[Doubts] Reply to educational questions received through google form last week

- Yes Mitron, Here are my replies to the educational queries received last week through google form. You can search the question term in the attached pdf file, and know my reply to your question.
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3/11/2019 How State Bank of Sikkim differs from other banks and from RBI regulations, if State Bank of Sikkim was set up in 1968 by their royal king's proclamation. Sikkim joined the Indian Union in
12:04:35 any. 1975, it has been granted special status under Article 371 F of the constitution. So as a result this bank remained
outside RBI's jurisdiction. RBI has wrote to Government to change the laws so it can be put under RBI's
supervision.

3/11/2019 I recently read - 14th FC recommended that State govt be excluded from the
14:51:26 investment operations of NSSF. These NSSF loans come at an extra cost to
the state government as the market rates are considerably lower. So, cabinet
gave its approval to State govt/UTs (with legislature) except Arunanchal, Delhi,
Kerela and MP from NSSF investments.
Small savings scheme interest is decided by union Government. The deposited money goes to NSSF -> there to
loans to states and union Government. 14th FC suggested states should not get loans from there because
interest rates are high. Beyond that technical things not imp. for UPSC.

Please explain this sir.

3/11/2019 Sir, Thank you, unacademy legal team is looking into this
19:20:46
A Telegram group with the 'UPSC Videos' has shared videos of these lectures
with people illegally. Please report the group. It is unfair that people are
watching these videos without paying.

Also, wanted to share that leaving blanks in the handouts has prevented shops
in Rajinder Nagar from photocopying and selling them. Please add more such
blanks in the handouts.
3/13/2019 Does PSBs give all their profits to the Govt. directly? If yes, is there any law/ Whenever Bank makes profit, its board of director will decide that how much of the profit is to be reinvested in
0:07:55 rule/ convention for this? What is the role of RBI here? Do they give their profits expanding the banks business and how much should be given as dividend to the shareholders. government will
only to the central govt? get the dividend in proportion of the share holding it has in a particular Bank. e.g. In case of Punjab National Bank
59% shareholding with Government so government will get dividend in that proportion. there is no law/RBI
regulation to control the amount of dividend that can be given
3/13/2019 The following are questions from 9th Mega edition Mrunal previous years 1) That we will learn in pillar 4.
11:19:41 papers of economy: 2) miscellaneous laws/org. topics preparing them will give a very poor cost benefit
1. Disguised unemployment is marginal productivity of labour is zero.What 3)That we will learn in pillar 5 infra.
does marginal productivity mean?- D4- Q41 4)Pursuing those type of miscellaneous/random things asked in UPSC will give very poor cost benefit
2. Difference between AGMARK and FSSAI labelling of food products?-D3- 5) Appropriated means eventually the one who gets it for example in case of Central Sale Tax it was given to the
Q42 origin state.
3. if national investment fund and national investment infrastructure funds are 6) The question is in context of 7 schedule. Central sales tax levied by the Union but actually collected and kept
important then please include in future lectures.-D2-Q102 by the origin states. Corporation tax is not in such nature so D is the answer. of course eventually it will be
4. external liabilities reported in union budget are based on historical exchange shared book with the status for the recommendations of 14th Finance Commission.
rate. True or false. If false, it is mentioned in what exchange rate?-D1-Q44
5. Generally we hear terms like tax is collected by, levied by, appropriated by.
What is meaning of Appropriated by?
6. Corporation tax
* Option C- is levied by the Union and shared by the Union and the states
* Option d- is levied by the Union and belongs to it exclusively
Answer is given as D in book. I believe option C is the answer as finance
commission shares the tax. - D1-Q5

