UPSC Prelims Economy PYQs (2016–2025) with Answers & Explanations

Answer: (b) Only two

SEBI's AIF Regulations, 2012 cover privately pooled investment vehicles such as venture capital funds, private equity, infrastructure funds and hedge funds. Bonds and stocks are conventional investments, not Alternative Investment Funds. So two of the four.

Answer: (a) I and II only

RBI earns mainly from interest on and trading in government securities (I) and from its foreign-exchange operations and foreign assets (II). Printing currency notes is an expense for RBI, not income. RBI does not manage pension funds (that is PFRDA) and does not lend to private companies.

Answer: (b) II only

Statement I is incorrect: SEBI, not RBI, mandates the Business Responsibility and Sustainability Report, and only for the top 1,000 listed companies by market capitalisation, not all listed companies.

Statement II is correct: BRSR disclosures are largely non-financial (environmental, social and governance).

Answer: (d) Statement I is not correct but Statement II is correct

Statement I is incorrect: only 'agricultural income' (from cultivating land) is exempt under the Income-tax Act. Income from allied activities such as poultry, dairy or wool rearing is taxable.

Statement II is correct: rural agricultural land is excluded from the definition of 'capital asset', so its sale attracts no capital-gains tax.

Answer: (a) Both Statement II and Statement III are correct and both of them explain Statement I

All three statements are correct, and both II and III explain I. Bondholders are creditors entitled to fixed interest, and in liquidation they are paid before shareholders. Shareholders are owners who bear residual risk.

Answer: (a) I and II only

Statements I and II are correct: India accounts for the bulk of equity options contracts traded worldwide, and its stock market overtook Hong Kong's in market value in early 2024.

Statement III is incorrect: SEBI regulates the market, warns retail investors about the risks of F&O trading, and acts against unregistered investment advisers.

Answer: (a) I and II only

Statements I and II are correct: capital receipts either create a liability (borrowings) or reduce assets (disinvestment, loan recoveries).

Statement III is incorrect: interest received is a revenue receipt and creates no liability.

Answer: (c) Both I and II

Both statements are correct. The Rashtriya Gokul Mission (2014) conserves and develops indigenous cattle and buffalo breeds scientifically. Since most low-yielding indigenous animals are kept by small and marginal farmers and landless labourers, raising their productivity helps the rural poor.

Answer: (b) Only two

The PNGRB regulates the refining, processing, storage, transportation, distribution, marketing and sale of petroleum products and natural gas. It does not regulate the production of crude oil or natural gas. So two of the activities (II and III).

Answer: (d) I, II and III

All three are correct:

Revenue deficit = revenue expenditure − revenue receipts = 80,000 − 60,000 = ₹20,000 crore.

Fiscal deficit = borrowings and other liabilities = ₹10,000 crore.

Primary deficit = fiscal deficit − interest payments = 10,000 − 6,000 = ₹4,000 crore.

Answer: (d) Statement I is not correct but Statement II is correct

Statement I is incorrect: the USA is the world's largest ethanol producer, making over half of global output, ahead of Brazil.

Statement II is correct: corn is the main feedstock in the USA and sugarcane in Brazil.

Answer: (a) ₹ 48,500 crores

Gross primary deficit = gross fiscal deficit − interest payments = 50,000 − 1,500 = ₹48,500 crore. Non-debt capital receipts are already accounted for in the fiscal deficit.

Answer: (c) I, III and IV

Statement I is correct: the 15th Finance Commission recommended ₹4,800 crore (2022–26) to incentivise better educational outcomes.

Statement II is incorrect: it recommended a 41% share for States, not 45%.

Statement III is correct: it proposed ₹45,000 crore as performance-based incentives for agricultural reforms.

Statement IV is correct: it reintroduced the tax-effort criterion.

Answer: (c) I and III only

Statement I is correct: the IBRD lends to and guarantees for middle-income and creditworthy lower-income countries.

Statement II is incorrect: it works alongside the IDA and other World Bank Group institutions and partners, not single-handedly.

Statement III is correct: it was set up in 1944 to help rebuild Europe after the Second World War.

Answer: (a) I only

Statement I is correct: RTGS settles each transaction in real time, while NEFT settles in half-hourly batches.

Statement II is incorrect: banks do not charge customers for inward RTGS or NEFT transactions.

Statement III is incorrect: both RTGS and NEFT now operate 24×7, 365 days a year.

Answer: (b) Only three

Of those listed, UPI merchant payments are accepted in the UAE, France (starting with the Eiffel Tower) and Singapore. They were not available in Germany or Bangladesh at the time. So three.

Answer: (a) I and II only

The question asks which statements are NOT correct.

Statement I is not correct: the National Rail Plan aims to create a 'future-ready' railway system by 2030, not 2028.

Statement II is not correct: Kavach was developed indigenously by RDSO with Indian industry, not with Germany.

Statement III is correct: Kavach uses RFID tags fitted on the track.

Answer: (c) Money market

CBLO (Collateralised Borrowing and Lending Obligation) was a money-market instrument run by the Clearing Corporation of India for short-term borrowing against government securities as collateral. It was replaced by TREPS (Tri-party Repo) in 2018.

Answer: (d) the average number of live births a woman would have by the end of her child-bearing age.

The total fertility rate is the average number of children a woman would bear over her reproductive life (ages 15–49) at current age-specific fertility rates. Option (a) describes the crude birth rate.

Answer: (c) 1, 2 and 3

Statement 2 is correct: Foreign Portfolio Investors can invest in government securities within prescribed limits, and through the Fully Accessible Route without limits.

Statement 3 is correct: stock exchanges run separate debt segments.

The official key treats statement 1 as correct as well. Note that the Liquidity Adjustment Facility is primarily available to banks and standalone primary dealers, so check this point against current RBI rules.

This explanation is being checked by a subject expert.

Answer: (d) 1, 2 and 3

All three can trade in corporate bonds and government securities. Insurance companies and pension funds are major institutional investors in both. Retail investors can buy G-Secs through RBI Retail Direct and stock exchanges, and corporate bonds through exchanges and online bond platforms.

Answer: (d) 1 and 3 only

Exchange-Traded Funds and currency swaps are financial instruments: tradeable contracts that represent monetary value or rights. Motor vehicles are physical (real) assets, not financial instruments.

Answer: (b) Only two

Pair 1 is incorrect: storage of agricultural produce is a service, so it is tertiary.

