India's Energy Security and Petroleum Economy

Nationalisation: Yes, the coal sector was nationalised by the Indira Gandhi government in phases during the 1970s. Hence, Statement 1 is Correct. Coal block allocation: Coal blocks are not allocated through a lottery system. They are currently allocated through auctions, a shift from the previous system of administrative allocation. Hence, Statement 2 is Incorrect. Coal self-sufficiency: India is not entirely self-sufficient in coal production. While domestic production has increased, there is still a gap that is met through imports. Hence, Statement 3 is Incorrect.

Statement 1 is incorrect: The rate of growth of real Gross Domestic Product has fluctuated over the decade. Statement 2 is correct: The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. Thus, statement 1 is incorrect while statement 2 is correct.

Expansionary policies: Expansionary policies like increased government spending or lower interest rates can stimulate economic activity and consumer spending. This can lead to excess demand that outstrips supply, causing prices to rise. Fiscal stimulus: Similar to expansionary policies, fiscal stimulus through government spending injections can create an inflationary gap if it's excessive. Higher purchasing power: Higher purchasing power can contribute to demand-pull inflation. If people have more money to spend due to factors like wage increases or wealth accumulation, it can lead to increased demand for goods and services. Inflation-indexing wages: While inflation-indexing wages can contribute to a wage-price spiral in some cases, it's not necessarily a direct cause of demand-pull inflation. It can be a consequence of inflation rather than a primary driver. Rising interest rates: Rising interest rates generally act as a tool to cool down an economy and reduce inflation. They make borrowing more expensive and encourage saving, thereby reducing the money supply and aggregate demand. Therefore, the correct code is 1, 2, and 4.

The real sector of the economy includes: Farmers harvesting their crops: This is a primary sector activity where raw materials are produced. Agriculture forms a crucial part of the real sector. Textile mills converting raw cotton into fabrics: This is a secondary sector activity where raw materials are processed into finished goods. Manufacturing industries are considered part of the real sector. The other two options are part of the financial sector: Commercial bank lending money (Financial sector): Banks and other financial institutions provide financial services like lending, borrowing, and investing. These activities facilitate transactions in the real sector but don't directly produce goods or services themselves. Issuing rupee-denominated bonds overseas (Financial sector): This is a financial instrument where a company raises funds by issuing bonds. While it can indirectly support real sector activities by providing capital, it's not directly involved in production. Therefore, the correct code is 1 and 2 only.

Statement 1 is incorrect: Tax revenue as a percent of GDP in India has not steadily increased over the last decade. It has fluctuated — for instance, it rose during periods of strong economic growth but fell during years like 2019–20 and 2020–21 (due to slowdown and the pandemic). Hence, the trend is not steadily upward. Statement 2 is incorrect: Fiscal deficit as a percent of GDP has also not steadily increased. It narrowed from around 4.5% in 2013–14 to about 3.4% in 2018–19, then spiked during the COVID-19 years (to around 9.2% in 2020–21) and has gradually declined since. Thus, there has been no steady increase over the decade.