Economics - II : Previous Year Questions (2022)

PART – A

Q1. Define CRR

Ans. The minimum percentage of a bank's Net Demand and Time Liabilities (NDTL) that it must maintain as cash reserves with the RBI.

An increase in CRR results in less cash with banks for lending. As a resultant, there is decrease in money supply in the economy. And vice-versa.

Q2. What do you mean by NBFIs?

Ans. Non-Banking Financial Institutions are entities that offer various banking-like services, such as loans, investments, and asset financing, without holding a formal banking license. In India, these are typically incorporated under the Companies Act, 1956. They operate as specialized intermediaries that cater to specific financial needs or underserved segments of the population.

Q3.  What is Inflation?

Ans. Inflation is a persistent rise in the general price level of goods and services in an economy over a period of time. While moderate inflation is often seen as a sign of a growing economy, high or unpredictable inflation can create significant distortions.

Q4. State the phases of Business Cycle.

Ans. An economy typically passes through several distinct phases in a complete cycle:

1. Expansion (Boom or Prosperity)
2. Peak
3. Recession (Contraction)
4. Depression
5. Trough
6. Recovery

Q5. What are the instruments of Fiscal Policy?

Ans. Governments utilize several key instruments to implement fiscal policy effectively:

1. Taxation
2. Public Expenditure
3. Public Borrowing (Public Debt)
4. Deficit Financing

Q6. Define Hedging.

Ans. Hedging is a risk-management strategy used to offset potential losses from adverse exchange rate movements. It allows traders to protect themselves against the risk of future changes in exchange rates by locking in rates for future transactions.

Q7. What is FII?

Ans. Foreign Institutional Investment (FII) involves foreign institutional entities (like pension funds, mutual funds, or insurance companies) investing in the financial markets (stocks and bonds) of another country.

Q8. Name the committee, who initiated reforms in Indian Banking sector.

Ans. Narasimham Committee, headed by former RBI Governor M. Narasimham.

Due to his pivotal role, M. Narasimham is often referred to as the "father of banking reforms" in India.

Q9. What do you understand by the term "Foreign Exchange"?

Ans. Foreign Exchange (Forex) refers to the conversion of one country's currency into another. It represents the price of one currency in terms of another, such as the number of Indian Rupees required to buy one US Dollar.

Q10. Define the concept of Poverty.

Ans. It is a situation wherein a person is not able to fulfil basic requirements or necessities of life. For e.g.: food, education, shelter, clothing, health, drinking water etc.

PART – B

Q11. Differentiate between Banks and NBFIs.

Ans. The Indian financial system is a sophisticated framework designed to mobilize savings and allocate credit. While Commercial Banks act as the primary pillar of this system, Non-Banking Financial Institutions (NBFIs), often referred to as Non-Banking Financial Companies (NBFCs), have emerged as critical components that fill essential gaps in the credit delivery mechanism.

The distinction between these two entities lies in their regulatory framework, operational scope, and systemic importance.

Q12. State the problems encountered during the estimation of National Income.

Ans. The estimation of National Income is a complex statistical and conceptual exercise, particularly in developing economies like India. These difficulties are broadly classified into two categories: Conceptual (Theoretical) Difficulties and Practical (Statistical) Difficulties.

I. Conceptual (Theoretical) Difficulties

These pertain to the logical and definitional challenges in deciding what should be included in the national income and how it should be valued.

1. Non-Market (Non-Monetized) Activities

Economic activities occurring outside the formal market, such as household production (housewives' services), volunteer work, and informal services, are often excluded. While these activities significantly contribute to societal well-being, they are challenging to quantify and include in traditional measures. In countries like India, a vast amount of production (e.g., kitchen gardening, child-rearing) never enters the market, leading to a systematic underestimation of the true economic output.

2. The Problem of Double Counting

Double counting occurs when the value of intermediate goods (goods used to produce other goods) is included alongside the final product's value. To avoid overestimation, only the value-added at each stage of production must be counted. For example, if the value of wheat is counted, and then the value of flour made from that wheat is also counted, the national income will be artificially inflated.

3. Price Level Fluctuations

National income is often measured at current market prices. However, prices fluctuate over time due to inflation. If prices rise without an increase in actual production, the "Nominal National Income" increases while "Real National Income" remains stagnant. Measuring real growth requires adjusting current prices using a price index (deflator).

