Trade Negotiators given Guidelines

The Trade and Economic Relations Committee held its 17th meeting on the 29th April 2011 under the chairmanship of the Prime Minister.

The committee reviewed the status of the India-European Union Bilateral Trade and Investment Agreement and discussed the various issues involved in the negotiations. It was observed that concern has been raised by various quarters about the Indian stand on issues on Intellectual Property Rights, especially in the context of the Indian Pharma products. The Prime Minister firmly directed that the Indian side shall not take on any obligation beyond TRIPS/ Domestic Law.

The Committee discussed proposals for two new economic engagements through the mechanism of Free Trade Agreements with Australia and with the Common Market of Eastern and Southern Africa (COMESA). It was apprised that the Joint Study Group constituted for studying the feasibility of a FTA with Australia has observed that India and Australia produce highly competitive and largely complementary goods for export to international markets. While economic activity in each country has led to substantial growth in bilateral goods trade, tariffs and non-tariff barriers continue to raise the cost of imports, imposing implicit taxes on businesses and consumers alike. A comprehensive FT A between Australia and India would benefit both countries and such liberalization would provide impetus to economic activity and economic welfare in each economy. The Committee accorded approval to the launch of the FTA negotiations with Australia.

The TERC also considered the proposal for establishing a Joint Study Group to examine the policy framework for enhancing the bilateral economic relationship between India and COMESA and assessing the feasibility of a comprehensive FTA/PTA covering trade in goods, services and investment and accorded its approval for the same. It was observed that bilateral trade between India and COMESA has shown very good growth during the last five years and the trade balance continues to be in our favour.

Electronic Fund Transfer

Meaning of Electronic Fund Transfer

You would surely buy anything online. At that time, you pay with your credit or debit card. Actually, at that time, you are doing electronic funds transfer. In simple words, electronic funds transfer means the online and computer transfer of money from one bank account to other bank account. According to EFT Act of USA, bank is not responsible for unauthorized withdrawals, if EFT card is lost or stolen by customer. But if financial institution fails to transfer fund correctly as per the term and conditions of consumer, that financial institution is responsible for paying  penalty plus that short amount.

Advantage of Electronic Funds Transfer


 Main benefit of EFT is to pay or get payment fastly. Multiple financial institution may deal with the help of EFT. Use of every bank's ATM can be possible due to EFT system. Direct deposit, direct debit, wire transfer and online banking are the main methods of electronic fund transfer. One of the largest companies that offer EFT service is  Western Union.

Disadvantage of Electronic Funds Transfer

Western Union. $100 billion of which goes anonymously to families in developing countries. Although Western Union keeps information about senders and receivers, some transactions can be done essentially anonymously, for the receiver is not always required to show identification.

Financial Inclusion

Financial inclusion is finance term. This term is used in banking sector. If any bank provides his banking services at very low cost to the poor people of any country. Then these financial services are called financial inclusion. This finance term is becoming so popular because every bank is doing some activities of financial inclusion.

We can include following banking services as financial inclusion:-

• Provide the facility to open free saving account to rural customers.
• Provide loan at very low rate to poor rural peoples of India.

Financial inclusion term is also used in govt. social work. Providing facilities free of cost to the poor section for upgrading them . Govt. of India is doing financial inclusion activities by operating Sarva Shiksha Abhiyan, Rural Employment Guarantee Scheme.

Objectives of Financial inclusion

According to UN the main objectives of financial inclusion are as follows:
Financial products like saving, short and long term credit, leasing and factoring, mortgages, insurance, pensions should provide to poor people at lower cost.

  Importance of Financial Inclusion:

1. For Reaching every Customer of Rural Sector : With the help of financial inclusion movement, RBI wants that every bank should reach to every customer at rural area.

2. Micro credit during emergency : At the time of emergency, bank should open their doors for micro credit, It can be only possible, if bank will use financial inclusion practically. Otherwise, bank will just become a middle man whose sole aim is to earn interest. But today, with financial inclusion, it can become just like NGO and can work with 3.3 millions NGO of India for progress of India.

3. Electronic fund transfer at Village Level : Now, revolution of mobile has reach up to village. With financial inclusion movement, banks has to start all ATM services and e-banking services at village level. So, better understanding of financial inclusion is must.

BANK OF BARODA P.O. EXAM 2011SOLVED PAPER

Socio-Economic & Banking Awareness

(Exam Held On: 13-03-2011)

1. One of the major challenges banking industry is facing these days is money laundering. Which of the following acts/norms are launched by the banks to prevent money laundering in general ?
(A) Know Your Customer Norms
(B) Banking Regulation Act
(C) Negotiable Instrument Act
(D) Narcotics and Psychotropic Substance Act
(E) None of these

2. Lot of Banks in India these days are offering M-Banking Facility to their customers. What is the full form of ‘M’ in ‘M-Banking’ ?
(A) Money
(B) Marginal
(C) Message
(D) Mutual Fund
(E) Mobile Phone

3. Which of the following is/are true about the ‘Sub-Prime Crisis’ ?
(i) It is a mortgage crisis referring to credit default by the borrowers.
(ii) Sub-Prime borrowers were those borrowers who were rated low and were high risk borrowers.
(iii) This crisis originated because of negligence in credit rating of the borrowers.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) All (i), (ii) and (iii)
(E) None of these

4. Which of the following is not the part of the structure of the Financial System in India ?
(A) Industrial Finance
(B) Agricultural Finance
(C) Government Finance
(D) Development Finance
(E) Personal Finance

5. Which of the following is not the part of the scheduled banking structure in India ?
(A) Money Lenders
(B) Public Sector Banks
(C) Private Sector Banks
(D) Regional Rural Banks
(E) State Co-operative Banks

6. As we all know Govt. of India collects tax revenue on various activities in the country. Which of the following is a part of the tax revenue of the Govt. ?
(i) Tax on Income
(ii) Tax on Expenditure
(iii) Tax on Property or Capital Asset
(iv) Tax on Goods and Services
(A) Both (i) and (iii) only
(B) Both (ii) and (iv) only
(C) All (i), (ii), (iii) and (iv)
(D) Only (ii), (iii) and (iv)
(E) None of these

7. We very frequently read about Special Economic Zones (SEZs) in newspapers. These SEZs were established with which of the following objectives ?
(i) To attract foreign investment directly.
(ii) To protect domestic market from direct competition from multinationals.
(iii) To provide more capital to agricultural and allied activities.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) All (i), (ii) and (iii)
(E) None of these

8. Which of the following groups of countries has almost 50% share in global emission of carbon every year ?
(A) US, China, India, South Africa
(B) India, China, Russia, Britain
(C) South Africa, Nepal, Myanmar
(D) US, Russia, China & India
(E) None of these

9. Which of the following correctly describes the concept of ‘Nuclear Bank’ floated by International Atomic Energy Agency ?
(i) It is a nuclear fuel bank to be shared by all the nations jointly.
(ii) It is a facility to help nations in enrichment of uranium.
(iii) It is an agency which will keep a close vigil on the nuclear programme of all the nations.
(A) Only (i)
(B) Only (ii)
(C) Both (i) and (iii) only
(D) Only (iii)
(E) Both (i) and (ii) only

10. Many times we read about Future Trading in newspapers. What is ‘Future Trading’ ?
(i) It is nothing but a trade between any two stock exchanges wherein it is decided to purchase the stocks of each other on a fixed price throughout the year.
(ii) It is an agreement between two parties to buy or sell an underlying asset in the future at a predetermined price.
(iii) It is an agreement between stock exchanges that they will not trade the stocks of each other under any circumstances in future or for a given period of time.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) All (i), (ii) and (iii)
(E) None of these

11. Inflation in India is measured on which of the following indexes/indicators ?
(A) Cost of Living Index (COLI)
(B) Consumer Price Index (CPI)
(C) Gross Domestic Product
(D) Wholesale Price Index (WPI)
(E) None of these

