Committees — Set 5

Correct Answer: D. Alagh Committee

• **Alagh Committee** = The Alagh Committee (1979) established the first calorie-based poverty line — 2,400 calories for rural and 2,100 calories for urban areas. • **1979** — This calorie-based definition became the standard for poverty measurement for several decades in India. • 💡 Wrong-option analysis: Lakdawala Committee: refined the price index methodology in 1993; Tendulkar Committee: moved beyond calorie-based approach in 2005; Rangarajan Committee: proposed higher consumption thresholds in 2012.

Correct Answer: C. State-specific price indices

• **State-specific price indices** = The Lakdawala Committee (1993) suggested using CPI-AL (agricultural labourers) for rural and CPI-IW (industrial workers) for urban poverty calculation. • **Price indexing** — This allowed for differences in the cost of living across various states while continuing the calorie-based approach. • 💡 Wrong-option analysis: Per-capita income only: too simplistic and not adopted; International standards: India uses domestic criteria; Calorie intake only: Alagh Committee used this alone; Lakdawala added price indices.

Correct Answer: D. High-Powered Committee on Stock Exchange Reforms

• **High-Powered Committee on Stock Exchange Reforms** = The High-Powered Committee headed by S.A. Dave led to the formation of SEBI in 1988, given statutory powers in 1992. • **1992 statutory status** — SEBI received statutory authority following the Harshad Mehta securities scam to regulate Indian capital markets and protect investors. • 💡 Wrong-option analysis: G.V. Ramakrishna Committee: related to SEBI later; Dantwala Committee: focused on district planning; Khusro Committee: focused on agricultural credit.

Correct Answer: A. NABARD

• **NABARD** = The Sivaraman Committee recommended a specialized agency for rural credit, leading to NABARD taking over the RBI's Agricultural Credit Department functions. • **Apex refinancing** — NABARD is the most important body for rural refinancing in India, supervising regional rural banks and cooperative banks. • 💡 Wrong-option analysis: IDBI: development bank created through separate legislation; SIDBI: created for small industries; NHB: National Housing Bank for housing finance.

Correct Answer: D. N.K. Singh Committee

• **N.K. Singh Committee** = The N.K. Singh Committee (2014) recommended a debt-to-GDP ratio as the primary fiscal policy target and suggested reducing the fiscal deficit to 2.5% by 2023. • **Flexibility** — It aimed to bring more flexibility to fiscal rules while maintaining long-term sustainability. • 💡 Wrong-option analysis: Rangarajan Committee: focused on poverty measurement; Urjit Patel Committee: focused on monetary policy and inflation targeting; Kelkar Committee: focused on tax reforms.

Correct Answer: D. Centre and States

• **Centre and States** = The Sarkaria Commission (1983) studied the distribution of powers between central and state governments, recommending that governors be eminent persons from outside the state. • **Inter-State Council** = It advocated strengthening the Inter-State Council as a constitutional forum for centre-state dialogue. • 💡 Wrong-option analysis: Bank and Customers: covered by Damodaran Committee; Judiciary and Executive: covered by separate legal reform commissions; Industries and Labour: covered by Labour Law committees.

Correct Answer: A. Nandan Nilekani Committee

• **Nandan Nilekani Committee** = The Nilekani Committee focused on deepening digital payments in India, suggesting measures to make transactions more accessible and secure. • **Digital infrastructure** — This committee played a vital role in expanding India's digital financial infrastructure, indirectly supporting UPI's growth. • 💡 Wrong-option analysis: Ratan Watal Committee: also focused on digital payments but is a separate committee; Bimal Jalan Committee: focused on RBI's capital framework; Nachiket Mor Committee: focused on financial inclusion.

Correct Answer: B. Agricultural Credit System

• **Agricultural Credit System** = The Khusro Committee (1989) conducted a comprehensive review of the agricultural credit system, highlighting weaknesses of cooperative and regional rural banks. • **Loan recovery** — It emphasized the need for better recovery of loans from farmers and improved institutional credit mechanisms. • 💡 Wrong-option analysis: Banking Mergers: covered by Narasimham Committee; External Sector: covered by separate balance of payments committees; Indirect Taxes: covered by Rekhi and Kelkar committees.

Correct Answer: D. Kelkar Committee

• **Kelkar Committee** = The Kelkar Committee recommended changes to corporate tax including the structure of Minimum Alternate Tax (MAT) to target companies making profits but paying no tax. • **Zero-tax companies** — MAT ensured that all profitable companies contributed to the national exchequer, preventing tax avoidance through exemptions. • 💡 Wrong-option analysis: Challiah Committee: focused on overall tax reform in 1991; L.K. Jha Committee: recommended VAT system in 1976; Justice B.N. Srikrishna Committee: focused on data protection.

Correct Answer: D. Market-determined interest rates

• **Market-determined interest rates** = The Narasimham Committee (1991) recommended that banks should have freedom to set their own interest rates based on market forces. • **Financial liberalization** — This was a fundamental shift from rigid RBI-controlled rates toward a more liberalized financial sector. • 💡 Wrong-option analysis: Nationalization: the opposite of liberalization; Fixed Exchange rates: not the recommendation; Indirect Control: too vague; the committee recommended full market determination.