Pair 2 is correct: dairy farming is primary.

Pair 3 is incorrect: mineral exploration and mining are primary.

Pair 4 is correct: weaving cloth is manufacturing, so it is secondary.

Answer: (b) Only two

Fixed capital (tools, machines) is used repeatedly over many production cycles, while working capital (raw materials, fuel) is used up in one cycle.

Pair 1 is incorrect: a plough is fixed capital.

Pair 2 is correct: a computer is fixed capital.

Pair 3 is incorrect: yarn is working capital.

Pair 4 is correct: petrol is working capital.

Answer: (d) Neither 1 nor 2

Statement 1 is incorrect: RBI requires a minimum paid-up capital (₹500 crore) for a wholly owned subsidiary of a foreign bank.

The official key also marks statement 2 incorrect. RBI's framework sets a board-composition rule that a portion of directors be Indian nationals resident in India; check the exact proportion against the current RBI directions.

This explanation is being checked by a subject expert.

Answer: (a) 1 only

Statement 1 is correct: under the CSR Rules, activities that benefit only the company or its employees and their families do not count as CSR.

Statement 2 is incorrect: Section 135 of the Companies Act, 2013 requires eligible companies to spend at least 2% of their average net profits of the previous three years on CSR.

UPSC dropped this question in the final answer key, so no option is marked correct.

For context: syndicated lending does spread default risk across lenders, so Statement-I is correct. Statement-II is factually incorrect, because a syndicated loan can be a term loan or a revolving credit line.

Answer: (d) 1, 2 and 4

Statement 1 is correct: the e-rupee is sovereign currency issued by RBI, in line with its monetary policy.

Statement 2 is correct: like cash, it is a liability on RBI's balance sheet.

Statement 3 is incorrect: it is not protected against inflation by design.

Statement 4 is correct: it is freely convertible at par with commercial bank money and cash.

Answer: (a) 1 only

Statement 1 is correct: India is a member of the International Grains Council (London), which administers the Grains Trade Convention.

Statement 2 is incorrect: IGC membership is not required to export or import rice or wheat.

Answer: (d) Statement-I is incorrect, but Statement-II is correct

Statement-I is incorrect: India does import apples from the USA. Retaliatory duties were removed in 2023, and imports rose.

Statement-II is correct: importing genetically modified food requires the approval of the competent authorities (FSSAI and GEAC).

Answer: (d) 1, 2 and 3

All three are correct. Since 2016 the Digital India Land Records Modernisation Programme has been a Central Sector Scheme with 100% central funding. It digitises cadastral maps and has an initiative to transliterate Records of Rights into any of the 22 Eighth-Schedule languages.

Answer: (a) Only one

Statement 1 is correct: India's arable land (about 155–160 million hectares) is larger than China's.

Statement 2 is incorrect as per the official key: China irrigates a larger share of its cropland than India.

Statement 3 is incorrect: average crop yields per hectare in China are considerably higher than in India.

This explanation is being checked by a subject expert.

Answer: (d) None

Statement 1 is incorrect: the East–West Corridor (part of the National Highways Development Project, not the Golden Quadrilateral) connects Silchar in Assam with Porbandar in Gujarat.

Statement 2 is incorrect: the India–Myanmar–Thailand Trilateral Highway runs from Moreh in Manipur to Mae Sot in Thailand.

Statement 3 is incorrect: the BCIM Economic Corridor was planned to link Kolkata with Kunming.

Answer: (d) Statement-I is incorrect but Statement-II is correct

Statement-I is incorrect: it reverses the tax treatment. Interest income distributed by an InvIT is taxable for unit holders, while dividends are generally exempt if the SPV has not opted for the concessional corporate tax regime.

Statement-II is correct: the Finance Act, 2021 enabled InvITs and REITs to be treated as borrowers under the SARFAESI Act, 2002.

Answer: (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

Both statements are correct, and Statement-II explains Statement-I. After the pandemic, inflation surged worldwide. Central banks raised policy rates because they believe tighter monetary policy can curb rising consumer prices by reducing demand.

Answer: (a) Conducting 'Open Market Operations'

Sterilization means offsetting the effect of RBI's foreign-exchange operations on domestic money supply. For example, when RBI buys dollars it injects rupees, and it absorbs them by selling government securities through Open Market Operations or the Market Stabilisation Scheme.

Answer: (b) Only two

Capital markets deal in long-term funds, so the government bond market and the stock market belong to them. The call money market (overnight lending) and the Treasury Bill market (up to 364 days) are money-market segments. So only two are capital markets.

Answer: (b) Many marginal farmers in an area organize themselves into groups and synchronize and harmonize selected agricultural operations

'Small Farmer Large Field' (first popularised in Vietnam) means small and marginal farmers in an area organise into groups and synchronise operations such as sowing, input purchase and harvesting. This gives them economies of scale while each farmer keeps ownership of their land.

Answer: (c) All three

All three are correct. The Government announces an MSP for nigerseed. Niger is grown mainly as a kharif crop. Tribal communities in Odisha, Madhya Pradesh and Chhattisgarh use niger seed oil for cooking.

Answer: (c) Only three

Brand recognition, intellectual property and a mailing list of clients are intangible assets with no physical form. Inventory consists of physical goods, so it is a tangible asset. So three are intangible.

Answer: (c) Only three

UNOPS's S3i (Sustainable Investments in Infrastructure and Innovation) initiative invests in affordable housing, renewable energy and health infrastructure. Mass rapid transport is not one of its focus sectors. So three apply.

Answer: (b) Only two

In a Recirculating Aquaculture System, biofilters treat waste: nitrifying bacteria break down organic waste from fish excreta and uneaten feed, and convert toxic ammonia to nitrite and then nitrate. So statements 1 and 2 are correct. Statement 3 is incorrect: biofilters do not add phosphorus as a nutrient for fish.

This explanation is being checked by a subject expert.

Answer: (d) None

None is correct. Several coastal plants (e.g. at Mundra and Tuticorin) use seawater for cooling. Many plants are located in water-stressed districts. Many plants are privately owned, by companies such as Adani Power, Tata Power and JSW.

Answer: (b) 2 only

Statement 1 is incorrect: under the revised MSME definition (2020), a medium enterprise has an investment of up to ₹50 crore and turnover up to ₹250 crore. The figures in the statement match neither the original 2006 limits nor the current ones.

Statement 2 is correct: under RBI's priority sector guidelines, all bank loans to MSMEs that meet the conditions qualify as priority sector lending.

