The 13th finance commission has an elaborate design for the GST. Statement 1 is correct. Statement 2 is incorrect. Report basically discusses the improved implementation of the existing schemes. The third statement is correct. The report in its para 10.44 mentions: “Taking into account the demand of local bodies that they be allowed to benefit from the buoyancy of central taxes and the constitutional design of supplementing the resources of Panchayats and municipalities through grants-in-aid, we recommend that local bodies be transferred a percentage of the divisible pool of taxes cover and above the share of the states, as stipulated by us, after converting this share to grant-in-aid under Article 275.”

Demographic Transition is the transition from high birth and death rates to lower birth and death rates as a country or region develops from a preindustrial to an industrialized economic System.

Capital gain is an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is the difference between a higher selling price and a lower purchase price. The increase in the sales of a product does not mean increase the selling price of the product.

1. Purchase of government securities from the public by the Central Bank.
3. Borrowing by the government from the Central Bank.

A Foreign direct investment (FDI) involves establishing a direct business interest in a foreign country, such as buying or establishing a manufacturing business, while foreign Portfolio Investment (FPI) refers to investing in financial assets such as stocks or bords in a foreign country. Hence, FDI does not involve portfolio Investment.

The National Development Council includes the Prime Minister, Union ministers, Chief ministers of all states, administrative heads of the Union Territories and members of the planning commission.

To reap the benefits of demographic dividend, skills have to be developed because a relatively larger portion of population fall under the category of productive labour force when there is a demographic dividend.

General Price rise may be caused by an increase in the money supply as the real value of the money reduces. The higher aggregate price level will reduce the purchasing power subsequently reducing the consumer spending. Effective demand also increases when there is less purchasing power due to inflation.

Extremely high rates of inflation are generally associated with high rates of money growth. It is often the result of financing large deficits by printing money.

Supply of money remaining the same when there is an increase in demand for money, there will be an increase in the rate of interest and vice-versa.

A country’s economic growth is reflected through capital formation, which in turn encourages private enterprises in enhancing the growth of a country’s economy.

When interest rates decreases then investment expenditure by businesses on capital goods like factories and equipment will increase in an economy.

Non-plan expenditure covers interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, defence, loans to public enterprises, loans to States, Union Territories and foreign governments.

Taxes on tooth paste come under GST which is administered by State government.Sales tax is paid to sales tax authority in the state from where the goods are moved.

Venture capital (VC) is a long term financial capital provided to early-stage, high-potential, growth startup companies or new companies.

IOR-ARC is a regional cooperation initiative of the Indian Ocean Rim countries which was established in Mauritius in March 1997 with the aim of promoting economic and technical cooperation. IOR-ARC is the only pan-Indian ocean grouping. It brings together countries from three continents having different sizes, economic strengths, and a wide diversity of languages, cultures. It aims to create a platform for trade, socio-economic and cultural cooperation in the Indian Ocean rim area, which constitutes a population of about two billion people. Presently it has 19 members-Australia, Bangladesh, India, Indonesia, Iran, Kenya, Malaysia, Madagascar, Mauritius, Mozambique, Oman, Seychelles, Singapore, South Africa, Sri Lanka, Tanzania, Thailand, UAE and Yemen.
Six priority areas were identified to take forward the cooperation under IOR-ARC:
(i) Maritime Safety and Security;
(ii) Trade and Investment Facilitation;
(iii) Fisheries Management;
(iv) Disaster Risk Reduction;
(v) Academic and S&T Cooperation; and
(vi) Tourism Promotion and Cultural Exchanges.

When inflation becomes very high, the RBI decreases supply of money (to check inflation) by adopting tight monetary policy. Decreasing the money circulation decreases the demand of goods and services, which helps in controlling the inflation. It is mainly effective in case of demand pull inflation.

To reduce the budget deficit, the government has to increase income and reduce Expenditure. Introducing new welfare schemes and Expanding industries will increase the government expenditure.

The Fair and Remunerative Price (FRP) of sugarcane is approved by Cabinet Committee on Economic Affairs.

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.