7. In economics chapter 4- Indian industries and trade- question no. 38, 43-
asked questions related to steel, coal, rubber etc- how to handle these type of
Q- do you teach in this program? If not, please give web link or recommend
book.
Thank you.
3/13/2019 Is IGST also imposed on imported good and services or just on the Inter-state Applicable on both. But upon exporting the goods/services, the manufacturer gets full refund hence in reality it is
17:12:51 trade? called ‘zero rated’
3/13/2019 Can Govt of India remove RBI Governor under Section 7(2) of RBI Act? If yes, Yes under Section 7(2)Government could Order the RBI Central board to remove the RBI Governor- if it wanted.
22:29:46 by which process will the Governor be removed?
3/13/2019 Pillar 2: 1. DEA is headed by secretary. Finance ministry has five department which are headed by 5 secretary and the
22:51:06 1. Who heads department of economic affairs? Secretary or CEA? Right now senior most among them is designated as the finance secretary but that does not mean if he stops being the
Subash Chandra Garg, department of economic affairs is now Finance secretary of the particular department.
secretary. - Handout pg 97 2. 14 finance commission has removed special category states concept from its formulas. however , GST Council
2. GST functions- protecting interests of spl category of xyz states- but as per is still empowered to take any measures they required for special category states
14FC there is no concept of spl States?- pg 112
3. As e-way bill system stop harrassment at checkpoint- so stopping this
system of checking can lead to meance of animal trafficking, sandal etc?
Pg121
4. Whether CBDT and income tax is same or different? Pg 126
5. How GST catalyses Make in India program? Pg-127
6. Petrol and Diesel subject to excise duty+cess/surcharge+ union road and
infra cess? Or only excise duty+union road and infra cess? Pg- 115
7. Do real estate services rate needs to be updated in handout? Pg 118
8. Why diamonds have so less GST. 0.25%? Surprised!!
9. Please correct page 121 last sentence wherein 4NE States are only given.
3/14/2019 sir tax collected at source is direct tax or indirect tax...according to ur notes it is whether a tax is direct tax or indirect tax It depends on the concept of Tax incidence and tax impact. TDS, TCS
0:46:13 both direct and indirect....but if question ask like which of the following is direct are mere administrative mechanism designed by the tax authorities to combat the evasion and avoidance of
tax or indirect tax and there is no option of both then TCS is which type of tax taxes.
according to u ????
3/14/2019 CSE 2013 Q. Supply of money remaining the same, when there is an increase Supply of onion remaining the same when there is an increase in the demand of onions the price of onion will
13:26:52 in demand for money, there will be ............... . increase. similarly in case of money its borrowing price (i.e. interest rate) will increase. UPSC has asked that
particular question in that simple context only there is no need to overthink about it with advanced concepts.
Ans given by UPSC is -
an increase in the rate of interest.

However, Speculative demand for money has inverse relation with r.o.i.

So, with increase in money demand (considering transactive money demand &
money supply to be constant), r.o.i. should decrease.

Kindly throw light on this.

Thank you in advance sir....& get well soon. : )

3/14/2019 Are Banks/ NBFCs borrowers of Certificate of Deposits or they issue it? The lend and borrow among themselves using those instruments
14:54:46
3/14/2019 1.)If someone wants to start a company, will he issue shares or bonds? 1)Depends on his business model he can issue either one or both. but usually he will prefer to issue shares so
17:04:24 2.) Since on investing in bonds one gets assured interest and principal, why will that if company does not make profit he will not be bound to share any money with them.
anyone invest in shares? 2) Bond will give only fixed interest rate that is promised by the company. E.g. 7% on 100 rs. irrespective of the
profit made by the company. whereas in case of shares, if company makes good profit, they may even issue
higher amount of dividend e.g. 10-20 rs. On the share of face value of Rs.100. however there is also the danger
that if company does not make profit, they will not issue dividend to the shareholders. Therefore, an investor
has to decide accordingly whetherin the given company it will be good to invest through share route or through
Bond route.
3/14/2019 Handout pg 113- GST Input Tax Credit: When Goods/Services (produced &) Because Delhi and Puducherry will be charging sgst. whereas other union territories without legislature will be
18:16:42 supplied ----> Why is it written UT without legislature? charging UTGST instead of SGST.
What about Delhi and Puducherry?
3/14/2019 Sir you are a great teacher ....but I request you to kindly take a few classes It takes a lot of time and effort to create the handout and PowerPoint for each weekends classes. Plus additional
19:27:50 other than those scheduled on weekend..even if you take 2 extra classes it will queries received through Google form- addressing them also takes a lot of time. So, if I am taking more number
be very beneficial for us since most of us are 1st attempters it's always better to of classes then I will not be generate enough content for the next weekend’s classes.
have some cushion between course completion and D-day
3/14/2019 Sir recently there have been conditions notified by DPIIT for gettingexemption We have learned the basic concept behind Angel tax. beyond that the technical norms related to imposition or
19:39:39 from angel tax.Do we have to consider it important? exclusion of Angel tax on a particular startup company is Not important for UPSC.
3/14/2019 Sir today it was mentioned in the newspaper that RBI will use forex swap for We have covered this in Sundays class. 17/3/19
20:41:28 injecting liquidity instead of OMO. How will this inject liquidity?
3/15/2019 With reference to Centre state financial relations which of the following net question you have mentioned is from the pre GST era. at that time union government levied The Central Sale
11:29:07 proceeds of taxes not form a part of consolidated fund of india Tax (CST) form interstate trade. however in reality the CST-mechanism was that origin state would get to keep
[ ] 1. Taxes on the consignment of goods in the course of interstate commerce that amount entirely. hence CST would not go to the consolidated fund of India.
 [ ] 2. Stamp duties on bills of exchange and policies of insurance
[ ] 3. Taxes on agricultural income select the correct answers using the code
given below
[ ] 1only
[ ] 2 and 3 only
[ ] 1 and 3 only
[ ] 1 2 and 3

