Committees — Set 3

Correct Answer: A. EAS Sarma Committee

• **EAS Sarma Committee** = The EAS Sarma Committee was set up to draft a law on fiscal responsibility, leading to the enactment of the FRBM Act in 2003. • **2003** — The FRBM Act set specific targets for fiscal deficit to bring fiscal discipline to government finances. • 💡 Wrong-option analysis: Rajaraman Committee: related to tax reform issues; Vijay Kelkar Committee: recommended GST structure; Bimal Jalan Committee: focused on RBI's economic capital framework.

Correct Answer: D. Unemployment

• **Unemployment** = The Bhagwati Committee (1973) was a committee of experts on unemployment, providing estimates of unemployed persons and suggesting employment generation schemes. • **Underemployment** — It also highlighted the critical distinction between underemployment and total unemployment in the Indian context. • 💡 Wrong-option analysis: Industrial Licensing: covered by other committees; Poverty Line: covered by Alagh, Lakdawala, and Tendulkar committees; Public Debt: covered by finance ministry committees.

Correct Answer: B. GAAR (General Anti Avoidance Rules)

• **GAAR (General Anti Avoidance Rules)** = The Shome Committee recommended deferring GAAR implementation to prevent a negative impact on foreign investment. • **Investor certainty** — It emphasized that tax laws should be clear and predictable, and GAAR was eventually implemented with several modifications. • 💡 Wrong-option analysis: Corporate Tax: not the specific focus; GST: covered by Kelkar Task Force; Wealth Tax: abolished separately, not subject of this committee.

Correct Answer: C. Ajay Chhibber Committee

• **Ajay Chhibber Committee** = The Ajay Chhibber Committee was one of the early studies suggesting a shift from centralized planning, arguing the Planning Commission was a vestige of the command economy. • **Cabinet resolution** — This report contributed to the cabinet resolution that eventually created NITI Aayog. • 💡 Wrong-option analysis: Arvind Panagariya Committee: not a formally constituted committee for this purpose; Bibek Debroy Committee: focused on railway reforms; Vijay Kelkar Committee: focused on tax and fiscal reforms.

Correct Answer: C. Agriculture

• **Agriculture** = The Swaminathan Commission (National Commission on Farmers, 2004) focused on agricultural sustainability and recommended MSP at least 50% above the weighted average cost of production. • **MSP recommendation** — This MSP formula is considered the benchmark for agrarian reforms and remains a subject of policy debate. • 💡 Wrong-option analysis: Higher Education: covered by education commissions; Telecommunication: covered by TRAI-related committees; Banking: covered by Narasimham and other banking committees.

Correct Answer: D. Gadgil Committee

• **Gadgil Committee** = The Gadgil Committee (1969) recommended an area-specific approach to banking, which the Nariman Committee then formalized into the Lead Bank Scheme. • **District allocation** — Under the Lead Bank Scheme, specific banks were assigned districts to lead local financial development. • 💡 Wrong-option analysis: Khusro Committee: focused on agricultural credit review; Nayakk Committee: focused on credit to SSI sector; Nariman Committee: formalized the scheme based on Gadgil's recommendation.

Correct Answer: A. Bank Credit to Industry

• **Bank Credit to Industry** = The Tandon Committee (1975) suggested norms for inventory levels and bank credit to industries to ensure credit was used for productive purposes only. • **Standard norms** — These norms remained the standard for corporate lending for many years after the committee's report. • 💡 Wrong-option analysis: Export Promotion: covered by separate committees; Poverty Estimation: covered by Alagh and Lakdawala committees; Price Control: an administrative function, not committee-led.

Correct Answer: B. SSIs and Tiny Sector

• **SSIs and Tiny Sector** = The Nayak Committee (1991) recommended improving institutional credit flow to the Small Scale Industrial (SSI) sector using a turnover-based formula. • **Turnover formula** — It suggested banks should provide working capital as a percentage of annual turnover, helping small entrepreneurs access funds easily. • 💡 Wrong-option analysis: Civil Aviation: covered by sector-specific committees; Information Technology: covered by IT sector committees; Heavy Industries: covered by industrial policy committees.

Correct Answer: B. Narasimham Committee (1975)

• **Narasimham Committee (1975)** = A working group under M. Narasimham recommended creating Regional Rural Banks (RRBs) to provide credit to the rural poor. • **October 1975** — The first RRB, Prathama Bank, was established in October 1975 to combine the local feel of cooperatives with commercial bank professionalism. • 💡 Wrong-option analysis: Sivaraman Committee: recommended NABARD creation; Gadgil Committee: focused on Lead Bank Scheme; Khusro Committee: reviewed agricultural credit system in 1989.

Correct Answer: C. Indirect Taxes

• **Indirect Taxes** = The Rekhi Committee (1992) suggested changes in the indirect tax structure, advocating for a single tribunal for all indirect tax disputes. • **Simplification** — It focused on simplifying customs and excise procedures to reduce compliance burden on businesses. • 💡 Wrong-option analysis: Direct Taxes: covered by Challiah and Kelkar committees; Banking Reforms: covered by Narasimham Committee; Export Policy: covered by Abid Hussain Committee.