UPSC Prelims 2002 Q45: Indian Economy – Human Development, Poverty & Employment Schemes
Consider the following statements: The objectives of the National Renewal Fund set up in
February 1992 were
1. To give training and counselling for workers affected by retrenchment or VRS.
2. Redeployment of workers
Which of these statements is/are correct?
- (a) Neither 1 nor 2
- (b) Both 1 and 2
- (c) 1 only
- (d) 2 only
Answer: (b) Both 1 and 2
Explanation
Objectives of the National Renewal Fund set up in February 1992
| Objective | Part of the National Renewal Fund? |
|---|---|
| Training and counselling for workers hit by retrenchment or VRS | Yes |
| Redeployment of workers | Yes |
| Compensation for voluntary retirement | Yes — through the Voluntary Retirement Scheme support |
| Capital for new industrial licences | No — outside the Fund's scope |
The National Renewal Fund (1992) was set up to cushion the social cost of industrial restructuring. It financed the training and counselling of workers affected by retrenchment or VRS and their redeployment. Both statements are therefore correct.
Answer: (b) Both 1 and 2.
Why each option is right or wrong
- (a) Incorrect. Both statements are in fact objectives of the Fund.
- (b) CORRECT. Training and counselling plus redeployment were its aims.
- (c) Incorrect. Statement 2 on redeployment is also correct.
- (d) Incorrect. Statement 1 on training and counselling is also correct.
Key point
NRF: set up in 1992 to give a safety net to workers during reforms; wound up around 2000.
Remember
National Renewal Fund = retraining plus redeployment of retrenched workers.
Common mistakes
- Choosing 1 only and dropping redeployment.
- Thinking the Fund was only for compensation.
- Not knowing that the Fund served the 1991 reform period.
Exam tip
Both statements describe the 'safety net' purpose, so both are correct.
Sources
- Economic Survey 1992-93
- Ramesh Singh — Indian Economy