GENERAL AWARENESS MCQs FOR BANK EXAMS

1. On 24 March 2011, to which bank, RBI had given permission to raise Rs.1000 cr. of which Rs.500 cr. can be raised through GDRs also?
1) ICICI bank
2) YES bank
3) HDFC bank
4) ING Vysya Bank
5) Dhanalaxmi Bank

2. If a letter from a bank, guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount, it is called ………?
1) Indemnity
2) Pledge
3) Mortgage
4) Letter of Credit
5) Estoppel

3. ……… sanctioned $89.7 million to Assam Power Sector Enhancement program?
1) IBRD (International Bank for Reconstruction and Development
2) IMF ( International Monetary Fund)
3) IDA (International Development Association)
4) ADB ( Asian Development Bank)
5) IFC ( International Finance Corporation)

4. On 21 February 2011, Reliance Industrial Limited (RIL) sold away the sale of 30% stake in 23 blocks to the ..……… for $ 7.2 billion?
1) Scotland Oil
2) Vodafone
3) London Oil
4) Llyod Insurance
5) British Petroleum

5. March list of days given. Pick up wrong one?
1) 8 March- International Women's Day
2) 15 March- World Consumer Day
3) 17 March- National Vaccination Day
4) 19 March - World Disabled Day
5) 22 March- World Day for Water

6. Recently India’s longest rail bridge work completed having the length of 4.62 km connecting Idapalli to Vallarpadam in Kochi in ..……..?
1) Tamilnadu
2) Bihar
3) Kerala
4) Odisha
5) Goa

7. On 11 January 2011, India’s third Antarctica research centre officially opened. It is .......?
1) Maitri
2) Dakshin Gangothri
3) Himadri
4) Astra
5) Bharati

8. 22nd Moorti devi Award got by Dr. Raghuvansh (Hindi) and 23rd Moorti devi Award got by .……, the Malayalam writer.
1) C. Narayan Reddy
2) Akkitham Achuthan Namboodiri
3) O.N.V. Kurup
4) Veerappa Moily
5) Vishnu Sastry

9. How many teams participated in 2011 Cricket cup?
1) 15
2) 18
3) 14
4) 10
5) 8

10. National Games highest tally of Gold medals got by ……………? ( 70 Gold Medals)
1) Manipur
2) Haryana
3) Goa
4) Services
5) Assam
11. India is the ............ largest nation in the terms of Purchasing Power Parity ( PPP)
1) Second
2) Fifth
3) Third
4) Fourth
5) Tenth

12. The famous personalities are given. Pick up correct pair?
1) K. Subramanyam - Defence Analyst
2) Fateh Singh - Conservator for Wild Life
3) Ashok Sahani - Mining
4) K.S.Chitra - Vocal Music
5) All of above

13. The heads of the states/ appointments are given. Pick up wrong one?
1) Loonel Fernandez Reyna-president of Dominican Republic
2) James Alix - president of Scychelles
3) Mari Kiviniemi - Prime minister of Finland
4) Kamala Persad - Bissessar- Prime minister of Trinidad and Tobago
5) None

14. Which day is celebrated as Earth day?
1) 18 April
2) 14 April
3) 22 April
4) 23 April
5) 7 April

15. Indian National Maritime day celebrated on ............?
1) 12 January
2) 15 January
3) 28 February
4) 5 April
5) 8 March

16. The books written by V.S. Naipaul?
1) Half a Life
2) A House for Mr. Biswas
3) In A Free State
4) Bend in the River
5) All of above

17. Which among the following book is not written by A.P.J.Abdul Kalam?
1) Inspiring Thoughts
2) wings of fire
3) The Greatness Guide
4) 2020- A Vision for the New Millennium
5) My Journey

18. The highest number of wickets taken in World cup Cricket 2011 (with economy rate of 3.62 ) is .............
1) Muralidharan
2) Yuvaraj Singh
3) Zaheer Khan
4) Tim Southee
5) Shahid Afridi

19. The statements related to the famous Games in the world are given. Pick up wrong one?
1) Olympics- 2008 (Beijing), 2012 (London), 2016 ( Rio)
2) Common Wealth Games-2006 (Sydney), 2010 (New Delhi) , 2014 (Glasgow)
3) Asian Games-2006 (Doha), 2010 (Guangzhou) , 2014 (Incheon)
4) South Asian Games-2006 (Colombo), 2010 (Dhaka), 2012 (New Delhi)
5) None

20. The sports terms are given. Pick up correct one?
1) Cricket- Ashes, Banana, Caught, Doosra, Fine Leg, Googly, Hat-trick, In swing
2) Chess-Bishop, Capture, Grand Master, King, Pawn, Queen, Rook, Stalemate
3) Basket Ball-Basket, Blocking, Free Throw, Jump Ball, Multiple Throws
4) Hockey- Advantage, Bully, Corner, Dribble, Free-hit, Goal Line, Green Card
5) All of above

21. To protect the farmers and cattle growers against any eventual loss of their animals due to death …….. was introduced by the ministry of Agriculture in 2005-06. The premium also subsidized up to 50% by the governments.
1) Animal Health Insurance Scheme
2) Animal Health Scheme
3) Live Stock Protection Scheme
4) Animal Breeding Scheme
5) Livestock Insurance Scheme

22. Rashtriya Swasthya Bima Yojna (RSBY) announced by the Prime Minister August 15, 2007, to provided the insurance cover to Below Poverty Line (BPL) up to Rs.30,000 per annum for a nominal registration of Rs. ………. ?
1) 100
2) 200
3) 30
4) 150
5) 500

23. Union Budget 2011-2012 enhanced Lower Excise duty from 4 percent to ..……%?
1) 5
2) 6
3) 7
4) 8
5) 9

24. Aam Admi Bima Yozana (AABY) announced on 2 October 2008, provides the insurance if the bread winner in the family dies or disabled in the rural area. Who administers this scheme?
1) LIC
2) State Governments
3) UNO
4) ASHA
5) None

25. Provision of Urban Amenities in Rural Areas (PURA) provide the ..… organized by Ministry of Rural
Development (MoRD)?
1) Urban Infrastructure
2) Rural Infrastructure
3) School Education
4) Higher education
5) All of above

26. Indira Gandhi National Widow Pension Scheme introduced on 1 February 2009, provide the pension of Rs.200 to the widows aged between ……..years?
1) 40-60
2) 50-70
3) 55-65
4) 45-64
5) 58-65

27. The Custom duty exemptions as per the 2011-12 Budget proposals are given below. Pick up Correct one?
1) Batteries imported by manufacturers of electrical vehicles
2) Concessional excise duty of 10 per cent to vehicles based on Fuel cell technology.
3) Basic customs duty on solar lantern reduced from 10 to 5 per cent.
4) Exemption from import duty for spares and capital goods required for ship repair units extended to import by ship owners
5) All of above

28. The book list is given. Pick up wrong one?
1) R.K.Narayan-Swami and Friends, Grand Mother’s Tale, A tiger of malgudi, the man- eater of malgudi, A horse and Two Goats, The Bachelor of Arts, The Guide
2) A.P.J.Abdul Kalam- Inspiring Thoughts, wings of fire, Indomitable Spirit, 2020- A Vision for the New Millennium, Guiding Souls, Envisioning an Empowered Nation
3) Chetan Bhagat-2 States, 3 Mistakes of My life, One Night @ The call Center,Five Point Some One
4) Robin Sharma- The Greatness Guide, The Monk Who Sold His Ferrari, The Leader Who Had No Title: A Modern Fable On Real Success in Business and in Life
5) None

29. Which bank was emerged as the most popular bank 2010 in the case of more online visits?
1) SBI
2) CITI bank
3) HDFC
4) Bank of Baroda
5) None

30. The Railway Budget 2011-2012 proposals to construct new projects are given below. Pick up correct one?
1) A bridge factory will be set up in Jammu
2) Disel Locomotive unit will be established in Manipur
3) Wagon units in Kolar (Kerala), Alappuzha (Kerala) and Buniadpur (West Bengal)
4) 700 MW gas based power plant will be established in Thakurli in Maharastra
5) All of above

31. The recent appointments and elections was given. Pick up wrong one?
1) Pascal Lamy elected as the Director General of WTO
2) Anibal Cavaco Silva elected as the president of Portugal second time
3) Sudhir Chandra took oath as the chairman of Central Board of Direct Taxes.
4) K.S. Das Guptha became the Director of the Indian Institute of Space Science and Technology
5) None

32. To kill the financial problems of Hand Weavers, Union Government provides Rs. 3,000 cr to ………… as per the budget 2011-12?
1) SBI
2) SFC
3) NCB
4) State Governments
5) NABARD

33. SAIL ultimately got clearance from the ministry of environment and forests to dig Iron Ore Mines. These mines are located in ……….?
1) Goa
2) Odisha
3) Andhra Pradhesh
4) Jharkhand
5) Bihar

34. IAF inducted ‘Super Hercules’ Transport  Aircraft, imported from ………?
1) Russia
2) UK
3) France
4) USA
5) Italy

ANSWERS:
1-5; 2-4; 3-4; 4-5; 5-3; 6-3; 7-5; 8-2; 9-3; 10-4; 11-4; 12-5; 13-5; 14-3; 15-4;
16-5; 17-3; 18-5; 19-5; 20-5; 21-5; 22-3; 23-1; 24-1; 25-1; 26-4; 27-5; 28-5;
29-3; 30-5; 31-5; 32-5; 33-4; 34-4.

