CHANAKYA PRELIMS TEST SERIES

CPTS-2024
Economic & Social Development-2
(TEST-15)
Answer and Explanation
1. Answer: (a) 2. Answer: (d)
Explanation: Explanation:
Foreign Direct Investment (FDI) • Rules of origin are the criteria needed to
• FDI pertains to foreign investment in which determine the national source of a product.
the investor obtains a lasting interest in an Their importance is derived from the fact that
enterprise in another country.
duties and restrictions in several cases depend
• It involves establishing a direct business
upon the source of imports.
interest in a foreign country, such as buying
• There is wide variation in the practice of
or establishing a manufacturing business,
building warehouses, or buying buildings. governments with regard to the rules of
Also, it tends to involve creating more of a origin. While the requirement of substantial
substantial, long-term interest in the economy transformation is universally recognized,
of a foreign country. some governments apply the criterion of
• Due to the significantly higher level of change of tariff classification, others the ad
investment required, FDIs are usually valorem percentage criterion and yet others
undertaken by MNCs, large institutions, or the criterion of manufacturing or processing
venture capital firms. FDI tends to be viewed operation. In a globalizing world it has
more favourably since they are considered become even more important that a degree of
long-term investments, as well as investments harmonization is achieved in these practices of
in the well-being of the foreign country itself.
Members in implementing such a requirement.
• What is meant by Foreign Investment, Foreign
• Rules of origin are used:
Direct Investment and Foreign Portfolio
◊ To implement measures and instruments
Investment?
• Foreign Investment means any investment of commercial policy such as anti-dumping
made by a person or entity resident outside duties and safeguard measures; (Statement
India on a repatriable basis in capital 1 is correct)
instruments of an Indian company or to the ◊ To determine whether imported products
capital of an LLP. shall receive most-favoured-nation (MFN)
• Foreign Direct Investment (FDI) is the treatment or preferential treatment;
investment through capital instruments by a (Statement 2 is correct)
person or entity resident outside India (a) in an ◊ For the purpose of trade statistics;
unlisted Indian company; or (b) 10 percent or ◊ For the application of labelling and marking
more in listed Indian company.
requirements; and (Statement 4 is correct)
Any foreign investment in an unlisted Indian
◊ For government procurement. (Statement
company is FDI and a foreign investment more
3 is correct)
than 10% in a listed Indian company is FDI.
Sectors in the Indian economy where FDI is not 3. Answer: (a)
allowed are: Explanation:
• Atomic Energy Generation In finance, an exchange rate is the rate at which one
• Cigars, Cigarettes, or any related tobacco currency will be exchanged for another. It is also
industry (A German investor cannot invest in regarded as the value of one country’s currency in
an Indian company making cigarettes because relation to another currency.
it is a prohibited sector. Hence, statement 3 is Speculation
incorrect.) Money in any country is an asset. If Indians believe
• Lotteries (online, private, government, etc)
that British pound is going to increase in value
• Investment in Chit Funds
relative to the rupee, they will want to hold pounds.
• Agricultural or Plantation Activities (although
there are many exceptions like horticulture, Thus exchange rates also get affected when people
fisheries, tea plantations, Pisciculture, animal hold foreign exchange on the expectation that
husbandry, etc.) they can make gains from the appreciation of the
• Housing and Real Estate (except townships, currency. This expectation in turn can actually
commercial projects, etc) affect the exchange rate in the following way. If
• Trading in TDR’s the current exchange rate is Rs. 80 to a pound
• Any Gambling or Betting businesses and investors believe that the pound is going to
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appreciate by the end of the month and will be 4. Answer: (b)
worth Rs.85, investors think if they gave the dealer Explanation:
Rs. 80,000 and bought 1000 pounds, at the end of What Is the Gig Economy?
the month, they would be able to exchange the In a gig economy, temporary, flexible jobs
pounds for Rs. 85,000, thus making a profit of Rs. are commonplace and companies tend to hire
5,000. This expectation would increase the demand independent contractors and freelancers instead
for pounds and cause the rupee-pound exchange of full-time employees. A gig economy undermines
rates to increase in the present, making the beliefs the traditional economy of full-time workers who
self-fulfilling. (Statement 1 is correct) often focus on their career development.
Interest Rates and the Exchange Rate Understanding the Gig Economy
In the short run, another factor that is important • In a gig economy, large numbers of people
in determining exchange rate movements is the work in part-time or temporary positions or
interest rate differential i.e. the difference between as independent contractors. The result of a gig
interest rates between countries. There are huge economy is cheaper, more efficient services,
funds owned by banks, multinational corporations such as Uber or Airbnb, for those willing to
and wealthy individuals which move around the use them. People who don’t use technological
world in search of the highest interest rates. If we services such as the Internet may be left
behind by the benefits of the gig economy.
assume that government bonds in country A pay
Cities tend to have the most highly developed
8 per cent rate of interest whereas equally safe
services and are the most entrenched in the
bonds in county B yield 10 percent, the interest
gig economy. Hence, option b is correct.
rate differential is 2 percent. Investors from country
• A wide variety of positions fall into the category
A will be attracted by the high interest rates in
of a gig. The work can range from driving or
country B and will buy the currency of country
delivering food to writing code or freelance
B selling their own currency. At the same time
articles. Adjunct and part-time professors,
investors in country B will also find investing in their
for example, are contracted employees as
own country more attractive and will therefore
opposed to tenure-track or tenured professors.
demand less of country A’s currency. This means
Colleges and universities can cut costs and
that the demand curve for country A’s currency will
match professors to their academic needs by
shift to the left and the supply curve will shift to the
hiring more adjunct and part-time professors.
right causing a depreciation of country “A” currency
and an appreciation of country B’s currency. Thus, 5. Answer: (d)
a rise in the interest rates at home often leads to Explanation:
an appreciation of the domestic currency. Here, “Deemed Exports” refers to those transactions in
the implicit assumption is that no restrictions exist which the goods supplied do not leave the country
in buying bonds issued by foreign governments. and the payment for such supplies is received
(Statement 2 is correct) either in Indian rupees or in free foreign exchange.
Income and the Exchange Rate These do not include services.
When income increases, consumer spending Following are few examples of these
increases. Spending on imported goods is also 1. Supply of goods to export oriented units or
likely to increase. When imports increase, the Software Technology parks
demand curve for foreign exchange shifts to 2. Supply of goods to project funded by UN
the right, so there will be a depreciation of the Agencies
domestic currency and not appreciation. 3. Supply of goods to nuclear power projects
So, we can say that income levels influence through competitive bidding as opposed to
currencies through consumer spending. When International Competitive Bidding.
incomes increase, people spend more. Higher 6. Answer: (b)
demand for imported goods increases demand Explanation:
for foreign currencies and, thus, weakens the local The impact of devaluation or depreciation in the
currency. Indian currency of the economy leads to:
(Statement 3 is incorrect as depreciation would • Promote export as exported commodities
be there) become cheaper in terms of foreign currencies.
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 • Discourages import as import will become • Deficit financing: Deficit financing refers to the
expensive. practice of borrowing funds by a government
• It tends to reduce current account deficit as in order to finance its expenses and make up
exports will get a boost. for a shortage in its budget. It occurs when a
• It promotes foreign remittances and NRI government’s spending exceeds its revenue,
deposits as weakening rupee gives more and it borrows money to cover the gap.
power to currency that they have and enables • Pumping Out: Pumping out is often used
them to have more goods and services in India. to describe an increase in the money supply,
7. Answer: (b) which can be accomplished through various
Explanation: monetary policies such as increasing the
Human capital can be viewed as the collective rate at which a central bank loans money to
knowledge, skills, and abilities of a population, commercial banks.
which is a crucial component of a country’s 9. Answer: (b)
economic growth and competitiveness. Explanation:
Difference between Human Resource and • The Agreement on Trade-Related Investment
Human Capital: Measures (TRIMs) are rules that are applicable
• Human Resource is simply human potential. to the domestic regulations a country applies to
Potential with infinite capabilities and capacity foreign investors, often as part of an industrial
with the possibility of beneficial engagement. policy. The agreement, concluded in 1994, was
Potential however, it must be noted does not negotiated under the WTO’s predecessor, the
have to be productive and that an opportunity General Agreement on Tariffs and Trade (GATT),
has to be provided to translate potential into and came into force in 1995. The agreement
real value. was agreed upon by all members of the World
• Human Capital is a well employed human Trade Organization. Trade-Related Investment
resource that is actively engaged in Measures is one of the four principal legal
meaningful, worthwhile work and delivering agreements of the WTO trade treaty.
some level of desired productivity. Human • TRIMs are rules that restrict preference
Capital is a question of factoring knowledge of domestic firms and thereby enable
and application to physicality. international firms to operate more easily
• Human Resource: The people of a country are within foreign markets. Policies such as local
known as human resource. It may or may not
content requirements and trade balancing
contribute significantly to the economy of a
rules that have traditionally been used to both
nation.
