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indian economy

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01. Indian economy is world’s 9th largest economy on exchange rate basis and 4th largest economy on PPP basis in 2010
02. PPP is called as the purchasing power party
03. Purchasing power party is a theory and according to the theory – the exchange rates between currencies are balanced when their purchasing power is the same in each of the two countries
04. The main characteristics of Indian economy are – agrarian economy, mixed economy and developing economy
05. Agrarian economy – it is also called as primary economy. Agriculture dominance prevails in both the gross national product and employment and more than half of India’s working population is engaged in agriculture
06. Mixed economy – It is an economy where both public and private sector coexist. The nature of Indian economy is a mixed economy coined by J M Keynes
07. Developing economy – the following are the features of developing economy
• Low per capita income
• Occupational pattern is primary producing
• Heavy population pressure
• Prevalence of chronic unemployment and under employment
• Steadily improving rate of capital formation
• Low capital per head
• Maldistribution of wealth/assets
• Low level of living of the average Indian
• Low human development indicators
08. The broad sectors of Indian economy are:
• Primary sector
• Secondary sector
• Tertiary sector
09. Primary sector consists of agriculture, forestry and fishing
10. Secondary sector consists of mining, manufacturing, electricity, gas and water supply and construction
11. The tertiary sector consists of – business, transport, telecommunication, banking, insurance, real estate, community and personnel services


12. National income –
• It is the net value of all the final goods and services produced in a country
• During a financial year
• It is a flow concept
• In India, the financial year is from April 1st to March 31st
• The national income is calculated annually
13. According to National Income committee 1949 – national income estimate measures the volume of commodities and services turned out during a given period counted without duplication
14. National income – is the measurement of the production power of an economic system during a given time period
15. National wealth is the measurement of the present assets available at a given time and it is a stock concept
16. Gross National Product – it refers to the money value of total output of production of final goods and services produced by the nationals of a country during a given period of time, generally a year
17. Gross national product = C+G+I+(X-M)+(R-P) where, C = consumption expenditure; G = government expenditure; I = Investment expenditure; X-M = net exports and R-P = net factor income from abroad
18. Gross domestic product – It is the total money value of all final goods and services produced within the geographical boundaries of the country during a given period of time
19. Gross domestic product = GNP – (R-P) and when R-P is equal to 0, then GDP = GNP
20. Net national product is obtained by subtracting depreciation value – ie. The capital stock consumption from gross national product
21. NNP = gross national product – depreciation
22. Personal Income - It is that income which is actually obtained by the individual or nationals
23. Personal Income = National Income – undistributed profits of corporations – payment for social security provisions – corporate taxes + transfer payments + net interest paid by the government
24. Personal disposable income – PDI
25. Personal disposable income – when personal direct taxes are subtracted from personal income, the obtained value is called as personal disposable income
26. Personal disposable income = PI – direct taxes
27. Personal disposable income = consumption + saving


28. When the national income is measured at the base year price, it is called as national income at constant prices
29. When the national income is measured at the current year price, it is called as national income at current prices
30. In 1968, the first attempt was made by Dadabhai Naoroji in arriving at national income through his book – Poverty and Un British rule in India
31. The first scientific attempt to measure national income was made by Prof VKRV Rao during 1931-1932
32. In 1949, National Income Committee under the chairmanship of Prof PC Mahalanobis was constituted
33. National Statistical Commission – NSO was set up on June 1,2005 for promoting statistical network in the country and it was headed by SD Tendulkar
34. In 1949, Central Statistical Organisation was constituted to public national income data
35. NSSO – National sample survey organization
36. NSSO was set up in 1950 for conducting large scale sample survey to meet the data needs of the country for the estimation of national income and other aggregates


37. Planning is a continuous attempt on the part of policy makers to achieve multiple and predetermined objectives of development within a specific period of time in a planned way
38. The first attempt was made by Sir M. Visvesvarayya through his bookd – Planned economy for India in 1934
39. National Planning Commission was set up under the chairmanship of J L Nehru in 1938