Sir kindly explain the 1st statement ..why taxes on interstate trade not part of
CFI..coz it goes to igst and subsequently a part of it to CFI
3/15/2019 Sir my doubt is from GST lecture. No that means they’re subjected to both CGST+ SGST.
11:53:02 Sir in handout (page No. 116) it is given that taxes like Purchase tax on The purpose of the table is to demonstrate that separately and additionally the state government cannot demand
vehicles,boats,animals ; Entertainment tax; Luxury tax at hotels spa etc. Are this type of taxes (purchase tax etc) because they have been replaced by SGST. so if movie ticket simply CGST+
replaced by "SGST". Does it mean only state govt. can collect this and centre SGST. and not “CGST+ SGST+entertainment tax”. [However in some areas the local bodies ( Panchayat,
can not collect CGST from them.?? (Are these taxes exclusively for state Municipal Corporation) are empowered to charge by additional entertainment tax. E.g. kerala- but that’s by local
government to collect or Central govt. Also collect CGST) bodies not Kerala State Government itself.]
Pls reply sir. I am in confusion
3/15/2019 Sir, expenditure made on defense equipment like fighter jets and tanks are Purchase of any vehicle or machinery means capital expenditure.
16:04:55 revenue expenditure or capital expenditure? its repair, maintanance, fuel costs will fall under the revenue expenditure
3/15/2019 In the handout under PM Fasal Bima Yojana, it is mentioned that it's optional Optional means state can refuse to implement that scheme in their state (Just like West Bengal has refused to
17:57:41 for states to join. What it means? Is it not compulsory for centre and state to implement the Pradhan Mantri Jan Arogya yojana 500000 rupee Health Insurance Scheme). However If they
share the premium in 50:50? decide to implement it then they have to bear the cost sharing.
3/15/2019 In PM Shram-Yogi Maandhan scheme, if both husband and wife have availed Yes she could do so.
19:41:06 this scheme and suppose if husband dies / disabled, can his wife pay the
monthly amount for her herself and also for her husband? Will she receive
pension for both the accounts?
3/15/2019 Sir what is capital conservation buffer? It is associated with the Basel 3 norms. beyond that what is exactly means how much is the formula is not
19:48:16 important for UPSC
3/15/2019 Sir, With the rise of inflation, will the "BOND YIELD" increase or decrease? As mentioned in the SEBI sharemarket handout, we’ll not be studying bond yield. Because it is not important for
20:11:57 Please explain in brief. UPSC. They are not asking it. so unnecessarily spending another half hour to teach that topic and student has to
read and revise it three times= will not give any cost benefit.
3/15/2019 Can FDI help reduce Fiscal Deficit? Indirectly it could help. 1) Indian company receives more capital so it will be able to expand and generate new
23:26:47 business so more Corporation tax collected. 2) Indian company gives dividend to the foreign investor. at that
time government will demand dividend distribution tax. So like that foreign direct investment can help augmenting
the tax income of the Government and thereby help reducing the fiscal deficit (indirectly).
3/16/2019 Sir, Please give an overview of recent RBI steps on Forex Swapping Taught in 17/3/2019 lecture.
1:28:38 Liquidation in OMO. Recently in News
3/16/2019 The Cabinet Committee recently gave its approval for the setting up of a unified We had learned in 16/3/2019 lecture that Gift-city IFSC is regulated by multiple regulators, i.e. RBI, SEBI and
13:41:18 authority for regulating all financial services. IRDA, PFRDA - and They will prescribe separate and relaxed norms for the IFSC.