promote the interests of domestic industries
• Human Capital: Healthy, Educated & Skilled
and combat restrictive business practices are
human population is known as human capital
now banned.
formation. It contributes significantly to the
economy of a nation. 10. Answer: (d)
Explanation:
8. Answer: (a)
• An anti-dumping duty is a protectionist tariff
Explanation:
that a domestic government imposes on
Crowding in effect
• Crowding in occurs when higher government foreign imports that it believes are priced
spending leads to an increase in private below fair market value.
sector investment. • Dumping is a process wherein a company
• The crowding in effects occurs because higher exports a product at a price that is significantly
government spending leads to an increase in lower than the price it normally charges in its
economic growth and therefore encourages home (or its domestic) market.
firms to invest because there are now more Directorate General of Trade Remedies (DGTR)
profitable investment opportunities. conducts anti-dumping investigations, under
Crowding out effect the Customs Tariff Act, 1975 and the rules made
• When the government increases its borrowing thereunder, on the basis of a duly substantiated
and spending, it raises interest rates, making it application filed by the domestic industry alleging
more expensive for individuals and businesses dumping of goods into the country causing injury
to borrow money. As a result, private investment to the domestic industry. The basic intent of anti-
decreases, leading to lower economic growth. dumping measures is to eliminate injury caused to

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 the domestic industry by the unfair trade practice 13. Answer: (a)
of dumping and to create a level playing field for Explanation:
the domestic industry. • The exchange rate of the currency of a nation
depends on the demand and supply of the
11. Answer: (c)
foreign currency.
Explanation:
• In case the demand exceeds the supply the
• Transfer payments is the issuance of funds to
exchange rate of the currency will be higher i.e.
individuals when the recipient is not expected
more domestic currency is required to purchase
to provide any type of goods or services in
one unit of foreign currency i.e. this condition
return.
• In macroeconomics and finance, a transfer is unfavourable for country’s exchange rate.
payment is a redistribution of income and • In case the supply exceeds the demand the
wealth by means of the government making condition is opposite of the above.
a payment, without goods or services being • Now increase in remittances will increase
received in return. These payments are the supply of the foreign currency while
considered to be non-exhaustive because reduction of the current account deficit will
they do not directly absorb resources or create
decrease the demand for foreign currency.
output. Examples of transfer payments include
welfare, financial aid, social security, and Both these factors are favourable in nature.
government subsidies for certain businesses. • Increase in wages and salaries will create
• However, government payments to cost push inflation. In other words the goods
corporations—including unconditional produced in the country will become dearer
bailouts and subsidies—are not commonly in nature, which will make them costlier in
described as transfer payments. case of exports. In this case the exports of the
• Unemployment compensation falls under the
country will become less competitive in the
classification of transfer payments, since the
international market, which will ultimately
recipient is usually not expected to repay the
funds issued. In like manner, any type of relief, impact the exports in a negative way or in
disability, or welfare payments issued to private simple terms there will be reduction in exports
citizens also qualify as transfer payments. i.e. their will be increase in current account
12. Answer: (d) deficit which will increase the demand of
Explanation: the foreign currency. Also there will be more
• Opening up the insurance sector to NRIs would demand for imported items.
increase the inflow of foreign capital and bring
14. Answer: (a)
in new expertise, helping to modernize and
Explanation:
improve the insurance sector. This, in turn,
would lead to increased insurance coverage Hard Currency:
and greater financial stability, both of which • It is the international currency in which the
can contribute to economic growth. highest faith is shown and is needed by every
• The promotion of small and medium enterprises economy.
can be a key driver of economic growth, as • The strongest currency of the world is one
these enterprises are often the engines of job which has a high level of liquidity.
creation and innovation. By providing access to
• Basically, the economy with the highest as
financing, training, and other forms of support,
the government can help these enterprises to well as highly diversified exports that are
grow and flourish, contributing to the overall compulsive imports for other countries (as
strength of the economy. of high-level technology, defence products,
• Promotion of foreign portfolio investment lifesaving medicines and petroleum products)
can also help to boost the Indian economy, will also create high demand for its currency in
as it can bring in new capital and investment the world and become the hard currency. It is
opportunities. This can help to modernize
always scarce.
various industries and increase the flow of
foreign currency, which can be used to fund Soft Currency:
various initiatives that help to drive economic A term used in the foreign exchange market which
growth. denotes the currency that is easily available in any

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 economy in its forex market. For example, rupee money is received, it is recorded like an export
is a soft currency in the Indian forex market. It is (credit).
basically the opposite term for the hard currency. • Income - Income is money going in (credit) or
out (debit) of a country from salaries, portfolio
Hot currency:
investments (in the form of dividends, for
A term of the Forex market and is a temporary
example), direct investments or any other
name for any hard currency. Due to certain reasons,
type of investment. Together, goods, services,
if a hard currency is exiting an economy at a fast
and income provide an economy with fuel
pace for the time, the hard currency is known to
to function. This means that items under
be hot. As in the case of the SE Asian crisis, the US
these categories are actual resources that are
dollar had become hot.
transferred to and from a country for economic
Cheap currency: production.
• A term first used by the economist J. M. Keynes • Current Transfers - Current transfers are
(1930s). If a government starts re-purchasing unilateral transfers with nothing received in
its bonds before their maturities (at full- return. These include workers’ remittances,
maturity prices) the money which flows into donations, aids and grants, official assistance
the economy is known as the cheap currency, and pensions. Due to their nature, current
also called cheap money. transfers are not considered real resources that
• In banking industry, it means a period of affect economic production.
comparatively lower/softer interest rates
regime
15. Answer: (c)
Explanation:
The current account is a country’s trade balance
plus net income and direct payments. The trade
balance is a country’s imports and exports of goods
and services. The current account also measures
international transfers of capital.
16. Answer: (c)
A current account is in balance when the country’s Explanation:
residents have enough to fund all purchases in the Learning Poverty Headcount (LPC): It measures
country. Residents include the people; businesses the number of children who do not meet the
and government. Funds include income and basic learning benchmark. Learning Poverty Gap
savings. Purchases include all consumer spending (LPG): It measures the gap between the basic
as well as business growth and government learning benchmark and the average scores of
infrastructure spending. those students who did not meet the benchmark.
Components of the current account: goods,
17. Answer: (a)
services, and income and current transfers.
Explanation:
• Goods - These are movable and physical in Option 1 and 3 are correct while option 2 is
nature and for a transaction to be recorded incorrect.
under “goods,” a change of ownership from/to • China, the world’s second largest economy, is
a resident (of the local country) to/from a non- slowly but surely moving towards an economic
resident (in a foreign country) has totake place. slowdown. Persisting geopolitical challenges
Movable goods include general merchandise, amid the ongoing Russia- Ukraine war, high
goods used for processing other goods, and global inflation and frequent lockdowns due to
non-monetary gold. An export is marked as its strict Covid Zero policy have all combined to
a credit (money coming in), and an import is put the Chinese economy under pressure. The
noted as a debit (money going out). recent power shortage and the unprecedented
• Services - These transactions result from hot weather across the country are set to further
an intangible action such as transportation, complicate the task of Chinese policymakers.
business services, tourism, royalties or • India may benefit from a Chinese slowdown.
licensing. If money is being paid for a service, The first global impact of a Chinese slowdown
it is recorded like an import (a debit), and if will be a fall in global oil prices. We all know that
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 India is a net importer of oil. Any fall in global to ‘anchor’ the issue by agreeing to subscribe to
oil prices will help India cut down its imports shares at a fixed price so that other investors may
bill. It will also ease the pressure on rupee and know that there is demand for the shares offered.
will give a boost to India’s foreign reserves. Each anchor investor had to put a minimum of 10
• However, in long term a slowdown in India’s top crore in the issue.
trading partner (China) will hit bilateral trade as
21. Answer: (c)
well. With overall demand slowing down, it may
Explanation:
impact both inbound and outbound supply of
• Statement 1 is correct. Modernization of
goods and services between the two nations.
industries was a major highlight of the Eighth
18. Answer: (d) Five Year Plan (1992-1997). Under this plan,
Explanation: the steady opening of Indian economy was
• Rolling Plan was the sixth five-year plan embarked to correct the mushrooming deficit
introduced by the Janata Government for foreign debt. This plan also termed as Rao &
the time period 1978-83. Rolling plan can be Manmohan model of Economic development.
defined as the plan where there is no fixation of • Statement 2 is correct as the second five-
dates in respect of commencement and end of year plan (1956-61) laid the foundation for
the plan. The main advantage of rolling plans economic modernization to better serve India’s
is that they are very flexible and are able to long-term growth imperatives. Launched
overcome the rigidity by mending targets and in 1956, it was based on the Mahalanobis
objectives. model that advocated rapid industrialization
• Due to the miserable failure of the Third Plan with a focus on heavy industries and capital
the government was forced to declare “plan goods. Prasanta Chandra Mahalanobis was
holidays” (from 1966 to 1967, 1967–68, and perhaps the single most important individual
1968–69). Three annual plans were drawn in directing Indian development planning. He
during this intervening period. was the chief adviser to the commission from
19. Answer: (c) 1955, founded the Indian Statistical Institute,
Explanation: and is considered the father of modern
• The Securities and Exchange Board of India statistics in India. The Mahalanobis plan was, in
(SEBI) is the regulator for the securities market a way, an invocation of the spirit of swadeshi or
in India. Securities and exchange Board of India self-reliance.