4. Rapid Technological Change & New Economies

Modern advancements, such as the digital economy and the sharing economy (e.g., Uber, Airbnb), often do not fit neatly into traditional national income frameworks. Capturing the economic impact of these rapidly evolving industries remains a conceptual challenge for statisticians.

II. Practical (Statistical) Difficulties

These involve the actual hurdles faced during data collection and the reliability of the figures obtained.

1. Incomplete Coverage & The Informal Sector

National income relies on data from surveys, tax records, and official statistics. Ensuring complete coverage is difficult, especially in the informal sector, which comprises unregistered businesses and informal employment. These activities often go unrecorded and do not contribute to official figures, leading to a distorted picture of the economy.

2. Quality and Reliability of Data

Data collection processes are frequently subject to errors, inconsistencies, and sampling biases. In many regions, flawed or outdated data leads to inaccurate estimations. This is compounded in developing nations by a lack of trained enumerators and low levels of literacy among respondents who cannot maintain accurate accounts of their income or expenditure.

3. International Transactions & Complexities

National income must account for exports, imports, and income from foreign investments. These are subject to complexities such as exchange rate fluctuations, transfer pricing (where MNCs manipulate prices to minimize tax), and intricate corporate structures, making accurate measurement difficult.

4. Lack of Occupational Specialization

In agrarian economies like India, many individuals do not have a single, specialized occupation. A farmer might also work as a seasonal labourer or a small-scale trader. This lack of clear occupational boundaries makes it difficult to categorize and estimate income based on the "Productive Method" or "Income Method."

III. Impact of Estimation Errors on Policy

• Distorted Fiscal Policy: Inaccurate national income figures can lead to flawed government policies regarding taxation and public expenditure.
• Misleading Growth Indicators: If the informal sector's contribution is ignored, the growth rate may appear lower than it actually is, affecting international competitiveness and investor confidence.
• Ineffective Deficit Financing: The government uses national income data to plan deficit financing (spending more than revenue) for infrastructure and human capital development. Faulty data can lead to excessive money supply, triggering high or "galloping" inflation.

Q13. Differentiate between forward and spot exchange rate.

Ans. The timing of delivery and payment defines the type of exchange rate used in a transaction.

A. Spot Exchange Rate

The rate at which a currency is traded for immediate delivery. Although called "immediate," most spot transactions take two business days (T+2) to settle. It reflects the current market price based on real-time supply and demand.

B. Forward Exchange Rate

The rate agreed upon today for a transaction that will occur on a specified future date (e.g., 30, 60, or 90 days from now). It allows businesses to avoid the uncertainty of future rate fluctuations. Forward rates may be at a premium (if the currency is expected to be more expensive in the future) or a discount.

Q14. Highlight the advantages and disadvantages of FDI inflow.

Ans. FDI is generally preferred by developing nations because it brings more than just money; it brings "packaged" resources.

Advantages of FDI

1. Economic Development Stimulation: FDI is a primary source of external capital that funds new factories and industrial centres, increasing the national income.
2. Employment Opportunities: By establishing new businesses and expanding existing ones, FDI directly creates jobs for the local population.
3. Human Capital Development: Foreign firms often provide advanced training and skills to their local employees, which enhances the overall quality of the workforce (the "ripple effect").
4. Technology and Resource Transfer: FDI gives host countries access to cutting-edge technologies, management practices, and operational tools that they might not have developed independently.
5. Increased Productivity and Competition: The entry of foreign players forces local firms to become more efficient and innovative to remain competitive, benefiting consumers with better products.
6. Improved International Trade: FDI often involves firms that produce goods for export, helping the host country improve its trade balance and foreign exchange reserves.

Disadvantages and Risks of FDI

1. Hindrance to Domestic Investment: Large foreign firms with massive resources may crowd out small local businesses that cannot compete, potentially leading to domestic monopolies.
2. Political and Sovereignty Risks: Foreign investors may gain significant influence over a country's key industries or infrastructure, potentially undermining national sovereignty.
3. Exchange Rate Volatility: Large inflows and outflows of FDI can cause fluctuations in the value of the host country's currency, sometimes to the detriment of other sectors.
4. Profit Outflow: While FDI brings capital in, the profits earned are eventually repatriated (sent back) to the investor's home country, which can drain foreign exchange in the long run.
5. Cultural and Social Impact: The introduction of foreign values and consumer preferences can lead to the erosion of local traditions and identities.
6. Unequal Distribution of Benefits: FDI often concentrates in developed urban regions or specific lucrative sectors, leaving backward areas or essential but low-profit sectors underdeveloped.
7. Expropriation Risk: Changes in the political landscape can lead to "expropriation," where the host government seizes the assets of foreign investors.

