Question 1

In what way(s) does the Vizhinjam International Seaport represent a structural shift in India's maritime trade and logistics policy?
1. By functioning exclusively as a domestic cargo hub to reduce reliance on coastal shipping and eliminate the need for foreign collaborations.
2. By focusing primarily on passenger cruise tourism and heritage shipping to increase Kerala's profile as a maritime heritage destination.
3. By leveraging its natural deep draft and strategic location to reduce dependence on foreign trans-shipment ports, enhance revenue retention, and reposition India in regional maritime trade.
Select the answer using the code given below:

Accepted Answer

2 and 3. * Statement 1 is incorrect: Vizhinjam Seaport (located in Kerala) is explicitly being developed as an international transshipment deep-water hub, not a domestic-only hub. * Statement 2 is incorrect: Its strategic role is focused on international container cargo and transshipment logistics, not cruise tourism or heritage shipping. * Statement 3 is correct: Gifted with a natural deep draft of 20–24 meters close to the shore requiring no capital dredging, Vizhinjam can host ultra-large next-generation container mother ships, allowing India to significantly reduce its dependence on foreign transshipment ports like Colombo and Singapore.

Question 2

Consider the following statements with reference to the Sagarmala Programme of the Government of India:
I. The Sagarmala Programme seeks to achieve port-led economic growth through cost-effective and sustainable coastal infrastructure.
II. The success of the Sagarmala Programme is reflected in significant growth in coastal and inland waterway shipping, along with improved global port rankings.
III. Sagarmala 2.0 aims to position India as a global maritime innovation hub aligned with Atmanirbhar Bharat and Viksit Bharat 2047 visions.
Which of the following relationships among the above statements is/are correct?
1. Statement II validates the effectiveness of the strategies envisioned in statement I.
2. Statement III extends the objectives of statement I by embedding them into a future-oriented innovation framework.
3. Statement I contradicts statement III by focusing only on traditional infrastructure instead of modern innovation.
Select the answer using the code given below:

Accepted Answer

1 only. * Relationship 1 is correct: Statement I outlines the infrastructure framework, while Statement II validates it with measurable outcomes (118% increase in coastal shipping, 700% increase in inland waterway cargo, and 9 Indian ports placing in the global top 100). * Relationship 2 is correct: Statement III details "Sagarmala 2.0," which incorporates technological innovation and startups (S212) to align with Atmanirbhar Bharat and Viksit Bharat 2047, effectively extending the physical targets of Statement I. * Relationship 3 is incorrect: There is no contradiction. Sagarmala 2.0 serves as a complementary, modern extension of the foundational framework.

Question 3

Which of the following statements about Real-World Assets (RWA) Tokenization are correct?
1. Tokenization is the process of turning real world assets into digital tokens using blockchain technology.
2. Tokenization of real world assets offers 24x7 access, promoting financial inclusion.
3. Tokenization of real world assets will allow the access to high growth investment opportunities for individuals in India.
Select the answer using the code given below:

Accepted Answer

1, 2 and 3. * Statement 1 is correct: Real-world asset tokenization uses blockchain tech to turn legal ownership rights of tangible or standard financial assets (real estate, commodities, bonds) into tradeable digital tokens. * Statement 2 is correct: Operating on a blockchain ensures continuous 24/7 market access. It lowers investment minimums through fractional shares, facilitating financial inclusion. * Statement 3 is correct: By introducing fractional ownership, tokenization allows retail investors in India to purchase small fractions of high-value, high-growth assets (such as commercial complexes or fine art) that were previously accessible only to high-net-worth individuals.

Question 4

Which of the following statements about M1xchange's role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct?
1. M1xchange provides collateral based loans to MSMEs.
2. M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs.
3. M1xchange functions as a credit rating agency for MSMEs.
Select the answer using the code given below:

Accepted Answer

1, 2 and 3. * Statement 1 is incorrect: M1xchange is a TReDS (Trade Receivables Discounting System) platform authorized by the RBI; it facilitates bill discounting rather than issuing collateral-based direct loans. * Statement 2 is correct: Its primary role is to enable MSMEs to secure early liquidity against their trade receivables by auctioning/discounting their invoices against corporate buyers. * Statement 3 is incorrect: M1xchange functions as a trade financing marketplace, not a credit rating agency (credit ratings are handled by entities like CRISIL or ICRA).