(SEBI) was first established in the year 1992 22. Answer: (b)
AQF as a non-statutory body for regulating the Explanation:
securities market. It became an autonomous • The World Economic Outlook (WEO) is a
body by The Government of India on 12 April comprehensive report published twice a
1992 and given statutory powers in 1992 with year by the International Monetary Fund
SEBI Act 1992 being passed by the Indian (IMF). Global economic activity is experiencing
Parliament. a broad-based and sharper-than-expected
• The SEBI is managed by its members, which slowdown, with inflation higher than seen
consists of the following: a chairman who is in several decades. The cost-of-living crisis,
nominated by the Union Government of India; tightening financial conditions in most
two members, i.e., Officers from Union Finance regions, Russia’s invasion of Ukraine, and
Ministry and one member from the Reserve the lingering COVID-19 pandemic all weigh
Bank of India. The remaining five members are heavily on the outlook.
nominated by the Union Government of India; • Highlights of the report for India: Its forecast
out of them at least three shall be whole-time for India’s Gross Domestic Product (GDP)
members. growth in 2022 to 6.8%, from 7.4% for India
20. Answer: (a) in the fiscal year that started in April 2022. For
Explanation: 2023, India has been projected to grow at
Anchor investors are institutional investors who 6.1%.
are offered shares in an IPO a day before the offer • Highlights of the report for World: Global
opens. As the name suggests, they are supposed growth is forecast to slow from 6% in 2021

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 to 3.2% in 2022 and 2.7% in 2023. This is the 4. Economic and Social Commission for Asia
weakest growth profile since 2001, except and the Pacific (ESCAP)
for the global financial crisis and the acute 5. Economic and Social Commission for
phase of the Covid-19 pandemic. The global Western Asia (ESCWA)
growth is expected to slow further in 2023. The 24. Answer: (a)
worst is yet to come and, for many people Explanation:
2023 will feel like a recession. • The Association of Southeast Asian Nations
(ASEAN), was established on 8 August 1967
in Bangkok, Thailand, with the signing of the
ASEAN Declaration (Bangkok Declaration)
by the Founding Fathers of ASEAN, namely
Indonesia, Malaysia, Philippines, Singapore,
and Thailand. Later Brunei Darussalam (1984),
Vietnam (1995), Lao PDR and Myanmar (1997),
and Cambodia (1999), joined the ASEAN.
• ASEAN Plus Three (APT) consist of ten ASEAN
Member States and the People’s Republic of
China, Japan and the Republic of Korea.
• India is consciously working with ASEAN
towards a vision of an open and inclusive Indo-
Pacific in tandem with initiatives such as the
Act East Policy (AEP), and Indo-Pacific Oceans
23. Answer: (c) Initiative (IPOI), to ensure Security and Growth
Explanation: for All in the Region (SAGAR). The ASEAN-India
• The Economic and Social Council (ECOSOC) Investment Agreement was signed by all
is the United Nations’ central platform for Parties November 2014 except Cambodia.
reflection, debate, and innovative thinking on • Myanmar was not invited to the summit
sustainable development. Under the overall because of disagreements over their lack of
authority of the General Assembly, it coordinates cooperation in implementing measures agreed
the economic and social work of the United upon by the 10-member group last year to help
Nations and the UN family of organizations. As ease the country’s violent political crisis.
the central forum for discussing international 25. Answer: (c)
economic and social issues and for formulating Explanation:
policy recommendations, the Council plays a Both Statements are correct
key role in fostering international cooperation • One of the key achievements of the Uruguay
for development. It also consults with non- Round of GATT negotiations was the decision to
governmental organizations (NGOs), thereby set up a permanent institution for looking after
maintaining a vital link between the United the promotion of free and fair trade amongst
Nations and civil society. The Council has 54 nations. The GATT was transformed into
members, elected by the General Assembly World Trade Organisation (WTO) with effect
for three-year terms, elected by a 2/3rd from 1st January 1995. The headquarter of
majority of the General Assembly. It meets WTO is situated at Geneva, Switzerland. WTO
throughout the year and holds a major session governs trade not only in goods, but also in
in July, during which a high-level meeting of services and intellectual property rights.
Ministers discusses major economic, social and • The topmost decision-making body of the WTO
humanitarian issues. is the Ministerial Conference, which usually
• ECOSOC has five regional commissions meets every two years. It brings together all
that promote economic development and members of the WTO, all of which are countries
cooperation in their respective regions: or customs unions. The Ministerial Conference
1. Economic Commission for Africa (ECA) can take decisions on all matters under any
2. Economic Commission for Europe (ECE) of the multilateral trade agreements. The
3. Economic Commission for Latin America WTO operates as a global system of trade
and the Caribbean (ECLAC) rules, it acts as a forum for negotiating

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 trade agreements, it settles trade disputes 28. Answer: (a)
between its members and it supports the Explanation:
needs of developing countries. • Statement 1 is correct: The Nominal Effective
26. Answer: (d) Exchange Rate (NEER) is an index of the
Explanation: weighted average of bilateral exchange rates
• Inflation is a rise in prices, which can be of home currency with respect to a basket of
translated as the decline of purchasing currencies of trading partners. NEER tells about
power over time. Deflation occurs when a country’s international competitiveness in
prices decline and purchasing power increases. terms of the foreign exchange market, it is
• Effects of inflation on balance of payment
also known as the trade-weighted currency
(BoP) - High price reduce the amount of exports
index. The Reserve Bank of India compiles and
and increase import from other countries
where goods are available at cheaper rates. It disseminates NEER of the Indian rupee for both
results in an unfavorable balance of payment. trades as well as export weighted. An increase
• Effects of inflation on exchange rates - High in NEER indicates an appreciation of the
import and low export means high demand local currency against the weighted basket
of foreign currencies compared to domestic of currencies of its trading partners.
currency. This depreciates domestic currency. • Statement 2 is incorrect: The real effective
• Effects of inflation on social and political exchange rate (REER) is the weighted
- Higher rates of inflation lead to social and average of a country’s currency in relation to
political tensions. The political parties and an index or basket of other major currencies.
organised groups of people call for strikes, The weights are determined by comparing
hartals and stage dharnas.
the relative trade balance of a country’s
27. Answer: (d) currency against that of each country in
Explanation: the index. An increase in a nation’s REER is
• Statement 1 is incorrect: Payment (BOP) is an indication that its exports are becoming
a statement that records all the monetary
more expensive and its imports are becoming
transactions made between residents of a
cheaper. It is losing its trade competitiveness.
country and the rest of the world during any
An increasing REER indicates that a country
given period. A BOP statement of a country
indicates whether the country has a surplus is losing its competitive edge.
or a deficit of funds, i.e. when a country’s 29. Answer: (d)
export is more than its import, its BOP is said Explanation:
to be in surplus. On the other hand, the BOP A foreign portfolio investment is a grouping
deficit indicates that its imports are more than
of assets such as stocks, bonds, and cash
its exports. The balance of payments (BOP) is
equivalents. Portfolio investments are held
a statement of all transactions that occurred
directly by an investor or managed by financial
between entities in one country and the rest
of the world over a specified time period professionals. Foreign portfolio investment is the
such as a quarter or a year. It summarises all entry of funds into a country where foreigners
transactions among individuals, businesses, deposit money in a country’s bank or make
and governments within a country and purchases in the country’s stock and bond markets.
individuals, businesses, and governments Characteristics of FPI:
outside the country. 1. The primary intention is not to control a foreign
• Statement 2 is incorrect: The net effect of business enterprise but to gain from profit
BoT can be either positive, negative, or zero.
making opportunities available in foreign
The net effect of the balance of payments is
markets.
always zero. The entries in the balance of trade
are related to goods. The transactions related 2. FPI is represented by monetary flows
to goods, services, and transfers are included in from individuals, mutual funds, portfolio
the balance of payments. Capital and unilateral management companies, pension funds,
transfers are not included in the trade balance. equity funds etc.