BANK EXAMS GENERAL AWARENESS MCQs

1. Under Marginal Standing Facility ( MSF) the banks are allowed to borrow up to one percent of their total ......... ?
1) Deposit base
2) Lending
3) Equity
4) Margins
5) Non Provisioning Assets

2. On 7 June, 2011 Syamala Gopinath Committee submitted a report on Small Savings Saving Fund to the finance minister of India. The highlights include .........
1) The Kisan Vikas Patras must be with drawn immediately
2) The long term 10 Years bonds must replace KVP
3) Monthly Savings Scheme and National Savings Certificate Period must be reduced from 6 years to 5 years
4) Post Office savings interest must be raised from 3.5 % to 4.0 %
5) All of above

3. From 1 April 2011, the minimum wage floor level increased from Rs. 100 to Rs. ......... as per the order of Labour Ministry?
1) 115
2) 150
3) 160
4) 175
5) 200

4. After ONGC, IOC, SAIL and NTPC ......... got Maharatna status?
1) CIL
2) BHEL
3) BP
4) RIL
5) RBI

5. Union Government passed FCRA on 2 May 2011. FCRA stands for .........?
1) Foreign Contribution Regulation Act
2) Foreign Conservative Restrictive Act
3) Foreign Contribution Repair Act
4) Foreign Contribution Regulation Apathy
5) None

6. 'Upper Caste Commission' to study the poor and economically backward people in the Upper Castes set up by
1) Bihar
2) Uttarakhand
3) West Bengal
4) Goa
5) Rajasthan

7. Gangadhar Pradhan is an exponent in ......... dance?
1) Kuchipudi
2) Kathak
3) Bihu
4) Bharata Natyam
5) None

8. Games/ Sports events are given. Pick the wrong one?
1) India hosts the 1st Super Series Badminton Championship
2) Novak Djokovic of Italy defeated Rafael Nadal of USA to get ATP Miami Masters Crown
3) Paes- Bhupathi duo clinches Miami Title
4) Chennai Super Kings is the two times IPL winner
5) Polly Umrigar award got by Sachin

9. ......... is used in the banking terminology?
1) Stock
2) Bear
3) Listing
4) Open Market Operations
5) Settlement Day

10. Current Account details are given. Pick the wrong one?
1) Generally the businessman having the more transactions opt this account
2) No rule is there to prohibit to allow the individual to take this account
3) The highest rate of interest paid on this account compare to other accounts
4) Any number of transactions can be done
5) No interest or least interest is paid on this account

11. ......... company agreed to export 1700 Cash Dispenser Machines ( CDM) ( ATM) to SBI having base in USA?
1) Axis
2) Banqit
3) Diebold
4) De La Rue
5) Fujitsu

12. Appreciation of money means .........
1) A hike in the price of money due to general fall in the price level.
2) A hike in the price of money due to general increase in the price level.
3) A reduction in the price of money due to general fall in the price level.
4) Absence of the price of money due to general fall in the price level.
5) None

13. Food Corporation of India got the working capital loan up to Rs. ......... crore from the union government?
1) 5000
2)1500
3) 500
4) 100
5) 50

14. The recent appointments/ambassadors list is given. Pick the correct one?
1) Cabinet Committee on Economic Affairs decided to include Kamal Nath and K.V.Thomas
2) Shaan was appointed as the Tobacco Ambassador of India
3) K.K. Talwar was appointed as the Chairman of Medical Council of India
4) N.K.Browne is the New Air Chief Marshal
5) All of above

15. A Peak of Lies written by ......... ?
1) Urmila Deshpande
2) Karan Singh
3) Kushwant Singh
4) Chetan Bhagath
5) R.K.Narayan

16. India was considered to be the member of NSG on 23 May 2011. NSG is a premier non-proliferation body. NSG means ......... ?
1) Nuclear System Group
2) Nuclear Symphony Group
3) Nuclear Syndrom Group
4) Nuclear Suppliers Group
5) None

17. India is not the member in ......... ?
1) G 20
2) G 77
3) G 15
4) G 7
5) SAARC

18. In the given list of the days which is wrongly matched one?
1) 31 May- World No Tobacco Day
2) 13 April- Jallianwallah Bagh Massacre Day
3) 24 March - World TB Day
4) 2 April- All Fools Day
5) None

19. Chandrayaan-2 to cost Rs. 426 crore as granted by Central Government. The project Director of Chandrayaan is ......... ?
1) Madhavan Nair
2) Radhakrishnan
3) M.Annadurai
4) Kasturi Rangan
5) None

20. ......... is the first cricketer in the world cup to claim five wickets and did half century against Ireland in 2011 WC ICC edition?
1) Sachin
2) Harbhajan
3) Pathan
4) Yuvraj Singh
5) Jahir Khan

21. Find the wrong abbreviation?
1) CVC-Central Vision Commission
2) CEC- Central Election Commission
3) CAG-Comptroller and Auditor General
4) IBA-Indian Banks' Association
5) IBPS-Institute of Banking Personnel Selection

22. The facts relating to Micro Finance Sector as per the statement of Reserve Bank of India on 3 May 2011 given. Pick the Correct one?
1) Micro Finance mean the lending in the small amounts
2) Maximum Rate of Interest levied by them must not cross 26 %
3) Maximum loan can take by the customer from Micro Finance company should not cross Rs. 35,000
4) The above rules are framed by RBI, according to the recommendations of Malegam Committee with few changes
5) All of above

23. On 3 May 2011, RBI in its monetary Policy for 2011-2012, estimated the inflation around ......... percent?
1) 7
2) 8
3) 4
4) 5
5) 6

24. Dedicated Frieght Corridor ( DFC) connecting Khurja (Uttar Pradesh ) to Kanpur (Uttar Pradesh) rail get the fund of $ 975 million from ......... ?
1) IMF
2) IDA
3) IFC
4) IBRD
5) ADB

25. The World Bank details are given. Pick the correct one?
1) Its original name is International Bank for Reconstruction and Development
2) Present members are 187.The latest member is Montenegro ( 18 Jan 2007)
3) Robert B. Zoellick (born in USA, German Origin ) is the present Chairman
4) It has headquarters in Washington D.C
5) All of above

26. India's total public debt increased by .........percent to Rs. 29,21,360 crore?
1) 4
2) 8.5
3) 8.1
4) 1.3
5) 0.6

27. Dailmler Group got license to establish Non-banking Finance company in India. This group belongs to .........?
1) France
2) Hongkong
3) Japan
4) Germany
5) USA

28. 2010-2011 Fiscal deficit (Actual) declared on 31 may 2011. The deficit is ......... percent against the Budget Estimates of
5.1 %?
1) 4.9
2) 4.7
3) 5.1
4) 9.1
5) 6.7

29. To monitor the investigation and the steps being taken to bring back black money stashed away in foreign banks, the supreme court constituted the committee under the chairman ship of Justice .........?
1) Markendeya Kathju
2) Lahoti
3) Dashratha Rama Reddy
4) Dinakarna
5) Jeevan Reddy


30. .........tops in the GDP growth with 11.3 percent in the last five years (2005-10) as per the report of Mckinsey & co. Haryana (11%) , Bihar (9.6%), Karnataka (8.5%) Kerala (8.1%) Andhra Pradesh (7.4%)
1) Delhi
2) Maharastra
3) Kerala
4) Manipur
5) Gujrat

31. The Awards given. Pick up the incorrect one?
1) Sahitya Bharati Samman 2010 conferred on Sitakanta Mohapatra
2) Girdhar Rathi got the Bihari Puraskar for 2010 for Anta ka Sanshaya
3) Indu Sharma Katha Samman got by Vikas Kumar Jha
4) NTPC bagged the Prestigious Business World Award for power Sector
5) None

32. ICC committee recommended the most controversial DRS in all cricket international matches in the coming days. DRS means......... .?
1) Decision Roll System
2) Decision Revision System
3) Deal Review System
4) Decision Review System
5) Dual Revision System

33. On April 7, 2011 as per the statement of RBI, the Credit rate growth rate is ......... in the banks in 2010-2011
1) 21.38
2) 14.25
3) 16.82
4) 20.12
5) 26.31

34. 2010-2011 Deposit growth rates in the banks are ......... percent?
1) 16.84
2) 15.84
3) 16.25
4) 18.54
5) 26.1

35. As per the new order of RBI in May 2011, the government of India is allowed to borrow Rs. ......... crore from the market through Treasury bills of up to one year?
1) 25000
2) 10000
3) 100000
4) 5000
5) 60000

36. The Financial Literacy includes ..........?
1) How to use the limited funds carefully
2) How to invest the funds
3) How to minimize the risk arisen
4) How to reinvest the money earned
5) All of above

37. The recent Sports events are given. Pick the wrong one?
1) Golden Player of IPL-4 - Chris Gayle of RCB
2) Orange Cap to get more runs in (608) IPL-4- Chris Gayle of RCB
3) Purple Cap to get more Wickets (28) in IPL-4- Latish Malinga of Mumbai Indians
4) Best Individual Performance in IPL 4- Paul Valthaty of Kings XI Punjab
5) None

38. Which bank used Tiny Cards with bio metric identification as part of the financial inclusion?
1) ICICI
2) SBH
3) SBI
4) IDBI
5) Axis

ANSWERS:

1.1 2.5 3.1 4.1 5.1 6.1 7.2 8.2
9.4 10.3 11.3 12.1 13.1 14.5 15.1
16.4 17.4 18.4 19.3 20.4 21.1 22.5
23.5 24.4 25.5 26.4 27.4 28.2
29.5 30.5 31.5 32.4 33.5 34.2
35.1 36.5 37.5 38.3.