Answer: (c) Both 1 and 2

Both statements are correct. A central bank digital currency can settle payments directly, without routing through the US dollar or SWIFT. It can also be programmable, for example with expiry dates or restrictions on use.

Answer: (d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market

Beta measures how volatile a stock is relative to the overall market. A beta of 1 means it moves with the market, above 1 means it is more volatile, and below 1 means it is less volatile.

Answer: (b) Only two

Statement 1 is incorrect: the SHG–Bank Linkage Programme was launched by NABARD in 1992, not by SBI.

Statement 2 is correct: SHG members share joint responsibility for loans taken by individual members.

Statement 3 is correct: Regional Rural Banks, commercial banks and co-operative banks all lend to SHGs.

Answer: (c) Statement-I is correct but Statement-II is incorrect

Statement-I is correct: Switzerland is a global gold-refining hub and among the largest exporters of gold by value.

Statement-II is incorrect: Switzerland does not have the world's second-largest official gold reserves. The USA, Germany, Italy and France hold more.

Answer: (d) Statement-I is incorrect but Statement-II is correct

Statement-I is incorrect: India's share of global merchandise exports is about 1.8%, not 3.2%.

Statement-II is correct: many domestic and foreign companies, for example in mobile phones and electronics, have used the Production-Linked Incentive schemes.

Answer: (b) International Monetary Fund

The Rapid Financing Instrument (RFI) and the Rapid Credit Facility (RCF) are IMF emergency lending windows for members facing urgent balance-of-payments needs, for example after natural disasters or shocks like COVID-19.

The RCF lends at zero interest to low-income countries under the Poverty Reduction and Growth Trust; the RFI is open to all member countries.

Answer: (c) 1 and 3 only

Statement 1 is correct: NEER is a weighted index of the rupee against a basket of currencies, and a rise means the rupee has appreciated.

Statement 2 is incorrect: a rise in REER means Indian goods have become relatively costlier, so trade competitiveness worsens.

Statement 3 is correct: REER adjusts NEER for relative inflation, so higher domestic inflation than abroad pushes REER up relative to NEER and widens the gap between them.

Answer: (b) 2 and 3 only

Statement 1 is incorrect: to fight high inflation the RBI sells government securities in open market operations to absorb liquidity; buying them would inject money.

Statement 2 is correct: when the rupee falls sharply, the RBI sells dollars from its reserves to support it.

Statement 3 is correct: lower interest rates in the US or EU push capital towards India; the inflow strengthens the rupee, and the RBI buys dollars to curb excess appreciation and build reserves.

Answer: (a) 1 and 2 only

Statement 1 is correct: because investors are protected against inflation, they accept a lower real coupon, which reduces the government's borrowing cost.

Statement 2 is correct: the principal (and so the interest) is indexed to inflation, protecting investors from inflation uncertainty.

Statement 3 is incorrect: there is no special tax exemption; interest and capital gains on IIBs are taxable under the Income Tax Act.

Answer: (b) 2 only

Statement 1 is incorrect: FDI policy allows 100% FDI only in the marketplace model of e-commerce; foreign-owned platforms cannot hold inventory and sell their own goods (the inventory model is barred).

Statement 2 is correct: since the 2018 Press Note 2, an entity in which the marketplace or its group has equity cannot sell on that platform, and no single vendor may account for more than 25% of the platform's sales.

Answer: (a) 1 and 2 only

The real sector produces goods and services: agriculture (harvesting crops) and manufacturing (turning cotton into fabric) are real-sector activities.

Bank lending and issuing rupee-denominated (masala) bonds are financial-sector activities, so statements 3 and 4 do not belong to the real sector.

Answer: (d) A foreign company transfers shares and such shares derive their substantial value from assets located in India

An "indirect transfer" is the transfer of shares of a foreign company whose value is derived substantially from assets located in India, such as the Vodafone-Hutchison deal.

The 2012 retrospective amendment taxed such transfers; the Taxation Laws (Amendment) Act, 2021 withdrew the retrospective demands.

Answer: (a) 1 only

Statement 1 is correct: buying new technology creates a long-term asset, so it is capital expenditure.

Statement 2 is incorrect: debt and equity are ways of raising money (sources of finance), not kinds of expenditure.

Answer: (c) Both 1 and 2

Statement 1 is correct: households' bank deposits, insurance, provident and small-savings funds are invested in government securities, so part of household financial savings finances government borrowing.

Statement 2 is correct: dated securities sold through auctions at market-related rates make up the largest share of the Centre's internal debt.

Answer: (a) 1 and 2 only

Statement 1 is correct: when the US Fed tightens, higher US yields pull capital out of emerging markets.

Statement 2 is correct: capital flight weakens the rupee, so firms with existing foreign-currency ECBs need more rupees to pay interest and principal.

Statement 3 is incorrect: devaluation of the domestic currency increases, not reduces, the currency risk of foreign-currency borrowing.

Answer: (b) 2 and 3 only

Statement 1 is incorrect: credit rating agencies in India are regulated by SEBI under the SEBI (Credit Rating Agencies) Regulations, 1999.

Statement 2 is correct: ICRA Limited is a public limited company listed on the stock exchanges.

Statement 3 is correct: Brickwork Ratings is an Indian rating agency (SEBI cancelled its registration in October 2022).

Answer: (b) 2 and 3 only

Statement 1 is incorrect: the Banks Board Bureau (2016) is chaired by an eminent professional or official appointed by the government, not the RBI Governor.

Statement 2 is correct: it recommends whole-time directors and heads of public sector banks and financial institutions.

Statement 3 is correct: it was also tasked with helping public sector banks develop strategies and capital-raising plans. (It was replaced by FSIB in 2022.)

Answer: (c) Both 1 and 2

Statement 1 is correct: because the holder gets the option to convert into equity, convertible bonds carry a lower coupon than similar plain bonds.

Statement 2 is correct: equity values tend to rise with inflation over time, so the conversion option gives the holder some protection against rising prices, unlike a fixed coupon.

This explanation is being checked by a subject expert.

Answer: (d) Reserve Bank of India

Under the amended RBI Act, 1934 (2016), the RBI conducts monetary policy with the primary objective of price stability, through flexible inflation targeting (4% CPI inflation, band 2–6%) set by the Monetary Policy Committee.