Question 5

Which of the following statements about insurance in aviation sector is/are correct?
1. 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment.
2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.
Select the answer using the code given below:

Accepted Answer

2 only. * Statement 1 is correct: Aviation Hull Insurance covers the physical structure and onboard machinery of an aircraft (body, engines, equipment) against loss, accidental damage, or crash destruction. * Statement 2 is correct: Under the international Montreal Convention (1999), to which India is a signatory, airlines are bound by a strict liability rule up to a specific limit, ensuring immediate baseline compensation to a deceased passenger's family without requiring them to prove administrative fault or negligence.

Question 6

Which of the following statements about Crowdfunding is/are correct?
1. Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.
2. Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.
Select the answer using the code given below:

Accepted Answer

2 only. * Statement 1 is correct: Crowdfunding represents the process of raising small amounts of capital from a large crowd of individual contributors via internet platforms or social networking tools for a defined goal. * Statement 2 is correct: Crowdfunding lets SMEs bypass the complex, expensive legal compliance required by bank loans or public equity markets (IPOs), helping them secure alternative funding smoothly and often at a more affordable cost.

Question 7

Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India:
1. NBFCs cannot accept demand deposits.
2. All the NBFCs operating in India have to be registered with the RBI.
3. NBFCs form part of the payment and settlement system and can issue cheque drawn on itself.
4. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.
Which of the statements given above is/are correct?

Accepted Answer

1 and 4. * Statement 1 is correct: NBFCs are strictly prohibited from accepting demand deposits (such as current or savings accounts), which distinguishes them from commercial banking entities. * Statement 2 is incorrect: Not all NBFCs register with the RBI; specific categories like housing finance companies, insurance entities, and chit funds fall under separate regulators and are exempt from RBI registration. * Statement 3 is incorrect: NBFCs are excluded from the formal payment and settlement system, meaning they cannot issue cheques drawn on their own accounts. * Statement 4 is correct: The deposit insurance safety net provided by the DICGC applies strictly to commercial bank deposits and is not extended to public depositors of deposit-taking NBFCs.

Question 8

Consider the following statements about Multidimensional Poverty Index (MPI):
1. MPI is calculated using Alkire-Foster methodology.
2. MPI calculated by NITI Aayog has a total of twelve indicators.
3. Maternal Health and Bank Account are common indicators in the MPI of NITI Aayog and MPI of United Nations Development Programme (UNDP).
Which of the statements given above is/are correct?

Accepted Answer

1 and 2 only. * Statement 1 is correct: Both the Global MPI (UNDP-OPHI) and NITI Aayog's National MPI rely on the Alkire-Foster mathematical methodology to identify and count overlapping deprivations. * Statement 2 is correct: NITI Aayog's National MPI tracks 12 distinct indicators under the three dimensions of Health, Education, and Standard of Living. * Statement 3 is incorrect: The "Bank Account" and "Maternal Health (ANC)" indicators are specific features added to NITI Aayog's national framework to suit India's context; they are not part of the 10 indicators used in the global UNDP MPI.

Question 9

Which of the following are the sources of income for the Reserve Bank of India?
I. Buying and selling Government bonds
II. Buying and selling foreign currency
III. Pension fund management
IV. Lending to private companies
V. Printing and distributing currency notes

Select the correct answer using the code given below.

Accepted Answer

I, III, IV and V. * Item I is correct: Open market operations, where the central bank buys or sells government bonds to regulate money supply, are a major source of income for the RBI. * Item II is correct: Transactions in the foreign exchange market (buying foreign currency cheaply and selling it later for a profit) also contribute to earnings. * Item III is incorrect: The RBI does not manage pension funds; this is done by entities like EPFO or PFRDA. * Item IV is incorrect: The RBI does not lend directly to private companies; it lends to commercial banks and financial institutions. * Item V is correct: The RBI earns income through "seigniorage," as currency notes cost significantly less to produce than their face value.

Question 10

Consider the following statements:
I. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
II. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.

Which of the statements given above is/are correct?

