Under theme: Indian Economy
105 PYQs. Learn elimination tricks first, then attempt the questions below.
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Every PYQ in this subtopic — exam mode with autosave, negative marking, and explanations after you submit.
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Common distractors and how to eliminate wrong options in this subtopic.
An agreement's entry into force often requires a specific number of ratifications, which can occur years afte…
Associate specific report names with their publishing international organizations.
Avoid dismissing statements about 'observer' status without specific knowledge, as it is a common practice fo…
Avoid relying on outdated information; focus on the 'last five years' trend as specified.
Be aware of the significant increase in India's foreign exchange reserves post-1991 as a key indicator of imp…
Be aware of the specific conditions, like the 10% equity threshold, that can reclassify FPI as FDI.
Be aware of the top few countries involved in the global trade of major agricultural commodities.
Be cautious of absolute terms like 'consistently increased'; real-world economic data often shows fluctuation…
Be cautious of plausible but incorrect geopolitical claims, such as military base rumors, which UPSC often us…
Be cautious with statements about specific commodity import/export trends (like iron and steel, chemicals) un…
Be cautious with superlative claims (e.g., 'most productive') unless specific data or strong evidence is know…
Be wary of absolute terms like 'All' or 'Most'; they are frequently incorrect in UPSC statements.
Be wary of absolute terms like 'all' or 'only' in statements; they often indicate incorrectness.
Beware of absolute terms like 'exclusively' or 'eliminate'; they are often used in incorrect statements.
Carefully differentiate between debt-creating and non-debt creating capital flows based on repayment obligati…
‘Global Financial Stability Report’ is prepared by the -
The 'Global Financial Stability Report' is prepared by the International Monetary Fund (IMF). The Global Financial Stability Report is a semiannual report published by the IMF that assesses the stability of the global financial system and emerging market financing. It highlights potential risks and vulnerabilities in the financial system and provides policy recommendations to promote financial stability.
Consider the following statements with reference to ‘IFC Masala Bonds’ -
1. The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.
Select the correct answer using the code given below.
Statement 1 is Correct. The International Finance Corporation (IFC) is indeed an arm of the World Bank Group, a group of five international organizations that work together to fight poverty and promote sustainable development. The IFC specifically focuses on encouraging growth in the private sector of developing countries. Statement 2 is Correct. Masala bonds are rupee-denominated bonds issued by foreign entities (public or private sector) outside of India. These bonds raise capital for the issuer in Indian rupees, providing an alternative funding source. Therefore, the correct answer is 1 and 2 both are correct.
What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and 'Gold Monetization Scheme'?
1. To bring the idle gold lying with India households into the economy
2. To promote FDI in the gold and jewellery sector
3. To reduce India’s dependence on gold imports
Select the correct answer using the code given below:
Statement 1 is correct: This is the primary objective of the Gold Monetization Scheme (GMS). The scheme encourages individuals and institutions to deposit their idle physical gold (jewellery, coins, bars) with banks. This gold is then melted, assayed, and added to the country's gold reserves, which can be lent to jewellers, thereby bringing it into the formal economy. Statement 2 is incorrect: These schemes are focused on managing domestic gold supply and demand. They are not designed to attract Foreign Direct Investment (FDI). Policies related to FDI in the jewellery sector are separate from these schemes. Statement 3 is correct: This is a core objective of both schemes.
* The Sovereign Gold Bond (SGB) Scheme provides a financial alternative to buying physical gold. By shifting demand from physical gold to paper gold, it helps reduce the demand for gold imports.
* The Gold Monetization Scheme (GMS) increases the domestic supply of recycled gold available to jewellers, thus reducing their reliance on imported gold. Both schemes aim to curb gold imports, which are a major component of India's import bill and contribute significantly to the Current Account Deficit (CAD).
180 min · −33% negative · explanations after submit
Which of the following best describes the term “import cover”, sometimes seen in the news?
The term "import cover" refers to the number of months a country's foreign exchange reserves can finance its imports. It's a crucial indicator of a country's external trade stability and its ability to meet its import obligations.