Answer: (c) Labour Bureau

The Labour Bureau (Ministry of Labour and Employment) compiles statistics on industrial disputes, closures, retrenchments and lay-offs, along with consumer price indices for workers.

Answer: (d) 1 and 4

Statement 1 is correct: the Tea Board is a statutory body under the Tea Act, 1953.

Statement 2 is incorrect: it works under the Ministry of Commerce and Industry.

Statement 3 is incorrect: its head office is in Kolkata.

Statement 4 is correct: it has overseas offices in Dubai and Moscow.

Answer: (b) 2 only

Statement 1 is incorrect: in 2022 India's largest solar park was Bhadla in Rajasthan.

Statement 2 is correct: Cochin International Airport in Kerala became the world's first fully solar-powered airport in 2015.

Statement 3 is incorrect: the largest floating solar project then was at NTPC Ramagundam in Telangana, not Goa.

Answer: (c) 1 and 3 only

Statement 1 is correct: under Section 8 of the RBI Act, 1934 the Governor is appointed by the Central Government.

Statement 2 is incorrect: the power to issue directions to the RBI in public interest comes from Section 7 of the RBI Act, not from the Constitution.

Statement 3 is correct: the Governor's powers of superintendence and management flow from the RBI Act.

Answer: (c) 1 and 3 only

Statement 1 is treated as correct: the EPF Act's definition of "employee" covers any person employed for wages in a covered establishment, which includes casual workers.

Statement 2 is incorrect: casual workers have no general entitlement to regular working hours and overtime pay.

Statement 3 is correct: under the Payment of Wages (Amendment) Act, 2017 the government can notify establishments that must pay wages only by cheque or into the worker's bank account.

This explanation is being checked by a subject expert.

Answer: (b) Increase in expenditure on public projects

In a recession governments use expansionary fiscal policy: more spending on public projects raises demand, incomes and employment.

Raising interest rates or taxes, or cutting public spending, would deepen the slowdown.

Answer: (a) 1 and 4 only

Statement 1 is correct: when a substitute becomes dearer, buyers switch to this good.

Statement 2 is incorrect: a costlier complement reduces demand for the good.

Statement 3 is incorrect: demand for an inferior good falls as income rises.

Statement 4 is correct: by the law of demand, a lower price raises the quantity demanded.

Answer: (b) 2 and 3 only

Statement 1 is incorrect: UCBs are registered under State (or Multi-State) Cooperative Societies Acts but their banking operations are regulated and supervised by the RBI, not by local boards.

Statement 2 is correct: RBI rules (2018) allow UCBs to raise capital through equity, preference shares and other instruments.

Statement 3 is correct: the Banking Laws (Application to Co-operative Societies) Act, 1965, in force from 1966, brought them under the Banking Regulation Act.

Answer: (d) 1, 2 and 3

All three influence Indian bond yields: US Fed moves change global capital flows and foreign demand for Indian bonds, RBI policy rates and liquidity operations set the base for yields, and inflation and short-term rates shape investors' required return.

Answer: (a) 1, 2 and 3

FDI can come through equity in several forms: Foreign Currency Convertible Bonds and Global Depository Receipts (once converted into equity) and, under certain conditions, foreign institutional investment above the prescribed threshold are counted as FDI.

Non-resident external (NRE) deposits are bank deposits, not investment in a company's capital, so they are not FDI.

This explanation is being checked by a subject expert.

Answer: (a) 1 only

Statement 1 is correct: devaluation makes domestic goods cheaper in foreign currency, so exports become more competitive.

Statement 2 is incorrect: devaluation lowers the external value of the domestic currency.

Statement 3 is incorrect: the trade balance improves only if demand is elastic enough (Marshall-Lerner condition), so it does not necessarily improve.

Answer: (d) Loss of revenue to the State Exchequer due to tax evasion

Black money is income hidden from the tax authorities, so the government's main concern is the loss of tax revenue to the exchequer.

The other effects are consequences, but tax evasion is the core worry.

Answer: (d) Creation of new money to finance a budget deficit

Printing new money (monetisation) to finance a deficit adds directly to the money supply without taking purchasing power away from anyone, so it is the most inflationary.

Borrowing from the public only transfers existing money, and repaying debt reduces it.

Answer: (c) Increase in the banking habit of the people

The money multiplier rises when more money stays in the banking system, so a higher banking habit (less cash held by the public) increases it.

Higher CRR or SLR lock up more reserves and reduce the multiplier; population size has no direct effect.

Answer: (a) 1, 2 and 4 only

Demand-pull inflation comes from aggregate demand outrunning supply: expansionary monetary policy, fiscal stimulus and higher purchasing power all raise demand.

Inflation-indexed wages are usually treated as a cost-push (wage-price spiral) factor, and rising interest rates reduce demand.

Answer: (b) 1 and 2

Statement 1 is correct: retail investors can bid for Treasury Bills and government securities in primary auctions (non-competitive bidding, and the RBI Retail Direct scheme launched in 2021).

Statement 2 is correct: NDS-OM is the RBI's electronic, anonymous trading platform for government securities.

Statement 3 is incorrect: CDSL was promoted by BSE together with banks; the RBI is not a promoter.

Answer: (c) 1 and 3 only

WaterCredit is an initiative of the non-profit Water.org.

It brings microfinance to water and sanitation, so poor households can take small loans for taps and toilets instead of relying on subsidies.

It was not launched by WHO and the World Bank, so statement 2 is wrong.

Answer: (b) 2 only

As lender of last resort, the central bank provides emergency liquidity to banks facing a temporary crisis, to prevent panic and bank runs.

It does not lend to trade and industry directly, and lending to the government is a separate function (banker to the government).

Answer: (d) Provisions of the Fiscal Responsibility and Budget Management Act, 2003

The Macro-Economic Framework Statement, the Medium-Term Fiscal Policy Statement and the Fiscal Policy Strategy Statement are presented with the Budget because Section 3 of the FRBM Act, 2003 requires them.

Answer: (d) a credit system granted by IMF to its members

The reserve (gold) tranche is the portion of a member's IMF quota paid in reserve assets; a member can draw it at any time without conditions or interest, so it is a credit facility of the IMF for its members.

Answer: (a) 1 only

Avoiding short-term foreign borrowing shields India from sudden capital flight and refinancing stress in a crisis.

More foreign banks and full capital account convertibility would increase exposure to global contagion, not provide immunity.

Answer: (d) to leave it unchanged

Money supply (M1 and above) counts both currency with the public and demand deposits.