Accepted Answer

I only. * Statement I is not correct: The reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR) were introduced by the Securities and Exchange Board of India (SEBI), not the RBI. * Statement II is correct: The BRSR is intended to mandate quantitative, standardized disclosures on ESG (Environment, Social, Governance) parameters to support comparisons, making the disclosures largely non-financial in nature.

Question 11

Consider the following statements:
I. India has joined the Minerals Security Partnership as a member.
II. India is a resource-rich country in all the 30 critical minerals that it has identified.
III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.

Which of the statements given above are correct?

Accepted Answer

II and III only. * Statement I is correct: India became the 14th member of the Minerals Security Partnership (MSP) in June 2023 alongside countries like the US, Australia, and Japan. * Statement II is incorrect: India's Ministry of Mines identified 30 critical minerals, but the country does not have proven domestic reserves for all 30 and remains dependent on imports for many (such as lithium, cobalt, and nickel). * Statement III is correct: The Parliament amended the MMDR Act, 1957 in 2023, empowering the Central Government to exclusively auction mining leases and composite licenses for specified critical and strategic minerals.

Question 12

Consider the following statements:
I. India accounts for a very large portion of all equity option contracts traded globally thus exhibiting a great boom.
II. India's stock market has grown rapidly in the recent past even overtaking Hong Kong's at some point of time.
III. There is no regulatory body either to warn the small investors about the risks of options trading or to act on unregistered financial advisors in this regard.

Which of the statements given above are correct?

Accepted Answer

I and II only. * Statement I is correct: India has safely emerged as a dominant global player in equity options; in early 2024, over 84% of all equity option contracts traded globally were executed on Indian exchanges. * Statement II is correct: In January 2024, the combined value of shares listed on Indian exchanges reached $4.33 trillion, briefly surpassing Hong Kong's market value to make India the world's fourth-largest stock market. * Statement III is not correct: India has an active regulatory body, the Securities and Exchange Board of India (SEBI), which actively monitors options risks, issues public warnings, and regulates unregistered investment platforms or financial advisors.

Question 13

Consider the following statements:
I. Capital receipts create a liability or cause a reduction in the assets of the Government.
II. Borrowings and disinvestment are capital receipts.
III. Interest received on loans creates a liability of the Government.

Which of the statements given above are correct?

Accepted Answer

I and II only. * Statement I is correct: All those receipts of the government that either create a financial liability or cause a reduction in fiscal assets are termed capital receipts. * Statement II is correct: Borrowings raise an obligation (creating liability), and disinvestment (sale of government assets or PSU shares) reduces the total asset pool, so both are capital receipts. * Statement III is incorrect: Interest received on loans granted by the central government is classified as non-tax revenue receipt. It represents current income and does not create any liability or reduce public assets.

Question 14

Consider the following statements about the Rashtriya Gokul Mission:
I. It is important for the upliftment of rural poor as majority of low producing indigenous animals are with small and marginal farmers and landless labourers.
II. It was initiated to promote indigenous cattle and buffalo rearing and conservation in scientific and holistic manner.

Which of the statements given above is/are correct?

Accepted Answer

II only. * The Rashtriya Gokul Mission (RGM) is being implemented for development and conservation of indigenous bovine breeds. * The scheme is crucial for the upliftment of the rural poor, as more than 80% of low-producing indigenous animals are with small and marginal farmers and landless labourers. * One of its primary objectives is to promote indigenous cattle & buffalo rearing and conservation in a scientific and holistic manner.

Question 15

Suppose the revenue expenditure is 80,000 crores and the revenue receipts of the Government are 60,000 crores. The Government budget also shows borrowings of 10,000 crores and interest payments of 6,000 crores. Which of the following statements are correct?
I. Revenue deficit is 20,000 crores.
II. Fiscal deficit is 10,000 crores.
III. Primary deficit is 4,000 crores.

Select the correct answer using the code given below.

Accepted Answer

I and III only. * All three calculations are correct: * I. Revenue Deficit = Revenue Expenditure (80,000 cr) - Revenue Receipts (60,000 cr) = 20,000 crores. * II. Fiscal Deficit is equivalent to total government borrowings, which stands at 10,000 crores. * III. Primary Deficit = Fiscal Deficit (10,000 cr) - Interest Payments (6,000 cr) = 4,000 crores.