Conclusion

While FDI provides stable, long-term growth and technology, it requires careful regulation to prevent the marginalization of domestic industries and ensure that benefits are distributed equitably across the economy.

PART – C

Q15. Discuss the effects of inflation on the economy.

Ans. Inflation is a persistent rise in the general price level of goods and services in an economy over a period of time. While moderate inflation is often seen as a sign of a growing economy, high or unpredictable inflation can create significant distortions.

Effects of Inflation on Production

Inflation doesn't just change prices; it changes how businesses operate and how resources are used.

1. Misallocation of Resources: Investors shift money away from productive sectors (like manufacturing) into "speculative" assets like gold or real estate, which hold value better during price hikes.
2. Reduced Quality: To maintain profit margins without raising prices too aggressively, producers may resort to "skimpflation", reducing the quality of raw materials or the size of the product.
3. Hoarding and Black Marketing: Anticipating further price rises, traders may hoard essential goods to sell them later at higher prices, creating artificial scarcity.
4. Discouragement of Savings: As the value of money falls, people prefer to spend now rather than save, which reduces the total capital available for long-term industrial investment.

Effects on Distribution of Income and Wealth

Inflation acts as a "hidden tax," but it doesn't affect everyone equally. It creates distinct winners and losers:

Other Macroeconomic & Social Effects

The ripple effects of inflation extend to the government's balance sheet and the moral fabric of society.

1. Balance of Payments (BOP) Crisis: High domestic inflation makes a country's exports more expensive and less competitive abroad. Meanwhile, imports become relatively cheaper, leading to a trade deficit.
2. Currency Depreciation: As the internal purchasing power of a currency falls, its value in the foreign exchange market usually drops as well.
3. Increased Public Expenditure: The government must spend more on public projects, defence, and administration because the cost of materials and labour has increased.
4. Social and Moral Impact: Rapid inflation can lead to social unrest. It often encourages "social evils" such as corruption, adulteration of goods, and a general loss of faith in the monetary system.
5. Risk of Collapse: In extreme cases (hyperinflation), the monetary system can fail entirely as people lose confidence in the currency.

Q16. Briefly explain the reforms undertaken to strengthen Indian money market.

Ans. The Indian money market is a vital component of the financial system, facilitating the borrowing and lending of short-term funds (typically with a maturity of up to one year). It acts as a mechanism for equilibrating the short-term surplus and deficit of funds in the economy and serves as the primary conduit for the transmission of monetary policy.

Historical Context and Need for Reforms

Before the 1980s, the Indian money market was characterized by a rigid, "administered" interest rate structure, lack of diverse instruments, and limited participation. The market was fragmented, with no established secondary market for short-term assets.

The push for systemic reforms began following the recommendations of two landmark committees:

• The Chakravarty Committee (1985): Highlighted the need for a flexible interest rate system to improve monetary policy effectiveness.
• The Vaghul Working Group (1987): Laid the blueprint for widening and deepening the money market through new instruments and specialized institutions.
• The Narasimham Committee (1991 & 1998): Focused on reducing the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) to free up bank resources and advocated for market-determined interest rates to enhance efficiency.

Core Regulatory and Structural Reforms

A. Deregulation of Interest Rates

A fundamental reform was the dismantling of the administered interest rate regime. Starting in May 1989, the ceiling on interest rates for call money, inter-bank deposits, and bill rediscounting was removed. This shift allowed market forces of demand and supply to determine rates, fostering a competitive environment and better price discovery.