12. As per the reports published in the newspapers a section of society staged a demonstration at the venue of the G-8 Summit recently. What was/were the issues towards which these demonstrators were trying to draw the attention of G-8 leaders ?
(i) Food shortage which has taken 50 million people in its grip.
(ii) Inflation which has gone up substantially across the Globe.
(iii) USA’s consistent presence in Iraq.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) Both (i) and (ii) only
(E) None of these

13. Hillary Clinton formally suspended her campaign to ensure election of who amongst the following for the next President of USA ?
(A) George Bush
(B) Barack Obama
(C) John McCain
(D) Bill Clinton
(E) None of these

14. Hugo Chavez whose name was recently in news is the—
(A) President of Congo
(B) Prime Minister of Uganda
(C) President of Venezuela
(D) Prime Minister of Brazil
(E) None of these

15. The Govt. of India has raised the amount of the Loan Waiver to the farmers by 20%. Now the amount is nearly—
(A) Rs. 60,000 crore
(B) Rs. 65,000 crore
(C) Rs. 72,000 crore
(D) Rs. 76,000 crore
(E) Rs. 80,000 crore

16. Delimitation Commission has made a recommendation that next Census should be Panchayat-wise. When is the next Census due ?
(A) 2010
(B) 2011
(C) 2012
(D) 2013
(E) 2015

17. The World Health Organisation has urged that advertisements of which of the following should be banned to protect youth from bad effects of the same ?
(A) Tobacco
(B) Alcoholic drinks
(C) Junk Food
(D) Soft drinks with chemical preservatives
(E) None of these

18. Which of the following countries has allocated a huge amount of US $ 10 billion to provide relief to its earthquake victims ?
(A) Japan
(B) South Korea
(C) China
(D) South Africa
(E) None of these

19. India and Nepal have many agreements on sharing of the water of various rivers. Which of the following rivers is not covered under these agreements ?
(A) Kosi
(B) Gandak
(C) Ganga
(D) Mahakali
(E) All these rivers are covered

20. Which of the following names is not closely associated with space programme of India or any other country ?
(A) CARTOSAT
(B) NLS – 5
(C) RUBIN – 8
(D) GSLV
(E) SCOPE

21. Vijay Hazare Trophy is associated with the game of—
(A) Hockey
(B) Cricket
(C) Badminton
(D) Football
(E) Golf

22. Which of the following was the theme of the Olympic Torch ?
(A) Journey of Harmony
(B) Green World Clean World
(C) Journey of Peace
(D) Journey for Hunger-free World
(E) None of these

23. Which of the following schemes is not a social development Scheme ?
(A) Indira Awas Yojana
(B) Mid Day Meal
(C) Bharat Nirman Yojana
(D) Sarva Shiksha Abhiyan
(E) All are social schemes

24. Which of the following is not a member of the ASEAN ?
(A) Malaysia
(B) Indonesia
(C) Vietnam
(D) Britain
(E) Singapore

25. Which of the following Awards are given for excellence in the field of Sports ?
(A) Kalinga Prize
(B) Shanti Swarup Bhatnagar Award
(C) Arjun Award
(D) Pulitzer Prize
(E) None of these

 Answers :

1. (E) 2. (E) 3. (D) 4. (E) 5. (A) 6. (C) 7. (A) 8. (D) 9. (B) 10. (B)
11. (D) 12. (B) 13. (B) 14. (C) 15. (A) 16. (B) 17. (A) 18. (C) 19. (C) 20. (E)
21. (B) 22. (A) 23. (C) 24. (D) 25. (C)

SBI Associate Banks Clerks Exam 2011

General Awareness  


Q:1 What is financial inclusion ?

(1) To provide a permanent employment to the unemployed
(2) To provide a 100 days job to all those who are in need of a job
(3) To provide banking services to all those living in remote areas
(4) To ensure that all financial transactions amounting Rs. 5,000/- and above are done through banks.
(5) To provide finances for all.

Q: 2 Recently the term 3G was very much in news and even a conference on it was organized in India. What is the letter 'G' denotes in 3G ?

(1) Grade
(2) Group
(3) Global
(4) Guild
(5) Generation

Q: 3 Some major banks and financial institutions in various Western countries were to wind up their business and/ or declare themselves in financial problems during last few years. This trend is technically known as _

(1) Devaluation
(2) Deformation

(4) Political backdrop
(5) Globalisation

Q: 4 Which of the following International sports events was organized in Delhi in October 2010 in which several countries participated ?

(1) Asian Games
(2) World Cup Cricket Tournament
(3) Asian Hockey Tournament
(4) Commonwealth Games
(5) None of these

Q: 5 Exporters in India get insurance cover and risk cover from which of the following organizations?

(1) SIOBI
(2) NABARD
(3) ECGC
(4) RBI
(5) None of these

Q: 6 Which of the following places in India does not have a Stock Exchange ?

(1) Kolkata
(2) Ahmedabad
(3) Mumbai
(4) Delhi
(5) Udaipur

Q.7 Hillary Clinton who was in India recently is the U.S. Secretary of--

(1) Commerce
(2) State
(3) Treasury
(4) Defence
(5) None of these

Q.8 If Indian Banking industry had demonstrated its resilience to external shocks in 2008-09, the credit  goes to --

(A) Policies of the RBI & the Govt. of India

(C) Foreign aid/investments to Indian companies

(1) Only (A) (2) Only (B) (3) Only (C)

Q: 9 Tembhli village which was in news is in ---

(1) Bihar
(2) Rajasthan
(3) Orissa
(4) West Bengal
(5) Maharashtra

Q:10 Rohan Bopanna who represented Indian in an international event is a----

(1) Billiards Player
(2) Golf Player
(3) Chess Player

(4) Table Tennis Player
(5) Lawn Tennis Player

Q:11 AlBA Women's World Boxing Championship was organized in September 2010 in ---

(I) Rome
(2) New Delhi
(3) London
(4) Vienna
(5) Barbados

Q: 12 Mr. A. K. Antony a Union Minister in the Indian Cabinet recently signed an agreement with South Korea. This means the agreement is for the Cooperation in the field of--

(1) Agriculture
(2) Rural Development
(3) Defence
(4) Steel & Iron
(5) None of these

Q: 13 Sir Mota Singh who was Knighte by the Queen Elizabeth II earlier this year is---

(1) First Sikh Judge in UK
(2) first Sikh Minister in UK

(3) First Indian to become Vice Chancellor in Cambridge

(4) First Indian to become Governor of a State in USA
(5) None of these

Q.14 'Ayodhya' which was in news recently is a place in---

(1) Madhya Pradesh
(2) Bihar
(3) Rajasthan
(4) Jharkhand
(5) Uttar Pradesh

Q.15 Which of the following is the name of a private sector Bank in India?

(1) IDBI Bank
(2) Axis Bank
(3) Corporation Bank
(4) UCO Bank
(5) All are Private Banks

Q.16. The Govt. of India does no! provide any direct financial assistance to which of the following schemes?

(1) Mahatma Gandhi National Rural Employment Guarantee scheme
(2) Rural Health Mission
(3) Indira Aawas Yojana
(4) Jeevan Sathi Yojana
(5) Rajiv Gandhi Grameen Vidyutikaran Yojana

Q.17. What does the letter'S' denotes in 'AFSPA' ar abbreviation we very often see in newspapers?

(1) Slow
(2) Special
(3) State
(4) Solid
(5) Sovereign

Q.18. Which of the following terms is used in banking and finance?

(1) Abiotic
(2) Demand Deposit
(3) Fat scales
(4) A diabetic
(5) Cathode

Q.19. Which of the following is a food crop?

(1) Maize
(2) Cotton
(3) Palm
(4) Jute
(5) Jatropha

Q.20. Vedanta Alumina is a company operating in the area of ----

(1) Shipping
(2) Mining
(3) Cement
(4) Textiles
(5) Banking

Q.21. Names of which of the following rates/ratios cannot be seen in financial newspapers?