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 3. Due to the short term nature of such 31. Answer: (d)
investments the fund flows are less predictable. Explanation:
This may result in volatility in both the foreign All Statements are correct.
exchange and capital markets. • Foreign direct investment by an individual
4. There is no interface between the management or a company based outside the country is
and the foreign investor. The transactions regulated through two routes- the automatic
represent a change in ownership of existing route and approval route.
equity from one investor to another. It has no • According to the new FDI policy - An entity of
impact on the balance sheet of the company. a country, which shares a land border with India
5. Conventionally, all such investments represent or the beneficial owner of an investment into
secondary market transactions. India who is situated in or is a citizen of such
country shall invest in an Indian company only
However, regulators may permit investments
with the Government approval. Government
through the primary market with quantitative
permission is also required for a transfer of
restrictions.
ownership in an FDI agreement that benefits
6. FPI transactions result in replacement of an
any country that shares a border with India.
existing investor. Thus they do not directly
• Rather than requesting prior authorization
contribute to economic growth. However, from the relevant government department,
the greater demand for shares of the target investors from countries not covered by the
company increases their market price leading new policy must simply notify the RBI after a
to a higher PE Ratio. This helps the target transaction.
company to raise capital at lower cost. • In all industries, the previous FDI policy only
30. Answer: (c) allowed Bangladesh and Pakistan to invest
Explanation: through the government method. Companies
Foreign direct investment (FDI) is defined as an from China are now subject to the government’s
investment involving a long-term relationship and route filter as a result of the amended rule.
reflecting a lasting interest and control by a resident • Foreign direct investments (FDI) from Taiwan
entity in one economy (foreign direct investor are not covered under the latest policy changes
that make prior government clearance
or parent enterprise) in an enterprise resident in
mandatory for fund inflows from countries
an economy other than that of the foreign direct
including China that share a land border with
investor (FDI enterprise or affiliate enterprise or
India. Investments from Taiwan will be treated
foreign affiliate).
as they were previously and are excluded from
Sectors in the Indian economy where FDI is not the latest changes. India considers investment
allowed are: from Taiwan separately and they were never
• Atomic Energy Generation sent for security clearance.
• Cigars, Cigarettes, or any related tobacco
32. Answer: (d)
industry
Explanation:
• Lotteries (online, private, government, etc) Statements 1, 2 and 4 are correct.
• Investment in Chit Funds An angel investor refers to a wealthy investor who
• Agricultural or Plantation Activities (although funds small businesses in exchange for equity.
there are many exceptions like horticulture, Unlike venture capitalists who invest funds on
fisheries, tea plantations, Pisciculture, animal behalf of others, angels invest their capital in a
husbandry, etc) company.
• Housing and Real Estate (except townships, Advantages of an Angel Investor:
commercial projects, etc) • Expert Investors: Angel investors have a large
• Trading in TDR’s sectoral knowledge. They might be business
• Any Gambling or Betting businesses owners that have experience in industry and
Only Statement 4 is incorrect: At present, 100% can offer guidance and coaching to help.
foreign direct investment (FDI) is allowed through • Large Set of Connections: Angel investors
the automatic route into India for the following could be well-connected in the business. They
agricultural activities: Floriculture, horticulture, might be able to connect with new clients,
apiculture and cultivation of vegetables and funding options, business partners, and other
mushrooms under controlled conditions. pertinent people
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 • Extended Support: Since they own the Scheme aims to provide financial assistance
business, angel investors often only profit if it to startups for proof of concept, prototype
is profitable. They should be encouraged by development, product trials, market entry and
their position to contribute as much as they commercialization.
can. Also, adding their names to your business • Support for Intellectual Property Protection:
profile can act as leverage to raise the next Startups are eligible for fast-tracked patent
round of funding, hence the extended support. application examination and disposal. The
• Big bankroll: In the future, if small firm requires Government launched Start-ups Intellectual
more money, angel investors might make Property Protection (SIPP) which facilitates
additional contributions. Even if a company the startups to file applications for patents,
is unable to secure finance from a bank or designs and trademarks through registered
other financial institution, angel investors may facilitators in appropriate IP offices by paying
nonetheless invest. only the statutory fees. Facilitators under this
Shared Authority: It’s a disadvantage of Angel Scheme are responsible for providing general
Investors. It might end someone’s selling more advisory on different IPRs, and information
of the business than he had intended to since on protecting and promoting IPRs in other
some angel investors might demand a significant countries.
ownership stake. This shall dilute your ownership • Startup Champions on Doordarshan: Startup
and may cause hindrance in further fund-raising Champions program on Doordarshan is a one-
for business. hour weekly program covering stories of award
33. Answer: (d) winning/ nationally recognised startups. It is
Explanation: telecasted in both Hindi and English across
All Statements are correct. Doordarshan network channels.
The Government with an intent to build a strong 34. Answer: (b)
ecosystem for nurturing innovation and startups Explanation:
in the country launched Startup India initiative on • Statement 1 is correct. The Reserve Bank of
16th January 2016. In order to meet the objectives India established the Committee on Capital
of the initiative, the Government unveiled an Action Account Convertibility (CAC) or S.S Tarapore
Plan for Startup India that laid the foundation of Committee to propose a roadmap for full
Government support, schemes and incentives convertibility of the rupee on the capital
envisaged to create a vibrant startup ecosystem in account. In May 1997, the committee
the country. submitted its report. The Committee has
Programs Launched under Startup India also stated that the timing and sequencing
initiative: of capital account convertibility would be
• Income Tax Exemption for 3 years: Startups greatly facilitated by the proposed changes in
incorporated on or after 1st April 2016 can apply the legislative framework governing foreign
for income tax exemption. The recognized exchange transactions as envisaged in the
startups that are granted an Inter-Ministerial Foreign Exchange Management Act(FEMA).
Board Certificate are exempted from income- • Current Account Convertibility:
tax for a period of 3 consecutive years out of 10 Current account is today fully convertible
years since incorporation. (operationalized on August 19, 1994). It
• Self-Certification under Labour and means that the full amount of the foreign
Environmental laws: Startups are allowed to exchange required by someone for current
self-certify their compliance under 9 Labour purposes will be made available to him at
and 3 Environment laws for a period of 3 to 5 the official exchange rate and there could be
years from the date of incorporation. an unprohibited outflow of foreign exchange
• Startup India Seed Fund Scheme (SISFS): (earlier it was partially convertible).
Easy availability of capital is essential for • Capital Account Convertibility: After
entrepreneurs at the early stages of growth the recommendations of the S.S. Tarapore
of an enterprise. The capital required at this Committee (1997) on Capital Account
stage often presents a make-or-break situation Convertibility India is still a country of partial
for startups with good business ideas. The convertibility (40:60) in the capital account
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 • Statement 2 is incorrect: Foreign direct • Statment 3 is correct. Fifth Plan The Plan
investment, Portfolio investment and Loans by (1974–79) has its focus on poverty alleviation
the government of one country to another are and self-reliance. The popular rhetoric of
the main components of Capital Account. poverty alleviation was sensationalised by
Export and import of goods and services, the government to the extent of launching a
Investment income and Current transfers are the fresh plan, i.e., the Twenty-point Programme
main components of Current Account. (1975) with a marginal importance being
given to the objective of ‘growth with stability’
35. Answer: (a) (one of the major objectives of the Fourth
Explanation: Plan). The havocs of hyper-inflation led the
Statment 1 is correct and 2 is incorrect. The government to hand over a new function
official experiment in the area of national planning to the Reserve Bank of India to stabilise the
is rooted in the Bolshevik Revolution of Russia inflation (the function which the RBI carries
(1917)—the Soviet Union. Dissatisfied with the pace forward even today). A judicious price wage
of industrialisation, it was in 1928 that Joseph policy was started to check the menace of
Stalin announced its policy of central planning inflation on the wage-earners. This Plan saw an
for the Soviet Union. The collectivisation of increase in the socio-economic and regional
agriculture and forced-draft industrialisation were disparities despite the many institutional,
other radical new policy initiatives announced by financial and other measures which were
Stalin besides economic planning in 1928. The initiated by the government to attend to them.
Soviet Union went for its first five year plan for
the period 1928–33 and the world was to have 37. Answer: (b)
its first experience of national planning. The Explanation:
famous Soviet slogan “great leap forward” was 11 • Second Five Year plan was made for the
10 initiated for rapid industrialisation through the duration of 1956 to 1961, under the leadership
introduction of economic planning at the national of Jawaharlal Nehru. It was based on the
level. The nature and scope of Soviet planning P.C. Mahalanobis Model made in the year
(called the Gosplan) will have its direct or indirect 1953. Its main focus was on the industrial
bearings on all those countries which went for development of the country. This plan lags
economic planning, be state or capitalist or mixed behind its target growth rate of 4.5% and
achieved a growth rate of 4.27%.
economies. India was to have direct influence of
• Fourth Plan The Plan period was 1969–74.