Question 16

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
I. It has recommended grants of 4,800 crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes.
II. 45% of the net proceeds of Union taxes are to be shared with States.
III. 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.
IV. It reintroduced tax effort criteria to reward fiscal performance.

Accepted Answer

I, II and IV. * Statement I is correct: The 15th Finance Commission (XVFC) recommended performance-based incentive grants totaling ₹4,800 crore (allocated as ₹1,200 crore each year) from 2022–23 to 2025–26 to encourage states to step up educational outcomes. * Statement II is incorrect: To preserve financial predictability and resource stability during the pandemic, the vertical devolution share to the states was maintained at 41 per cent, not 45%. (This adjusted the previous 42% rule by 1% to account for the changed status of Jammu & Kashmir into the Union Territories of Ladakh and J&K). * Statement III is correct: The commission specifically recommended setting aside an allocation of ₹45,000 crore as a performance-linked financial incentive for states executing agricultural reforms. * Statement IV is correct: The horizontal tax devolution framework re-introduced a specialized tax effort criterion to explicitly reward superior fiscal performance among states.

Question 17

Consider the following statements in respect of RTGS and NEFT:
I. In RTGS, the settlement time is instantaneous while in case of NEFT, it takes some time to settle payments.
II. In RTGS, the customer is charged for inward transactions while that is not the case for NEFT.
III. Operating hours for RTGS are restricted on certain days while this is not true for NEFT.

Accepted Answer

I only. * Statement I is correct: Real Time Gross Settlement (RTGS) is a financial system that processes fund transfers continuously and instantaneously on an individual transaction-by-transaction basis without any netting. National Electronic Funds Transfer (NEFT) is a batch-based electronic clearing transfer system that processes queued transactions at specific hourly intervals, meaning it takes time to clear. * Statement II is incorrect: Under the service fee rationalization mandated by the Reserve Bank of India, inward digital fund transactions arriving via RTGS or NEFT must be credited absolutely free, with no charges levied on the recipient customer. * Statement III is incorrect: To expand digital banking, the RBI made both centralized systems available 24x7x365 throughout the year, removing previous operational restrictions on weekends or holidays.

Question 18

Consider the following airports:
1. Donyi Polo Airport
2. Kushinagar International Airport
3. Vijayawada International Airport

In the recent past, which of the above have been constructed as Greenfield projects?
Select the answer using the code given below:

Accepted Answer

1 and 2 only. * Project 1 is a Greenfield project: Donyi Polo Airport (located in Hollongi, Itanagar, Arunachal Pradesh) was built completely from scratch as a new Greenfield facility under the GFA Policy. * Project 2 is a Greenfield project: Kushinagar International Airport in Uttar Pradesh was cleared and operationalized as a new Greenfield airport development. * Project 3 is not a Greenfield project: Vijayawada International Airport in Andhra Pradesh is a pre-existing, brownfield airport facility that underwent modernization and expansion, not an entirely new project built from scratch. * Therefore, option (a) is the correct answer.

Question 19

Consider the following statements:
1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.
2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).
3. In India, Stock Exchanges can offer separate trading platforms for debts.

Which of the statements given above is/are correct?

Accepted Answer

1, 2 and 3. * Statement 1 is incorrect: The Liquidity Adjustment Facility (LAF) window of the RBI is primarily accessed by scheduled commercial banks and Primary Dealers (PDs) to manage overnight liquidity against G-Sec collaterals. Standard NBFCs cannot access this central banking facility. * Statement 2 is correct: Foreign Portfolio/Institutional Investors (FIIs) are permitted to invest up to 100% of their localized portfolios in corporate debt and dated sovereign Government Securities (G-Secs). * Statement 3 is correct: To promote corporate debt markets, SEBI permits domestic stock bourses to deploy distinct, separate debt trading segments where financial institutions and brokers can clear fixed-income instruments. (The National Stock Exchange was the first to unveil a standalone debt trading platform).

Question 20

In India, which of the following can trade in Corporate Bonds and Government Securities?
1. Insurance Companies
2. Pension Funds
3. Retail Investors

Select the correct answer using the code given below:

Accepted Answer

1 and 3 only. * All items are correct: The institutional participant base for trading sovereign Government Securities (G-Secs) and corporate bond structures incorporates commercial banking entities, mutual funds, insurance companies (1), and provident or pension funds (2). * Concurrently, under the RBI's Retail Direct Scheme, individual retail investors (3) can directly open Gilt accounts with the central bank to trade and bid on sovereign debt assets.