(1) Bank Rate
(2) Repo Rate
(3) Cash Reserve Ratio
(4) Pulse Rate
(5) Statutory Liquidity Ratio

Q.22. An individual visiting UAE will have to make his/her payments in which of the following currencies?

(1) Dirham
(2) Taka
(3) Baht
(4) Peso
(5) Dinar

Q.23. Who, amongst the following is NOT a famous writer?

(1) Sania Mirza
(2) V. S. Naipaul
(3) Chetan Bhagat
(4) Khushwant Singh
(5) Namita Gokhale

Q.24. 'Peepli Live' is a film directed by ---

(I) Anusha Rizvi
(2) Aamir Khan
(3) Kiran Rao
(4) David Dhawan
(5) None of these

Q.25. Which of the following is the Chemical name of the salt we use in our kitchen?

(1) Calcium Carbonate
(2) Calcium Chloride
(3) Sodium Carbonate
(4) Sodium Chloride
(5) Ammonium Sulphate

Q.26. The judges of the Supreme Court of India now retire at the age of---

(1) 58 years
(2) 60 years
(3) 62 years
(4) 65 years
(5) 68 years

Q.27. Operation New Dawn is the beginning of stability in---

(1) Afghanistan
(2) Iran
(3) Sudan
(4) Sri Lanka
(5) Iraq

Q.28. Which of the following books' is written by Kiran Desai ?

(1) A house for Mr. Biswas
(2) 3 Mistakes of My Life
(3) A Tale of Two Sisters
(4) The Inheritance of Loss
(5) Tale of Two Cities

Q.29. Jimena Na";'arrete who was crowned Miss Universe 2010 is from ---

(I) Mexico
(2) Venezuela
(3) Brazil
(4) New Zealand
(5) Italy

Q.30. India has an agreement with USA for producing energy in the form of---

(1) Hydraulic
(2) Thermal
(3) Nuclear
(4) Solar
(5) All of these forms

Q. 31 Which of the following is an economic term?

(1) Plaintiff
(2) Bunker Blaster
(3) Deflation
(4) Lampoon
(5) Zero Hour

Q.32. Which of the following awards is given to sports persons in India?

(1) Shantiswarup Bhatnagar Awards
(2) Arjuna Award
(3) Kalidas Samman
(4) Saraswati Samman
(5) None of these

Q.33. Which of the following is the trophy/cup associated with the game of cricket?

(1) Derby
(2) Merdeka Cup
(3) Santosh Trophy
(4) Duleep Trophy
(5) Durand Cup

Q.34. Who amongst the following can take benefit of the Social Security Fund established by the Govt. ofIndia for unorganized workers? .

(1) Primary school teacher
(2) Employee of Sugar Factory
(3) Textile Mazdoor
(4) Rickshaw Puller
(5) Clerk in a factory

Q.35. Shushil Kumar who won a Gold Medal at an international event is a famous---

(1) Wrestling champion
(2) Golf player
(3) Table Tennis Player
(4) Weight lifter
(5) None of these

Q.36. In case a major war breaks out between two nations, which of the following organizations/agencies will be seen in the battle field, in addition to the armies of the fighting parties?

(1) WTO
(2) Red Cross
(3) CARE
(4) OPEC
(5) All of these

Q.37. Which of the following is the abbreviated name associated with food security?

(1) ASHA
(2) PDS
(3) WTO
(4) OPEC
(5) NPA

Q.38. Which of the following is a good and rich source of vitamin 'C' ?

(1) Milk
(2) Radish
(3) Mango
(4) Lemon Juice
(5) Banana

Q.39. Who amongst the following Indian Prime Ministers was honoured Posthumously by the Govt. of Bangladesh for his/her contributions to the independence of the nation?

(1) Rajiv Gandhi
(2) Jawaharlal Nehru
(3) Indira Gandhi
(4) Lai Bahadur Shastri
(5) None of these           

Q.40. Who amongst the following was never a Governor of the RBI?

(1) Bimal Jalan
(2) Y. V. Reddy
(3) Arup Roy Choudhury
(4) C. Rangarajan
(5) D. Subbarao

Answer:

(1) 3 (2) 5 (3) 3 (4) 10 (5) 5 (6) 5 (7) 4 (8) 1 (9) 5 (10) 5 (11) 5 (12) 3 (13) 1 (14) 5 (15) 2 (16) 1 (17) 2 (18) 2 (19) 4 (20) 2 (21) 4 (22) 1 (23) 1 (24) 1 (25) 4 (26) 4 (27) 1 (28) 4 (29) 1 (30)  (31) 3 (32) 2 (33) 4 (34) 4 (35) 5 (36) 2 (37) 2 (38) 4 (39) 3 (40) 3

SOCIO ECONOMIC DEVELOPMENT OBJECTIVE QUESTIONS

1.RBI’s open market operation transactions are carried out with a view to regulate
(A) Liquidity in the economy
(B) Prices of essential commodities
(C) Inflation
(D) Borrowing power of the banks
(E) All the above

2.When more than one banks are allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is generally known as—
(A) Participation
(B) Consortium
(C) Syndication
(D) Multiple banking
(E) None of these

3.Open market operations, one of the measures taken by RBI in order to control credit expansion in the economy means —
(A) Sale or purchase of Govt. securities
(B) Issuance of different types of bonds
(C) Auction of gold
(D) To make available direct finance to borrowers
(E) None of these

4.The bank rate means—
(A) Rate of interest charged by commercial banks from borrowers
(B) Rate of interest at which commercial banks discounted bills of their borrowers
(C) Rate of interest allowed by commercial banks on their deposits
(D) Rate at which RBI purchases or rediscounts bills of exchange of commercial banks
(E) None of these

5.What is an Indian Depository Receipt?
(A) A deposit account with a Public Sector Bank
(B) A depository account with any of Depositories in India
(C) An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company
(D) An instrument in the form of deposit receipt issued by Indian depositories
(E) None of these

6.An instrument that derives its value from a specified underlying (currency, gold, stocks etc.) is known as—
(A) Derivative
(B) Securitisation Receipts
(C) Hedge Fund
(D) Factoring
(E) Venture Capital Funding

7.Fiscal deficit is—
(A) total income less Govt. borrowing
(B) total payments less total receipts
(C) total payments less capital receipts
(D) total expenditure less total receipts excluding borrowing
(E) None of these

8.In the Capital Market, the term arbitrage is used with reference to—
(A) purchase of securities to cover the sale
(B) sale of securities to reduce the loss on purchase
(C) simultaneous purchase and sale of securities to make profits from price
(D) variation in different markets
(E) Any of the above

9.Reverse repo means—
(A) Injecting liquidity by the Central Bank of a country through purchase of Govt. securities
(B) Absorption of liquidity from the market by sale of Govt. securities
(C) Balancing liquidity with a view to enhancing economic growth rate
(D) Improving the position of availability of the securities in the market
(E) Any of the above

10.The stance of RBI monetary policy is—
(A) inflation control with adequate liquidity for growth
(B) improving credit quality of the Banks
(C) strengthening credit delivery mechanism
(D) supporting investment demand in the economy
(E) Any of the above

11. Currency Swap is an instrument to manage—
(A) Currency risk
(B) interest rate risk
(C) currency and interest rate risk
(D) cash flows in different currencies
(E) All of the above

12.‘Sub-prime’ refers to—
(A) lending done by banks at rates below PLR
(B) funds raised by the banks at sub-Libor rates
(C) Group of banks which are not rated as prime banks as per Banker’s Almanac
(D) lending done by financing institutions including banks to customers not meeting with normally required credit appraisal standards
(E) All of the above

13. Euro Bond is an instrument—
(A) issued in the European market
(B) issued in Euro Currency
(C) issued in a country other than the country of the currency of the Bond
(D) All of the above
(E) None of these