Soviet planning on its planning process. In the
The Plan was based on the Gadgil strategy with
first Soviet Plan, heavy industries was favoured
special focus to the ideas of growth with
over light industry, and consumer goods were the
stability and progress towards self-reliance.
residual sector after all the other priorities had
Droughts and the Indo-Pak War of 1971–72
been met. We see the same emphasis in the Indian
led the economy to capital diversions creating
planning process.
financial crunch for the plan. This plan failed
36. Answer: (c) and could achieve a growth rate of 3.3%
Explanation: only against the target of 5.7%.
• Statements 1 is correct. First Five Year - Plan • The Ninth Plan (1997–2002) was launched
The period for this plan was 1951–56. when there was an all round ‘slowdown’ in
The economy was facing the problem of the economy led by the South East Asian
largescale foodgrains import (1951) and Financial Crisis (1996–97). The objectives of
the pressure of price rise, the plan accorded this plan include the establishment of a
the highest priority to agriculture including self-sufficient economy, opportunities for
irrigation and power projects. About 44.6 productive employment, and up-gradation
per cent of the plan outlay went in favour of of technology.
the public sector undertakings (PSUs). The Plan • Eleventh Plan targets a growth rate of 10 per
was launched with all the lofty ideas of socio- cent and emphasises the idea of ‘inclusive
economic development, which had frustrating growth’. In this plan, the top priority was
outcomes in the following years. given to the development of human
• Statment 2 is incorrect. Initial five year plans resources i.e. employment, education, and
failed in achieving the target growth rate. public health.

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38. Answer: (a) happens, a country’s foreign exchange reserves
Explanation: grow, helping it lower interest rates, which
Statment 1 is incorrect and 2 is correct: The stimulates economic growth and bolsters the
Sarvodaya Plan published in January 1950. The local currency exchange rate.
plan drew its major inspirations from the • Political Stability - politically stable country
Gandhian techniques of constructive works by attracts more foreign investment, which helps
the community and trusteeship as well as the prop up the currency rate.
Sarvodaya concept of Acharya Vinoba Bhave, • Speculation - Sometimes, currencies are
the eminent Gandhian constructive worker. affected by the confidence (or lack thereof )
Major ideas of the plan were highly similar to the traders have in a currency. Currency changes
Gandhian Plan like emphasis on agriculture, agri- from speculation tend to be irrational, abrupt,
based small and cottage industries, self-reliance and short-lived.
and almost no dependence on foreign capital
40. Answer: (d)
and technology, land reforms, self-dependent
Explanation:
villages and decentralised participatory form
• Statement 1 is incorrect: In 1934, a
of planning and economic progress, to name
serious need of national planning was
the major ones. Some of the acceptable ideas
recommended by the Federation of Indian
of the plan got their due importance when the
Chambers of Commerce and Industry
Government of India promoted five year plans.
(FICCI), the leading organisation of Indian
39. Answer: (d) capitalists. Its President N.R. Sarkar proclaimed
Explanation: that the days of undiluted laissez-faire were
An exchange rate is the value of one nation’s gone forever and for a backward country like
currency versus the currency of another nation. India, a comprehensive plan for economic
• All statements are correct: Interest rates - development covering the whole gamut of
Interest rates are tightly tied to inflation and economic activities was a necessity. Voicing
exchange rates. Different country’s central the views of the capitalist class, he further
banks use interest rates to modulate inflation called for a high powered ‘National Planning
within the country. For example, establishing Commission’ to coordinate the whole process
higher interest rates attracts foreign capital, of planning so that the country could make a
which bolsters the local currency rates. structural break with the past and achieve its
However, if these rates remain too high for too full growth potential.
long, inflation can start to creep up, resulting in • Statement 2 is incorrect. The Gandhians
a devalued currency. As such, central bankers and some of the business and propertied
must consistently adjust interest rates to representatives were opposed to commit the
balance benefits and drawbacks. party to centralised state planning (including
• Public Debt - Most countries finance their Mahatma Gandhi), it was on the initiative
budgets using large-scale deficit financing. In of the INC president Subhash C. Bose that
other words, they borrow to finance economic the National Planning Committee (NPC)
growth. If this government debt outpaces was set up in October 1938 under the
economic growth, it can drive up inflation by chairmanship of J. L. Nehru to work out
deterring foreign investment from entering concrete programmes for development
the country, two factors that can devalue a encompassing all major areas of the
currency. In some cases, a government might economy. Basically, the NPC was set up in a
print money to finance debt, which can also conference of the Ministers of Industries of
drive up inflation. the Congress-ruled States (though other states
• Balance of Trade - BOP is the relative difference were also invited to participate) where M.
between a country’s imports and exports. For Visvesvaraya, J.R.D. Tata, G.D. Birla and Lala Sri
example, if a country has a positive balance Ram and many others including academicians,
of trade, it means that its exports exceed its technocrats, provincial civil servants, trade
imports. In such a case, the inflow of foreign unionists, socialists and communists, etc., were
currency is higher than the outflow. When this also invited.
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41. Answer: (a) India’ with the help of the NITI Aayog and has given
Explanation: a slogan, ‘from planning to NITI’. Followings are
• Statement 1 is correct: The credit of proposing published by the NITI Aayog.
the first blueprint of Indian planning is given to Report on Digital Banks.
the popular civil engineer and the ex-Dewan of • Report of the Inter-Ministerial Committee on
the Mysore state, M. Visvesvaraya. In his book just Transition from Coal.
the planned Economy of India, published in • Report of the Inter-Ministerial Committee on
1934, he outlined the broad contours of his Energy Data Management.
plan proposal. His ideas of state planning • White Paper on ‘Urban Wastewater Scenario in
were an exercise in democratic capitalism India’.
(similar to the USA) with emphasis on • Preserving Progress on Nutrition In India:
industrialisation—a shift of labour from Poshan Abhiyaan in Pandemic Times.
agricultural to industries, targeting to • Report on Carbon Capture, Utilisation, and
double the national income in one decade. Storage (CCUS) Policy Framework and its
Though there was no follow up by the British Deployment Mechanism in India
government on this plan, it aroused an urge • Responsible AI-AIForAll
for national planning among the educated 43. Answer: (d)
citizens of the country. Explanation:
• Statement 2 is correct and 3 is incorrect. In • All statements are correct. The Harrod–Domar
1945, yet another plan was formulated by the model is a Keynesian model of economic
radical humanist leader M.N. Roy, Chairman growth. It is used in development economics
of the Post-War Reconstruction Committee to explain an economy’s growth rate in
of Indian Trade Union. The plan was based terms of the level of saving and of capital. It
on Marxist socialism and advocated the suggests that there is no natural reason for an
need of providing the people with the economy to have balanced growth. The model
‘basic necessities of life’. Agricultural and was developed independently by Roy F. Harrod
industrial sectors, both were equally in 1939 and Evsey Domar in 1946. According
highlighted by the plan. Many economists to the Harrod–Domar model there are three
have attributed the socialist leanings in Indian kinds of growth: warranted growth, actual
planning to this plan. The common minimum growth and natural rate of growth.
programmes of the United Front Government • The Feldman–Mahalanobis model is a Neo-
of the mid-nineties (20th century) and that of Marxian model of economic development,
the United Progressive Alliance of 2004 may created independently by Soviet economist
also be thought to have been inspired from the Grigory Feldman in 1928[1] and Indian
same plan. ‘Economic reforms with the human statistician Prasanta Chandra Mahalanobis in
face’, the slogan with which the economic 1953. The essence of the model is a shift in
reforms started in the early 1990s also has the the pattern of industrial investment towards
resonance of the People’s Plan. building up a domestic consumption goods
sector. Thus the strategy suggests in order
42. Answer: (d) to reach a high standard in consumption,
Explanation: investment in building a capacity in the
All statements are correct. By midway 2014 he production of capital goods is firstly needed.
government abolished the Planning Commission A high enough capacity in the capital goods
(PC) and replaced it by a new body—the NITI sector expands in the long-run the nation’s
Aayog. The acronym NITI stands for National consumer-goods production capacity.
Institution for Transforming India. We see the • The Solow–Swan model or exogenous
government aspiring for the emergence of the growth model is an economic model of
‘Team India’ in the new body. The government long-run economic growth. It attempts to
aims at ‘transforming the development agenda of explain long-run economic growth by looking
India’ with the help of the NITI Aayog and has given at capital accumulation, labor or population
a slogan, ‘from planning to NITI’.The government growth, and increases in productivity largely
aims at ‘transforming the development agenda of driven by technological progress.
