UPSC solved previous year questions

UPSC Indian economy PYQ with Answers

71 solved Indian economy questions from previous UPSC papers, each with an answer and explanation.

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Questions
71
Years covered
2016–2024
Exam years
5
With answers
71

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UPSC Indian economy PYQ with Answers

1–13 of 13
  1. Q1 2024 Prelims GS

    The total fertility rate in an economy is defined as:

    1. The number of children born per 1000 people in the population in a year.
    2. The number of children born to a couple in their lifetime in a given population.
    3. The birth rate minus the death rate.
    4. The average number of live births a woman would have by the end of her child-bearing age.✓
    Answer explanation

    The average number of live births a woman would have by the end of her child-bearing age. Total Fertility Rate (TFR) estimates the average number of children a woman would bear during her reproductive years if she experienced the…

    DemographyFertility and population indicatorsIndian economy
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  2. Q2 2024 Prelims GS

    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 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?

    1. 1 and 2 only
    2. 3 only
    3. 1, 2 and 3
    4. 2 and 3 only✓
    Answer explanation

    2 and 3 only Statement 1 is incorrect: NBFCs are not generally eligible to access the RBI's Liquidity Adjustment Facility (LAF), which is available to eligible banks and other specified institutions subject to RBI conditions.…

    Banking and financial marketsG-secs and debt trading platformsIndian economy
    Read full explanation
  3. Q3 2024 Prelims GS

    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:

    1. 1 and 2 only
    2. 2 and 3 only
    3. 1 and 3 only
    4. 1, 2 and 3✓
    Answer explanation

    1, 2 and 3 All three categories can participate in these debt markets. Insurance companies invest in corporate bonds and government securities as part of their regulated investment portfolios.…

    Corporate bonds and government securitiesDebt market participantsFinancial markets
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  5. Q5 2024 Prelims GS

    With reference to the sectors of the Indian economy, consider the following pairs:
    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?

    1. Only one
    2. Only two✓
    3. Only three
    4. All four
    Answer explanation

    Only two Pairs 2 and 4 are correctly matched. Dairy farming belongs to the primary sector because it involves animal husbandry and the direct use of natural resources.…

    Classification of economic activitiesEconomic sectorsIndian economy
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  6. Q6 2024 Prelims GS

    With reference to physical capital in the Indian economy, consider the following pairs:
    1. Farmer's plough — Working capital
    2. Computer — Fixed capital
    3. Yarn used by the weaver — Fixed capital
    4. Petrol — Working capital
    How many of the above pairs are correctly matched?

    1. Only one
    2. Only two✓
    3. Only three
    4. All four
    Answer explanation

    Only two Pairs 2 and 4 are correct. A computer is a durable asset used repeatedly in production and is therefore fixed capital. Petrol is consumed during production or operations and is classified as working capital.…

    Capital and investmentClassification of physical capitalFixed and working capital
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  7. Q7 2024 Prelims GS

    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?

    1. 1 only
    2. 2 only✓
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer explanation

    2 only Statement 1 is incorrect because RBI's framework prescribes a minimum capital requirement for a wholly owned subsidiary of a foreign bank in India; it is not exempt from minimum capital norms.…

    Banking regulationForeign banks in indiaIndian economy
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  8. Q8 2024 Prelims GS

    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?

    1. 1 only✓
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer explanation

    1 only Statement 1 is correct: activities that benefit the company itself or its employees in ways excluded by the CSR framework are not treated as eligible CSR activities. Statement 2 is incorrect.…

    Corporate governanceCorporate social responsibilityCsr eligibility and spending rules
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  9. Q9 2024 Prelims GS

    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?

    1. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
    2. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
    3. Statement-I is correct, but Statement-II is incorrect
    4. Statement-I is incorrect, but Statement-II is correct✓
    Answer explanation

    Statement-I is incorrect, but Statement-II is correct Statement I is incorrect because a US default would mean failure to make payments when due; it would not automatically extinguish bondholders' legal claims to repayment.…

    Indian economyPublic financeSovereign debt and government bonds
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  10. Q10 2024 Prelims GS

    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?

    1. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
    2. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
    3. Statement-I is correct, but Statement-II is incorrect✓
    4. Statement-I is incorrect, but Statement-II is correct
    Answer explanation

    Statement-I is correct, but Statement-II is incorrect Statement I is correct: syndicated lending involves multiple lenders financing a borrower under a common arrangement, allowing credit exposure and default risk to be shared.…

    Banking and creditIndian economyLoan structure and risk sharing
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  11. Q11 2024 Prelims GS

    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?

    1. 1 and 2 only
    2. 1 and 3 only
    3. 2 and 4 only
    4. 1, 2 and 4✓
    Answer explanation

    1, 2 and 4 Statements 1, 2 and 4 are correct. The digital rupee (e₹) is a digital form of sovereign currency issued by the RBI; like physical currency, it is an RBI liability.…

    Central bank digital currencyDigital financeDigital rupee characteristics
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  12. Q12 2024 Prelims GS

    Consider the following statements:
    1. India is a member of the International Grains Council.
    2. A country needs to be a member of the International Grains Council for exporting or importing rice and wheat.
    Which of the statements given above is/are correct?

    1. 1 only✓
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer explanation

    1 only Statement 1 is correct: India is a member of the International Grains Council, an intergovernmental body concerned with cooperation and transparency in the international grains market. Statement 2 is incorrect.…

    Indian economyInternational grains councilInternational trade
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  13. Q13 2024 Prelims GS

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

    1. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I.
    2. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I.✓
    3. Statement-I is correct, but Statement-II is incorrect.
    4. Statement-I is incorrect, but Statement-II is correct.
    Answer explanation

    Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I. Statement-I is correct in the context of the question: India was not importing apples from the United States.…

    Agricultural importsGm food approval and apple importsIndian economy
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