B. Evolution of New Money Market Instruments

To provide diverse avenues for short-term investment and borrowing, the Reserve Bank of India (RBI) introduced and refined several instruments:

1. Treasury Bills (T-Bills): These are risk-free government securities. While 91-day T-bills were traditional, the RBI introduced 182-day and 364-day bills to provide a range of maturities, issued at a discount and redeemed at face value.
2. Commercial Paper (CP): Introduced in 1990, CPs allow highly-rated corporate entities to raise short-term funds directly from the market, reducing their dependence on bank credit. The RBI strictly regulates their issuance and disclosure to protect investor confidence.
3. Certificates of Deposit (CD): These are negotiable, interest-bearing instruments issued by banks to mobilize large-value short-term deposits. RBI regulations have standardized their terms to make them more attractive to institutional investors.
4. Cash Management Bills (CMBs): Introduced in 2010, these ultra-short-term (less than 91 days) instruments help the government manage temporary mismatches in cash flows.

C. Liquidity Management Mechanisms

1. Repo and Reverse Repo: Repurchase agreements (Repos) were introduced to allow participants to borrow funds against government securities. This has become the primary tool for the RBI to inject or absorb liquidity.
2. Liquidity Adjustment Facility (LAF): Established in 2000, the LAF allows banks to manage their day-to-day liquidity mismatches through repo and reverse repo auctions.
3. Standing Deposit Facility (SDF): A recent addition that allows the RBI to absorb liquidity without the need for collateral (securities), providing more flexibility in liquidity management.

Institutional and Infrastructure Strengthening

A. Specialized Institutions

• Discount and Finance House of India (DFHI): Set up in 1988 to provide liquidity to money market instruments and develop an active secondary market.
• Clearing Corporation of India Limited (CCIL): Established in 2001, the CCIL acts as a central counterparty, providing guaranteed clearing and settlement for transactions in government securities and repos, thereby significantly reducing settlement risk.

B. Technological Infrastructure

The RBI has shifted the market toward electronic and screen-based trading to enhance transparency and speed:

• Negotiated Dealing System (NDS): An electronic platform for trading and reporting transactions in government securities and money market instruments.
• Real-Time Gross Settlement (RTGS): The implementation of RTGS facilitated the instantaneous transfer of high-value funds, essential for modern money market operations.

Protection and Integration Reforms

A. Money Market Mutual Funds (MMMFs)

To allow individual and corporate investors to participate in the money market, MMMFs were introduced. Regulated by SEBI, these funds follow strict guidelines on investment limits, valuation, and transparency to safeguard investor interests.

B. Derivative Markets

• Overnight Indexed Swaps (OIS): These derivative contracts enable market participants to hedge against fluctuations in overnight interest rates, providing a crucial tool for interest rate risk management.

C. Investor Awareness and Literacy

The RBI and SEBI have undertaken initiatives to educate investors on the risks and benefits of various short-term instruments. This includes awareness programs and the dissemination of publications to ensure informed participation.

D. Global Integration

Efforts are ongoing to align the Indian money market with international standards. This involves harmonizing regulations and facilitating cross-border transactions to attract foreign institutional investors and enhance market depth.

Recent Developments (2023–2026)

The Indian money market continues to evolve with a focus on digital resilience and regulatory clarity:

1. Consolidation of Directions: In 2025, the RBI replaced thousands of older circulars with consolidated Master Directions, simplifying compliance for all market participants.
2. Digital Security: New mandates for two-factor authentication for digital payments (effective April 2026) strengthen the security of the digital financial ecosystem.
3. Inflation Targeting: The RBI’s shift toward a formal "dual mandate" prioritizes price stability (aiming for a 4% CPI target) as the core of its monetary policy decisions, which directly influences money market interest rates.

Conclusion

Reforms in the Indian money market have transitioned it from a dormant, tightly controlled sector to a dynamic, transparent, and internationally aligned market. Through the introduction of risk-free instruments like T-Bills, the formalization of the Repo market, and the establishment of robust infrastructure like CCIL, the market now provides the necessary liquidity and stability to support India’s broader economic growth. Future strengthening will likely focus on further deepening the corporate bond market and expanding the use of advanced fintech solutions for real-time risk assessment.

Q17. Define the term "Protectionism" and state arguments for and against Protection.

Ans. Protectionism is a policy approach where a government imposes restrictions such as tariffs, quotas, and subsidies to shield domestic producers from foreign competition. The primary goal is to ensure that local industries can survive and grow without being overwhelmed by cheaper or more established foreign products.

While free trade focuses on efficiency and global cooperation, protectionism prioritizes national interests, domestic employment, and industrial development.