DIRECT AND INDIRECT TAXES

A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government, a payment exacted by legislative authority. A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority". Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent (often but not always unpaid labour). India has a well developed taxation structure. The tax system in India is mainly a three tier system which is based between the Central, State Governments and the local government organizations. In most cases, these local bodies include the local councils and the municipalities. According to the Constitution of India, the government has the right to levy taxes on individuals and organizations. However, the constitution states that no one has the right to levy or charge taxes except the authority of law. Whatever tax is being charged has to be backed by the law passed by the legislature or the parliament. Article 246 (SEVENTH SCHEDULE) of the Indian Constitution, distributes legislative powers including taxation, between the Parliament and the State Legislature. Schedule VII enumerates these subject matters with the use of three lists;
• List - I entailing the areas on which only the parliament is competent to makes laws,
• List - II entailing the areas on which only the state legislature can make laws, and
• List - III listing the areas on which both the Parliament and the State Legislature can make laws upon concurrently.
Separate heads of taxation are provided under lists I and II of Seventh Schedule of Indian Constitution. There is no head of taxation in the Concurrent List (Union and the States have no concurrent power of taxation). Any tax levied by the government which is not backed by law or is beyond the powers of the legislating authority may be struck down as unconstitutional. The thirteen heads List-I of Seventh Schedule of Constitution of India covered under Union taxation, on which Parliament enacts the taxation law, are as under:
• Taxes on income other than agricultural income;
• Duties of customs including export duties;
• Duties of excise on tobacco and other goods manufactured or produced in India except (i) alcoholic liquor for human consumption, and (ii) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in (ii);
• Corporation Tax;
• Taxes on capital value of assets, exclusive of agricultural land, of individuals and companies, taxes on capital of companies;
• Estate duty in respect of property other than agricultural land;
• Duties in respect of succession to property other than agricultural land;
• Terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freight;
• Taxes other than stamp duties on transactions in stock exchanges and futures markets;
• Taxes on the sale or purchase of newspapers and on advertisements published therein;
• Taxes on sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce;
• Taxes on the consignment of goods in the course of inter-State trade or commerce.
• All residuary types of taxes not listed in any of the three lists of Seventh Schedule of Indian Constitution.
The nineteen heads List-II of Seventh Schedule of the Indian Constitution covered under State taxation, on which State Legislative enacts the taxation law, are as under:
• Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues;
• Taxes on agricultural income;
• Duties in respect of succession to agricultural income;
• Estate Duty in respect of agricultural income;
• Taxes on lands and buildings;
• Taxes on mineral rights;
• Duties of excise for following goods manufactured or produced within the State (i) alcoholic liquors for human consumption, and (ii) opium, Indian hemp and other narcotic drugs and narcotics;
• Taxes on entry of goods into a local area for consumption, use or sale therein;
• Taxes on the consumption or sale of electricity;
• Taxes on the sale or purchase of goods other than newspapers;
• Taxes on advertisements other than advertisements published in newspapers and advertisements broadcast by radio or television;
• Taxes on goods and passengers carried by roads or on inland waterways;
• Taxes on vehicles suitable for use on roads;
• Taxes on animals and boats;
• Tolls;
• Taxes on profession, trades, callings and employments;
• Capitation taxes;
• Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling;
• Stamp duty.
Provisions have been made by 73rd Constitutional Amendment, enforced from 24th April, 1993, to levy taxes by the Panchayat. A State may by law authorise a Panchayat to levy, collect and appropriate taxes, duties, tolls etc. Similarly, the provisions have been made by 74th Constitutional Amendment, enforced from 1st June, 1993, to levy the taxes by the Municipalities. A State Legislature may by law authorise a Municipality to levy, collect and appropriate taxes, duties, tolls etc.

Direct Taxes:

A Direct tax is a kind of charge, which is imposed directly on the taxpayer and paid directly to the government by the persons (juristic or natural) on whom it is imposed. A direct tax is one that cannot be shifted by the taxpayer to someone else. The some important direct taxes imposed in India are as under:
Income Tax: Income Tax Act, 1961 imposes tax on the income of the individuals or Hindu undivided families or firms or co-operative societies (other tan companies) and trusts (identified as bodies of individuals associations of persons) or every artificial juridical person. The inclusion of a particular income in the total incomes of a person for income-tax in India is based on his residential status. There are three residential status, viz., (i) Resident & Ordinarily Residents (Residents) (ii) Resident but not Ordinarily Residents and
(iii) Non Residents. There are several steps involved in determining the residential status of a person. All residents are taxable for all their income, including income outside India. Non residents are taxable only for the income received in India or Income accrued in India. Not ordinarily residents are taxable in relation to income received in India or income accrued in India and income from business or profession controlled from India.
Corporation Tax:
The companies and business organizations in India are taxed on the income from their worldwide transactions under the provision of Income Tax Act, 1961. A corporation is deemed to be resident in India if it is incorporated in India or if it’s control and management is situated entirely in India. In case of non resident corporations, tax is levied on the income which is earned from their business transactions in India or any other Indian sources depending on bilateral agreement of that country.
Property Tax:
Property tax or 'house tax' is a local tax on buildings, along with appurtenant land, and imposed on owners. The tax power is vested in the states and it is delegated by law to the local bodies, specifying the valuation method, rate band, and collection procedures. The tax base is the annual ratable value (ARV) or area-based rating. Owner-occupied and other properties not producing rent are assessed on cost and then converted into ARV by applying a percentage of cost, usually six percent. Vacant land is generally exempted from the assessment. The properties lying under control of Central are exempted from the taxation. Instead a 'service charge' is permissible under executive order. Properties of foreign missions also enjoy tax exemption without an insistence for reciprocity.
Inheritance (Estate) Tax: 
An inheritance tax (also known as an estate tax or death duty) is a tax which arises on the death of an individual. It is a tax on the estate, or total value of the money and property, of a person who has died. India enforced estate duty from 1953 to 1985. Estate Duty Act, 1953 came into existence w.e.f. 15th October, 1953. Estate Duty on agricultural land was discontinued under the Estate Duty (Amendment) Act, 1984. The levy of Estate Duty in respect of property (other than agricultural land) passing on death occurring on or after 16th March, 1985, has also been abolished under the Estate Duty (Amendment) Act, 1985.
Gift Tax: 
Gift tax in India is regulated by the Gift Tax Act which was constituted on 1st April, 1958. It came into effect in all parts of the country except Jammu and Kashmir. As per the Gift Act 1958, all gifts in excess of Rs. 25,000, in the form of cash, draft, check or others, received from one who doesn't have blood relations with the recipient, were taxable. However, with effect from 1st October, 1998, gift tax got demolished and all the gifts made on or after the date were free from tax. But in 2004, the act was again revived partially. A new provision was introduced in the Income Tax Act 1961 under section 56 (2). According to it, the gifts received by any individual or Hindu Undivided Family (HUF) in excess of Rs. 50,000 in a year would be taxable.

