Correct Answer: A
Explanation
Statement 1, 2 and 4 are correct. Statement 3 is incorrect.
SARFAESI Act of 2002 is an act to regulate securitization and reconstruction of financial assets and
enforcement of security interests, and to provide for a central database of security interests created on
property rights, and for matters associated with or incidental thereto,”. It permits banks and other
financial institutions to recover loans by auctioning off the defaulter’s residential or commercial assets.
Hence statement 1 is correct. The SARFAESI Act of 2002 will now apply to all state and multi-state cooperative banks, according to the Supreme Court of India. Hence statement 3 is incorrect. Unsecured
loans, loans under ₹100,000, and debts that are less than 20% of the initial principle are exempt from
the statute. Hence statement 4 is correct. This law permitted the formation of asset reconstruction
companies (ARCs) and the sale of nonperforming assets by banks to ARCs (which are regulated by the
RBI). Hence statement 2 is correct. Without the consent of a court, banks are authorised to take
ownership of collateral property and sell it.

Correct Answer: A
Explanation
Statements 1, 2, and 3 are correct. Statement 4 is incorrect. The Indian economy can be classified into
various sectors on the basis of ownership, working conditions and the nature of the activities. In
Primary sector of economy, activities are undertaken by directly using natural resources. Agriculture,
Mining, Fishing, Forestry, Dairy etc. are some examples of this sector. Secondary activities are those
activities that involve the manufacturing of finished goods by processing the raw materials that are
found in nature. Secondary activities add value to natural resources by transforming raw materials into
valuable products. Secondary activities are concerned with manufacturing, processing, and construction
(infrastructure) industries. Hence statement 2 is correct. Cotton in the boll has limited use but after it is
transformed into yarn, becomes more valuable and can be used for making clothes. The cotton textile
industry involves spinning, weaving, and finishing fabrics. Hence statement 3 is correct. Tertiary sector’s
activities help in the development of the primary and secondary sectors. By itself, economic activities in
tertiary sector do not produce a goods but they are an aid or a support for the production. This sector
jobs are called white collar jobs. The mining of Iron ore is a primary activity and Extraction of Iron from
Iron ore is a secondary activity. Hence statement 1 is correct and statement 4 is incorrect.

Correct Answer: D
Explanation
Both the statements are correct. GDP is commonly used as the metric for evaluating the state of
economic activity. In India, however, there is an overwhelming preference of statisticians, the academia
and policymakers for the use of gross value added (GVA) in view of the latter’s superior sectoral
coverage and tractability in terms of explaining primary, secondary and tertiary areas of activity that
together constitute aggregate supply. While GVA gives a picture of the state of economic activity from
the producers’ side or supply side, the GDP gives the picture from the consumers’ side or demand
perspective. Both measures need not match because of the difference in treatment of net taxes. Hence,
statement 1 is correct. GVA is also a better reflection of the productivity of producers as it excludes
indirect taxes which could distort an analytical view of the production process. As a result, highfrequency indicators of activity have developed around the constituents of GVA and less robustly
around GDP. In the same vein, however, it can be argued that GDP is distorted by the presence of
subsidies. Hence statement 2 is correct.

Correct Answer: D
Explanation
Statement 1 and 2 are incorrect. Statement 3 is correct.
An inflationary gap is a macroeconomic concept that measures the difference between the current level
of real GDP and the gross domestic product (GDP) that would exist if an economy was operating at full
employment. For the gap to be considered inflationary, the current real GDP must be higher than the
potential GDP. The inflationary gap exists when the demand for goods and services exceeds production
due to factors such as higher levels of overall employment, increased trade activities or increased
government expenditure. Therefore, increasing the salaries of government employees and enhancing
the minimum support price (MSP) of the notified agricultural commodities will lead to an increase in
government expenditure. Hence statement 2 is incorrect. It will create more demand in the economy
and further widen the inflationary gap. Hence statement 1 is incorrect. Dated G-Secs are long-term
securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on a halfyearly basis. Generally, the tenor of dated securities ranges from 5 years to 40 years. Issuing fresh dated
securing will reduce the available money and demand in the market consequently. Therefore, It will lead
to a reduction in an inflationary gap. Hence statement 3 is correct.

Ans d
Point Calimere Wildlife & Bird Sanctuary is the only site in Tamil Nadu to be declared as a
Ramsar Site in 2002