14. Money Laundering normally involves—
(A) placement of funds
(B) layering of funds
(C) integration of funds
(D) All of (A), (B) and (C)
(E) None of (A), (B) and (C)

15. The IMF and the World Bank were conceived as institutions to—
(A) strengthen international economic co-operation and to help create a more stable and prosperous global economy
(B) IMF promotes international monetary cooperation
(C) The World Bank promotes long term economic development and poverty reduction
(D) All of (A), (B) and (C)
(E) None of (A), (B) and (C)

16.Capital Market Regulator is—
(A) RBI
(B) IRDA
(C) NSE
(D) BSE
(E) SEBI

17.In the term BRIC, R stands for—
(A) Romania
(B) Rajithan
(C) Russia
(D) Regulation
(E) None of these

18.FDI refers to—
(A) Fixed Deposit Interest
(B) Fixed Deposit Investment
(C) Foreign Direct Investment
(D) Future Derivative Investment
(E) None of these

19.What is Call Money?
(A) Money borrowed or lent for a day or over night
(B) Money borrowed for more than one day but upto 3 days
(C) Money borrowed for more than one day but upto 7 days
(D) Money borrowed for more than one day but upto 14 days
(E) None of these

20.Which is the first Indian company to be listed in NASDAQ?
(A) Reliance
(B) TCS
(C) HCL
(D) Infosys
(E) None of these

21.Which of the following is the Regulator of the credit rating agencies in India?
(A) RBI
(B) SBI
(C) SIDBI
(D) SEBI
(E) None of these

22.Who is Brand Endorsing Personality of Bank of Baroda?
(A) Juhi Chawla
(B) Kiran Bedi
(C) Amitabh Bachchan
(D) Kapil Dev
(E) None of these

23.The branding line of Bank of Baroda is—
(A) International Bank of India
(B) India’s International Bank
(C) India’s Multinational Bank
(D) World’s local Bank
(E) None of these

24.The logo of Bank of Baroda is known as—
(A) Sun of Bank of Baroda
(B) Baroda Sun
(C) Bank of Baroda’s Rays
(D) Sunlight of Bank of Baroda
(E) None of these

25.Which of the following statements(s) is/are True about the exports of China which is a close competitor of India?
(i) China’s economic success is basically on the fact that it exports cheaper goods to rich nations like
the USA, etc.
(ii) In the year 2007 China’s exports became almost 40% of its GDP.
(iii) When compared to India China’s share in the World Exports is more than 30% whereas India’s share is mere 6% of the global exports.
(A) Only (i)
(B) Only (ii)
(C) Both (i) and (ii)
(D) All (i), (ii) and (iii)
(E) None of these

26.One of the major challenges banking industry is facing these days is money laundering. Which of the following acts/norms are launched by the banks to prevent money laundering in general?
(A) Know Your Customer Norms
(B) Banking Regulation Act
(C) Negotiable Instrument Act
(D) Narcotics and Psychotropic Substance Act
(E) None of these

27.Lot of Banks in India these days are offering M-Banking Facility to their customers. What is the full form of ‘M’ in ‘M-Banking’?
(A) Money
(B) Marginal
(C) Message
(D) Mutual Fund
(E) Mobile Phone

28.Which of the following is/are true about the ‘Sub-Prime Crisis’ ? (The term was very much in news recently.)
(i) It is a mortgage crisis referring to credit default by the borrowers.
(ii) Sub-Prime borrowers were those borrowers who were rated low and were high risk borrowers.
(iii) This crisis originated because of negligence in credit rating of the borrowers.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) All (i), (ii) and (iii)
(E) None of these

29.Which of the following is not the part of the structure of the Financial System in India?
(A) Industrial Finance
(B) Agricultural Finance
(C) Government Finance
(D) Development Finance
(E) Personal Finance

30.Which of the following is not the part of the scheduled banking structure in India?
(A) Money Lenders
(B) Public Sector Banks
(C) Private Sector Banks
(D) Regional Rural Banks
(E) State Co-operative Banks

31.As we all know Govt. of India collects tax revenue on various activities in the country. Which of the following is a part of the tax revenue of the Govt.?
(i) Tax on Income
(ii) Tax on Expenditure
(iii) Tax on Property or Capital Asset
(iv) Tax on Goods and Services
(A) Both (i) and (iii) only
(B) Both (ii) and (iv) only
(C) All (i), (ii), (iii) and (iv)
(D) Only (ii), (iii) and (iv)
(E) None of these

32.We very frequently read about Special Economic Zones (SEZs) in newspapers. These SEZs were established with which of the following objectives?
(i) To attract foreign investment directly.
(ii) To protect domestic market from direct competition from multinationals.
(iii) To provide more capital to agricultural and allied activities.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) All (i), (ii) and (iii)
(E) None of these

33.Which of the following groups of countries has almost 50% share in global emission of carbon every year?
(A) US, China, India, South Africa
(B) India, China, Russia, Britain
(C) South Africa, Nepal, Myanmar
(D) US, Russia, China & India
(E) None of these

34.Which of the following correctly describes the concept of ‘Nuclear Bank’ floated by International Atomic Energy Agency?
(i) It is a nuclear fuel bank to be shared by all the nations jointly.
(ii) It is a facility to help nations in enrichment of uranium.
(iii) It is an agency which will keep a close vigil on the nuclear programme of all the nations.
(A) Only (i)
(B) Only (ii)
(C) Both (i) and (iii) only
(D) Only (iii)
(E) Both (i) and (ii) only

35.Many times we read about Future Trading in newspapers. What is ‘Future Trading’?
(i) It is nothing but a trade between any two stock exchanges wherein it is decided to purchase the stocks of each other on a fixed price throughout the year.
(ii) It is an agreement between two parties to buy or sell an underlying asset in the future at a
predetermined price.
(iii) It is an agreement between stock exchanges that they will not trade the stocks of each other under any circumstances in future or for a given period of time.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) All (i), (ii) and (iii)
(E) None of these

36.Inflation in India is measured on which of the following indexes/indicators?
(A) Cost of Living Index (COLI)
(B) Consumer Price Index (CPI)
(C) Gross Domestic Product
(D) Wholesale Price Index (WPI)
(E) None of these
37.As per the reports published in the newspapers a section of society staged a demonstration at the venue of the G-8 Summit recently. What was/were the issues towards which these demonstrators were trying to draw the attention of G-8 leaders?
(i) Food shortage which has taken 50 million people in its grip.
(ii) Inflation which has gone up substantially across the Globe.
(iii) USA’s consistent presence in Iraq.
(A) Only (i)
(B) Only (ii)
(C) Only (iii)
(D) Both (i) and (ii) only
(E) None of these
38.Hillary Clinton formally suspended her campaign to ensure election of who amongst the following for the next President of USA?
(A) George Bush
(B) Barack Obama
(C) John McCain
(D) Bill Clinton
(E) None of these

39.Hugo Chavez whose name was recently in news is the—
(A) President of Congo
(B) Prime Minister of Uganda
(C) President of Venezuela
(D) Prime Minister of Brazil
(E) None of these

40.The Govt. of India has raised the amount of the Loan Waiver to the farmers by 20%. Now the amount is nearly—
(A) Rs. 60,000 crore
(B) Rs. 65,000 crore
(C) Rs. 72,000 crore
(D) Rs. 76,000 crore
(E) Rs. 80,000 crore

41.Delimitation Commission has made a recommendation that next Census should be Panchayat-wise.When is the next Census due?
(A) 2010
(B) 2011
(C) 2012
(D) 2013
(E) 2015

42.The World Health Organisation has urged that advertisements of which of the following should be banned to protect youth from bad effects of the same?
(A) Tobacco
(B) Alcoholic drinks
(C) Junk Food
(D) Soft drinks with chemical preservatives
(E) None of these