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 1. Planning, Objectives of Planning - Major • Statement 2 is incorrect as the SCO comprises
Objective of Planning, Planning History eight-member states, namely the Republic
2. Investment Models, Classification of of India, the Republic of Kazakhstan,
Investment, FDI, FPI, Angel Investors and the Peoples Republic of China, the
Start-ups, External Sector, Fixed Foreign Kyrgyz Republic, the Islamic Republic
Currency Market, Float Foreign Currency of Pakistan, the Russian Federation, the
Market Republic of Tajikistan, and the Republic
3. Balance of Payments of Uzbekistan.
4. Various International Organizations and • Statement 3 is correct as the organisation
Trade agreements has two permanent bodies — the SCO
Secretariat based in Beijing and the
44. Answer: (c)
Executive Committee of the Regional Anti-
Explanation:
Terrorist Structure (RATS) based in Tashkent.
• Statement 1 is correct as the ILO was created
in 1919, as part of the Treaty of Versailles 46. Answer: (d)
that ended World War I, to reflect the belief Explanation:
that universal and lasting peace can be • Statement 1 is correct as Created in 1945,
accomplished only if it is based on social justice. the IMF is governed by and accountable to
• Statement 2 is incorrect as in 1946, the ILO the 189 countries that make up its near-global
became a specialized agency of the newly membership. It is acting as a short-term credit
formed United Nations. institution. (Statement 2 is correct)
• Statement 3 is correct as the only tripartite • Statement 3 is correct as its objective is to
U.N. agency, since 1919 the ILO brings facilitate expansion of balanced growth of
together governments, employers and workers international trade and to contribute thereby
of 187-member States, to set labour standards, to the promotion and maintenance of high
develop policies and devise programmes levels of employment and real income.
promoting decent work for all women and 47. Answer: (d)
men. Explanation:
45. Answer: (b) All the statements are correct as the major
Explanation: objectives and functions of International Monetary
• Statement 1 is correct as the Shanghai fund
Cooperation Organisation (SCO) is a permanent (IMF) are -
intergovernmental international organisation, • Acting as a short-term credit institution.
the creation of which was announced on 15 • Providing machinery for the orderly
June 2001 in Shanghai (China) by the Republic adjustment of exchange rates;
of Kazakhstan, the Peoples Republic of China, • Acting as a reservoir of the currencies of
the Kyrgyz Republic, the Russian Federation, all the member countries, from which a
the Republic of Tajikistan, and the Republic borrower nation can borrow the currency of
of Uzbekistan. other nations.
• The Secretariat of the SCO, headquartered • Acting as a lending institution of foreign
in Beijing, China, is the primary executive currency and current transaction.
body of the organisation. It serves to • To promote international monetary
implement organisational decisions and cooperation through a permanent institution,
decrees, drafts proposed documents (such • To facilitate expansion of balanced growth of
as declarations and agendas), function as a international trade and to contribute thereby
document depository for the organisation, to the promotion and maintenance of high
arrange specific activities within the SCO levels of employment and real income,
framework, and promotes and disseminates • To promote exchange stability with a view
information about the SCO. The SCO Secretary- to maintain orderly exchange arrangements
General is elected to a three-year term. The among member countries, and
current Secretary-General is Zhang Ming of • To assist in the establishment of a multilateral
China, who assumed his office on 1 January system of payments in respect of current
2022. transactions between members.

15 | p a g e
48. Answer: (c) (IBRD) and The International Development
Explanation: Association (IDA), together form the World
Statements 1 and 3 are correct. Bank.
The basic objectives of WTO are • Statement 2 is incorrect as world Bank
• To ensure reduction of tariffs and other trade provides financing, policy advice, and technical
barriers imposed by different countries. assistance to governments of developing
• To engage in such activities which improve countries.
the standards of living, create employment, • Statement 3 is correct as IDA focuses on the
• Increase income and effective demand and world’s poorest countries, while IBRD assists
facilitate higher production and trade. middle- income and creditworthy poorer
• To facilitate the optimal use of the world’s countries.
resources for sustainable development. Further, IFC, MIGA, and ICSID focus on strengthening
• To promote an integrated, more viable and the private sector in developing countries. Through
durable trading system. these institutions, the World Bank Group provides
• Ensuring full employment, expanding financing, technical assistance, political risk
production and trade. insurance, and settlement of disputes to private
Statement 2 is incorrect as it is the IMF enterprises, including financial institutions.
whose principal function is to supervise the
51. Answer: (d)
international monetary system. Several functions
Explanation:
are derived from this. These are: granting of credit
• Statement 1 is incorrect as the New
to member countries in the midst of temporary
Development Bank (NDB) is a multilateral
balance of payments deficits, surveillance over the
development bank (MDB) established by
monetary and exchange rate policy of member
Brazil, Russia, India, China and South Africa
countries, issuing policy recommendations. It is to
(BRICS) with the objective of financing
be noted that all these functions of the IMF may be
infrastructure and sustainable development
combined into three.
projects in BRICS and other emerging
49. Answer: (d) economies and developing countries. NDB’s
Explanation: work complements the efforts of multilateral
• Statement 1 is correct as Copyright is a and regional financial institutions, toward
legal term used to describe the rights global growth and development.
that creators have over their literary and • Statement 2 is incorrect as the bank will
artistic works. Works covered by copyright support public or private projects through
range from books, music, paintings, sculpture loans, guarantees, equity participation and
and films, to computer programs, databases, other financial instruments.
advertisements, maps and technical drawings. 52. Answer: (c)
• Statement 2 is correct as a patent is an Explanation:
exclusive right granted for an invention. • Statement 1 is correct as Asian Infrastructure
Generally speaking, a patent provides the Investment Bank (AIIB), a multilateral
patent owner with the right to decide how - or development bank with a mission to improve
whether - the invention can be used by others. social and economic outcomes in Asia and
• Statement 3 is correct as a trademark is a beyond.
sign capable of distinguishing the goods or • Statement 2 is incorrect as AIIB is
services of Headquartered in Beijing, China.
• one enterprise from those of other • Statement 3 is correct as AIIB offers sovereign
enterprises. Trademarks date back to ancient and non-sovereign financing for sound and
times when artisans used to put their signature sustainable projects in energy and power,
or marks on their products. transportation and telecommunications, rural
50. Answer: (c) infrastructure and agriculture development,
Explanation: water supply and sanitation, environmental
• Statement 1 is correct as The International protection, and urban development and
Bank for Reconstruction and Development logistics.

16 | p a g e
53. Answer: (d) members and prescribed holders can buy and
Explanation: sell SDRs and if required, the IMF can designate
• Statement 1 is correct as World Economic members to buy SDRs from other participants.
Forum was established in 1971 as a not- • Statement 3 is incorrect as the value of
for-profit foundation and is headquartered the SDR is based on a basket of five major
in Geneva, Switzerland. It is independent, currencies —the US dollar, the euro, the
impartial and not tied to any special interests. Chinese renminbi (RMB), the Japanese yen,
• Statement 2 is correct as formally recognised and the British pound sterling.
as an international organization in 2015, It is
56. Answer: (d)
now on the next phase of its journey as the
Explanation:
global platform for public-private cooperation.
All the Statements are correct as International
• Statement 3 is also correct as the World
monetary fund provide periodic assessments of
Economic Forum (WEF) has released
• Global prospects in its World Economic
the 18th Edition of Global Risks Report 2023
Outlook
which seeks that the world be prepared for
• Financial markets in its Global Financial
‘Natural disasters and extreme weather events’
Stability Report
in the next two years. The WEF report has been
• Public finance developments in its Fiscal
released ahead of its flagship Davos 2023
Monitor
Meeting, which is titled as Cooperation in a
• External positions of largest economies in
Fragmented World.
its External Sector Report
54. Answer: (a)
57. Answer: (b)
Explanation:
Explanation:
• Statement 1 is correct as Foreign Investment,
Only Statement 2 is correct.
consisting of both foreign direct investment
The value of capital goods produced in an
(FDI) and foreign portfolio investment (FPI),
economy is defined as investment. This includes
are the components of the capital account.
the purchase of bonds, stocks, or real estate
• Statement 2 is incorrect. Current Account is
property, among other examples. However,
the record of trade in goods and services and
production of consumption goods and services
transfer payments. Trade in goods includes
are not investment. Buying and selling of shares
exports and imports of goods. Trade in services
from one person to another person is also not
includes factor income and non-factor income
investment for the economy as only the ownership
transactions. Transfer payments are the
changes and nothing happens on ground.
receipts which the residents of a country
get for ‘free’, without having to provide any 58. Answer: (b)
goods or services in return. They consist of Explanation:
gifts, remittances and grants. They could be Bank rate refers to the rate at which the Central
given by the government or by private citizens bank lends money to its clients for the long term.
living abroad. Option b is correct as an increase in this rate means
that the Central bank is following a tight monetary
55. Answer: (c)
policy as an increase in rates will lead to a decrease
Explanation:
in money supply thereby leading to a decrease in
• Statement 1 is incorrect as The Special
inflation and a reduction in investment.
