[Mission 2022] QUIZ – 2022: INSIGHTS STATIC QUIZ, 29 March 2022 – Economy – INSIGHTSIAS

Solution:  b)

India surpassed its ambitious export target of $400 billion in March 2022. Merchandise exports from India crossed $400 billion in the current financial year, 9 days ahead of schedule. This is far higher than the previous record of $330 billion achieved in 2018-19

India’s merchandise export in February 2022 was USD 33.81 billion, an increase of 22.36% over USD 27.63 billion in February 2021 and an increase of 21.88% over USD 27.74 billion in February 2020. 

An increase in merchandise exports to GDP ratio has a net positive impact on BOP position.

Solution: d)

• A foreign currency convertible bond (FCCB) is a type of bond that is issued in a currency other than the issuer’s home currency.

• Convertible bonds fall in the middle of debt and equity financial instruments, both acting as a bond but allowing investors to convert the bond into stock.

• These kinds of bonds are often listed by large, multinational companies with offices around the world, seeking to raise money in foreign currencies.

Solution: b)

HSN stands for ‘Harmonized System Nomenclature.’ The WCO (World Customs Organization) developed it as a multipurpose international product nomenclature that first came into effect in 1988 with the vision of facilitating the classification of goods all over the World in a systematic manner.

Solution: d)

The commerce ministry’s arm Directorate General of Foreign Trade (DGFT) has introduced an online system for traders who seek tariff rate quota (TRQ) for imports, a move aimed at promoting ease of doing business in the country.

The TRQ is a mechanism that allows import of a set quantity of specific products. Tariff quotas are used on a wide range of products but most are in the agriculture sector. Cereals, meat, fruit and vegetables, and dairy products are the most common, and sugar is also protected in most producing countries.

Solution: d)

The term ‘Washington Consensus’ was coined by the US economist John Williamson (in 1989) under which he had suggested a set of policy reforms which most of the official in Washington (i.e., International Monetary Fund and World Bank) thought would be good for the crisis-driven Latin American countries of the time. The policy reforms included ten propositions:

• Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP;
• Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
• Tax reform, broadening the tax base and adopting moderate marginal tax rates;
• Interest rates that are market determined and positive (but moderate) in real terms;
• Competitive exchange rates;
• Trade liberalization: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
• Liberalization of inward foreign direct investment;
• Privatization of state enterprises;
• Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions;
• Legal security for property rights.