43.Which of the following countries has allocated a huge amount of US $ 10 billion to provide relief to its earthquake victims?
(A) Japan
(B) South Korea
(C) China
(D) South Africa
(E) None of these

44.India and Nepal have many agreements on sharing of the water of various rivers. Which of the following rivers is not covered under these agreements?
(A) Kosi
(B) Gandak
(C) Ganga
(D) Mahakali
(E) All these rivers are covered

45.Which of the following names is not closely associated with space programme of India or any other country?
(A) CARTOSAT
(B) NLS - 5
(C) RUBIN - 8
(D) GSLV
(E) SCOPE

46.Vijay Hazare Trophy is associated with the game of—
(A) Hockey
(B) Cricket
(C) Badminton
(D) Football
(E) Golf

47.Which of the following was the theme of the Olympic Torch?
(A) Journey of Harmony
(B) Green World Clean World
(C) Journey of Peace
(D) Journey for Hunger-free World
(E) None of these

48.Which of the following schemes is not a social development Scheme?(A) Indira Awas Yojana
(B) Mid Day Meal
(C) Bharat Nirman Yojana
(D) Sarva Shiksha Abhiyan
(E) All are social schemes

49.Which of the following is not a member of the ASEAN?
(A) Malaysia
(B) Indonesia
(C) Vietnam
(D) Britain
(E) Singapore

50.Which of the following Awards are given for excellence in the field of Sports?
(A) Kalinga Prize
(B) Shanti Swarup Bhatnagar Award
(C) Arjun Award
(D) Pulitzer Prize
(E) None of these


Answers :

1. (E) 2. (B) 3. (A) 4. (D) 5. (C) 6. (C) 7. (D) 8. (C) 9. (A) 10. (E) 11. (D) 12. (D) 13. (C) 14. (D) 15. (D) 16. (E) 17. (C) 18. (C) 19. (A) 20. (D)21. (D) 22. (E) 23. (B) 24. (B) 25. (C) 26. (E) 27. (E) 28. (D) 29. (E) 30. (A) 31. (C) 32. (A) 33. (D) 34. (B) 35. (B) 36. (D) 37. (B) 38. (B) 39. (C) 40. (A) 41. (B) 42. (A) 43. (C) 44. (C) 45. (E) 46. (B) 47. (A) 48. (C) 49. (D) 50. (C)

Direct Tax Code

The direct tax code seeks to consolidate and amend the law relating to all direct taxes, namely, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an economically efficient, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio. Another objective is to reduce the scope for disputes and minimize litigation. It is designed to provide stability in the tax regime as it is based on well accepted principles of taxation and best international practices. It will eventually pave the way for a single unified taxpayer reporting system.
The salient features of the code are:

• Single Code for direct taxes: all the direct taxes have been brought under a single Code and compliance procedures unified. This will eventually pave the way for a single unified taxpayer reporting system.
  
• Use of simple language: with the expansion of the economy, the number of taxpayers can be expected to increase significantly. The bulk of these taxpayers will be small, paying moderate amounts of tax. Therefore, it is necessary to keep the cost of compliance low by facilitating voluntary compliance by them. This is sought to be achieved, inter alia, by using simple language in drafting so as to convey, with clarity, the intent, scope and amplitude of the provision of law. Each sub-section is a short sentence intended to convey only one point. All directions and mandates, to the extent possible, have been conveyed in active voice. Similarly, the provisos and explanations have been eliminated since they are incomprehensible to non-experts. The various conditions embedded in a provision have also been nested. More importantly, keeping in view the fact that a tax law is essentially a commercial law, extensive use of formulae and tables has been made.
  
• Reducing the scope for litigation: wherever possible, an attempt has been made to avoid ambiguity in the provisions that invariably give rise to rival interpretations. The objective is that the tax administrator and the tax payer are ad idem on the provisions of the law and the assessment results in a finality to the tax liability of the tax payer. To further this objective, power has also been delegated to the Central Government/Board to avoid protracted litigation on procedural issues.
  
• Flexibility: the structure of the statute has been developed in a manner which is capable of accommodating the changes in the structure of a growing economy without resorting to frequent amendments. Therefore, to the extent possible, the essential and general principles have been reflected in the statute and the matters of detail are contained in the rules/schedules.
  
• Ensure that the law can be reflected in a Form: for most taxpayers, particularly the small and marginal category, the tax law is what is reflected in the Form. Therefore, the structure of the tax law has been designed so that it is capable of being logically reproduced in a Form.
  
• Consolidation of provisions: in order to enable a better understanding of tax legislation, provisions relating to definitions, incentives, procedure and rates of taxes have been consolidated. Further, the various provisions have also been rearranged to make it consistent with the general scheme of the Act.
  
• Elimination of regulatory functions: traditionally, the taxing statute has also been used as a regulatory tool. However, with regulatory authorities being established in various sectors of the economy, the regulatory function of the taxing statute has been withdrawn. This has significantly contributed to the simplification exercise.
  
• Providing stability: at present, the rates of taxes are stipulated in the Finance Act of the relevant year. Therefore, there is a certain degree of uncertainty and instability in the prevailing rates of taxes. Under the Code, all rates of taxes are proposed to be prescribed in the First to the Fourth Schedule to the Code itself thereby obviating the need for an annual Finance Bill. The changes in the rates, if any, will be done through appropriate amendments to the Schedule brought before Parliament in the form of an Amendment Bill.
  

Value Added Tax (VAT)

One of the important components of tax reforms initiated since liberalization is the introduction of Value Added Tax (VAT). VAT is a multi-point destination based system of taxation, with tax being levied on value addition at each stage of transaction in the production/ distribution chain. The term 'value addition' implies the increase in value of goods and services at each stage of production or transfer of goods and services. VAT is a tax on the final consumption of goods or services and is ultimately borne by the consumer. It is a multi-stage tax with the provision to allow 'Input tax credit (ITC)' on tax at an earlier stage, which can be appropriated against the VAT liability on subsequent sale. This input tax credit in relation to any period means setting off the amount of input tax by a registered dealer against the amount of his output tax. It is given for all manufacturers and traders for purchase of inputs/supplies meant for sale, irrespective of when these will be utilised/ sold. The VAT liability of the dealer/ manufacturer is calculated by deducting input tax credit from tax collected on sales during the payment period (say, a month). If the tax credit exceeds the tax payable on sales in a month, the excess credit will be carried over to the end of next financial year. If there is any excess unadjusted input tax credit at the end of second year, then the same will be eligible for refund. VAT is basically a State subject, derived from Entry 54 of the State List, for which the States are sovereign in taking decisions. The State Governments, through Taxation Departments, are carrying out the responsibility of levying and collecting VAT in the respective States. While, the Central Government is playing the role of a facilitator for the successful implementation of VAT. The Ministry of Finance is the main agency for levying and implementing VAT, both at the Centre and the State level.
The Department of Revenue, under the Ministry of Finance, exercises control in respect of matters relating to all the direct and indirect taxes, through two statutory Boards, namely, the Central Board of Direct Taxes (CBDT) and the Central Board of Customs and Central Excise (CBEC). The Sales Tax Division, of Department of Revenue, deals with enactment and amendment of the Central Sales Tax Act; levy of tax on sales in the course of inter-State trade or commerce; levy of VAT; etc. The Central Board of Excise and Customs (CBEC) deals with the tasks of formulation of policy concerning levy and collection of customs and central excise duties, allowing of Central Value added Tax (CENVAT) credit, etc. While, the decision to implement State level VAT has been taken in the meeting of the Empowered Committee (EC) of State Finance Ministers, held on June 18, 2004, where a broad consensus was arrived at to introduce VAT in all States/ Union Territories (UTs).