Withdrawing cash only converts one into the other, so the money supply is unchanged at that moment.

Answer: (b) It is a largely non-debt creating capital flow.

FDI is investment in a company's equity (listed or unlisted) with a lasting interest; it does not create debt or repayment obligations, which makes it a stable, largely non-debt-creating capital flow.

Answer: (d) 1, 3 and 4 only

Statement 1 is correct: India has a merchandise trade deficit.

Statement 2 is incorrect: imports of iron and steel, chemicals, fertilisers and machinery have not fallen in recent years.

Statement 3 is correct: India runs a large surplus in services trade (IT, business services).

Statement 4 is correct: India usually has an overall current account deficit.

Answer: (d) 1, 2 and 3

Non-financial debt is debt owed by the non-financial sectors: households, non-financial companies and government.

Housing loans and credit card dues are household debt, and Treasury bills are government debt, so all three count.

This explanation is being checked by a subject expert.

Answer: (c) 1 and 3 only

Statement 1 is correct: TRIMs prohibits measures such as quantitative restrictions and local-content or trade-balancing requirements that discriminate against imports.

Statement 2 is incorrect: TRIMs applies only to trade in goods.

Statement 3 is correct: TRIMs does not regulate foreign investment as such; it only disciplines trade-distorting investment measures.

Answer: (b) 2 only

An expansionary policy cuts rates and frees liquidity: lowering SLR, Bank Rate and Repo Rate all expand credit.

Raising the Marginal Standing Facility rate makes borrowing dearer, so the RBI would not do that.

Answer: (b) 3 and 4 only

Statements 3 and 4 are correct: after 1991 the rural non-farm economy grew, while the growth rate of rural employment slowed.

Statement 1 is incorrect: worker productivity rose in both urban and rural areas.

Statement 2 is incorrect: the rural share of the workforce declined as workers moved to urban areas and non-farm jobs.

This explanation is being checked by a subject expert.

Answer: (b) 2 only

Statement 1 is incorrect: Scheduled Commercial Banks deliver by far the largest share of short-term agricultural credit, ahead of cooperatives and RRBs.

Statement 2 is correct: DCCBs, the middle tier of the short-term cooperative structure, mainly finance Primary Agricultural Credit Societies.

Answer: (b) 1, 3 and 4 only

Individual cyber insurance policies typically cover restoring data and systems after a malware attack, the cost of an expert to handle cyber extortion, and legal defence costs against third-party claims.

Replacing a computer deliberately damaged by a miscreant is property damage, not usually covered, so statement 2 is wrong.

This explanation is being checked by a subject expert.

Answer: (c) 2, 3 and 6 only

Public investment creates capital assets: computerising PACS, building social capital (institutions, training) and government cold storage are investments.

MSP, free electricity and loan waivers are subsidies or transfers, not investment.

Answer: (a) 1 and 2 only

The interest coverage ratio (earnings before interest and tax ÷ interest expense) shows how comfortably a firm can pay interest, helping a bank judge its present and emerging credit risk.

A higher ratio means better, not worse, debt-servicing ability, so statement 3 is wrong.

Answer: (d) 1, 2, 3 and 4

Rice prices in India are shaped by MSP, government trading (procurement and open-market sales), large FCI stockpiles and consumer subsidies through the PDS.

All four affect the price.

Answer: (b) 1, 3 and 4 only

KCC short-term credit covers crop cultivation, post-harvest expenses, working capital for maintaining farm assets and part of household consumption needs.

Buying tractors and harvesters, building houses and setting up cold storage are investment (term) loans, not short-term credit.

Answer: (a) 1 and 2 only

Statement 1 is correct: food has about 46% weight in CPI-Combined versus about 24% in WPI.

Statement 2 is correct: WPI covers only goods; CPI includes services such as housing, health and education.

Statement 3 is incorrect: since 2014–16 the RBI uses CPI-Combined inflation as its target and nominal anchor.

Answer: (d) Neither 1 nor 2

Statement 1 is incorrect: open-ended MSP procurement happens mainly for wheat and paddy in some States; pulses and oilseeds are bought in limited quantities (e.g. under PM-AASHA).

Statement 2 is incorrect: MSP is a floor price set nationally on CACP advice, and market prices often rise above it.

Answer: (c) 1 and 3 only

Statement 1 is correct: commercial paper is a short-term unsecured promissory note issued by companies.

Statement 2 is incorrect: certificates of deposit are short-term instruments issued by banks and financial institutions, not by the RBI.

Statement 3 is correct: call money is overnight interbank borrowing.

Statement 4 is incorrect: zero-coupon bonds pay no interest; they are issued at a discount and redeemed at face value.

Answer: (a) 1, 2 and 3 only

Copper slag (a waste reuse), cold-mix asphalt (no heating, so less fuel and emissions) and geotextiles (less material, longer life) reduce the carbon footprint of rural roads.

Hot-mix asphalt and Portland cement are energy- and carbon-intensive.

Answer: (d) 1, 2 and 3

With zero tillage (e.g. Happy Seeder), wheat can be sown directly into rice stubble without burning it; paddy can be direct-seeded without a nursery; and leaving soil undisturbed helps store carbon in it.

All three are advantages.

Answer: (c) 1, 3 and 4 only

Fertigation (applying fertiliser through drip irrigation) can correct irrigation-water alkalinity with acid fertilisers, raises nutrient availability at the roots and reduces leaching.

Rock phosphate is insoluble and cannot be applied through fertigation, so statement 2 is wrong.

Answer: (b) 2 and 3 only

Statement 1 is incorrect: urea's retail price is fixed by the government, and P&K fertilisers get nutrient-based subsidies, so prices are not purely market-driven.

Statement 2 is correct: ammonia for urea is made mainly from natural gas.

Statement 3 is correct: sulphur, used to make sulphuric and then phosphoric acid, is largely a by-product of oil refining.

Answer: (a) The ceiling laws were aimed at family holdings and not individual holdings.

Land ceiling laws fixed the maximum land a family (not each individual) could hold, to stop owners from evading the ceiling by splitting land among members.

Land reforms did not aim to give land to every landless person, did not make cash crops predominant, and ceiling laws allowed exemptions (e.g. plantations, orchards, religious trusts).

Answer: (c) World Economic Forum

The Global Competitiveness Report is published by the World Economic Forum (Geneva).

Answer: (c) NITI Aayog

The Atal Innovation Mission (2016), which runs Atal Tinkering Labs and Atal Incubation Centres, is set up under NITI Aayog.