Arguments For Protection (Protectionist Arguments)

Proponents of protectionism argue that unrestricted free trade can be detrimental to a nation's long-term economic and social stability. Below are the key justifications:

1. The Infant Industry Argument

This is one of the most widely accepted economic justifications for protection. It suggests that new (infant) industries in developing countries may not have the economies of scale or technical expertise to compete with big MNCs initially. By providing temporary protection (e.g., through tariffs), the government allows these industries to grow, learn, and eventually become competitive enough to survive in the global market. Countries like Japan, South Korea, and the United States used high tariffs in their early development stages to foster industrialization.

2. National Defence and Strategic Industry Argument

Economic efficiency is sometimes secondary to national security. Dependence on foreign nations for essential goods can make a country vulnerable during times of conflict. Industries such as steel, aerospace, advanced technology, and agriculture are often protected to ensure a country is self-sufficient in "war-essential" items. Ensuring that a nation can feed its people and arm its military without external reliance is seen as a core responsibility of the state.

3. Diversification of the Economy

Relying too heavily on a single export (like oil or a specific crop) makes an economy fragile. If the global price for that product drops, the entire nation suffers. Protectionism encourages the development of multiple sectors, creating a more balanced and resilient economic structure that can withstand global market shocks.

4. Protection of Domestic Employment

Competition from low-wage countries or highly efficient foreign firms can lead to factory closures and mass unemployment in specific domestic sectors. Protecting local jobs through trade barriers maintains social cohesion and prevents the "brain drain" or economic decay of industrial heartlands.

5. Anti-Dumping Argument

Dumping occurs when a foreign company sells its products in another country at a price lower than its cost of production to drive out local competitors. Once domestic firms are bankrupt, the foreign firm may raise prices. Anti-dumping duties are used to "level the playing field" and prevent such predatory pricing.

6. Balance of Payments (BOP) Correction

A chronic trade deficit (where imports exceed exports) can lead to a depletion of foreign exchange reserves. Imposing tariffs on "non-essential" luxury imports can help reduce the outflow of currency and stabilize the nation's balance of payments.

Arguments Against Protection (Arguments for Free Trade)

Critics of protectionism argue that it leads to long-term economic stagnation and harms the very people it claims to protect.

1. Increased Costs for Consumers

Trade barriers limit the supply of cheap foreign goods, forcing consumers to buy more expensive domestic alternatives. This acts like a hidden tax on the public, reducing the overall purchasing power and standard of living for households, particularly low-income ones.

2. Loss of Economic Efficiency

Without the pressure of international competition, domestic firms often become complacent. Protected firms have less incentive to invest in R&D or improve their production processes, leading to lower-quality products over time.

3. Misallocation of Resources

According to the principle of comparative advantage, countries should produce what they can make most efficiently. Protectionism pushes capital and labour into industries where the country is naturally inefficient, wasting resources that could have been used more productively elsewhere.

4. Risk of Retaliation and Trade Wars

Trade barriers rarely exist in a vacuum. When one country raises tariffs, its trading partners often retaliate with their own restrictions. This can spiral into a trade war, which reduces total global trade volume and harms exporters in both countries.

5. Increased Production Costs for Other Industries

Protection in one sector often harms another. For example, a tariff on imported steel might help steel mills but will increase costs for domestic car manufacturers and construction firms. Higher input costs make it harder for domestic manufacturers to compete in international markets.

6. Political Corruption and Rent-Seeking

Protectionism creates opportunities for rent-seeking, where businesses spend money lobbying politicians for protection rather than improving their business. Once a "temporary" tariff is granted, it is politically very difficult to remove it because the protected industry will fight to keep its advantage.

Q18. Briefly highlight the Poverty Alleviation Programmes undertaken in India.

Ans. Poverty is a situation wherein a person is not able to fulfil basic requirements or necessities of life. For eg.: food, education, shelter, clothing, health, drinking water etc.

Poverty alleviation programmes in India are as follows:

1. National Food for Work Programme –

• Launched on - November 14, 2004
• Aim/Objective - to intensify the generation of supplementary wage employment
• The programme is open to all rural poor who are in need of wage employment and desire to do manual unskilled work.
• It is implemented as a 100 per cent centrally sponsored scheme and the food grains are provided to States free of cost. However, the transportation cost, handling charges and taxes on food grains are the responsibility of the States.
• The collector is the nodal officer at the district level and has the overall responsibility of planning, implementation, coordination, monitoring and supervision.