The entire design of VAT with input tax credit is crucially based on documentation of tax invoice, cash memo or bill. Every registered dealer, having turnover of sales above an amount specified, needs to issue to the purchaser serially numbered tax invoice with the prescribed particulars. This tax invoice is to be signed and dated by the dealer or his regular employee, showing the required particulars. For identification/ registration of dealers under VAT, the Tax Payer's Identification Number (TIN) is used. TIN consists of 11 digit numerals throughout the country. Its first two characters represent the State Code and the set-up of the next nine characters can vary in different States.
In India's prevalent sales tax structure, there have been problems of double taxation of commodities and multiplicity of taxes, resulting in a cascading tax burden. For instance, in this structure, before a commodity is produced, inputs are first taxed, and then after the commodity is produced with input tax load, output is taxed again. This causes an unfair double taxation with cascading effects. Hence, the VAT has been introduced to replace such sales tax structure. Moreover, it seeks to phase out the Central Sales Tax (CST) and several efforts are being made in this regard.
The main motive of VAT has been the rationalisation of overall tax burden and reduction in general price level. Thus, it seeks to help common people, traders, industrialists as well as the Government. It is indeed a move towards more efficiency, equal competition and fairness in the taxation system. The main benefits of implementation of VAT are:-

• Minimizes tax evasion as VAT is imposed on the basis of invoice/ bill at each stage, so that tax evaded at first stage gets caught at the next stage;
• A set-off is given for input tax as well as tax paid on previous purchases;
  
• Abolishes multiplicity of taxes, that is, taxes such as turnover tax, surcharge on sales tax, additional surcharge, etc. are being abolished;
• Replaces the existing system of inspection by a system of built-in self-assessment of VAT liability by the dealers and manufacturers (in terms of submission of returns upon setting off the tax credit);
• Tax structure becomes simpler and more transparent;
  
• Improves tax compliance;
• Generates higher revenue growth;
• Promotes competitiveness of exports; etc.

At the Central level, there is Central Value Added Tax (CENVAT) which pertains to the rationalisation of Central excise duty structure in India. At present, there is a uniform rate of CENVAT of 16 per cent on most of the inputs and final products. The CENVAT has been introduced to end all the disputes that were taking place due to classification of various types of inputs as rates were different on different varieties. Accordingly, the CENVAT Credit Rules have been notified and amended, from time to time, which are as follows:-

• The Cenvat Credit Rules, 2004
• The Cenvat Credit Rules, 2002
• The Cenvat Credit Rules, 2001
  

Under these, a manufacturer or producer of final products and a provider of output service is allowed to take credit (known as CENVAT credit) of the duty of excise, as mentioned in the Rules, paid on specified inputs and capital goods used in or in relation to the manufacture of specified final products. The CENVAT credit so allowed can be utilized for payment of :- (i) any duty of excise on any final product; or (ii) an amount equal to CENVAT credit taken on inputs, if such inputs are removed as such or after being partially processed; or (iii) an amount equal to the CENVAT credit taken on capital goods, if such capital goods are removed as such; or (iv) service tax on any output service, as per the conditions laid down in the rules. In the latest budget, it is proposed to reduce the general CENVAT rate on all goods from 16 per cent to 14 per cent in order to give a stimulus to the manufacturing sector.

At the State level, the Empowered Committee of State Finance Ministers have finalized a design of VAT to be adopted by all the States/ UTs. This basic design of VAT retains the essential features of VAT and keep them common for all the States/ UTs, like, the rates of VAT on various commodities are kept uniform for all. At the same time, it provides a measure of flexibility to the States/ UTs so as to enable them to meet their local requirements.
At present, there are 2 basic rates of VAT, namely, 4 per cent and 12.5 per cent, besides an exempt category and a special rate of 1 per cent for a few selected items. The items of basic necessities and goods of local importance (upto 10 items) have been put in the zero rate bracket or the exempted schedule. Gold, silver and precious stones have been put in the 1 per cent schedule. There is also a category with 20 per cent floor rate of tax, but the commodities listed in this schedule are not eligible for input tax rebate/set off. This category covers items like motor spirit (petrol, diesel and aviation turbine fuel), liquor, etc. Some of the other features of VAT in the State (as finalized by the Empowered Committee) are:-

• As per provision for eliminating the multiplicity of taxes, all the State taxes on purchase or sale of goods (excluding Entry Tax in lieu of Octroi) are required to be subsumed in VAT or made VATable.
• A provision has been made for allowing 'Input Tax Credit (ITC)' which is the basic feature of VAT. However, since the VAT being implemented is intra-State VAT only and does not cover inter-State sale transactions, ITC is not to be available on inter-State purchases.
• Exports to be zero-rated, with credit given for all taxes on inputs/purchases related to such exports.
• There are provisions to make the system more business-friendly. For instance, provision for self assessment by the dealers; provision of a threshold limit for registration of dealers in terms of annual turnover of Rs. 5 lakhs; and provision for composition of tax liability up to annual turnover limit of Rs. 50 lakhs.
• Regarding the industrial incentives, the States have been allowed to continue with the existing incentives, without breaking the VAT chain. Further, no fresh sales tax/ VAT-based incentives are permitted.

Haryana became the first State in the country to introduce Value Added Tax (VAT). Till 2007, VAT has been introduced by more than 30 States/UTs, including Tamil Nadu (implemented VAT from January 1, 2007) and the UT of Puducherry (implemented VAT from April 1, 2007). From January 01, 2008, the Government of Uttar Pradesh has made VAT effective in the State. Some of the other States/ UTs which have implemented VAT are:-

• Andhra Pradesh
• Chhattisgarh
• Delhi
• Goa
• Gujarat
• Jammu and Kashmir
• Jharkhand
• Karnataka
• Kerala
• Maharashtra
• Meghalaya
• Orissa
• Rajasthan
• West Bengal

Over the years, the experience of implementing VAT in India has been very encouraging, with the Empowered Committee constantly reviewing the progress of implementation. The revenue performance of VAT-implementing States/UTs has also been very significant. During 2006-07, the tax revenue of the 31 VAT States/UTs had collectively registered a growth rate of about 21 per cent over the tax revenue of 2005-06. During 2007-08, the tax revenue of 32 VAT States/UTs showed a further growth of 14.6 per cent during the first six months of 2007-08 (April-September) as compared to the corresponding period of last year.
Besides, the Central Government had announced a compensation package under which the States are compensated for any revenue loss on account of VAT introduction at the rate of 100 per cent of revenue loss during 2005-06, 75 per cent during 2006-07 and 50 per cent during 2007-08. Further, the technical and financial support are being provided to the States/ UTs for VAT computerization, publicity and awareness and other related aspects.

Service Tax

Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. Service Tax was introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on a initial set of three services in 1994 and the scope of the service tax has since been expanded continuously by subsequent Finance Acts. The Finance Act, extends the levy of service tax to the whole of India, except the State of Jammu & Kashmir.
The Central Board of Excise & Customs (CBEC) under Department of Revenue in the Ministry of Finance, deals with the task of formulation of policy concerning levy and collection of Service Tax. In exercise of the powers conferred, the Central Government makes service tax rules for the purpose of the assessment and collection of service tax. The Service Tax is being administered by various Central Excise Commissionerates, working under the Central Board of Excise & Customs. There are six Commissionerates located at metropolitan cities of Delhi, Mumbai, Kolkata, Chennai, Ahmedabad and Bangalore which deal exclusively with work related to Service Tax. Directorate of Service Tax at Mumbai over sees the activities at the field level for technical and policy level coordination.

Excise Duty

Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. It is a tax on manufacturing, which is paid by a manufacturer, who passes its incidence on to the customers. The term "excisable goods" means the goods which are specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 , as being subject to a duty of excise and includes salt.
The term "manufacture" includes any process,

1. Incidental or ancillary to the completion of a manufactured product and
2. Which is specified in relation to any goods in the Section or Chapter Notes of the First Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture or
3. Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer.