Question 21

Consider the following:
1. Exchange-Traded Funds (ETF)
2. Motor vehicles
3. Currency swap

Which of the above is/are considered financial instruments?

Accepted Answer

1, 2 and 3. * Items 1 and 3 are financial instruments: A financial instrument represents a formal legal agreement or document that carries contractual monetary value. This includes equity-based pools like Exchange-Traded Funds (1) and foreign exchange derivatives or cash-flow swaps like currency swaps (3). * Item 2 is incorrect: Motor vehicles are tangible, physical assets rather than virtual financial claims or contractual financial agreements.

Question 22

With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements:
1. There is no minimum capital requirement for wholly owned banking subsidiaries in India.
2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.

Which of the statements given above is/are correct?

Accepted Answer

1 only. * Statement 1 is incorrect: The RBI dictates strict regulatory capitalization frameworks for foreign banks operating via Wholly Owned Subsidiaries (WOS), prescribing an initial minimum paid-up voting equity capital of ₹5 billion funded via foreign exchange remittances. * Statement 2 is correct: To align foreign banking subsidiaries with domestic banking norms, the RBI mandates that not less than 50% of the board of directors must be Indian nationals, NRIs, or PIOs, provided that a minimum of one-third are resident Indian citizens.

Question 23

With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements:
1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
2. CSR rules do not specify minimum spending on CSR activities.

Which of the statements given above is/are correct?

Accepted Answer

1 only. * Statement 1 is correct: Under the Companies (CSR Policy) Rules, 2014, any corporate spending on projects or programs that exclusively or directly benefit the company's own employees and their families is disqualified and cannot count as valid CSR expenditure. * Statement 2 is incorrect: Section 135 of the Companies Act, 2013 explicitly sets out a minimum mandatory baseline spending limit, requiring qualifying corporate entities to spend at least 2% of their average net profits earned during the three immediately preceding financial years on approved CSR initiatives.

Question 24

Consider the following statements in respect of the digital rupee:
1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
2. It appears as a liability on the RBI's balance sheet.
3. It is insured against inflation by its very design.
4. It is freely convertible against commercial bank money and cash.

Which of the statements given above are correct?

Accepted Answer

2 and 4 only. * Statement 1 is correct: The Central Bank Digital Currency (CBDC), or e-Rupee, is a sovereign digital currency officially issued by the RBI in complete alignment with its monetary policy parameters. * Statement 2 is correct: Unlike commercial bank ledger digital entries, the Digital Rupee is a direct tokenized legal tender that explicitly appears as a liability on the RBI's balance sheet. * Statement 3 is incorrect: The Digital Rupee operates as a digital counterpart to physical cash and is not inherently insulated or insured against inflation by its design. * Statement 4 is correct: It operates as a fungible legal tender that is freely convertible one-to-one at par (1:1) against physical cash and commercial bank money.

Question 25

With reference to the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) Yojana, consider the following statements:
1. The entry age group for enrolment in the scheme is 21 to 40 years.
2. Age specific contribution shall be made by the beneficiary.
3. Each subscriber under the scheme shall receive a minimum pension of ₹ 3,000 per month after attaining the age of 60 years.
4. Family pension is applicable to the spouse and unmarried daughters.

Which of the statements given above is/are correct?

Accepted Answer

1, 3 and 4. * Statement 1 is incorrect: To be eligible for the PM-SYM pension scheme, an unorganized sector worker must fall within the entry age bracket of 18 to 40 years, not 21 to 40 years. * Statement 2 is correct: Beneficiaries enter the voluntary scheme at different times, requiring monthly, age-specific financial contributions based on their enrollment age. * Statement 3 is correct: The central program guarantees a minimum assured pension of ₹3,000 per month once the subscriber attains 60 years of age. * Statement 4 is incorrect: Following the subscriber's demise, the family pension component is strictly applicable only to the surviving spouse (entitling them to 50% of the initial pension value), not to unmarried daughters.

Indian Economy: Multi-statement (Traditional Style) PYQ.

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