2. Rural Housing – Indira Awaas Yojana (IAY) –

• Operationalised from – 1999 – 2002
• Aim/Objective - construction of houses for the poor, free of cost.
• The Ministry of Rural Development (MORD) provides equity support to the Housing and Urban Development Corporation (HUDCO) for this purpose.

3. Pradhan Mantri Gram Sadak Yojana (PMGSY) –

• Launched on – 25^th December 2000
• Aim/Objective -  to provide connectivity to eligible unconnected rural habitations as part of a poverty reduction strategy.
• It’s a 100% centrally sponsored scheme.
• Its primary goal is to facilitate overall socio-economic development by improving access to health, education, and markets, creating jobs, and enhancing economic opportunities for villagers.
• The scheme is implemented by State Governments and overseen by the National Rural Infrastructure Development Agency (NRIDA).

4. Antyodaya Anna Yojana (AAY) –

• Launched in – December 2000
• Aim/Objective – to provide food grains at a highly subsidized rate of Rs.2.00 per kg for wheat and Rs.3.00 per kg for rice to the poor families under the Targeted Public Distribution System (TPDS).
• Eligible households receive 35 kg of food grains monthly, including rice and wheat, at a low Central Issue Price (CIP) to ensure food security for the most vulnerable segments of the population. 
• The scheme is part of the Targeted Public Distribution System (TPDS) and targets specific groups such as households headed by widows, disabled persons, the elderly without support, landless labourers, and daily wage earners. 

5. Valmiki Ambedkar Awas Yojana (VAMBAY) –

• Launched in – December 2001
• Aim/Objective – to facilitate the construction and upgradation of dwelling units for the slum dwellers and provide a healthy and enabling urban environment through community toilets under Nirmal Bharat Abhiyan, a component of the scheme.
• The Central Government provides a subsidy of 50 per cent, the balance 50 per cent being arranged by the State Government.
• The VAMBAY scheme was followed by the Rajiv Awas Yojana (RAY), launched in June 2011, to further the vision of a "Slum free India". 

6. Pradhan Mantri Awas Yojana – Gramin (PMAY – G) –

• Formerly known as Indira awas Yojana (IAY)

• Launched on – 1^st April 2016
• Aim/Objective - providing a pucca house, with basic amenities, to all houseless households and those households living in kutcha and dilapidated house.
• PMAY-G addresses the rural housing shortage and bridges the housing deficit in rural areas of India, contributing significantly to the mission of "Housing for All".
• The beneficiaries are identified using the Socio-Economic and Caste Census (SECC) parameters and verified by the Gram Sabhas. The amount is transferred directly to the Aadhaar-Linked Bank Account / Post-Office Account of the beneficiary.  

7. Integrated Rural Development Programme (IRDP) –

• Launched in – 1978 – 79
• Aim/Objective - to raise families above the poverty line through self-employment, skill development, and access to credit.
• The scheme was discontinued in 1999 and merged into the Swarna Jayanti Gram Swarozgar Yojana.

8. Indira Gandhi National Old Age Pension Scheme (IGNOAPS) –

• Launched in – 1995
• Aim/Objective – give needy senior citizens, who lack sufficient income or support, a monthly pension.
• It is for citizens who are 60 years or older and belong to a household below the poverty line. 
• It is implemented in both rural and urban areas across all States and Union Territories. 
• A monthly pension of Rs. 200 for citizens in the age bracket of 60 – 79 years, and Rs. 500 for citizens aged 80 years and above.

9. Annapurna Scheme –

• Launched on – April 1, 2000
• Aim/Objective - to provide 10 kg of food grains free of cost to destitute senior citizens aged 65 or above who were eligible but not covered by the National Old Age Pension Scheme (NOAPS).
• The scheme aimed to ensure food security for these vulnerable individuals, who lacked regular income or financial support. 

10. Pradhan Mantri Jan Dhan Yojana (PMJDY) –

• Launched on – 15 August 2014
• Aim/ Objective – Financial Inclusion
• It provides a platform for universal access to banking facilities with at least one basic banking account for every household, financial literacy, and access to credit, insurance and pension facility.