As incidence of excise duty arises on production or manufacture of goods, the law does not require the sale of goods from place of manufacture, as a mandatory requirement. Normally, duty is payable on 'removal' of goods. The Central Excise Rules provide that every person who produces or manufactures any 'excisable goods', or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rules or under any other law. No excisable goods, on which any duty is payable, shall be 'removed' without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided. The word 'removal' cannot be necessarily equated with sale.

The removal may be for:-

1. Sale
2. Transfer to depot etc.
3. Captive consumption
4. Transfer to another unit
5. Free distribution

Thus, it can be seen that duty becomes payable irrespective of whether the removal is for sale or for some other purpose.

Wealth Tax

Wealth tax is a direct tax, which is charged on the net wealth of the assessee. It is a tax on the benefits derived from ownership of property. The tax is to be paid year after year on the same property on its market value, whether or not such property yields any income. Wealth tax, in India, is levied under Wealth-tax Act, 1957. The Income tax department under the Department of Revenue in the Ministry of Finance administers the Wealth Tax Act, 1957 as well as the Wealth Tax Rules framed there under.

Under the Act, the tax is charged in respect of the wealth held during the assessment year by the following persons :-

• Individual
• Hindu Undivided Family(HUF)
• Company

Chargeability to tax also depends upon the residential status of the assessee same as the residential status for the purpose of the Income Tax Act.

Wealth tax is not levied on productive assets, hence investments in shares, debentures, UTI, mutual funds, etc are exempt from it. The assets chargeable to wealth tax are :-

• Guest house, residential house, commercial building
• Motor car
• Jewellery, bullion, utensils of gold, silver etc
• Yachts, boats and aircrafts
• Urban land
• Cash in hand(in excess of 50,000), only for Individual & HUF

The following will not be included in Assets :-

• Any of the above if held as Stock in trade.
• A house held for business or profession.
• Any property in nature of commercial complex.
• A house let out for more than 300 days in a year.
• Gold deposit bond.
• A residential house allotted by a Company to an employee, or an Officer, or a Whole Time Director ( Gross salary i.e. excluding perquisites and before Standard Deduction of such Employee, Officer, Director should be less than Rs. 5,00,000).

The Assets exempt from Wealth tax are :-

• Property held under a trust.
• Interest of the assessee in the coparcenary property of a HUF of which he is a member.
• Residential building of a former ruler.
• Assets belonging to Indian repatriates.
• One house or a part of house or a plot of land not exceeding 500sq.mts,for individual & HUF assessee.

Wealth tax is chargeable in respect of Net wealth corresponding to Valuation date.(Net wealth means all assets less loans taken to acquire those assets. Valuation date means 31st March of immediately preceding the assessment year). In other words, the value of the taxable assets on the valuation date is clubbed together and is reduced by the amount of debt owed by the assessee. The net wealth so arrived at is charged to tax at the specified rates. Wealth tax is charged @ 1% of the amount by which the net wealth exceeds Rs. 15 Lakhs.

MODVAT and CENVAT

Taxation of inputs, like raw materials, components and other intermediaries had a number of limitations. In production process, raw material passes through various processes stages till a final product emerges. Thus, output of the first manufacturer becomes input for second manufacturer and so on. When the inputs are used in the manufacture of product `A', the cost of the final product increases not only on account of the cost of the inputs, but also on account of the duty paid on such inputs. As the duty on the final product is on ad valorem basis and the final cost of product `A' includes the cost of inputs, inclusive of the duty paid, duty charged on product `A' meant doubly taxing raw materials. In other words, the tax burden goes on increasing as raw material and final product passes from one stage to other because, each subsequent purchaser has to pay tax again and again on the material which has already suffered tax. This is called cascading effect or double taxation. This very often distorted the production structure and did not allow the correct assessment of the tax incidence. Therefore, the Government tried to remove these defects of the Central Excise System by progressively relieving inputs from excise and countervailing duties. An ideal system to realize this objective would have been to adopt value added taxation (VAT). However, on account of some practical difficulties it was not possible to fully adopt the value added taxation. Hence, Government evolved a new scheme, `MODVAT' (Modified Value Added Tax). MODVAT Scheme which essentially follows VAT Scheme of taxation. i.e. if a manufacturer A purchases certain components(raw materials) from another manufacturer B for use in its product. B would have paid excise duty on components manufactured by it and would have recovered that excise duty in its sales price from A. Now, A has to pay excise duty on product manufactured by it as well as bear the excise duty paid by the supplier of raw material B. Under the MODVAT scheme, a manufacturer can take credit of excise duty paid on raw materials and components used by him in his manufacture. It amounts to excise duty only on additions in value by each manufacturer at each stage. The modvat scheme is regulated by Rules 57A to 57U of the Central Excise Rules and the notifications issued there under (The Central Excise Rules, 2002 (Section 143 of the Finance Act, 2002). Modvat Scheme ensures the revenue of the same order and at same time the price of the final product could be lower. Apart from reducing the costs through elimination of cascade effect, and bringing in greater rationalization in tax structure and also bringing in certainty in the amount of tax leviable on the final product, this scheme will help the consumer to understand precisely the impact of taxation on the cost of any product and will, therefore, enable consumer resistance to unethical attempts on the part of manufacturers to raise prices of final products, attributing the same to higher taxes. Subsequently, MODVAT scheme was restructured into CENVAT( Central Value Added Tax) scheme. A new set of rules 57AA to 57AK , under The Cenvat Credit Rules, 2004, were framed and whatever restrictions restrictions were there in MODVAT Scheme were put to an end and comparatively, a free hand was given to the assesses. Under the Cenvat Scheme, a manufacturer of final product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product. The term "Input" means: - All goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production All goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1 : The light diesel oil, high-speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2 : Inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer;" The term "Input service" means any service: - Used by a provider of taxable service for providing an output service; or Used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, And includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;" Manufacturer and service providers can avail Cenvat credit of capital goods used by them. The plant and machinery and allied items are purchased by a manufacturer. Such goods known as capital goods may be duty paid. The capital goods shall be used in manufacture of final products or for providing output service. The CENVAT credit in respect of duty paid on capital goods shall be taken only for an amount not exceeding fifty percent of the duty paid in the same financial year and the credit of balance amount can be take in any financial year subsequent to the financial year in which the capital goods were received. Duty Paying Documents against which CENVAT credit can be availed are:- Invoice issued by A manufacture of inputs or capital goods. An importer An importer from his depot or premises of consignment agent, Provided the depot/ premises is registered with central excise A first/second stage dealer. A supplementary invoice A bill of entry. A certificate issued by appraiser of customs An invoice/bill/challan issued by providers of input service. A challan evidencing payment of service tax. Credit of duty is allowed only if all the conditions given below are met:- The basic criteria for availment of credit of duty paid on inputs or capital goods is that the goods shall be used in manufacture of final products. The goods shall be accompanied with proper prescribed documents. The final products shall not be exempt from whole of duty or chargeable to nil rate of duty.

All India Consumer Price index Numbers for Industrial Workers on base 2001=100 for the Month of March, 2011

All India Consumer Price Index Number for Industrial Workers (CPI-IW) on base 2001=100 for the month of  March, 2011 remained stationary at 185 (one hundred and eighty five).

        During March, 2011, the index recorded decrease of 4 points in Chennai centre, 3 points each in Warrangal, Tiruchirapally, Vadodara and Quilon centres, 2 points in 12 centres and 1 point in 17 centres. The index increased by 6 points in Srinagar centre, 5 points in Hubli Dharwar centre, 3 points each in Bhilai, Sholapur and Mysore centres, 2 points in 5 centres, 1 point in 13 centres, while in the remaining 21 centres the index remained stationary.