Drawing Rights (SDR) is an international
reserve asset, created by the IMF in 1969 to 59. Answer: (c)
supplement its member countries’ official Explanation:
reserves. Statement 1 is incorrect as stagflation means a
• Statement 2 is correct as individuals and situation characterized by simultaneous
private entities cannot hold SDRs. IMF increase in prices and stagnation of economic
members – and the IMF itself – hold SDRs growth. It is described as a situation in the
and the IMF has the authority to approve economy where the growth rate slows down, the
other holders, such as central banks. As of level of unemployment remains steadily high and
end-January 2021, there were 15 organizations yet the inflation or price level remains high at the
approved as prescribed holders. Participating same time.

17 | p a g e
 It is Dangerous for the economy. 62. Answer: (b)
• In a usually low growth situation, central Explanation:
banks and governments try to stimulate the • Statement 1 is correct as Measures taken
economy through higher public spending and by the Government to put in place an
low interest rates to create demand. enabling investor friendly FDI Policy has
• These measures also tend to elevate prices resulted in increased FDI inflows setting
and cause inflation. So, these tools cannot be up new records. FDI inflows in India stood
adopted when inflation is already running at US$ 45.14 billion in 2014-15 and have
high, which makes it difficult to break out of continuously increased since then. India
the low growth-high inflation trap. registered its highest ever annual FDI inflow
Statement 2 is correct as inflation is the rate of of US$ 81.97 billion (provisional) in the 2020-
increase in prices over a given period of time. 21 reflecting the growth of 10 percent as
Inflation is typically a broad measure, such as the compared to the previous year. The increase
overall increase in prices or the increase in the cost has been on the back of growth of 20 percent in
of living in a country 2019-20. In the year 2021-22, FDI inflows grew
Statement 3 is incorrect as recession is a slowdown by 4 percent in the first six months to reach US$
or a massive contraction in economic activities. 42.86 billion as compared to US$ 41.37 billion
A significant fall in spending generally leads to a for the same period of last year.
recession. • Statement 2 is incorrect as about 27% of the
FDI came through Singapore followed by
60. Answer: (c)
USA (17.94%), Mauritius (15.98%), Netherland
Explanation:
(7.86%) and Switzerland (7.31%)
Both the statements are correct.
• The key sectors which attracted the maximum
According to the RBI, balance of payment is a
FDI include the services segment, computer
statistical statement that shows
software, and hardware, telecommunications,
1. The transaction in goods, services and income trading, construction development,
between an economy and the rest of the world, automobile, chemicals and pharmaceuticals.
2. Changes of ownership and other changes
63. Answer: (a)
in that economy’s monetary gold, special
Explanation:
drawing rights (SDRs), and financial claims on
The International Monetary Fund (IMF) works to
and liabilities to the rest of the world, and
achieve sustainable growth and prosperity for all of
3. Unrequited transfers.
its 190 member countries. It does so by supporting
61. Answer: (b) economic policies that promote financial stability
Explanation: and monetary cooperation, which are essential to
• Circular trading is the fraudulent use of an input increase productivity, job creation, and economic
tax credit by traders to get goods or services well-being. The IMF is governed by and accountable
by sending invoices without actually receiving to its member countries.
them. Circular commerce, to put it simply, is the The IMF has three critical missions: furthering
practice of buying and selling items through international monetary cooperation, encouraging
shell firms without really moving those goods. the expansion of trade and economic growth, and
Money that leaves the country through various discouraging policies that would harm prosperity
means and then returns, frequently as foreign (hence option 1, 2 and 4 are correct). To fulfil
investment, is referred to as “round tripping.” these missions, IMF member countries work
• Circular trading’s primary goal is to increase collaboratively with each other and with other
business turnover. However, businesses may international bodies.
also seek to do the following through circular
trading: Boost the company’s or business’s 64. Answer: (a)
valuation; to gain access to larger loans from Explanation:
banks or non-bank financial institutions (NBFI); • Statement 1 is correct as Flexible Exchange
to introduce illicit funds into the system; to Rate or Floating Exchange Rate is determined
avail fake input tax credits. by the market forces of demand and supply.
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 • Statement 2 is correct as Increase in exchange • Metal surfaces reflect microwave radiation.
rate implies that the price of foreign currency • Refraction, diffraction, reflection, and
(dollar) in terms of domestic currency (rupees) interference are some of the phenomena that
has increased. This is called Depreciation of impact microwave transmission.
domestic currency (rupees) in terms of foreign • They can easily pass through glass and plastics,
currency (dollars). and hence are used in heating and cooking in
• Statement 3 is incorrect as in a flexible an oven.
exchange rate regime, when the price of • Shorter distances cause them to attenuate
domestic currency (rupees) in terms of easily.
foreign currency (dollars) increases, it is called • These radiations are not reflected by the
Appreciation of the domestic currency (rupees) Ionosphere. Hence statement 3 is incorrect.
in terms of foreign currency (dollars). • As they pass through conducting surfaces,
65. Answer: (d) microwaves travel in a straight line.
Explanation: • It is possible for microwave currents to pass
Both the statements are correct. through a cable’s thin layer.
Hybrid Annuity Model (HAM) is a mix of Build- 67. Answer: (c)
Operate-Transfer (BOT) and Engineering, Explanation:
Procurement and Construction (EPC) models. The Geoemydidae turtle family includes the Indian
Innovative features that have led to the success of roofed turtle (Pangshura tecta). It can be identified
HAM includes - by the prominent “roof” on the shell’s highest
• Financial risk sharing between government portion.
and the private sector by injecting a portion The principal rivers of South Asia contain it.
of project costs during construction, accepting • In the Indian Subcontinent, it is a typical pet. It
the risk of revenue forecast and collection, and can be found in Pakistan, Bangladesh, India, and
hedging inflation by ensuring indexation of Nepal.The Indian Roofed Turtle can be found
construction costs and O&M payments. in various wildlife sanctuaries and national
• The introduction of amenable qualification parks in India, such as Keoladeo National Park
criteria has been instrumental in sustaining in Rajasthan, Nameri National Park in Assam,
market appetite and broadening the supply and Sariska Tiger Reserve in Rajasthan. The
base beyond large companies. best time to see them is during the breeding
• Provisions requiring environmental permits season, which is from November to March.
and forest clearances—and at least 80% of site • It is present in the Ganges, Brahmaputra, and
availability at commencement—are strong Indus River drainages in India.
measures intended to achieve a high level of • It is included in CITES Appendix I.
project readiness at the outset. • The species is protected under the Wildlife
• By focusing on performance-based service Protection Act of India, and various
specifications for end users, the model offers conservation measures have been taken to
flexibility to the private sector to promote conserve this species in the wild.
innovation in construction and O&M.
68. Answer: (a)
66. Answer: (b) Explanation:
Explanation: • An inactivated vaccine is a vaccine consisting
• Microwaves are classified as electromagnetic of virus particles, bacteria, or other pathogens
radiation, having wavelengths between 1 mm that have been grown in culture and then killed
and about 30 cm and frequencies between 300 to destroy disease-producing capacity.
MHz and 300 GHz. • Vaccines of this type are made by inactivating
• In the electromagnetic spectrum, they are a pathogen, usually using heat or chemicals
located halfway between radio waves and like formaldehyde or formalin. This stops the
infrared radiation. pathogen from reproducing but leaves it
These are some characteristics of microwave “intact” so that the immune system can still
radiation or microwaves themselves. recognise it.
• These radiations have the ability to • Inactivated vaccines use the killed version
emit electromagnetic energy at shorter of the germ that causes a disease. (Viral
wavelengths. vaccines of this kind are typically referred to as
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 “inactivated” rather than “killed,” as viruses are Hydrogen Occurrence:
typically not thought of as being alive.) • It is the element that is most prevalent in the
• Typically, they don’t offer as strong of immunity cosmos. The majority of the sun’s and other
(protection) as live vaccinations. Therefore, a stars’ mass is hydrogen.
number of doses (booster shots) throughout • 90% of the atoms in the universe, according
to astronomers, are hydrogen atoms. More
time may be necessary to maintain your
molecules include hydrogen than any other
immunity against illnesses. Hence statement 3
element, and water is the most prevalent
is incorrect. hydrogen compound on the planet.
• They are used to prevent Hepatitis A, the flu • However, there are no readily accessible natural
(only by shot), polio, and rabies reserves of molecular hydrogen on Earth.