Indirect Tax:
An indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the customer). An indirect tax is one that can be shifted by the taxpayer to someone else. An indirect tax may increase the price of a good so that consumers are actually paying the tax by paying more for the products. The some important indirect taxes imposed in India are as under:
Customs Duty: 
The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods. Besides, all imports are sought to be subject to a duty with a view to affording protection to indigenous industries as well as to keep the imports to the minimum in the interests of securing the exchange rate of Indian currency. Duties of customs are levied on goods imported or exported from India at the rate specified under the customs Tariff Act, 1975 as amended from time to time or any other law for the time being in force. Under the custom laws, the various types of duties are leviable. (1) Basic Duty: This duty is levied on imported goods under the Customs Act, 1962. (2) Additional Duty (Countervailing Duty) (CVD): This is levied under section 3 (1) of the Custom Tariff Act and is equal to excise duty levied on a like product manufactured or produced in India. If a like product is not manufactured or produced in India, the excise duty that would be leviable on that product had it been manufactured or produced in India is the duty payable. If the product is leviable at different rates, the highest rate among those rates is the rate applicable. Such duty is leviable on the value of goods plus basic custom duty payable. (3) Additional Duty to compensate duty on inputs used by Indian manufacturers: This is levied under section 3(3) of the Customs Act. (4) Anti-dumping Duty: Sometimes, foreign sellers abroad may export into India goods at prices below the amounts charged by them in their domestic markets in order to capture Indian markets to the detriment of Indian industry. This is known as dumping. In order to prevent dumping, the Central Government may levy additional duty equal to the margin of dumping on such articles. There are however certain restrictions on imposing dumping duties in case of countries which are signatories to the GATT or on countries given "Most Favoured Nation Status" under agreement. (5) Protective Duty: If the Tariff Commission set up by law recommends that in order to protect the interests of Indian industry, the Central Government may levy protective anti-dumping duties at the rate recommended on specified goods. (6) Duty on Bounty Fed Articles: In case a foreign country subsidises its exporters for exporting goods to India, the Central Government may impose additional import duty equal to the amount of such subsidy or bounty. If the amount of subsidy or bounty cannot be clearly deter mined immediately, additional duty may be collected on a provisional basis and after final determination, difference may be collected or refunded, as the case may be. (7) Export Duty: Such duty is levied on export of goods. At present very few articles such as skins and leather are subject to export duty. The main purpose of this duty is to restrict exports of certain goods. (8) Cess on Export: Under sub-section (1) of section 3 of the Agricultural & Processed Food Products Export Cess Act, 1985 (3 of 1986), 0.5% ad valorem as the rate of duty of customs be levied and collected as cess on export of all scheduled products. (9) National Calamity Contingent Duty: This duty was imposed under Section 134 of the Finance Act, 2003 on imported petroleum crude oil. This tax was also leviable on motor cars, imported multi-utility vehicles, two wheelers and mobile phones. (10) Education Cess: Education Cess is leviable @ 2% on the aggregate of duties of Customs (except safeguard duty under Section 8B and 8C, CVD under Section 9 and anti-dumping duty under Section 9A of the Customs Tariff Act, 1985). Items attracting Customs Duty at bound rates under international commitments are exempted from this Cess. (11) Secondary and Higher Education Cess: Leviable @1% on the aggregate of duties of Customs. (12) Road Cess: Additional Duty of Customs on Motor Spirit is leviable and Additional Duty of Customs on High Speed Diesel Oil is leviable by the Finance Act (No.2), 1998. and the Finance Act, 1999 respectively. (13) Surcharge on Motor Spirit: Special Additional Duty of Customs (Surcharge) on Motor Spirit is leviable by the Finance Act, 2002.
Central Excise Duty:
The Central Government levies excise duty under the Central Excise Act, 1944 and the Central Excise Tariff Act, 1985. Central excise duty is tax which is charged on such excisable goods that are manufactured in India and are meant for domestic consumption. 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. It is mandatory to pay Central Excise duty payable on the goods manufactured, unless exempted eg; duty is not payable on the goods exported out of India. Further various other exemptions are also notified by the Government from the payment of duty by the manufacturers. Various Central Excise are: (1) Basis Excise Duty: Excise Duty, imposed under section 3 of the ‘Central Excises and Salt Act’ of 1944 on all excisable goods other than salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under the category of Basic Excise Duty In India. (2) Special Excise Duty: According to Section 37 of the Finance Act, 1978, Special Excise Duty is levied on all excisable goods that come under taxation, in line with the Basic Excise Duty under the Central Excises and Salt Act of 1944. Therefore, each year the Finance Act spells out that whether the Special Excise Duty shall or shall not be charged, and eventually collected during the relevant financial year. (2) Additional Duty of Excise: Section 3 of the ‘Additional Duties of Excise Act’ of 1957 permits the charge and collection of excise duty in respect of the goods as listed in the Schedule of this Act. (4) Road Cess: (a) Additional Duty of Excise on Motor Spirit: This is leviable by the Finance Act (No.2), 1998. (b) Additional Duty of Excise on High Speed Diesel Oil: This is leviable by the Finance Act, 1999. (5) Surcharge: (a) Special Additional Duty of Excise on Motor Spirit: This is leviable by the Finance Act, 2002. (b) Surcharge on Pan Masala and Tobacco Products: This Additional Duty of Excise has been imposed on cigarettes, pan masala and certain specified tobacco products, at specified rates in the Budget 2005-06. Biris are not subjected to this levy. (6) National Calamity Contingent Duty (NCCD): NCCD was levied on pan masala and certain specified tobacco products vide the Finance Act, 2001. The Finance Act, 2003 extended this levy to polyester filament yarn, motor car, two wheeler and multi-utility vehicle and crude petroleum oil. (7) Education Cess: Education Cess is leviable @2% on the aggregate of duties of Excise and Secondary and Higher Education Cess is Leviable @1% on the aggregate of duties of Excise. (8) Cess - A cess has been imposed on certain products.
Service Tax: 
The service providers in India except those in the state of Jammu and Kashmir are required to pay a Service Tax under the provisions of the Finance Act of 1994. The provisions related to Service Tax came into effect on 1st July, 1994. Under Section 67 of this Act, the Service Tax is levied on the gross or aggregate amount charged by the service provider on the receiver. However, in terms of Rule 6 of Service Tax Rules, 1994, the tax is permitted to be paid on the value received. The interesting thing about Service Tax in India is that the Government depends heavily on the voluntary compliance of the service providers for collecting Service Tax in India.
Sales Tax: 
Sales Tax in India is a form of tax that is imposed by the Government on the sale or purchase of a particular commodity within the country. Sales Tax is imposed under both, Central Government (Central Sales Tax) and State Government (Sales Tax) Legislation. Generally, each State follows its own Sales Tax Act and levies tax at various rates. Apart from sales tax, certain States also imposes additional charges like works contracts tax, turnover tax and purchaser tax. Thus, Sales Tax Acts as a major revenue-generator for the various State Governments. From 10th April, 2005, most of the States in India have supplemented sales tax with a new Value Added Tax (VAT).

Value Added Tax (VAT):

The practice of VAT executed by State Governments is applied on each stage of sale, with a particular apparatus of credit for the input VAT paid. VAT in India classified under the tax slabs are 0% for essential commodities, 1% on gold ingots and expensive stones, 4% on industrial inputs, capital merchandise and commodities of mass consumption, and 12.5% on other items. Variable rates (State-dependent) are applicable for petroleum products, tobacco, liquor, etc. VAT levy will be administered by the Value Added Tax Act and the rules made there-under and similar to a sales tax. It is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer. Under the current single-point system of tax levy, the manufacturer or importer of goods into a State is liable to sales tax. There is no sales tax on the further distribution channel. VAT, in simple terms, is a multi-point levy on each of the entities in the supply chain. The value addition in the hands of each of the entities is subject to tax. VAT can be computed by using any of the three methods: (a) Subtraction method: The tax rate is applied to the difference between the value of output and the cost of input. (b) The Addition method: The value added is computed by adding all the payments that is payable to the factors of production (viz., wages, salaries, interest payments etc). (c) Tax credit method: This entails set-off of the tax paid on inputs from tax collected on sales.
Securities Transaction Tax (STT): 
STT is a tax being levied on all transactions done on the stock exchanges. STT is applicable on purchase or sale of equity shares, derivatives, equity oriented funds and equity oriented Mutual Funds. Current STT on purchase or sell of an equity share is 0.075%. A person becomes investor after payment of STT at the time of selling securities (shares). Selling the shares after 12 months comes under long term capital gains and one need not have to pay any tax on that gain. In the case of selling the shares before 12 months, one has to pay short term capital gains @10% flat on the gain. However, for a trader, all his gains will be treated as trading (Business) and he has to pay tax as per tax sables. In this case the transaction tax paid by him can be claimed back/adjusted in tax to be paid.
The overall control for administration of Direct Taxes lies with the Union Finance Ministry which functions through Income Tax Department with the Central Board of Direct Taxes (CBDT) at its apex. The CBDT is a statutory authority functioning under the Central Board of Revenue Act, 1963. It also functions as a division of the Ministry dealing with matters relating to levy and collection of Direct Taxes. The Central Excise Department spread over the entire country administers and collects the central excise duty. The apex body that is responsible for the policy and formulation of rules is the Central Board of Excise and Customs which functions under the control of the Union Finance Ministry. The Central Excise officers are also entrusted with the administration and collection of Service tax and the Customs duty.
The information contained in this chapter is related to direct and indirect taxes imposed and collected by the Union Government. The tables giving data from 2000-01 onwards in respect direct taxes (corporation tax, income tax and other direct taxes) collected by Central Board of Direct Tax (CBDT) and indirect taxes (customs duties, union excise duties and service tax) collected by Central Board of Excise and Customs. Customs Collection Rate used in this chapter is defined as the ratio of revenue collection (basic customs duty + countervailing duty) to value of imports (in per cent) unadjusted for exemptions, expressed in percentage.

BANK EXAMS GENERAL AWARENESS MCQs

1. Paying for facilities like issuance of demand drafts, cheque books, credit or debit cards and ATM interchange may soon become pass as public sector lender ____ waived all service charges on current and savings accounts (CASA), the first by any bank. The move is aimed at increasing the bank’s below-industry average CASA deposits and the bank expects to double its retail account to 1 crore in the next 12 months.
a) SBI
b) PNB
c) Canara Bank
d) IDBI Bank
e) None of these

2. At present, how many families are categorized as BPL?
a) 5.10 cr
b) 6.52 cr
c) 7.81 cr
d) 10.40 cr
e) None of these

3. DTC stands for
a) Direct Tax Code
b) Disinvestment Tax Code
c) Derivative Trade Code
d) Distinct Tax Code
e) Delhi Tax Code

4. In a surprise move and to the disappointment of taxpayers, the government on Aug 30 deferred the implementation of the Direct Taxes Code (DTC) by a year to ___, 2012 and sough to waive the preferential treatment to woman in tax payment in the name of gender equity.
a) Jan 1
b) Mar 31
c) Apr 1
d) Dec 31
e) None of these

5. Which of the following statement is/are true about Direct Taxes Code (DTC)?
A) Under the Direct Taxes Code Bill, 2010 – tabled in the Lok Sabha by finance minister Pranab Mukherjee and referred to the Select Committee of Parliament for scrutiny – the government has sought to raise the income tax exemption limit from Rs.1.6 Lakh to Rs.2 Lakh while retaining a host of incentives for individuals.
B) While senior citizens (above 65 years) will enjoy a higher exemption of Rs.2.5 Lakh, woman taxpayers will have no additional relief as they have not been categorized separately.
C) As for corporate taxes, the levy will be at a flat rate of 30 per cent with no surcharges or cesses. The minimum alternate tax (MAT)will be levied on book profits at 20 per cent.
a) Only A
b) Only A& B
c) Only B&C
d) All the above
e) None of these

6. Name the country with India has signed a protocol to the Double Taxation Avoidance Agreement that would the wealth illegally stashed away in banks.
a) Britain
b) US
c) Switzerland
d) France
e) None of these

7. In a major step to alleviate delays in wage payments under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which state govt has launched an “e-Shakti Financial Inclusion” scheme, the first of its kind in the country?
a) UP
b) MP
c) Bihar
d) Maharashtra
e) None of these