40. 1944 – Bombay Plan ( a plan of economic development) by eight industrialists
41. 1944 – Gandhian plan by S N Agarwal
42. 1945 – People’s plan by M N Roy
43. 1950 – Sarvodaya plan by Jai Prakash Narayan
44. Planning commission was set up by Government of India on 15.3.1950
45. The present composition of Planning commission is as detailed below:
• Dr. Manmohan sing – chairman
• Shri Montek Singh Ahuwalia – deputy chairman
• Shri Soumitra Choudhary – member
• Shri Mihir Shah – member
• Shri K. Kasturi Rengan – member
• Shri Aman Maira – member
• Shri Abhijit Sen – Member
• Shri Syeda Hameed – member
• Shri Narendra Jadhav – member
• Shri B K Chaturvedi – member
46. National Development Council was constituted on 6.8.1952
47. The prime minister is the ex officio chairman
48. The secretary of the Planning Commission is the ex-officio secretary of the national development council
49. Chief Ministers of all states and the members of the Planning Commission are the members of the national development council
50. The following are the functions:
• Aims to make cooperative environment for economic planning between the states and the planning commission
• It evaluates the management of plans from time to time
• It analyses the policies affecting the development
• It gives suggestions to achieve fixed aim in the plans
• It gives final approval to the five year plans
51. The strategies of planning in the country are:
• Harrod Domar planning
• Nehru Mahalanobis strategy
• Gandhian strategy
• LPG strategy
• Pura strategy
52. The following are the types of planning:
• Planning by direction
• Planning by inducement
• Financial planning
• Physical planning
• Perspective planning
• Indicative planning
• Imperative planning
• Rolling plan
• Core plan
53. The following are the details of various five year plans in the country:
• First plan – 1951 – 1956
• Second plan – 1956 – 1961
• Third plan – 1961-1966 (Gadgil yojana)
• Fourth plan – 1969 – 1974
• Fifth plan – 1974 – 1979
• Sixth plan – 1980-1985
• Seventh plan – 1985 – 1990
• Eighth plan – 1992 – 1997
• Ninth plan – 1997 – 2002
• Tenth plan – 2002 – 2007
54. The eleventh plan document was titled as – TOWARDS FASTER AND MORE INCLUSIVE GROWTH
55. The monitorable targets for eleventh five year plan were:
• Income and poverty
• Education
• Health
• Women and children
• Infrastructure
• Environment
56. The twelfth plan period is 2012 – 2017
57. The twelfth plan document was titled as – FASTER, SUSTAINABLE AND MORE INCLUSIVE GROWTH
58. Inclusive development means – development which is participative and empowers every individual especially the poor and excluded
59. The essential elements of inclusive development are:
• Poverty reduction and increase in quantity and quality of employment
• Agricultural development
• Reduction in regional disparities
• Social sector development
• Protecting the environment
60. The various indexes of human development are:
• Human development index – HDI
• Inequality adjusted HDI – IHDI
• Gender inequality indeed – GII
• Multidimensional poverty index – MPI
61. Causes of rural poverty are:
• Rapid population growth
• Lack of capital
• Lack of alternate employment opportunities other than agriculture
• Excessive population –pressure on agriculture
• Illiteracy
• Regional disparities
• Joint family system
• Child marriage
• Lack of proper implementation of PDS
62. The different types of unemployment are:
• Structural unemployment
• Under employment
• Open unemployment
• Disguised unemployment
• Frictional unemployment
• Seasonal unemployment
• Classical unemployment
• Cyclical unemployment
63. The flagship programme of Government of India are:
• Sarva Shiksha Abhiyan - 2001
• National Rural Health Mission- 2005
• Integrated child development scheme - 1975
• Midday meal – 1995
• National rural drinking water programme – 2009
• Total sanitation programme – TSP
• National social assistance programme – NSAP
• Mahatma Gandhi Rural Employment Guarantee act – 2006
• Indira Awas Yojana – 1999
• Rajiv Gandhi Gramin Vidyuthikaran Yojana
• JLN National Urban Renewal Mission
• Bharat Nirman Yojana