Answer: (b) price levels vary from State to State

State poverty lines differ because price levels (cost of the same consumption basket) differ between States; the Tendulkar and Rangarajan methods use State-specific price indices.

Answer: (b) India

India has been the world's largest rice exporter since 2012, ahead of Thailand and Vietnam, led by basmati and non-basmati exports.

Answer: (c) Both 1 and 2

Both are correct: the 2018 amendment allowed fixed-term employment in all sectors, so a fixed-term worker's job simply ends with the contract, making it easier to lay off workers; and it says no notice of termination is needed for a temporary workman.

Answer: (b) Lead Bank Scheme

The Service Area Approach (1989) assigned each rural bank branch a cluster of villages for planned lending; it was introduced under the Lead Bank Scheme.

Answer: (d) Neither 1 nor 2

Statement 1 is incorrect: most of India's external debt is non-sovereign (commercial borrowings, NRI deposits, short-term trade credit); sovereign debt is under a fifth.

Statement 2 is incorrect: about half is in US dollars, the rest in rupees, yen, SDR, euro and other currencies.

Answer: (b) Deposits

Deposits are a bank's liabilities (money it owes to depositors).

Advances, investments and money at call and short notice are assets.

Answer: (b) 1 and 3 only

IT sector foreign exchange earnings and remittances from Indians abroad bring in foreign currency and cut the current account deficit, reducing currency-crisis risk.

Higher government expenditure can widen deficits and raise the risk.

Answer: (d) Participatory Note

Participatory notes (P-notes) are offshore derivative instruments issued by registered foreign portfolio investors to overseas investors who want exposure to Indian securities without registering with SEBI.

Answer: (a) 1 and 2 only

Statement 1 is correct: the Second Plan (Mahalanobis model) pushed basic and capital goods industries to substitute imports.

Statement 2 is correct: the Fourth Plan aimed to correct the concentration of wealth and economic power (bank nationalisation, MRTP Act).

Statement 3 is incorrect: the financial sector was not first made an integral part of the Plan in the Fifth Plan.

This explanation is being checked by a subject expert.

Answer: (a) 1 only

Statement 1 is correct: AIIB had over 90 approved members by 2019.

Statement 2 is incorrect: China is the largest shareholder; India is second.

Statement 3 is incorrect: AIIB has many non-Asian members, such as the UK, Germany, France and Egypt.

Answer: (d) To aim at faster resolution of stressed assets of ₹ 50 crore or more which are under consortium lending

The Inter-Creditor Agreement (2018, under Project Sashakt) let lenders in a consortium agree on a lead lender and a resolution plan, for faster resolution of stressed loans of ₹50 crore or more.

Answer: (a) Banks Board Bureau

The Banks Board Bureau (2016) selects and recommends the heads (chairmen, MDs) of public sector banks and financial institutions; the Government makes the final appointment.

Answer: (b) 2 and 3 only

Statement 1 is incorrect: PNGRB (2006) was not India's first regulator; SEBI, TRAI and electricity regulators came earlier.

Statement 2 is correct: PNGRB promotes competitive markets in gas.

Statement 3 is correct: appeals against PNGRB go to the Appellate Tribunal for Electricity.

Answer: (a) Maintenance of law and order

The Ease of Doing Business index had ten indicators, including paying taxes, registering property and dealing with construction permits.

Maintenance of law and order was not one of them.

Answer: (c) procurement incidentals and distribution cost

FCI's economic cost = MSP (plus any bonus) + procurement incidentals (mandi charges, taxes, gunny bags, storage before dispatch) + distribution cost (freight, handling, storage and transit losses).

Answer: (d) The level of mutual trust and harmony in the society

Social capital is the networks, norms, mutual trust and cooperation in a society.

Literacy is human capital, buildings and machines are physical capital, and working-age population is a demographic measure.

Answer: (a) 1 only

Statement 1 is correct: PPP rates compare what the same basket of goods and services costs in different countries.

Statement 2 is incorrect: by PPP India is the third largest economy, after China and the USA.

Answer: (d) Vegetable oils

Vegetable (edible) oils, mainly palm, soybean and sunflower oil, are India's largest agricultural import by value, well ahead of pulses, fresh fruits and spices.

Answer: (d) Following an expansionary monetary policy

An expansionary monetary policy lowers interest rates and adds rupee liquidity, which would weaken the rupee further.

Curbing non-essential imports, encouraging Masala Bonds and easing ECB rules all bring in or save foreign exchange and support the rupee.

Answer: (a) 1 only

Statement 1 is correct: RBI's April 2018 directive requires all payment system data to be stored only in India.

Statement 2 is incorrect: there is no requirement of public-sector ownership.

Statement 3 is incorrect: the system audit report goes to the RBI, not the CAG.

Answer: (b) Increase in the banking habit of the population

When more people keep money in banks (a stronger banking habit), less leaks out as cash, so banks can create more credit and the money multiplier rises.

Higher CRR or SLR reduces it; population size alone does not raise it.

Answer: (c) 1 and 3 only

Statement 1 is correct: Rajasthan had the highest share of agricultural households among rural households (about 78%).

Statement 2 is incorrect: about 45% of agricultural households were OBC, not over 60%.

Statement 3 is correct: in Kerala about 61% of agricultural households got their largest income from non-agricultural sources.

Answer: (c) The charge to a merchant by a bank for accepting payments from his customers through the bank's debit cards.

The Merchant Discount Rate is the fee a bank charges a merchant for accepting card payments from customers; it is shared among the issuing bank, the acquiring bank and the card network.

Answer: (d) Neither 1 nor 2

Statement 1 is incorrect: the equalisation levy was introduced through the Finance Act, 2016 as a separate levy, not as part of the Income Tax Act.

Statement 2 is incorrect: because it is not an income tax, it is not covered by Double Taxation Avoidance Agreements, so non-residents cannot claim a credit for it at home.

This explanation is being checked by a subject expert.

Answer: (c) 1 and 3 only

Statement 1 is correct: the FRBM Review Committee (N. K. Singh, 2017) recommended general government debt of 60% of GDP by 2023, 40% for the Centre and 20% for the States.

Statement 2 is incorrect: the figures are reversed; the Centre's domestic liabilities were about 49% of GDP and the States' about 21%.

Statement 3 is correct: under Article 293(3) a State that owes the Centre money needs its consent to raise a loan.