8. Name the bank whose chairman Stephan K Green will be appointed as the minister of state for trade and investment.
a) HSBC Holdings
b) Standard Chartered Bank
c) Barclays Bank
d) Royal Bank of Scotland
e) None of these

9. In a big boost to the disinvestment programme of the UPA-II Government, the Petroleum and Natural Gas Ministry gave its green signal to the sale of government’s stake in Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOC), a move aimed at raising around __________ this fiscal.
a) Rs. 14,000 cr
b) Rs.18,000 cr
c) Rs.24,000 cr
d) Rs. 30,000 cr
e) None of these

10. With a net worth of US$62 billion, Mukesh Ambani would be the richest man of earth in ___________, going past the current claimant, Mexican businessman Carlos Slim, according to a forecast by Forbes.
a) 2012
b) 2014
c) 2016
d) 2018
e) None of these

11. In one of his speeches Pranab Mukherjee said that the Govt had no plans to dilute the roles of market regulators. This means the role of which of the following will not be diluted?
a) Life Insurance Corporation of India (LIC)
b) Confederation of Indian Industry (CII)
c) Federation of Chambers of Commerce & Industry (FICCI)
d) Bureau of Indian Standards
e) Securities & Exchange Board of India (SEBI)

12. What is the full form of “ULIP’, the term which was in the news recently?
a) Universal Life & Investment Plan
b) Unit Loan & Insurance Plan
c) Universal Loan & Investment Plan
d) Uniformly Loaded Investment Plan
e) Unit Linked Insurance Plan

13. As per the news published in some major financial news papers, the Maharashtra Govt is planning to introduce “Green Tax” on Vehicles. What is the Purpose of Green Tax?
a) It has been introduced with the aim of discouraging high consumption of petroleum products.
b) It is a tax levied by the Govt in place of VAT as VAT is not very profitable for State Govts.
c) It is just like a toll tax which will be charges from all the vehicles whenever they enter green areas of a city like hospitals, schools, and old-age homes.
d) This is a tax levied on big commercial vehicles only with the aim of prohibiting them from entering residential areas and non-commercial areas.
e) None of these

14. Very often we read in newspapers about 3 G Third Generation Technology. This is a set of standards used by which of the following?
a) To Combat climatic changes
b) Production of nuclear energy
c) Film production
d) Mobile telecommunications
e) All of these

15. Which of the following companies is NOT in the field of insurance business?
a) ICICI Prudential
b) Bajaj Allianz
c) Tata AIG
d) Aegon Religare
e) Royal Orchild

16. Many times we read that a corporate entity is in the process of raising its capital base. Why is a company required to raise money to strengthen its capital base?
A) To finance its diversification Plans
B) To finance its diversification plans
C) To repay its loans and borrowings
a) Only A
b) Only B
c) Only C
d) Only A & B
e) All A, B&C

17. Many times we read in newspapers that a company is planning to bring a public issue. What does it mean?
A) Shares of the company will be issued only through public sector organizations like banks/Central financial institutions etc.
B) Shares of the company will be issued to general public only through primary market.
C) This means some stakeholders/ promoters are willing to leave the company. Hence they wish to sell their stock to the general public.
a) Only A
b) Only B
c) Only C
d) All A,B&C
e) None of these

18. Whenever some people wish to enter into the business world, it is a must for them to approach a bank. What services do banks provide them in this regard?
A) Banks act as payment agents by operating current accounts, paying cheques and receiving payments for them.
B) Maintaining account books for them for their day-to- day activities so that they are not required to appoint account/finance personnel on a regular basis.
C) Lending money by way of overdraft, installment loan, credit or advance for business activities
a) Only A
b) Only B
c) Only C
d) Only A&C
e) All of these

19. As we all have noticed, banks these days are giving more emphasis on “Branchless Banking”. What does this really mean?
A) Banks will not have many branches as used to be in the good old days. Instead, the number of branches will be restricted and will conduct only a specified core business.
B) Banks will launch/operate many delivery channels like ATMs, Mobile Banking/ Internet Banking etc sot that people are not required to visit a branch for their usual banking needs.
C) This means banks will issue only debit or credit cards for all types of day-to-day financial transactions. Cheques/cash payments will not be allowed.
a) Only A
b) Only B
c) Only A&B
d) Only B&C
e) All A, B&C

20. Which of the following is NOT a function of a bank?
a) Providing project finance b) Selling Mutual Funds
c) Deciding policy rates like CRR, Repo Rate / SLR etc
d) Settlement of payments of behalf of the customers
e) All of these are functions of a bank

21. Which of the following is a form of “savings Bank” popular among the poor or children?
a) Core Banking
b) Credit Banking
c) Debit Card
d) Merchant Banking
e) Piggy Banking

22. Dr. Amartya Sen is a famous
a) Physicist
b) Chemical Engineer
c) Psychologist
e) Economist
e) None of these

23. Which of the following nations is considered the originator of the concept of Micro Finance?
a) India
b) Bangladesh
c) South Africa
d) USA
e) None of these

24. Govt normally does not announce the Minimum Support Price (MSP) of
a) Wheat
b) Paddy
c) Sugarcane
d) Jute
e) All of these

25. At present Dr.D Subbarao is the
a) Governor of Orissa
b) Deputy Chairman of the Planning Commission
c) Chairman of the FICCI
d) India’s Representative in IMF
e) None of these

26. Banks borrow money from the RBI on which of the following rates?
a) Bank rate
b) CRR
c) SLR
d) Reverse Repo Rate
e) Repo Rate

27. Which of the following is NOT a part of India’s Money Market?
a) Bill Market
b) Call Money Market
c) Banks
d) Mutual Funds
e) Indian Gold Council

28. Which of the following is/are NOT the feature(s) of India’s Foreign Trade Policy (2004 to 2009)?
A) To double India’s percent age share of global trade from present 0.7 per cent to 1.5 per cent by 2009
B) Simplifying the procedures and bringing down the cost
C) Make SAARC countries India’s most preferred foreign trade partners by 2009
a) Only I
b) Only II
c) Only III
d) All I, II and III
e) Only I and III

29. Which of the following is /are the measure(s) taken by the Reserve Bank of India (RBI) to ease the liquidity crunch in the country?
A) Cut in Cash Reserve Ratio and Statutory Liquidity Ratio.
B) Increase the flow of foreign direct investment
C) Supply of additional currency notes in the market.
a) Only I
b) Only II
c) Only III
d) All I, II and III
e) None of these

30. Which of the following services is NOT provided by the post offices of India?
a) Savings Bank Scheme
b) Retailing of Mutual Funds
c) Sale of Stamp Papers (Judicial)
d) Issuance of Demand Drafts
e) Life Insurance Cover

31. Which of the following is true of New Lending Rate System in Banks?
a) For existing loans, the base rate would be applicable once they matured.
b) For new loans, the base rate would be levied immediately.
c) Banks can not charge customers any fee for such switch-over.
d) All of these
e) None of these

32. According to recently released RBI data on the Balance of Payment, net portfolio investments into country during April- December amounted to
a) $ 23.6 billion
b) $ 30.4 billion
c) $ 32.8 billion
d) $ 36.6 billion
e) $ 40.4 billion

33. Which of the following is NOT a Government sponsored organization?
a) Small Industries Development Bank of India
b) NABARD
c) National Housing Bank
d) ICICI Bank
e) All are government sponsored

34. The Reserve Bank has constituted a working group to review the current operating procedure of monetary policy, as transmission of the policy to the rest of the system remains imperfect. The group, to be headed by RBI executive director ___________, will also review the liquidity adjustment facility (LAF), through which the central bank manages money supply in the system on a day-to-day basis.
a) Usha Thorat
b) Deepak Mohanty
c) Rakesh Mohan
d) Naresh Chandra
e) None of these

35. SEBI was established in
a) 1993
b) 1992
c) 1988
d) 1990
e) None of these

36. The working of SEBI includes:
a) To regulate the dealings of share market
b) To check the foul dealings in share market
c) To control the inside trading of shares
d) All of these
e) None of these

37. The ‘Ad hoc Treasury Bill a system’ of meeting budget deficit in India was replaced by a system which came into force on
a) March 31,1997
b) April 1,1996
c) April 1,1997
d) March 31, 1996
e) None of these

38. The recommendations of the 13th Finance Commission has become/will be operational during the period
a) 2009-14
b) 2010 – 15
c) 2011 – 16
d) 2012 – 2017
e) None of these

39. Rural Woman can avail the benefit of Mahila Samriddhi Yojana if they open their account in
a) Rural Pot Offices
b) Commercial Banks
c) Rural Development Bank
d) Any of the above
e) None of these

40. The rate at which banks lend to RBI is known as
a) Bank Rate
b) Repo Rate
c) Reverse Repo Rate
d) Interest Rate
e) None of these

41. The cause of deflation is
a) Lack of goods and services as compared to money supply
b) Lack of imports as compared to exports
c) Lack of money supply as compared to supply of goods and services
d) Lack of money supply and goods
e) None of these

42. Which bank in India performs the duties of the central bank?
a) Central Bank of India
b) State Bank of India
c) Reserve Bank of India
d) Bank of India
e) None of these

43. Mixed Economy means
a) Co-existence of small and large industries
b) Promoting both Agriculture and Industries in the economy
c) Co-existence of public and private sectors
d) Co-existence of the rich and the poor
e) None of these

44. ‘Pure Banking, Northing Else’ is a slogan raised by
a) ICICI Bank
b) HDFC Bank
c) SBI
d) UTI Bank
e) None of these