01. It is a plan of insurance which provides life cover to a number of persons under single policy called as master policy
• The premium is found to be cheaper on account of low administration cost
• A number of group insurance schemes have been designed for various groups
• The groups include employer-employee groups; associations of professionals (such as doctors, lawyers, chartered accountants etc); members of cooperative banks; welfare funds; credit societies and weaker sections of the society
• Individual lives are not assessed. A person will be covered so long as he remains eligible to be the member of the group
• Double accident benefit is available – payment of double the sum assured on death due to accident – without permanent disability benefit – by payment of extra premium
02. The different types of reinsurance are:
• Proportional form of reinsurance
• Non proportional form of reinsurance
03. Proportional form of reinsurance are:
• Quota method
• Share surplus form
04. Non proportional form of reinsurance are:
• Excess of loss method
• Excess of loss ratio method
• Pools method of reinsurance
• Treaty method of reinsurance
06. The objectives of DICGC are:
• Provide insurance against the loss or part of bank deposits by participating banks and other financial institutions
• Provide guarantee support to small scale borrowers by participating banks and other financial institutions
• Provide credit guarantee support to the priority sectors – agriculture, retain trade, small business, professional and self employed persons and education
07. The important credit guarantee schemes operated by the corporation are:
• Small loans guarantee scheme – 1971
• Small loans (financial corporation) guarantee scheme – 1971
• Service Cooperative Societies guarantee scheme – 1971
• Small loans (small scale industries) guarantee scheme – 1981
• Small loans (cooperative banks) guarantee scheme 1984
• Credit guarantee schemes for small borrowers
• Credit guarantee scheme for small scale industries
08. The objectives of insurance legislations are
• To fostering a sound, competitive and progressive insurance business
• To monitor the activities of the insurance industry
• To protect the interests of the policy holders by ensuring the insurers, intermediaries and surveyors abide the rules and regulations
• To promote and preserve high standards of professionalism in the conduct of insurance business
• To provide regulatory and fiscal infrastructure conducive to the development of insurance industry in the country
• To coordinate investment and other activities of the insurers with the objectives of the national economic policies
• To provide the best treatments to policy holders of various insurance policies
• To provide the best solutions to the insuring public
09. The consumer protection redressal agencies were established by the consumer protection act in India
10. District consumer forum
• is set up by state governments in all districts in India.
• Each district forum is headed by a district judge with two other members
• These forums have jurisdiction to entertain complaints and compensation claim does not exceed Rs. 5 lakhs
11. The following unfair trade practices:
• Falsely represent that the goods are of a particular standard, quality or grade
• Falsely represent that the services are of a particular standard, quality or grade
• Falsely represent any rebuilt, second hand, renovated, reconditioned or old goods as new goods
• Represent that the seller or supplier has sponsorship or approval which they do not have
• Making a false representation about the usefulness of any good or service
• Giving public any warranty or guarantee of the performance efficacy or length of life of product or any goods that is not based on adequate proper test
12. State consumer forum
• Shall have the jurisdiction to entertain complaints where the value of goods an services and compensation if any claim exceeds Rs. 5 lakhs
• It shall have the administrative control over all district forums within its jurisdiction in all matters
13. National consumer forum shall be headed by a judge of supreme court of India
• Consists of four other members
• Has the jurisdiction to hear complaints where value of goods and services and compensations if any claimed exceeds Rs. 2 lakhs and shall hear appeals against the orders of state commissions.
14. The following are the features of motor vehicles act:
• Vehicle must be a motor vehicle
• Use must be in a public place
• Insurance policy should be in force
• Statutory contract between insurer and driver
• Rights of third parties
• Limitations of the third party’s rights
15. Fire insurance consists of the following:
• Loss and profit policy
• Industrial all risk policy and fire reinstatement
• Declaration and floating policy
16. Marine (cargo) insurance consists of the following:
• Inland transit policy
• Import and export marine policy
• Special declaration policy
• Annual open policy
• Special storage policy
• Sellers contingency insurance
17. Marine (Hull) insurance consists of the following:
• Fishing vessels,
• Major fleets
• Inland vessels
• Country crafts/motorized boats
• Builders risk ship policy
• Ship breakage risks
• Major/Sunday hulls
• Vessels under erection cover
18. Aviation insurance consists of the following:
• Aircraft comprehensive insurance
• Legal liability for passengers
• Legal liability of crews
• Loss of licence
• Flight coupon (personal accident insurance)
• Third party liability for crews
19. Engineering insurance consists of the following:
• Machine cum erection and storage policy
• Machinery breakdown
• Contractors all risks
• Contracts plant and machinery
• Advanced loss of profit
• Electronic equipment insurance
20. Miscellaneous insurance consists of the following:
• Agricultural pumpsets
• Householders comprehensive insurance
• Shopkeepers comprehensive insurance
• Baggage insurance NTV
• Coffee plantation insurance
• Neon signs insurance
• Personal accident individual and group insurance
• School children’s personal accident insurance
• Fidelity guarantee – individual
• Employees liability insurance
• Medical practitioners professional indemnity insurance,
• Burglary insurance (business premise)
• Cash insurance
• Product liability insurance
• Bankers blanket insurance
• Personal accident social scheme and hut insurance
• Medical claim individual and group insurance
• Overseas medical claim
• Boat and shipbuilders insurance
• Bhavishya arogya
21. Personal selling of insurance is a selling process and assisting a prospective buyer to buy a product
22. The quality of a salesman are:
• Should have the ability to persuade people to buy products of their choice
• Should have good communication ability
• Should possess knowledge about customers and their wants and desire and the products offered to satisfy them or not
• Should know the socio psychological factors of customers
• Influence the buying behavior
• Should understand various customers, their attitudes and behaviours
• Should have ability to recognize and handle them for successful salesmanship
• Should follow AIDAS formula
23. AIDAS means – A for attention; I for interest; D for desire; A for action and S for satisfaction
24. A sales person should have the following qualities:
• Physical qualities
• Social qualities
• Mental qualities
25. Skills of a salesman are:
• Interpersonal skills
• Communication skills
• Organization skills
26. The characteristics and traits of salesman are:
• Trustworthiness
• Enthusiasm
• Empathy
• Persistence
• Patience
• Desire for self improvement
• Motivation
27. Insurance business both life insurance and non life insurance is procured through individuals called as agents
28. Individuals who want to be insurance agents should
• Obtain a license from the controller of insurance of the IRDA in India
• After obtaining the license, he should have to enroll with the insurance company to be authorized to work as an insurance agent
• A well trained insurance agent can explain the details of various policies to the clients in detail
29. Corporate agency system was introduced in India during 2003
30. A bank can act as an agent on behalf of an insurance company
31. A corporate agent can be
• A firm
• A company under the companies act
• A banking company
• A corresponding new bank
• A regional rural bank
• A cooperative society including a cooperative bank
• A panchayat
• A local authority
• A non government organization
• A micro lending finance organization
• A non banking finance company
• Any other organization that may be approved by IRDA
32. There are three categories of insurance brokers
33. Insurance brokers can be classified into:
• Direct broker
• Composite broker
• Reinsurance broker
34. Objectives of Life Insurance Corporation of India are:
• Provide life insurance cover to insuring people in India and outside India
• To create insurance awareness in rural areas in India
• To achieve growth in new insurance business
35. The subsidiaries of Life Insurance Corporation of India are:
• The LIC housing finance Limited
• LIC Mutual fund
• LIC (Nepal) Limited
• LIC(international )EC Bahrain
36. Public sector Non Life Insurance corporations are:
• General Insurance Corporation of India
• National Insurance Company Limited
• The New India assurance company limited
• The oriental insurance company Limited
• United India insurance company
• Employees state insurance corporation
• Deposit Insurance and credit guarantee corporation
• Export credit guarantee corporation of India
• Agricultural Insurance Company of India Limited
37. Functions of DICGC
• Deposit insurance functions
• Credit guarantee functions
38. Export credit insurance consists of
• Standard policy
• Small exporters policy
• Specific policies
• Guarantee to banks
• Special schemes
39. ECGC has evolved six types of guarantees
• Packing credit guarantee
• Export production finance guarantee
• Post shipment export credit guarantee
• Export finance guarantee
• Export performance guarantee
• Export finance (overseas lending) guarantee
40. The different types of insurance risk are:
• Pure risk
• Speculative risk
• Static risk
• Dynamic risk
• Subjective risk
• Objective risk
• Financial risk
• Business risk
• Personal risk
• Property risk
• Liability risk
• Underwriting risk
• Credit risk
• Market risk
• Liquidity risk
41. Pure risks and speculative risks are handled by:
• Risk assessment
• Risk sharing
• Risk exploitation
• Risk monitoring
42. The risk management strategies are:
• Risk avoidance
• Risk retention
• Risk transfer
• Risk reduction
• Risk hedging
• Risk combination
• Risk sharing
43. The risk management process consists of the following:
• Risk identification and exposures to loss
• Risk evaluation
44. Risk identification and exposures to loss consists of the following:
• Loss exposure check list method
• Financial statement analysis
• Flow charts
• Contract analysis
• Physical verification and inspection
• Statistical analysis of past loss
45. The modern risk financing techniques are
• Alternative risk transfer
• Catastrophic bonds
46. Alternative risk transfer consists of
• Loss sensitive contracts
• Finite insurance contract
• Captive insurers
• Multi line insurance policies
• Multi trigger insurance policies
• Contingent financial arrangements
• Structured debt instruments
47. The different types of CAT bonds are:
• Surety bond
• Judicial BONDS
• Public official bonds
• Fidelity bonds
• Retirement planning
• Annuity

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