Question 1

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 2

With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of:

Accepted Answer

Forex market. * (c) Money market is correct: A Collateralized Borrowing and Lending Obligation (CBLO) is a short-term, liquid money market instrument operated in India under the supervision of the CCIL and the RBI. It allows institutional market participants to borrow or lend short-term funds securely using government securities as collateral.

Question 3

The total fertility rate in an economy is defined as:

Accepted Answer

the birth rate minus death rate.. * (d) is correct: Total Fertility Rate (TFR) is defined as the average number of live births a woman would have over her lifetime if she survived to the end of her reproductive child-bearing years and experienced current age-specific fertility rates. A TFR score of 2.1 is generally known as replacement-level fertility.

Question 4

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 5

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 6

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 7

With reference to the sectors of the Indian economy, consider the following pairs:
Economic activity : Sector
1. Storage of agricultural produce : Secondary
2. Dairy farm : Primary
3. Mineral exploration : Tertiary
4. Weaving cloth : Secondary

How many of the pairs given above are correctly matched?

Accepted Answer

Only two. * Pair 1 is incorrectly matched: The storage of agricultural produce is an supportive service activity that falls under the Tertiary sector, not the Secondary sector. * Pair 2 is correctly matched: Running a dairy farm exploits natural and biological resources directly, placing it inside the Primary sector. * Pair 3 is correctly matched: Mineral exploration is a high-end research, prospecting, and consultancy service that is covered under the wider umbrella of the Tertiary sector. * Pair 4 is correctly matched: Weaving cloth converts raw fibers into secondary manufactured goods, representing standard Secondary sector industrial processing. * Therefore, exactly three pairs (2, 3, and 4) are correct.

Question 8

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 9

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 10

Consider the following statements:
Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment.
Statement-II: The USA Government debt is not backed by any hard assets, but only by the faith of the Government.

Which one of the following is correct in respect of the above statements?

Accepted Answer

Both Statement-I and Statement-II are correct and Statement-II explains Statement-I. * (a) is correct: If the US Congress fails to raise or suspend its statutory debt ceiling and the Treasury runs out of cash, a historic sovereign debt default would occur, preventing holders of US Treasury Bonds from successfully exercising their claims to collect immediate obligations. This validates Statement I. * US government debt and currency operate as fiat instruments, meaning they are not backed by physical hard commodities (like gold or silver reserves) but rely entirely on the full faith, credit, and stability of the issuing sovereign government. This validates Statement II. * Because the reality that US bonds are backed solely by governmental faith and no physical assets (Statement II) is the precise reason why an institutional default would completely block bondholders from enforcing claims or extracting underlying value (Statement I), Statement II provides the direct causal explanation for Statement I.

Question 11

Consider the following statements:
Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders.
Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line.

Which one of the following is correct in respect of the above statements?

Accepted Answer

Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I. * Statement I is correct: A syndicated loan is a large financing package structured by a group of financial institutions working together to pool funds for a single borrower. This setup allows individual banks to participate in large projects while effectively spreading and mitigating the risk of borrower default across their capital bases. * Statement II is incorrect: Syndicated lending structures are highly versatile; the agreed facility can be issued as a fixed lump sum of funds, an adaptable revolving line of credit, or a combination of both options.

Question 12

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 13

Consider the following statements:
Statement-I: India does not import apples from the United States of America.
Statement-II: In India, the law prohibits the import of Genetically Modified food without the approval of the competent authority.

Accepted Answer

Statement-I is correct, but Statement-II is incorrect. * Statement I is incorrect: India actively imports apples from the United States; following bilateral adjustments, India scrapped its 20 per cent retaliatory tariffs on American agricultural goods, leading to a major surge in US apple imports. * Statement II is correct: Under India's import and food safety policies, the import of any Genetically Modified (GM) foods or Genetically Modified Organisms (GMOs) strictly requires mandatory prior clearance from the Genetic Engineering Appraisal Committee (GEAC) alongside a No Objection Certificate from the FSSAI. Thus, option (d) is correct.

Question 14

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: 2024 PYQ.

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