45. Which of the following is true about Swavalamban Scheme?
A) Finance minister Pranab Mukherjee will launch the Swavalamban scheme in Murshidabad district of West Bengal.
B) As per the scheme, the Centre will contribute Rs.1,000 a year to each New Pension Scheme (NPS) account opened in the current year.
C) The contribution will be made till 2013 – 14
D) To be eligible, a person will have to make a minimum contribution of Rs.1,000 and maximum contribution of Rs.12,000 per annum.
a) Only A,B & C
b) Only A, C & D
c) Only A & D
d) All the above
e) None of these

46. The axe finally fell on Asia’s first cooperative bank, ___________, when the Reserve Bank of India (RBI) cancelled its licence and asked it not to continue any banking – related transactions until further directions.
a) Saraswat Co-operative Bank Ltd
b) Cosmos Co-operative Bank Ltd
c) Nadar Co-operative Bank Ltd
d) Anyonya Cooperative Bank Ltd
e) None of these

47. 13th Finance Commission was constituted under the Chairmanship of
a) YSP Thorat
b) Vijai L Kelkar
c) TS Vijayan
d) Laxmi Narayan
e) None of these

48. SEBI is a
a) Statutory body
b) Advisory body
c) Constitutional body
d) Non-statutory body
e) None of these

49. Bank Cash Transaction Tax (BCTT) was withdrawn with effect from
a) January 1, 2009
b) March 1, 2009
c) March 31, 2009
d) April 1, 2009
e) None of these

50. Which committee recommended abolition of tax rebates under Section 88?
a) Chelliah Committee
b) Kelkar Committee
c) Shome Committee
d) Naresh Chandra Committee
e) None of these

38. Tarapore Committee submitted its report on “Full Convertibility on Rupee” in
a) Current account
b) Capital account
c) Both on current as well as on capital account
d) Special Drawing Rights (SDRs)
e) None of these

39. CENVAT is related to
a) Sales Tax
b) Excise Duty
c) Custom Duty
d) Service Tax
e) None of these

45. NABARD was established on the recommendation of
a) Public Accounts Committee
b) Shivaraman Committee
c) Narasimham Committee
d) Khandelwal Committee
e) None of these

46. Sampurna Gramin Rozgar Yojana has been launched from
a) 1 Apr 2001
b) 25 Sep 2001
c) 30 Sep 2001
d) No scheme of such title has yet been launched
e) None of these

47. VAT is imposed
a) Directly on the consumer
b) On the final stage of production
c) On the first stage of production
d) On all stages between production and final sale
e) None of these

48. Kutir Jyoti scheme is associate with
a) Promoting cottage industry in villages
b) Promoting employment among rural unemployed youth
c) Providing electricity to rural families living below the poverty line
d) All of these
e) None of these

49. CAPART is related with
a) Assisting and evaluating rural welfare programmes
b) Computer hardware
c) Consultant service of export promotion.
d) Controlling pollution in big industries
e) None of these

50. The note issuing dept of RBI should always possess a minimum gold stock worth
a) Rs.85 crore
b) Rs.115 crore
c) Rs.200 crore
e) Rs.215 crore
e) None of these

ANSWERS :

1.D 2.B 3.A 4.C 5.D 6.C 7.C 8.A 9.C 10.B

11.E 12.E 13.E 14.D 15.E 16.A 17.B 18.D 19.E 20.C

21.E 22.D 23.B 24.D 25.E 26.E 27.E 28.D 29.A 30.E

31.D 32.C 33.D 34.B 35.C 36.D 37.C 38.B 39.A 40.C

41.C 42.C 43.C 44.C 45.D 46.D 47.B 48.A 49.D 50.B

PUBLIC FINANCE

Power to raise and disburse public funds has been divided under the Constitution between the Union and the state governments. Sources of revenue for Union and states are, by and large, mutually exclusive, if shareable taxes and duties between them are excluded. The Constitution provides that:
(i) no tax can be levied or collected except by an authority of law;
(ii) no expenditure can be incurred from public funds except in the manner provided in the Constitution; and
(iii) executive authorities must spend public money only in the manner sanctioned by the Parliament in case of the Union and by the state legislature in the case of a state.
All receipts and disbursements of the Union are kept under two separate headings, namely, the Consolidated Fund of India and Public Account of India. All revenues received, loans raised and money received in repayment of loans by the Union form the Consolidated Fund. No money can be withdrawn from this Fund except under the authority of an Act of Parliament. All other receipts, such as deposits, service funds and remittances go into Public Account and disbursements therefrom are not subject to the vote of Parliament. To meet unforeseen needs not provided in the Annual Appropriation Act, a Contingency Fund of India has been established under Article 267(1) of the Constitution. The Indian Constitution provides for the establishment of a Consolidated Fund, a Public Account and a Contingency Fund for each state.
The Railways, the largest public undertaking, present their budget separately to the Parliament. Appropriations and disbursements under the Railway budget are subject to the same form of parliamentary control as other appropriations and disbursements. However, as the Railways have no separate cash balance of their own, total receipts and disbursements of the Railways are incorporated in the budget of the Union as part of the General Budget.
SOURCES OF REVENUE
The main sources of the Union tax revenue are customs duties, Union excise duties, corporate, service tax and income taxes. Non-tax revenues largely comprise interest receipts, including interest paid by the Railways and Telecommunications, dividend and profits. The main heads of revenue in states are taxes and duties levied by the respective state governments, share of taxes levied by the Union and grants received from the Union. Property taxes, octroi and terminal taxes are the mainstay of local finance.
TRANSFER OF RESOURCES
Devolution of resources from the Union to the states is a salient feature of the system of federal finance of India. Apart from their share of taxes and duties, state governments receive statutory and other grants as well as loans for various development and non-development purposes. In addition, resources are also transferred by Central government to implementing agencies under various schemes without routing it through State Budgets.
ANNUAL FINANCIAL BUDGET
An estimate of all anticipated receipts and expenditure of the Union for the ensuing financial year is laid before the Parliament. This is known as ‘Annual Financial Statement’ or ‘Budget’ and covers Central Government’s transactions of all kinds, in and outside India, occurring during the preceding year, the year in which the statement is prepared as well as the ensuing year or the ‘Budget Year’ as it is known. The presentation of Budget is followed by a general discussion on it in both the Houses of Parliament. Estimates of expenditure from the Consolidated Fund of India are placed before the Lok Sabha in the form of ‘Demands of Grants’. All withdrawals of money from the Consolidated Fund are thereafter authorised by an Appropriation Act passed by the Parliament every year. Tax proposals of Budget are embodied in a Bill which is passed as the ‘Finance Act’ of the year. Estimates of receipts and expenditure are similarly presented by the state governments in their legislatures before the beginning of the financial year and legislative sanction for expenditure is secured through similar procedure.

RESERVE BANK OF INDIA

The Reserve Bank of India (RBI) was established under the Reserve Bank of India Act, 1934 on 1 April 1935 and nationalised on 1 January 1949. The Bank acts as banker to the Central Government, state governments, commercial banks, state co-operative banks and some of the financial institutions. It formulates and administers monetary policy with a view to ensuring stability in prices while promoting higher production in the real sector through proper deployment of credit. RBI plays an important role in maintaining the stability of exchange value of the rupee and acts as an agent of the Government in respect of India’s membership of International Monetary Fund. The Reserve Bank also performs a variety of developmental and promotional functions. These apart, the Reserve Bank also handles the borrowing programme of the Government of India.

The Reserve Bank is the sole authority for issue of currency in India other than one rupee coins and subsidiary coins and notes.

As the agent of the Central Government, the Reserve Bank undertakes distribution of one-rupees notes and coins, as well as small coins issued by the Government.

Composition of Banking System- Commercial Banking system in India consisted of 218 scheduled commercial books (including foreign banks) as on 31 March 2006. Of the scheduled commercial banks, 116 are in public sector of  which 133 are regional rural banks (RRBs) and these account for about 75.2 percent of the deposits of all scheduled commercial banks. The regional rural banks were specially set up to increase the flow of credit to small borrowers in the rural areas. The remaining 28 banks in the public sector (i.e.), 19 nationalized banks, 8 Banks in SBI group and IDBI Ltd. are commercial banks and transact all types of commercial banking business.

MINTS AND PRESSES

India Security Press, Nasik Road functionally consists of two units, a Stamp Press and Central Stamp Depot. Stamp Press prints postal stationery, postal and non-postal stamps, judicial and non-judicial stamps, RBI/SBI cheques, Bonds, National Savings Finance Certificates, Indira Vikas Patras, Kisan Vikas Patras, Postal Order, Passports, Promissory Notes and such other security documents as may be required by the Central and state governments. Central Stamp Depot deals with the supply of finished products to the indentors. The Currency Note Press, Nasik Road now prints and supplies bank notes of rupees ten, fifty and hundred denomination. Security Paper Mill, Hoshangabad manufactures paper for printing bank notes and Non-Judicial Stamp Paper of higher denominations. Bank Note Press, Dewas consists of two production units, viz., main press for printing bank notes of the denomination of rupees twenty, fifty, hundred and five hundred and ink factory for the manufacture of security inks. Security Printing Press, Hyderabad was set up in 1982 for printing and supply of postal stationery to meet the demands of southern states, and that of Central Excise stamps to meet the demands of the whole country. Inland Letter Cards, Postcards and Embossed Envelops are also printed in the Press to supplement the output of India Security Press, Nasik. The Press is also printing non-judicial stamp papers of lower denominations.
There are four Government mints at Mumbai, Calcutta, Hyderabad and NOIDA. The main function of the mints is minting of coins to meet domestic requirements, gold and silver assaying and medals productions.

