investment decisions. Crowding out effect refers to how increased government spending, for which it must borrow more money, tends to reduce private spending. This happens because when the government takes up the lion’s share of funds available in the banking system; less of it is left for private borrowers. A high magnitude of the crowding out effect may even lead to lesser income in the economy.

4.Consider the following statements regarding the Archaeological Survey of India (ASI).

1.ASI’s function is to explore, excavate, conserve, preserve and protect the monuments and sites of national importance only.

2.ASI was formed by a statute passed into law by Viceroy Canning.

3.ASI is the successor of The Asiatic Society of India.

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-a

Explanation-

The Archaeological Survey of India (ASI) is an attached office in the Ministry of Culture. It was set up in 1861 with the primary object of surveying antiquarian remains in this country and their study. ASI is the successor of The Asiatic Society of India. It was founded in its current form in 1861 by Sir Alexander Cunningham with the help of the then Viceroy Canning.

ASI’s function is to “explore, excavate, conserve, preserve and protect the monuments and sites of National & International Importance.”

Archaeological Survey of India is an attached office of department of Culture with headquarters in New Delhi. It has 24 regional Circles and 5 Regional Directorates.

It regulates all the archaeological activities in the country as per the provisions of the Ancient Monuments and Archaeological Sites and Remains Act, 1958 and the Antiquities and Art Treasure Act, 1972.

5.Which of the following cultural site and state of location is correctly matched?

Cultural site                 State of location

  1. Adichanallur: Kerala
  2. Shivsagar: Tamil Nadu
  3. Dholavira: Maharashtra
  4. Lothal: Gujarat

Choose the correct option.

(a) 4 only

(b) 1, 2 and 3 only

(c) 2, 3 and 4 only

(d) 2 and 4 only

Answer-a

Explanation-

Shivsagar in Assam

Dholavira and Lothal in Gujarat

Adichanallur in Tamil Nadu.