With reference to the ‘Trans-Pacific Partnership’, consider the following statements:
1. It is an agreement among all the Pacific Rim countries except China and Russia.
2. It is a strategic alliance for the purpose of maritime security only.
Which of the statements given above is/are correct?
Statement 1 is Incorrect: While China and Russia were not part of the TPP negotiations, it wasn't solely focused on Pacific Rim countries. Other economies like Vietnam and Singapore were part of the TPP despite not exactly being on the Pacific Rim. Statement 2 is Incorrect: The TPP was a proposed trade agreement, not a strategic alliance for maritime security. It aimed to reduce trade barriers and promote economic integration among member countries. The TPP negotiations were concluded in 2015, but the agreement was never ratified by all the signatories. The United States withdrew from the TPP in 2017, effectively ending the initiative in its original form. However, some member countries pursued alternative trade agreements based on the TPP framework. Hence, option D is the correct answer.
With reference to the International Monetary and Financial Committee (IMFC), consider the following statements:
1. IMFC discusses matters of concern affecting the global economy and advises the International Monetary Fund (IMF) on the direction of its work.
2. The World Bank participates as an observer in IMFC’s meetings.
Which of the statements given above is/are correct?
Statement 1 is Correct: The International Monetary and Financial Committee (IMFC) serves as a vital forum for discussing global economic issues and providing guidance to the International Monetary Fund (IMF). It brings together finance ministers, central bank governors, and other high-level officials from member countries to discuss challenges and opportunities facing the global economy. They also advise the IMF on its policy direction and work program. Statement 2 is Correct: The World Bank, while a separate institution, collaborates closely with the IMF. While not a formal member of the IMFC, the World Bank typically participates as an observer in IMFC meetings. This allows for better coordination and exchange of information between the two institutions on matters of mutual interest, such as global economic stability and development. Hence, option C is the correct answer.
180 min · −33% negative · explanations after submit
The term ‘Regional Comprehensive Economic Partnership’ often appears in the news in the context of the affairs of a group of countries known as
The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement that involves the Association of Southeast Asian Nations (ASEAN) and its FTA partners — Australia, China, Japan, New Zealand, and South Korea. It aims to create a comprehensive economic partnership covering trade in goods, services, investment, intellectual property, and e-commerce. ASEAN was initially a 10-member bloc consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. In 2025, Timor-Leste (East Timor) formally became the 11th member of ASEAN — marking its first expansion since Cambodia’s inclusion in 1999. In the 22nd ASEAN-India Summit (2025), both sides endorsed the ASEAN-India Plan of Action (2026–2030), focusing on areas such as maritime cooperation, digital innovation, education, and sustainable development. The year 2026 was declared the ASEAN-India Year of Maritime Cooperation. Hence, the RCEP continues to be associated with ASEAN and its FTA partners, and the correct answer remains (b) ASEAN.
The problem of international liquidity is related to the non-availability of -
The correct answer is (C) dollars and other hard currencies International Liquidity: This refers to a country's ability to meet its short-term external obligations (payments for imports, debt servicing, etc.) It essentially reflects the ease with which a country can access foreign currencies needed for international transactions. Focus on Hard Currencies: While some transactions might involve other currencies, international reserves are predominantly held in major reserve currencies like the US Dollar, Euro, Japanese Yen, and British Pound. These currencies are considered "hard" because they are stable, widely traded, and liquid (easily convertible into other currencies).
Convertibility of rupee implies:
Rupee convertibility means the system where any amount of rupee can be converted into any other currency without any question asked about the purpose for which the foreign exchange is to be used. Non-convertibility can generally be defined with reference to the transaction for which foreign exchange cannot be legally purchased (e.g., import of consumer goods etc), or transactions which are controlled and approved on a case-by-case basis (like regulated imports etc).
In India the steel production industry requires the import of
India has sufficient reserves of iron ore, a key raw material for steel production. However, it lacks coking coal, a specific type of coal essential for the steel-making process. Saltpetre (option A) and rock phosphate (option B) are not directly used in steel production.