India and Britain Confirmed Trade Deals

India and Britain on 26 July 2011 confirmed trade deals worth billions of pounds after the talks concluded between Union Finance minister Pranab Mukherjee and Chancellor of the Exchequer George Osborne in London. The talks were a part of the Economic and Financial dialogue between the two countries. The commercial ties are growing between UK and India.  Around 3000 British firms were either investing in or planning to invest in India.

India and UK also issued a joint statement at the end of the Economic and Financial dialogue. The main features of the joint statement are as following:
• Both countries are committed to the implantation of credible, medium-term fiscal consolidation plans as we meet our commitments through the G20 Framework for strong, sustainable and balanced growth.
• India and UK discussed the vital role that foreign banks play in both our countries in driving innovation, furthering inclusion and bringing new technology into our markets. Both sides welcomed the Reserve Bank of India’s paper on foreign banks.

RBI raises interest rate by 50 bps

The RBI on July 26 hiked short-term lending and borrowing rates sharply by 50 basis points for the third time in three months to tame high inflation, a move that would make all personal and corporate loans more expensive.

The RBI has also revised its fiscal-end inflation projection to 7 per cent from 6 per cent earlier.

With July 26 increase of 0.50 per cent, the short-term lending (repo) rate has been hiked to 8 per cent and the short-term borrowing (reverse repo) rate has also been increased by a similar margin to 7 per cent.

It, however, has retained the cash reserve ratio (CRR) at 6 per cent.

“Notwithstanding signs of moderation, inflationary pressures are clearly very strong... inflation continues to be the dominant macroeconomic concern. On the basis of this assessment, it has been decided to increase policy repo rate by 50 basis points from 7.5 to 8 per cent with immediate effect,” RBI Governor D. Subbarao said while announcing the quarterly review of the monetary policy. 

Eleventh time

This is the 11th time since March, 2010, that the RBI has raised the interest rate to check inflation, which is currently ruling at over 9 per cent.

The RBI’s unexpected decision led to a sharp decline of over 300 points in the BSE Sensex. The 30-share Sensex fell to 18,570 after announcement of the policy, although it had opened in positive terrain.

The RBI admitted that its cumulative decision of past actions to curb demand and anchor medium term inflationary expectations will curtail growth in the near term. 

Impact on interest rates

Bankers are of view that the increase in key policy rates by the RBI will definitely have an impact on interest rates, leading to loans becoming expensive.

“The hike is more than expected and it will push interest rate by up to 50 basis points,” said Oriental Bank of Commerce Executive Director S C Sinha.

In the annual policy on May 3, the apex bank had increased policy rates by 50 bps, which was followed by a 25 bps hike at its mid-quarter review in June.

While revising the inflation target upward, Dr. Subbarao reiterated the RBI’s view that the policy is guided by uncomfortable inflation, which hovers well above 9.4 per cent. 

On domestic and global growth

Sounding hawkish, the Governor said, “Going forward, the monetary policy stance will depend on the evolving inflation trajectory, which in turn will be determined by trends in the domestic growth and global commodity prices.

“A change in stance will be motivated by signs of a sustainable downturn in inflation,” Dr. Subbarao said.

Accordingly, the RBI, which has been at the receiving end for its repeatedly off-mark inflation projections, also revised its fiscal-end inflation forecast upward by 1 per cent to 7 per cent from its 6 per cent estimate made earlier in May.

Admitting that there has been a moderation in growth, the Governor maintained his previous estimate of 8 per cent GDP growth for the current fiscal and pointed out downside risks to growth as global commodity prices, the uncertain global macro economic environment and the Centre’s inability to meet the fiscal deficit target of 4.6 per cent on the back of a rising fuel subsidy bill.

“Overall, the current balance of global and domestic factors suggest that monetary policy needs to persist with a firm anti-inflationary stance,” the governor concluded.

India slips to 14th spot as FDI destination

Indicating a serious crisis developing in foreign investment climate, India slipped to the fourteenth spot from the eighth position in the list of countries that attracted the highest foreign direct investment (FDI) last year.

Inflows into India declined by about $10 billion to $25 billion, according to the "World Investment Report 2011" released by United Nations Conference on Trade and Development (UNCTAD). According to the investment report, India ranked way below its competing neighbour China, which saw FDI inflows to the tune of $106 billion in 2010. India was in the eighth place in 2009.

The report said India attracted FDI worth $25 billion last year, much lower than the inflows of $36 billion seen in 2009. The United States saw the maximum $228 billion FDI, Hong Kong at $69 billion was number three, Belgium was the fourth largest FDI inflow destination at $62 billion.

Expressing concern over the continued declining trend in FDI into India, independent economic researcher, Premila Nazareth Satyanand, who released the report here on Tuesday, said the country needs to have a good investment climate. The report said FDI inflows worldwide climbed 5 per cent to about $1.24 trillion last year, compared to 2009. "FDI to South Asia declined to $32 billion, reflecting a 31 per cent slide in inflows to India and a 14 per cent drop in flows to Pakistan. By contrast, inflows to Bangladesh, a rising low-cost production location, increased by nearly 30 per cent to $913 million," the report said.

India saw FDI inflows of $19.42 billion in 2010-11. Presently, the FDI flow into the country is sluggish, especially due to uncertain global economic conditions.

India was also the fifth largest source of funds (FDI outflow) in developing Asia, helped by a string of major acquisitions in countries across the globe between 2007-2011. Among major buyouts that figured in the U.N. report were Tata Steel's acquisition of U.K.-based Corus group worth $11.8 billion and Hindalco Industries's acquisition of U.S. firm Novelis Inc worth $5.8 billion. Tata Motors also acquired U.K.-based Jaguar Cars for $2.3 billion, Essar Steel Holdings bought Canada's Algoma Steel Inc for $1.6 billion and United Spirits acquired Whyte & Mackay of U.K. for $1.17 billion.

Cabinet Committee on Economic Affairs approved BP’s purchase of 30% stake in 21 RIL Oil Blocks

The Cabinet Committee on Economic Affairs (CCEA) on 22 July 2011 approved BP’s purchase of 30% stake in 21 out of 23 oil blocks belonging to Reliance Industries in the Krishna Godavari basin for $7.2 billion.

While stake sale in KG-D6 gas and discovery area NEC-25 was approved, nod for inconsequential two blocks, one a deep sea area off the Orissa coast and other an on-land block in Assam can be given by the ministry after technical issues like exploration status were sorted out.

This acquisition of 30% stake in 21 oil blocks is part of BP's strategy of creating long-term value through alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets.

The deal will give Reliance access to BP's expertise in deep-water drilling and accelerate development and production at its fields, particularly the under-performing eastern offshore KG-D6. BP on the other hand will gain entry into the oil market where energy demand is growing at 5-8 per cent.

Reliance is the operator in all the 23 blocks while Canadian Niko Resources and U.K.'s Hardy Oil have minority 10 per cent interest in a few. After the deal, Reliance's holding in the blocks will come down to 60-70 per cent.

RIL had in February 2011 signed an agreement with BP to sell the 30% stake in 23 out of its 29 oil and gas blocks for $7.2 billion. BP made a provision of pumping in additional $1.8 billion if the two explorers find more hydrocarbons. The deal is expected to help RIL ramp up its natural gas production from the KGD6 block.

SOCIO ECONOMIC DEVELOPMENTS MCQs

1. A customer can approach banking ombudsman if he does not get satisfactory response to his grievance from the bank within how many days?
A) 5
B) 20
C) 30
D) 40
E) None

2. National Civil Services Day in India is observed on-
A) April 23
B) April 24
C) April 18
D) April 21
E) None

3. CAG was in the news recently due to 2G spectrum scam. It stands for
A) Commissioner and Auditor General
B) Comptroller and Auditor General
C) Chief Auditor General
D) Chairman and Auditor General
E) None of these

4. FPO stands for?
A) Follow-on public offer
B) First public offer
C) Free public offer
D) Frequent public offer
E) None of these

5. The structure of Basel II is based on how many pillars?
A) One
B) Two
C) Three
D) Four
E) None of these

6. The Monetary and Credit Policy is reviewed by RBI after a gap of
A) One month
B) Three months
C) Six months
D) One year
E) None of these

7. Hosni Mubarak is associated with which country?
A) Tunisia
B) Sudan
C) Libya
D) Syria
E) Egypt

8. Who has been appointed as the new chairman of the Securities Exchange Board of India (SEBl)?
A) NK Sinha
B) Sushma Seth
C) Darshan Mehta
D) UK Sinha
E) None of these

9. Who has been appointed as the head of the reconstituted National Security Advisory Board (NSAB)?
A) Shyam Saran
B) Anil Kakodkar
C) C Rajamohan
D) Naresh Chandra
E) None of these

10. What is India's position current FIFA rankings?
A) 120th
B) 132nd
C) 144th
D) 150th
E) None of these

11. What percentage of its total crude oil is imported by India?
A) 40%
B) 50%
C) 60%
D) 80%
E) None of these

12. In Global Gender Gap Report, India has been ranked at?
A) 97th
B) 107th
C) 112th
D) 122nd
E) None of these

13. At present, what is RBI's share in NABARD equity?
A) 100%
B) 74%
C) 51%
D) 1%
E) None of these

14. Who has been appointed as the first chief of the National Green Tribunal (NGT)?
A) Dhanendra Kumar
B) Lokeshwar Singh
C) SushmaNath
D) Sam Pitroda
E) None of these