Answer: (a) 1 only

Statement 1 is correct: India imports about 14–15 million tonnes of edible oil a year, more than its domestic production.

Statement 2 is incorrect: customs duty is levied on imported edible oils and is changed from time to time.

Answer: (c) National Payments Corporation of India

The National Payments Corporation of India runs the National Financial Switch, which links the ATMs of all banks in India.

Answer: (a) 1 only

Statement 1 is correct: CAR is the share of a bank's own capital against its risk-weighted assets, kept to absorb losses if borrowers default.

Statement 2 is incorrect: the minimum CAR is set by the RBI (based on Basel norms), not by each bank.

Answer: (b) 2 only

Statement 1 is incorrect: NFSA covers up to 75% of rural and 50% of urban people as priority households and Antyodaya families, not only BPL families.

Statement 2 is correct: the eldest woman aged 18 or above is the head of the household for ration cards.

Statement 3 is incorrect: pregnant women and lactating mothers get a free meal and maternity benefit of at least ₹6,000, not a 1600-calorie take-home ration.

Answer: (d) WTO

India enacted the Geographical Indications Act, 1999 to meet its obligations under the WTO's TRIPS Agreement.

Answer: (a) 1 only

Statement 1 is correct: BHIM lets users send money to anyone with a UPI-enabled bank account.

Statement 2 is incorrect: a chip-and-PIN debit card uses two factors (the card and the PIN), not four; BHIM also uses two (the registered device and the UPI PIN).

This explanation is being checked by a subject expert.

Answer: (b) The money which a creditor is under compulsion to accept in settlement of his claims

Legal tender is money that a creditor is legally bound to accept in settlement of a debt, such as RBI notes and government coins.

Cheques and drafts are not legal tender.

Answer: (c) the opportunity cost is transferred from the consumers of the product to the tax-paying public.

A free good still uses resources, so its opportunity cost does not disappear; it is paid by taxpayers through government spending instead of by the users.

Answer: (c) poverty and unemployment increase.

Economic development means a better life for people; if poverty and unemployment rise, growth in GNP, even per capita, does not mean higher development.

Answer: (c) 2 and 4

Human capital formation means raising people's knowledge, skills and capacities through education, training and health; these are intangible wealth.

Accumulating capital or tangible wealth is physical capital formation.

Answer: (d) high capital-output ratio

A high capital-output ratio means a lot of investment is needed for each extra unit of output, so even high savings and capital formation give little growth in output.

Answer: (c) 2 and 3 only

Statement 1 is incorrect: the RBI manages and services the securities of State Governments too (State Development Loans).

Statements 2 and 3 are correct: only the Government of India issues treasury bills, and they are issued at a discount and redeemed at par.

Answer: (c) 2, 4 and 5

Conservation agriculture rests on minimum soil disturbance (minimum tillage), permanent soil cover (crop residues) and crop diversification through sequencing and rotation.

Avoiding monoculture is part of rotation, but the official key takes 2, 4 and 5; avoiding plantation crops is not a principle.

Answer: (b) 2, 4, 5 and 6 only

MSP is announced for 22 mandated crops, including barley, ragi (finger millet), groundnut and sesamum.

Areca nut, coffee and turmeric do not get MSP.

Answer: (b) 2 only

Statement 1 is incorrect: capital infusion into public sector banks has fluctuated year to year rather than rising steadily.

Statement 2 is correct: SBI's five associate banks and Bharatiya Mahila Bank were merged with SBI in April 2017.

Answer: (c) 1, 2 and 4 only

Hulled cereal grains, eggs and newspapers (including those with advertising) are exempt from GST.

Processed and canned fish is taxed (5%), so the official key takes 1, 2 and 4.

This explanation is being checked by a subject expert.

Answer: (a) World Economic Forum

The Global Gender Gap Index is published by the World Economic Forum in its annual Global Gender Gap Report.

Answer: (a) 1 only

Statement 1 is correct: the MPC fixes the policy (repo) rate.

Statement 2 is incorrect: it has six members (three from the RBI including the Governor, three appointed by the Government for four years).

Statement 3 is incorrect: it is chaired by the RBI Governor.

Answer: (b) 2 only

Statement 1 is incorrect: under the 2016 amendment a transaction where the owner is unaware of or denies knowledge of it is benami.

Statement 2 is correct: benami property is liable to confiscation.

Statement 3 is incorrect: the Act provides four authorities and an Appellate Tribunal.

Answer: (a) Developing solar power production in our country

Domestic Content Requirement refers to rules in India's National Solar Mission requiring solar cells and modules to be made in India; the US challenged it at the WTO.

Answer: (c) All State Government employees joining the services after the date of notification by the respective State Governments

State Government employees who join after their State notifies NPS are covered.

NPS is also open to NRIs, the age limit then was 18–60 (later 65 and 70), and the Armed Forces are excluded.

Answer: (a) 1 only

Statement 1 is correct: the BIS mark is mandatory for automotive tyres and tubes.

Statement 2 is incorrect: AGMARK is issued by India's Directorate of Marketing and Inspection, not the FAO.

Answer: (c) Both 1 and 2

Both are correct: e-NAM is a pan-India electronic trading portal linking APMC mandis, giving farmers a national market and quality-based prices.

Answer: (c) Both 1 and 2

Both are correct: QCI was set up in 1997 jointly by the Government of India and industry bodies (ASSOCHAM, CII, FICCI), and its Chairman is appointed by the Prime Minister on the industry's recommendation to the Government.

Answer: (a) 1 and 2 only

Small Finance Banks were created for financial inclusion: to supply credit to small business units, small and marginal farmers, micro and small industries and the unorganised sector.

Encouraging young entrepreneurs in rural areas is not their stated purpose.

Answer: (a) Mobile wallets will not be necessary for online payments.

UPI lets users pay directly from bank account to bank account through a mobile app, so a separate mobile wallet is no longer needed for online payments.

Answer: (d) Neither 1 nor 2

Statement 1 is incorrect: NIIF (2015) is a government-anchored investment fund under the Ministry of Finance, not an organ of NITI Aayog.

Statement 2 is incorrect: its planned corpus was ₹40,000 crore, not ₹4,00,000 crore.

Answer: (b) World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of private sector and institutional investor capital.

The Global Infrastructure Facility (2014) is a World Bank Group partnership that helps prepare and structure complex infrastructure PPPs to attract private and institutional investors.

Answer: (b) It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.