1) Will it super cede PFRDA, IRDAI etc? Government’s International Financial Srvices Centres Authority Bill, 2019 aims to setup new unified authority
2) If not, what purpose does it serve? that’s make norms for such IFCS. it’ll not replace those Financial regulators for rest of the country.
3/16/2019 What is the meaning of "TDS Threshold on house rent also tweaked"? Is there House rent TDS : The exact amount / norms is not important for UPSC because we are not here to prepare CA
14:54:23 any specific amount? exam .
3/16/2019 Sir, Page93 ends with question “PM jan-dhan yojana”. Page94 starts with title “pillar#2: budget: an introduction”.
17:51:51 Doubt regarding PDF notes , Those handouts are given in the dashboard only please relook at the old posts.
Page no. 93 is end of 1D Insurance Pension & Financial inclusion
Page no . 131 is start of Taxation
can i know what is there from page no.94 to 130 as i am unable to find it .
3/16/2019 Doubt is resolved, i got the pdf - Budget Taxation upto GST page 94 to 130 Good to know it’s sorted out.
18:06:52 Thank you

3/16/2019 Is Entertainment tax on cinema, live shows levied by both by centre and They are subjected to “CGST+SGST” So yes you can say both centre and state. However in some areas the
18:12:36 states? local bodies ( Panchayat, Municipal Corporation) are empowered to charge by additional e entertainment tax.
E.g. kerala.
3/16/2019 what is credit default swap? Swap is a derivative instrument where one type of asset is swap with another. credit default swap what is exactly
19:17:55 means and how it exactly works Is not important for the scope of UPSC exam.
3/16/2019 hello sir CAD is zigzag pattern in last decade- as we learned in saturday lecture.
19:36:55 plz explain COD trend is it improving mean in past decade it is surplus or deficit
 wht will be the answer
3/16/2019 Respected sir...which one to follow vision 365 or it's monthly magazine
21:07:14
3/16/2019 (when oil price came down in 2016)why Saudi Arabia was not cutting the
23:03:27 supply of crude oil? to hurt Iran? is it related to Iran nuclear deal?But
how?Please explain.Thank you
3/16/2019 in the handout of burning issues in Banking sector, in Insolvency and
23:10:18 Bankruptcy article it is written that the PSB executives will shy away from voting
positively towards resolution plan. I don't understand why?
3/17/2019 Sir,apne btaya ki usa ke sath trade me export jyada h pr books me to Km h or
11:10:13 editorial pages me b jb usa ke import duty increase krna ka issue hota h to, ye
kha jata h ki we do not export very much so no need to worry
3/17/2019 Sir, there is a small inconsistency regarding external borrowing. handout says
11:57:10 Govt>Pvt whereas opposite in ppt. Please clarify
3/17/2019 Sir this is again related to rbi grade b and I enquired and investigated for this
14:18:54 exam to many of colleagues but they seems to be not in aware of this
examination's strategy.On the other side your official site contains only such
interview related to this(it's quite authentic,I must say).Can you ask your
students who have cleared this examination to give more of such interviews
explaining the technicalities and strategies related to preparation(be it study
material,sources and optimal time requirements for each stage of exam).Then
you can put them in public domain. Because it's hard to find such authentic
sources around us.
3/17/2019 This is not legal tender -: Dollar, 1000notes, G-sec, T-bill, share, bonds, dd
15:49:18 cheque, ATM cards, casino coin, Bitcoin. i Know these are not legal tender,
"""but are they Fiat money""" give answer yes /No that's it.
3/17/2019 1. Currency Swap Agreement helps in Internationalization of Rupee. (I
19:16:49 understand the mechanism but PIB didn't mention this during India-Japan
CSA).
2. RBI $ Swap agreement with Indian Banks will impact the current exchange
rate negatively as it will increase the Rupee supply while reducing $'s. So, it is
actually a mitigation for future volatility. (Just want to know whether this
understanding is correct).
3/17/2019 Dear sir, I am facing problems in playing yesterday's 16/03/19 recorded video
19:56:27 especially last 15 -20 minutes.When I change slide no. to 120 and then
play(resume) ,the video is not playing.Am I the only one facing the
issue?sought help from chat support but still not working.Please help.Thank
you.
3/17/2019 bop positive->more dollar inflow to India ->rupee strenghten->1$=60rs-
21:08:00 >1$=40rs->bad for exporter.
1)am I right?
