JAIIB Paper 1 Module A Quiz 6

Pre-British India had agriculture alongside extensive artisanal production and internal and external trade networks. Colonial rule reoriented production and trade in ways that supported imperial commercial interests and contributed to deindustrialisation in several traditional crafts. Mechanised export-led industrialisation and Five-Year Plans belong to different historical phases.

Economic planning can pursue several objectives at once, including growth, modernisation, self-reliance, employment and social justice. Directing investment toward underdeveloped regions is specifically associated with balanced regional development. It does not require eliminating private activity or public investment.

Recovery of loans is classified as a capital receipt and does not create a new repayment liability for the government, so it is a non-debt capital receipt. Market borrowing and small-savings liabilities create liabilities; interest received is a revenue receipt.

Nominal GDP values output at current prices, so it can increase because of higher prices. Real GDP adjusts for price changes and is intended to measure changes in the volume of production. Unchanged real output does not establish an increase in real production or welfare.

Structural transformation involves changes in output and employment across sectors. A rising services share of GDP alongside substantial low-productivity agricultural employment can signal that workers are not moving into more productive jobs at the same pace as output changes. It does not imply that informal employment has disappeared.

The organised/unorganised distinction relates to the degree of formal registration, regulation, record-keeping and employment protection. Organised employment can be public or private; unorganised work includes many types of wage employment and self-employment beyond agriculture.

The Blue Revolution refers to development and expansion of fisheries and aquaculture. The White Revolution is associated with milk, the Yellow Revolution with oilseeds, and the Green Revolution with food-grain production.

A sunrise sector is an emerging or rapidly developing area with potential for future growth, investment and employment. Renewable-energy technology can fit this description because of innovation and energy-transition demand, although it may require substantial capital and skills.

Priority sector lending uses prescribed targets and eligible categories to encourage credit flow to areas important for inclusive growth, such as agriculture, MSMEs and other specified segments. It does not remove prudential appraisal, require uniform interest rates, or concentrate lending only on large firms.

A notification title alone does not show the full scope of an amendment. Candidates should read the operative text, identify the exact paragraph modified, and check its effective date. An amendment may change one provision without replacing all categories or targets.

From 1 April 2025, the micro-enterprise ceiling is investment up to ₹2.5 crore and turnover up to ₹10 crore. Both figures in the scenario are within those limits, so the enterprise meets the micro category criteria, subject to applicable classification rules.

The revised limits are: micro, investment up to ₹2.5 crore and turnover up to ₹10 crore; small, up to ₹25 crore and ₹100 crore; medium, up to ₹125 crore and ₹500 crore. Classification considers both investment and turnover; the higher applicable category is relevant if either criterion crosses the lower category ceiling.

The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy programme intended to support the establishment of new micro-enterprises, particularly in the non-farm sector. The other options concern farmer income support, pension provision and food security respectively.

Social infrastructure includes services and facilities that support human development and quality of life, such as health, education, sanitation and drinking water. Railways, highways and ports are generally classified as physical or economic infrastructure.

Reliable power is a key enabling input. Outages can halt machinery, spoil goods, interrupt digital systems and force firms to incur backup-generation costs. These disruptions reduce capacity utilisation and productivity; they do not automatically lower prices or eliminate working-capital needs.

Fair globalisation recognises that trade and investment can generate aggregate gains but distribute them unevenly. Skills development, social protection, adjustment assistance and competition policy can help more people share the gains without assuming that all foreign competition should be prohibited.

Tariffs can protect some domestic producers, but they can also raise prices for consumers and for firms using imported inputs. Trading partners may retaliate, and protection does not guarantee productivity improvements or eliminate competitive pressures.

Real-sector reforms affect production, investment, trade, competition and the operating environment of businesses. Industrial licensing and entry barriers are real-sector issues. SLR, bank capital requirements and provisioning rules are financial-sector or prudential matters.

FDI is generally associated with a lasting interest in an enterprise and a meaningful degree of influence or control, while portfolio investment typically involves financial securities without that same management relationship. FDI can take different forms and is not restricted to government investors.

Economic growth generally refers to an increase in output or income, while economic development is broader and includes health, education, opportunity, distribution and quality of life. Rising per-capita income is important but does not prove that all dimensions or all regions have improved.