S4A (2016) was an RBI scheme to restructure the debt of large stressed companies with viable operations by splitting it into sustainable and unsustainable parts.

Answer: (c) 1 and 3 only

Zero or reduced tillage and leaving crop residue on the field cut evaporation and help soil hold moisture.

Gypsum mainly reclaims sodic soils and is not counted as a water-conservation practice in the official key.

This explanation is being checked by a subject expert.

Answer: (b) 3 only

The Soil Health Card scheme (2015) gives farmers soil nutrient status and fertiliser recommendations to check overuse of fertilisers.

It does not expand irrigation or decide bank loans.

Answer: (b) 2, 3 and 4 only

After 1991 India's share in world exports, FDI inflows and forex reserves all rose.

Agriculture's share of GDP fell steadily.

Answer: (c) Both 1 and 2

Both are correct: NPCI promotes financial inclusion through retail payment systems, and it launched the RuPay card scheme in 2012.

Answer: (a) 1 only

GST replaces many indirect taxes levied by the Centre and States with one tax, creating a common national market.

It is not expected to drastically cut the current account deficit or let India overtake China soon.

Answer: (a) 1 and 2 only

Statements 1 and 2 are correct: India ratified the WTO Trade Facilitation Agreement in 2016, and the TFA was part of the Bali Ministerial Package (2013).

Statement 3 is incorrect: the TFA entered into force in February 2017.

Answer: (d) Neither 1 nor 2

Neither is correct: over the previous decade both tax revenue and the fiscal deficit as a share of GDP rose and fell rather than moving steadily in one direction.

Answer: (c) 1, 2 and 3

The Global Hunger Index (then compiled with IFPRI) uses undernourishment, child wasting, child stunting and child mortality, so all three listed indicators are used.

Answer: (c) 1 and 3 only

Cutting revenue expenditure and rationalising subsidies reduce the deficit.

New welfare schemes raise spending, and lower import duty reduces revenue, so both would widen the deficit.

Answer: (b) 1 and 3 only

Statements 1 and 3 are correct: telecom companies and supermarket chains owned and controlled by residents may promote payment banks, which cannot lend.

Statement 2 is incorrect: payment banks can issue debit cards but not credit cards.

Answer: (d) Providing for financial turnaround and revival of power distribution companies

UDAY (Ujwal DISCOM Assurance Yojana, 2015) aimed at the financial turnaround of power distribution companies: States took over 75% of DISCOM debt and DISCOMs had to cut losses.

Answer: (c) Both 1 and 2

Both are correct: the IFC is the private-sector arm of the World Bank Group, and Masala bonds are rupee-denominated bonds issued abroad that raise debt for Indian entities.

Answer: (a) WTO affairs

Amber, blue and green boxes classify domestic farm subsidies under the WTO Agreement on Agriculture by how much they distort trade.

Answer: (d) 1, 2 and 3

The capital budget covers capital receipts (such as loans from foreign governments) and capital expenditure (acquiring assets, and loans and advances to States and UTs), so all three are included.

Answer: (d) Renminbi

In November 2015 the IMF decided to add the Chinese renminbi (yuan) to the SDR basket, effective October 2016.

Answer: (c) Both 1 and 2

Both are correct: the IMFC advises the IMF Board of Governors on the global economy and the Fund's work, and the World Bank attends its meetings as an observer.

Answer: (d) It is the number of months of imports that could be paid for by a country's international reserves

Import cover is the number of months of imports a country's foreign exchange reserves can pay for; it measures external resilience.

Answer: (b) 2 only

Statement 1 is incorrect: farmers pay 2% for kharif, 1.5% for rabi and 5% for commercial and horticultural crops.

Statement 2 is correct: PMFBY covers post-harvest losses from cyclones and unseasonal rain (for crops left to dry in the field).

Answer: (b) Neem coating slows down the rate of dissolution of urea in the soil

Neem coating slows the release of nitrogen from urea, so more of it reaches the crop; it also discourages diversion of subsidised urea to industry.

Answer: (a) 1 only

Core Banking Solutions network a bank's branches so customers can operate their accounts from any branch.

It is not a tool for RBI control or for taking over weak banks.

Answer: (c) World Bank

The Ease of Doing Business ranking was published by the World Bank in its annual Doing Business report (discontinued in 2021).

Answer: (c) Both 1 and 2

Both are correct: MCLR (2016) made the way banks set lending rates more transparent and aimed to give credit at rates fair to borrowers and banks, while speeding up policy transmission.

Answer: (c) 2 and 3 only

Statements 2 and 3 are correct: the FSDC (2010) is chaired by the Union Finance Minister and monitors macroprudential supervision of the economy.

Statement 1 is incorrect: it is not an organ of NITI Aayog.

Answer: (b) curbing of the tax evasion by multinational companies

BEPS refers to tax planning by multinationals that shifts profits to low-tax jurisdictions; the OECD/G20 BEPS project aims to curb such tax avoidance.

Answer: (a) Andhra Pradesh

The official key gives Andhra Pradesh. NIMZs were created under the National Manufacturing Policy (2011); the first ones approved included Prakasam and Chittoor in Andhra Pradesh, though Gujarat's Ahmedabad-Dholera NIMZ received in-principle approval early as well.

This explanation is being checked by a subject expert.

Answer: (b) 2 only

Statement 1 is incorrect: the New Development Bank was set up by the BRICS countries, not APEC.

Statement 2 is correct: its headquarters is in Shanghai.

Answer: (c) 1 and 3 only

Both schemes (2015) aim to mobilise idle household gold and reduce demand for physical gold, and so India's dependence on gold imports.

Promoting FDI in the gold and jewellery sector is not an aim.

Answer: (a) bringing the small entrepreneurs into formal financial system

PM MUDRA Yojana (2015) gives collateral-free loans up to ₹10 lakh (Shishu, Kishore, Tarun) to non-farm micro and small enterprises, bringing them into the formal financial system.

Answer: (b) International Monetary Fund

The Global Financial Stability Report is published twice a year by the IMF.

Answer: (d) 1, 2 and 3

The BEE star label covers ceiling fans, electric (storage) geysers and tubular fluorescent lamps, among other appliances.

Answer: (c) 1 and 3 only

Drip irrigation wets only the root zone, so fewer weeds grow and there is little surface run-off to erode soil.

Its effect on soil salinity is not counted as an advantage in the official key.

This explanation is being checked by a subject expert.