2)then what happens to importers?does appreciation of rupees good for
importers?If yes then how ? Please expain
3)if answer to 2) is yes, then RBI buys $ to prevent harm to exporter but at the
same time is it not preventing benefit of importer?
I am getting so confused.Maybe I am Overthinking!
Thank you.
3/17/2019 Sir,plz explain treasure loan.forex swap is the same that you taught about RBI
21:20:34 purchasing or selling dollars .which one is better for current affairs-drishti or
vision.
Suppose there is a company generating monthly current affairs magazine/PDF.
when only few weeks are left before the prelim exam they have to boost the sales / web-traffic. so they would
compile content from those previous month’s magazines into 1 Mega issue so the students who were not
diligently preparing on monthly basis would be tempted to use it. So depending on your taste you can either use
the monthly thing or the 365 “mega compilation” thing. There is no need to prepare both of them because it will
give poor cost benefit.
Under the Iran Nuclear deal, USA and western powers were to relax the sanctions imposed on Iran and then Iran
could export its oil, Other goods and services easily to the western powers. then Iran would have had lot of
money from such foreign Exports. Iran may use such money to fund various dissenting/opposing parties in the
neighbouring countries to keep its position stronger (.e.g like how China does). Saudi wouldn’t like it, because of
their Shia-Sunni animosity and because they don’t want Iran to become a bigger player in middle-eastern affairs.
therefore they were not cutting the oil production in order to keep the oil prices down so even if Iran was able to
export more oil, in the monetary terms Iran would not make a lot of money .
In the resolution plan, usually the deal will be that bank will relax the interest rate and loan repayment tenure. if it
is done for the loans given to Anil Ambani, Jet Airways or any corporate then opposition parties and media will
make issue out of it that why did the bank gave loan in the first place to such elements you (PSB officials) must
have taken some bribe or order from Modi! Then someone will file a PIL court will begin enquiry - PSB officials
don’t like that type of spotlight. So they shy away from voting positively for resolution plan.
We’ll learn that in upcoming lecture under protectionism.
Please correct in handout to “private borrowers > Government .”
There is no secret strategy to it. simply go through previous papers and accordingly you prepare the additional
banking-related content from RBI website, annual reports and selective study from certain books like Indian
financial system by Uma Kapila. In RBI officers’ recruitment, number of seats are limited, so it Does not have a
full time dedicated aspirant base unlike civil services or staff selection. so, Others will perform badly you have to
perform less badly and with bit amont of luck you will get selected. You don’t have to become the ‘maestro
researcher’ of every topic under RBI syllabus.
Dollar, 1000notes = fiat money. Others are not fiat money.
1) Such mechanisms indirectly help in Greater acceptance of rupee currency.
2) You are understanding it correct but RBI is also mandated to keep the inflation between 2 to 6%. in February
2019 policy RBI noted that economy moving towards less than 2% deflation side, so they have to increase the
money supply anyways.
I have redirected your query to the technical team they are looking into it.
1) Yes you are right
2) because they have to spend less amount of rupee to buy (import) same amount of goods from the
international market.
3)At any point of currency exchange rate either the import will get unhappy or exporter will get unhappy. what
RBI tries to do is keep stability in the exchange rate so importers and exporters can plan and adjust their
business accordingly. it is just like that if we are changing the lecture date from Sunday to Monday some
students will not be able to attend due to their jobs/other classes/college. however if it is given that we will
always try to keep the lectures only on the weekends then students can arrange the schedule accordingly.
We have done the forex swap in Sunday lecture. If drishti tries to link it with 500 other birbal khichdi concepts to
fill the pages, we can’t pursue it due to poor cost:benfit.
3/17/2019 Pranam Guruji!!
22:00:54
1. Does PMJAY support free medicines or do they need to pay money?
2. Does EPFO have monopoly in managing funds of workers with salary less