                 The maximum decrease of 4 points  in  Chennai centre is mainly on account of decrease in the prices of Rice, Onion, Garlic, Vegetable items, Flower/Flower Garlands, etc. The decrease of 3 points each in Warrangal, Tiruchirapally, Vadodara and Quilon centres is due to decrease in the prices of Rice, Arhar Dal, Onion, Garlic, Vegetable items, etc. The increase of 6 points in Srinagar centre is the outcome of increase in the prices of Rice, Poultry (Chicken), Vegetable & Fruit items, Bus Fare, Tailoring Charges, Utensils Copper, etc. The increase of 5 points in Hubli Dharwar centre is due to increase in the prices of Rice, Goat Meat, Fish Fresh, Milk, Tea (Readymade), Pan Leaf, etc. whereas, the increase of 3 points each in Bhilai, Sholapur and Mysore centres  is due to increase in the prices of Rice, Wheat, Milk,  Coffee Powder, Firewood, etc.

            The indices in respect of the six major centres are as follows :

1. Ahmedabad	177		4. Delhi	169
2. Bangalore	188		5. Kolkata	178
3. Chennai	163		6. Mumbai	183

            The All-India (General) point to point rate of inflation for the month of March, 2011 remained static at 8.82% in comparison with the level of February, 2011. Inflation based on Food Index is 8.29% in March, 2011 as compared to 7.65% in February, 2011.

Census 2011: Population pegged at 1.21 billion

India's most backward and populous States slowed down their rate of population growth, helping the country register its sharpest decline in population growth since Independence. India's population grew to 1.21 billion, according to provisional results of the decadal headcount declared by Census Commissioner C. Chandramouli on March 30, 2011.

The absolute addition of about 181 million people is slightly less than the population of Brazil—the world fifth most populous country—but the slower decadal growth rate of 17.64% has offered hope to policy makers. This is the first time since 1921 that the country has actually added lesser people in a decade compared to the previous decade.

Eight States, including India's most backward States—Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh—broke the jinx to reduce their percentage decadal growth to 20.9%. This is a significant achievement since the growth rates of these States had frozen at 24-25% since 1971.
The absolute number of children in the 0-6 age group also recorded decline, from 163 million in the 2001 census to 158 million in 2011, signalling a fall in fertility. But worryingly, this decline is sharper in case of females than males.

The figures broadly indicate a drop in fertility across the country except in Jammu & Kashmir, where the proportion of children has in fact increase to 16.01%, compared to 14.65 in 2001.

There are 57 more Indians for every square kilometer in addition to those already jostling for space in the country. Census 2011 shows that from 325 per square km in 2001, the average density of population has increased to 382 in 2011—up by 17.5%. While the cow-belt and West Bengal continues their dominance, the density spread is more in the urban areas, pointing to the pressure on the natural resources, infrastructure and government aid.

India accounts for a meager 2.4% of the world surface area of 135 million sq km and supports 17.5% of the world’s population. In contrast, the US accounts for 7.2% of the surface area with only 4.5% of the population.

At 11,297 people for every sq km, Delhi tops the list of States and Union Territories in terms of density. Chandigarh comes next, with 9,252 people.

Among States, however, the top slot goes to Bihar with 1,102 people/ sq km. West Bengal is the only other State to have a density in excess of 1,000. Uttar Pradesh, otherwise the most populous State, has a density of only 828.

Andaman and Nicobar and Arunachal Pradesh are the least densely populated territories, with 46 and 17 people, respectively, in every sq km.

Dibang valley of Arunachal has only one person in a sq km, while Samba in J&K has two.

Nagaland is the only State that has statistically demonstrated a negative growth rate and a marginal decline in density.

Women steal literacy lead over men: More Indian women gained literacy over the past decade than men, according to the 2011 census. A total of 110 million additional women have become literate since 2001, as opposed to 107 million men over the same period. Never before have women outdone men in numbers gaining literacy over any decade.

India’s overall literacy rate has risen from 64.8 % in 2001 to 74.04% — but the surge in women literates means the gap between male and female literacy has shrunk.

While male literacy has increased from 75.2% in 2001 to 82%, female literacy has jumped from 53.6% to 65.4% over the same period.

The literacy increase—overall and for women—follows a decade in which successive governments have focused on school education like never before since Independence.

The Sarva Shiksha Abhiyaan launched in 2001, along with the universalisation across government schools of the mid-day meal scheme, are credited by most experts as critical interventions that have helped India achieve near universal enrollment in primary education.

Bihar and Uttar Pradesh—traditional laggards in education—have shown maximum improvement both in improving overall literacy and in their female literacy rate.

Bihar’s overall literacy has gone up from 47% in 2001 to 63.8% in 2011, while UP’s overall literacy has risen from 42.2% to 59.3% over the same period. The female literacy rate of Bihar has jumped a startling 20%—from 33.1% in 2001 to 53.3% now. UP has a seen a rise from 42.2% to 59.3% in female literacy.

Kerala remains at the top of the pile in overall, male and female literacy.

Child sex ratio of India, as per Census 2011, is 914 females against 1000 males. This is lowest since independence. The overall sex ratio has risen by 7 points to 940 females per 1000 males.

Five most populated States of India are (as per 2011 Census): Uttar Pradesh, Maharashtra, Bihar, West Bengal and Andhra Pradesh. Five least populated States/UTs are: Lakshadweep, Daman & Diu, Dadar & Nagar Haveli, Andaman & Nicobar and Sikkim.

India now accounts for 17.5% of the world’s population. China accounts for 19.4%.

India’s total population, as per the 2011 Census is 12102.2 million. Out of this 586.5 are females and 623.7 are males.

Literacy rate of India, as per Census 2011 has gone up to 74.04% from 64.83% a decade ago. 82.4% is male literacy and 65.46 is female literacy.

The decadal growth rate of population in 2001-11 was 17.64%. It was 21.54% in the previous decade.

The density of population of India (as per Census 2011) is 382 persons per sq km. Delhi (11,297) is the densest State, followed by Chandigarh (9,252). Arunachal Pradesh is the least dense State with a density of 17.

FDI policy liberalised

Relaxing the rules for foreign direct investment (FDI) in the country, the Union government, on March 31, 2011, decided to permit the issuance of equity to overseas firms against imported capital goods and machinery. Furthermore, the norms for overseas investment in production and developments of seeds have been liberalised.

The measure which liberalises the conditions for conversion of non-cash items into equity, is expected to significantly boost the prospects for foreign companies doing business in India.

In the agriculture sector, FDI will now be permitted in the development and production of seeds and planting material without the stipulation of having to do so under 'controlled conditions'.

The government has further decided to abolish the condition of prior approval in case of existing joint ventures and technical collaborations in the 'same field'. It is expected that this measure will promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI and technology inflows into the country.

Further, companies have now been classified into only two categories—'companies owned or controlled by foreign investors' and 'companies owned and controlled by Indian residents'.

The earlier categorisation of 'investing companies', 'operating companies' and 'investing-cum-operating companies' has been done away with.

Primer on Goods and Services Tax (GST)

The nationwide Goods and Services Tax (GST) roll-out has entered the final stage with the Union government introducing the Constitution Amendment Bill. It is a uniform national tax to be levied across the country on all goods and services.

The current indirect tax system in India is mired in a maze of multi-layered taxes levied by the Centre and States at different stages of the supply chain such as excise duty, octroi, central sales tax, value-added tax and service tax. Under GST, all these will be subsumed under a single tax.

The plan is to roll out the regime on April 1, 2012.

The Finance Commission estimates prices of agricultural goods will increase between 0.61% and 1.18%, while prices of manufactured items would fall by 1.22-2.53%.

A corpus of about Rs 50,000 crore is likely to be set up to compensate States for any loss of revenue due to GST implementation.

A GST council will be created, which will act as a joint forum for the Centre and States. It will be headed by the Finance Minister and will have Finance Ministers of each State as members. The council will decide on tax rates, exemptions and threshold limits.

There will be a dual GST structure—one for Centre and the other for States. The proceeds of the central GST would be shared between Centre and States on basis of the devolution formula recommended by the Finance Commission.