Daily Current Affairs Quiz: November 10, 2025

Answer: C [Statement-I is correct but Statement-II is incorrect]
Explanation:

Statement 1 is correct: Revenue deficit represents the shortfall when the government’s revenue expenditure exceeds its revenue receipts. It highlights the inability of the government to meet its regular operational expenses from its income, indicating a structural imbalance in fiscal management that may require corrective policy measures.

Statement 2 is incorrect: Revenue deficit is not always financed by borrowings from the Reserve Bank of India. Instead, it is typically met through a combination of market borrowings, small savings, and other sources. Direct borrowing from the RBI is rare and discouraged due to its inflationary impact and fiscal discipline concerns.

Answer: B [1, 2 and 3 only]
Explanation:

Statement 1 is correct: Under the on-lending model, loans disbursed by NBFCs from funds borrowed from banks can be classified under PSL, provided they adhere to the specified guidelines, including loans for agricultural machinery. This leverages the NBFCs’ wider reach and expertise in lending to specific sectors.

Statement 2 is correct: The co-lending model, introduced by the RBI, allows banks and NBFCs to collaborate in providing PSL, combining the banks’ lower cost of funds with the NBFCs’ greater reach and understanding of the priority sector.

Statement 3 is correct: To address regional disparities in PSL, the RBI has implemented a differential weighting system. Incremental PSL in districts with lower per capita credit flow receives a higher weightage, encouraging banks to focus on these underserved areas.

Statement 4 is incorrect: Loans for renewable energy projects, including solar power plants for agricultural use, are specifically included under the PSL guidelines as part of the broader focus on sustainable and inclusive development.

Answer: A [Only one]
Explanation:

Statement 1 is correct: The Production Linked Incentive (PLI) scheme aims to make domestic manufacturing globally competitive by addressing sectoral inefficiencies. It helps build economies of scale, improve supply chain integration, and reduce import dependence, thereby strengthening India’s industrial base.

Statement 2 is incorrect: The scheme is not restricted to large-scale industries. MSMEs are also eligible to participate in several sectors under the PLI scheme. In fact, the government has encouraged MSME inclusion to promote inclusive growth and expand manufacturing capacity across different scales.

Statement 3 is correct: The PLI scheme encourages foreign direct investment (FDI) by offering financial incentives to companies—both domestic and foreign—that manufacture in India. This helps attract global players and enhances India’s position in global supply chains.

Statement 4 is correct: Under the PLI scheme, incentives are provided based on incremental sales of products manufactured in India over a base year. This performance-linked approach ensures that benefits are tied to actual production growth and market expansion.

Answer: D [Securities Transaction Tax (STT)]
Explanation:

Option A is incorrect: GST, while having a fixed rate for a particular good or service, is not truly proportional overall. An individual’s total GST burden depends on their consumption pattern, which varies based on income and preferences. Someone with a higher income may consume more goods and services subject to higher GST rates or consume a larger quantity overall, leading to a higher tax burden, while someone with a lower income might spend a larger proportion of their income on essential goods with lower or no GST.

Option B is incorrect: Income tax in India is progressive, meaning the tax rate increases as income rises. Different income slabs have different applicable tax rates.

Option C is incorrect: Corporate tax, similar to income tax, is also progressive, with different tax rates for different levels of corporate profits.

Option D is correct: STT is levied at a fixed percentage on the value of securities transacted, irrespective of the income or profit of the investor. This makes it the closest to a proportional tax among the given options. The same rate applies to all transactions of a particular type of security.

Answer: A [Address gaps and mismatches in tax rules that allow profit shifting to low-tax locations]
Explanation:

Option A is correct: The BEPS project, initiated by the OECD and G20, addresses loopholes and mismatches in international tax rules that multinational companies exploit to shift profits artificially to low or no-tax locations.

Option B is incorrect: BEPS is not related to customs duties on imports. It deals with corporate taxation across jurisdictions.

Option C is incorrect: The project does not aim to eliminate corporate taxes but to ensure they are paid fairly in the jurisdictions where profits are earned.

Option D is incorrect: BEPS is not about tax incentives or holidays for start-ups but about curbing aggressive tax avoidance by large corporations.