than Rs 15000? Can private players provide this scheme?
3. In Page no 95, ‘cannot be enquired by any court regarding money bill’ but in
Aadhar verdict court has given its verdict that Aadhar act can be considered as
money bill.
4. If I buy agriculture land, any tax to be levied? Or zero percent?
5. Page 15- Does increase in forex reserves increases inflation in the country?
(We find forex reserves on the asset side of the balance sheet of Issue dept)
6. Why deposit taking NBFC not covered under CRR? Any logic?
7. Is MSF given only for commercial banks?
8. How Monetary policy affects ease of doing business?
9. Is SARFAESI act applicable to individuals or partners come under IB code?
Eg: If a person do not pay Rs 2 lakhs home loans? Is the person home
mortgaged under SARFAESI? Or IB code? Or SARFAESI of IB code? Page 45
10. How loan write off saves corporation tax for the bank. Please explain.
11. In page 93 of handout, please help fill this blank. BY ________ with help of
Bill & Melinda gates foundation. (regarding Global Index Database)
12. Why government supports sugar industry with so many sops? If to be
covered in future lectures please do not answer
Dhanyavad!!
3/17/2019 1. I kindly request you to teach us economic survey if it is introduced in this
22:05:41 year at a later date?
2. I know you are giving a concise notes. Still, is it possible to give gist of notes
in less than 10 papers to study before day of exam?
3. My compulsory language paper is Hindi. However, i am not good at Hindi.
What to go about it? I purchased NCERT class 8 polity hindi medium book to
know technical terms. Considering my weakness in this subject I like to begin
early
3/17/2019 Sir Appropriation bill is also mentioned in Article 114, so will it be a part of Art
22:47:39 266 or 114?
3/17/2019 1) Are all sectors permitted for FPI (i.e. 10% stake)? Means can railways or SBI
23:05:19 get 10% foreign investment as FPI ?
2) In case of Hot money Problem, when Foreign investors sell their stake and
run to other countries, then someone must be buying these shares. Then how
is it problematic ?
1. Free treatment involved free medicine included in it.
2. private players can provide, but statutory norm is that EPFO contributions will be compulsory for the employer
and employee for the salary less than 15000. so if a worker tries to join both a private pension/providend fund
scheme as well as EPFO then hardly little money will be left in his hand for his monthly expenses.
3. That takes us into polity ->‘basic structure and judicial review adhar vs privacy debate etc. so many non-
economy topics. What we have learnt is with respect to fundamental concepts of budget for MCQs.
4. State government can demand stamp duty on registration of that land/property.
5. Yes and therefore RBI engages ‘sterilization’ process to absorb the excess supply of rupee in that case.
6. Deposit taking nbfc is only taking time deposits and not demand deposits. So they’ll not face sudden rush of
deposits on any random day to get their money out. so if RBI imposed CRR norms, unnecessarily it’ll raise their
cost of operations.
7. Commercial And selected cooperative banks.
8. high level of loan interest rates will discourage the industrial expansion and thus affect the ease of doing
business
9. IBC for Business loans only. SARFAESI applicable on any type of non-agri loan.
10. As explained in the slide- it’s a CA thing not imp for UPSC.
11. By World bank.
12.to keep the UP sugar farmers happy for elections.
1.i’ll look into this.
2.If we do any further compression of these notes, many important topics may have to be omitted then it’ll be
harmful if something is asked from omitted topics.. However you can make further self notes on your own.
3. In the compulsory Hindi paper you only have to get the passing mark you don't have to become proficient in all
the technical terms. You can refer to a book by unique publication for this purpose..
Art 114. But it is necessitated because of art.266 (which says No fund can be withdrawn from the consolidated
fund of India without approval of parliament )
1. If the shares are listed on stock exchange then yes foreigner may buy it.
2. Because in their haste, they would be selling it at a lower price, resulting into ‘bear’ market. Ie. 1000 rs shares
selling for 800 rs. So, If you (indian investor) had also previously bought those shares in 1000 rs. (before this
foreigners started running away) then now your shares are worth less value now. So it’s a loss to indian investors.