Question

Which of the following is not correct?
• [(1)] At present the exchange rate of the Indian currency is market determined.
• [(2)] The exchange rate remained overvalued in the pre-reform period.
• [(3)] Based on current international trade standards, trade facilitation policies include a focus on paperless procedures.
• [(4)] 'Vivad-se Vishwas' is an initiative to settle international trade disputes in India.

• A. 1
• B. 2
• C. 3
• D. 4

Hint:

Remember:
• Market-determined exchange rate was adopted after the 1991 economic reforms.
• Trade facilitation includes paperless customs procedures and electronic documentation.
• Vivad se Vishwas is a scheme for resolving tax disputes, not international trade disputes.

Answer 1

The Correct Option is D

Concept: India follows a market-oriented exchange rate system, and several reforms have been introduced to facilitate international trade. It is important to distinguish between trade-related reforms and tax dispute resolution schemes.

Step 1: Examine Statement (1). India currently follows a market-determined exchange rate system, where the value of the Indian Rupee is largely determined by the demand and supply of foreign exchange in the market. Hence, \[ \boxed{\text{Statement (1) is Correct.}} \]

Step 2: Examine Statement (2). Before the economic reforms of 1991, the Indian Rupee was generally considered to be overvalued due to government control over the exchange rate. Hence, \[ \boxed{\text{Statement (2) is Correct.}} \]

Step 3: Examine Statement (3). Modern trade facilitation measures promoted by organizations such as the WTO include:
• Paperless trade procedures.
• Electronic documentation.
• Simplification of customs procedures. Hence, \[ \boxed{\text{Statement (3) is Correct.}} \]

Step 4: Examine Statement (4). The Vivad se Vishwas Scheme was introduced by the Government of India to settle direct tax disputes between taxpayers and the Income Tax Department. It is not an initiative for settling international trade disputes. Hence, \[ \boxed{\text{Statement (4) is Incorrect.}} \] Therefore, the incorrect statement is \[ \boxed{(4)} \] Hence, the correct answer is \[ \boxed{(D)\;4} \]