15. India has finally woken up to the needs of the country's elderly. With the number of people in the 60-plus age group in India expected to increase to 100 million in 2013 and to 198 million in 2030, the health minister is all set to roll out the?
A) National Programme for Health care for the Elderly
B) National Programme for Senior Citizens
C) National Programme for Old Aged
D) Rashtriya Vriddha Swasthya Yojana
E) None of these

16. In accordance with the Centre's policy to open more banks in rural areas, a target has been set to open at least one bank branch in each of the 72,000 villages in the country by?
A) 2012
B) 2013
C) 2014
D) 2015
E) None of these

17. The number of Padma Vibhushan Awardees this year is?
A) 13
B) 15
C) 16
D) 17
E) None

18. The Indian music director who was nominated for Oscar Award this year is?
A) AR Rehman
B) Bappi Lahiri
C) Gulzar
D) Chakri
E) None of these

19. An IPO is?
A) Initial price offered by a private limited company to its shareholders
B) An offer by an unlisted company for sale of its shares for the first time to the public
C) Used to increase the share capital of an unlisted company
D) A book building process
E) None of these

20. Private equity investors, invest in a company based mainly on?
A) The age of the company
B) The location of the company
C) The activity undertaken by the company
D) The creditability and the valuation of the company
E) The existing profitability of the company

21. Deuce is a term used in?
a) Polo
b) Lawn tennis
c) Badminton
d) Boxing
e) Volley ball
A) a, b, c
B) b, c, d
C) c, d, a
D) a, b, e
E) b, c, e

22. ISI is the intelligence agency of?
A) United Kingdom
B) USA
C) Israel
D) Pakistan
E) India

23. In broad gauge, the distance between the rails is?
A) 1·00 metre
B) 3 metre
C) 1·67 metre
D) 2·67 metre
E) 0·76 metre


24. CNBC and TV18 TV Channels essentially broadcast?
A) English News
B) Classic English Movies
C) Political Events and News
D) Business and Economic News
E) All important national and international news in English

25. According to a recent newspaper survey, which one of the following is the most preferred language for leisure reading among the Indian Youth ?
A) Hindi
B) Marathi
C) Bengali
D) Telugu
E) English

26. The RBI reviews its credit and monetary policy at regular inte-rvals and also in between. What is the purpose of the same?
1) To ensure that inflation does not cross the limit
2) To ensure that banks have enough liquidity
3) To ensure that cost of the fund does not reach a very high level
A) Only 1
B) only 2
C) All, 1, 2 & 3
D) Only 2 and 3
E) None of these

27. The name of the white revolution is associated with?
A) J. V. Narlikar
B) J. C. Bose
C) Kurien Verghese
D) M. S. Swaminathan
E) C. Rangarajan

28. The cabinet committee recently approved the 'IGMSY' a scheme for the welfare of the people of India. Who amongst the following will get the benefit of the scheme?
A) Pregnant, lactating women and infants
B) Children upto 12 years of age
C) Youth
D) Old and Senior Citizens
E) All the above

29. The Govt. of India provides direct financial support to which of the following schemes?
A) Jeevan Bharati Scheme
B) ULIP
C) Sampoorna Grameen RozgarYojana
D) Packing Credit Guarantee Scheme
E) All of the above

30. Who amongst the following is the author of the Book 'A Bend in the River' ?
A) V S. Naipaul
B) Arun Shourie
C) Octavia paz
D) Daniel Defoe
E) Walter Scott

31. Government recently set up a Ta-sk Force to plug fund wastage? The task force is headed by?
A) Justice Sri Krishna
B) Nandan Nilekani
C) C. Rangrajan
D) Dr. Bimal Jalan
E) None of these

32. Which of the following countries recently decided to continue £ 28 million annual aid to India ?
A) U.S.A.
B) U.K.
C) The Netherlands
D) France
E) None of these

33. India in February 2011 signed Free Trade Agreement with?
A) Japan
B) Indonesia
C) South Korea
D) Australia
E) None of these

34. India has signed Comprehensive Economic Cooperation Agreement with?
A) Indonesia
B) Vietnam
C) Malaysia
D) Saudi Arabia
E) None of these

35. Energy Giant BP PIC is a companyof?
A) UK
B) USA
C) UAE
D) Sudan
E) None of these

36. Jhalanath Khanal has been sworn in as the Prime Minister of?
A) Bhutan
B) Sri Lanka
C) Nepal
D) India
E) None of these

37. Who among the following has been honoured with the Fakhru-ddin Ali Ahmed Memorial Award for National Integration 2008 ?
A) M. J. Akbar
B)Swami Agnivesh
C) Javed Akhtar
D) Digvijay Singh
E) None

Answers

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

Rashtriya Swasthya Bima Yojana extended to the Domestic Workers

The Union Cabinet approved extension of the Rashtriya Swasthya Bima Yojana (RSBY) to all the registered domestic workers in the country recently. The scheme is expected to cover approximately 47.50 lakh domestic workers in the country.

            The Scheme envisages smart card based cashless health insurance cover up to Rs. 30,000/- in any empanelled hospital anywhere in the country. The funds will be allocated from the National Social Security Fund for Unorganised Workers. The premium will be shared by the Central and State Governments in the ratio of 75:25. In case of States in NE Regional and J&K the ratio is 90:10. The estimated expenditure to be borne by the  Government for the year 2011-12 is Rs. 29.70 crore, for 2012-13 is Rs. 74.25 crore, for 2013-14 is Rs. 148.50 crore and 2014-15 is Rs. 297 crore.

            Domestic work forms one of the largest sectors of female employment in the urban areas. Domestic workers are unorganized and the sector remains unregulated and unprotected by labour laws. These workers come from vulnerable communities and backward areas. Most of these are poor, vulnerable, illiterate, unskilled and do not understand the urban labour market.

            The RSBY provides for smart card based cashless health insurance cover of Rs.30,000/- per annum to BPL workers (a unit of five) in unorganised sector is presently being implemented in 25 States / UTs. The scheme has since been extended to building and other construction workers registered with Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996, street vendors, beedi workers and such MNREGA workers who have worked for more than 15 days during the preceding year.

Domestic Workers

Domestic work forms one of the largest sectors of female employment in the urban areas. Domestic workers are unorganized and the sector remains unregulated and unprotected by labour laws. This is largely because the domestic workers undertake work in private homes rather than in commercial establishments. They work in appalling conditions, with no coverage under the existing welfare measures and schemes for social security, old age pension, health and maternity protection etc.  Domestic workers lack organizational strength and voice and comprise largely of unskilled women, who enter the labour market without any technical skills.  As per National Sample Survey (NSS) 2004-05, there are about 47.50 lakh domestic workers in the country. About 30 lakh of these workers are urban women, making domestic work as the largest female occupation in urban India.

 Domestic workers come from vulnerable communities and backward areas. Most of these are poor, vulnerable, illiterate, unskilled and do not understand the urban labour market. Domestic work is undervalued and poorly regulated, and many domestic workers remain overworked, underpaid and unprotected. They are maltreated, exploited and suffer violence and even sexually abused.  The main issues that concern domestic work are: lack of decent wages and work conditions, no defined work time, no weekly offs, loneliness, violence, abuse, and sexual harassment at workplace, victimization at the hands of traffickers/ placement agencies, forced migration, lack of welfare measures (such as health insurance, maternity protection, old age security), and lack of skills development resulting in stagnation and no career growth. 

 Looking at the vulnerable nature of the domestic workers, the Ministry of Labour & Employment constituted a Task Force to evolve a policy frame work on Domestic Workers in the context of regulatory mechanism and for providing social security. The Task Force in its Report has, inter-alia, recommended extension of the welfare schemes to the domestic workers including: health and maternity benefits, death and disability benefits, and old age benefits. The Task Force defined the “domestic workers” as follows:

“Domestic Worker” means, a person who is employed for remuneration whether in cash or kind , in any house hold through any agency or directly, either on a temporary basis or permanent, part time or full time to do the household work but does not include - any member of the family of an employer.”

The State Governments would identify domestic workers as those having completed 18 years of age. For the purpose of identification of domestic workers, any two of the following criteria would be treated as evidence of persons working as domestic workers:

·         certificate by registered Resident Welfare Association to the effect that a person is working as a domestic worker in the area;

·         employer certificate

·         certificate from a registered trade union that the concerned person is working as a domestic worker;

·         police verification certificate which certifies that the person is working as a domestic worker.

The Task Force has recommended that the Rashtriya Swasthya Bima Yojana (RSBY), the national health insurance scheme should be the first welfare scheme to be extended to the domestic workers.  RSBY provides for smart card based cashless health insurance cover of Rs. 30000 per annum per family (a unit of five).  The premium is shared between Centre and State Government in the ratio of 75:25 basis.   25 States/Union Territories have started enrollment and issuance of smart cards in 348 districts. Remaining States except Andhra Pradesh are in the process of implementation of the scheme.  More than 2.35 crore smart cards have been issued as on June 30, 2011.  

The Government  has taken a decision to extend the RSBY to domestic workers. It is proposed to cover 10% of the estimated 47.50 lakh domestic workers i.e. 4.75 lakh during the current financial year i.e.  2011-12 and remaining in next three years.   After 2014-15 the recurring expenditure is likely to be around Rs. 297 crores annually, though the exact amount will be determined on the basis of persons identified and registered as domestic workers under the scheme during each preceding year and the actual premium rates. The expenditure will be met from the National Social Security Fund for unorganized sector workers administered by Ministry of Finance.

The International Labour Organization (ILO) also discussed at length during the last International Labour Conference on International Convention for protecting the rights of domestic workers and for providing social security to this extremely vulnerable segment of unorganised workers and adopted a Convention and Recommendation. The Government  of India supported adoption of Convention on Domestic Workers.