69. Answer: (c) On Earth, the majority of hydrogen is bound
to carbon in living, dead, and/or fossilised
Explanation:
biomass as well as oxygen in water. Water can
• Since the 1990s, a number of initiatives have
be split into hydrogen and oxygen to produce
been launched worldwide to explore the it.
potential applications of High Altitude Pseudo
71. Answer: (a)
Satellites, also called High Altitude Platform
Explanation:
Stations (HAPS). HAPS are aircraft positioned
• Recently, Two new mammalian species -
above 20 km altitude, in the stratosphere, for Binturong or the bearcat and the small-clawed
very-long-duration flights counted in months otter - have been recorded in the Kaziranga
and even years. These unmanned aircraft may National Park and Tiger Reserve.
be airplanes, airships or balloons. A number • The binturong, also known as the bearcat, is
of HAPS development projects have recently a viverrid native to South and Southeast Asia.
reached more advanced development stages, It is uncommon in much of its range, and has
which indicates that first operational services been assessed as Vulnerable on the IUCN Red
could be expected by 2018 - 2022. List because of a declining population. It is
estimated to have declined at least 30% since
• HAPS could offer advantages and
the mid-1980s. Hence statement 1 is incorrect.
complementary applications over satellites,
• It has been classified as Vulnerable on the IUCN
terrestrial infrastructures and Remotely Piloted Red List. It has the greatest level of protection
Aircraft Systems (RPAS), at relatively low cost. In because it is listed in Schedule I of the Wild
this context, space assets could play a key role Life Protection Act of 1973 and Appendix III of
in the development of these new services. CITES. Hence statement 2 is correct.
• Unmanned aerial vehicles (UAVs) and traditional 72. Answer: (a)
satellites are intended to be connected via the Explanation:
solar-powered system. • The CBDC pilot launched by the RBI in retail
Hence all the statements are correct. segment has components based on blockchain
technology.
70. Answer: (b) • Giving more information on the CBDC, the
Explanation: Minister stated that the RBI has launched
Hydrogen pilots of CBDC in both Wholesale and Retail
• The first and lightest element on the periodic segments. The pilot in wholesale segment,
table is hydrogen. Being lighter than air, known as the Digital Rupee -Wholesale (e₹-W),
hydrogen rises in the atmosphere and is was launched on November 1, 2022
consequently infrequently seen in its pure • Transactions can be both Person to Person
form, H2. (P2P) and Person to Merchant (P2M). The e₹-R
offers features of physical cash like trust, safety
• Hydrogen is a diatomic gas that is harmless,
and settlement finality. Like cash, the CBDC will
non-metallic, tasteless, colourless, and highly
not earn any interest and can be converted to
flammable at standard temperature and other forms of money, like deposits with banks.
pressure. A fuel that produces no emissions • On the other steps being taken by RBI for full
when burned with oxygen is hydrogen. It can operationalisation of CBDC include expanding
be applied to internal combustion engines or the scope of the pilots gradually to include
fuel cells. more banks, users and locations based on
Additionally, it serves as a propulsion fuel for feedback received during the pilots, the
spaceships. Hence statement 2 is incorrect. Minister stated

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73. Answer: (b) 76. Answer: (a)
Explanation: Explanation:
• Manthan is a platform that encourages • Hindustan Aeronautics Limited is an indigenous
extensive cooperation between business manufacturer of the ALH MK III helicopters
and the ecosystem of scientific research (HAL). Therefore, statement 1 is incorrect.
and development. Manthan enables diverse • The aircraft’s attributes allow it to conduct
stakeholders to work together to co- maritime surveillance and SAR at greater
create explanations that are in line with the distances while operating from ships
Sustainable Development Goals (SDGs) of the throughout both day and night.
United Nations and our own country’s scientific • The aircraft can transform from an offensive
missions. HENCE STATEMENT 1 IS CORRECT. platform equipped with a powerful machine
• The Office of the Principal Scientific Adviser gun to a benign one transporting a medical
(PSA) to the Government of India designed and intensive care unit to ease the transfer of
carried out the platform’s development. seriously ill patients.
74. Answer: (a) 77. Answer: (c)
Explanation: Explanation:
• In nature, the pressure belts are not permanent. Community Innovator Fellowship” programme.
They oscillate with the apparent movement of • The Community Innovator Fellowship Program
the sun. is an initiative of Atal Innovation Mission, NITI
• In the northern hemisphere in winter they Aayog in collaboration with UNDP India to
move southwards and in summer they move facilitate knowledge building and provide
northwards. The equatorial low pressure and infrastructure support to aspiring community
polar high pressure belts are formed due to innovators essential for their entrepreneurship
high and low temperature respectively. journey.
• Air expands when heated and gets compressed • This is a one-year-long intensive fellowship
when cooled. This results in variations in the program wherein an aspiring community
atmospheric pressure. innovator can apply irrespective of their socio-
• Air moves from high pressure to low pressure economic background.
due to variations in atmospheric pressure, • During the course of this fellowship, each
which initiates motion in the gas. Atmospheric fellow would be hosted at an Atal Community
pressure also determines when the air will rise Innovation Centre and would acquire SDG
or sink. awareness, entrepreneurial skills and life skills
75. Answer: (d) while working on her/his idea.
Explanation: 78. Answer: (a)
• The Hygam wetland lies downstream of Explanation:
another Ramsar Site, Wular Lake, with which it • WMO’s State of Global Water Resources report
is connected, and forms an important site for for 2022 has been launched, following the
biodiversity conservation. success of the first pilot report launched last
• It lies on the Central Asian Flyway; over 40,000 year in response to calls made at various global
migratory and resident bird species have been forums for an independent and consistent
recorded annually. The wetland also supports assessment of global water resources to guide
mammals, amphibians, and fish including policy discussions.
the Eurasian otter (Lutra lutra), common • The State of Global Water Resources report is
carp (Cyprinus carpio) and common pochard one among the 3 commitments of WMO made
(Aythya ferina). the UN 2023 Water Conference Water Action
• The wetland is located within the Jhelum Agenda.
River basin and plays a significant role in flood • This WMO flagship report gives a concise
control, aquifer recharge, and regulating the presentation of the status of water resources
water flow of Wular Lake. in large basins in comparison to the long-term
• This wetland provides local communities with average, for various variables characterizing
a range of “ecosystem services”, providing fish, the water cycle.
wood and clean water, and regulating the local • In comparison to the first edition that reported
climate. conditions of streamflow, terrestrial water
Therefore, option (d) is the correct answer. storage and selected cryosphere parameters
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 only, the present 2022 WMO State of Global 81. Answer: (a)
Water Resources report is extended to Explanation:
include variables describing, groundwater, Central Adoption Resource Authority
evapotranspiration, soil moisture, reservoirs • Central Adoption Resource Authority (CARA)
along with an overview of the major extreme is a statutory body of Ministry of Women &
hydrological disasters around the globe in Child Development, Government of India. It
2022. Hence statement 2 is incorrect. functions as the nodal body for adoption of
Indian children and is mandated to monitor
• The first edition of the World Meteorological
and regulate in-country and inter-country
Organization’s State of Global Water Resources
adoptions.
Report 2021 has been published. • CARA is designated as the Central Authority
79. Answer: (b) to deal with inter-country adoptions in
Explanation: accordance with the provisions of the Hague
• It is a voluntary export control system known as Convention on Inter-country Adoption, 1993,
the Wassenaar Arrangement. 42 parties to the ratified by Government of India in 2003. Hence
Arrangement, which was formally established statement 2 is incorrect.
in July 1996, share information on transfers • CARA primarily deals with adoption of orphan,
abandoned and surrendered children through
of conventional weapons and products and
its associated /recognised adoption agencies.
technologies with dual uses.
• The Arrangement is open to prospective 82. Answer: (b)
adherents who meet the established conditions Explanation:
on an international and nondiscriminatory • Only three locations in south Asia’s tropical
basis. regions—Teri Sands in Tamil Nadu, Erra Matti
• The agreement of all members is necessary for Dibbalu in Visakhapatnam, and another site in
Sri Lanka—have been found to contain these
the admission of new members.
uncommon sand deposits. For a variety of
• The Arrangement is not directed at any state or
scientific reasons, they don’t exist in equatorial
group of states and does not obstruct legitimate or temperate climates.
civil transactions. All actions performed in Hence statement 1 is incorrect.
relation to the Arrangement are in conformity
• Red sand dunes on outskirts of Visakhapatnam
with the national laws and regulations of face threat of disintegration due to rapid realty
the member countries and are carried out in growth. Hence statement 2 is correct.
accordance with national discretion. • The Coastal Red Sand Dunes is also known as
80. Answer: (d) ‘Erra Matti Dibbalu’. It is one of the many sites of
Explanation: Visakhapatnam, The Coastal Red Sand Dunes is
• The Ministry of Civil Aviation is adding a Digital also known as ‘Erra Matti Dibbalu’. It is one of
experience for Air Travellers through DigiYatra the many sites of Visakhapatnam,
Platform. The ‘DigiYatra’ is an industry-led 83. Answer: (a)
initiative co-ordinated by the Ministry in line Explanation:
with the Prime Minister Shri Narendra Modi’s Despite not having a legal definition, the term
Digital India’s vision to transform the nation “Urban Co-operative Banks” (UCBs) refers to main
into a digitally empowered society. cooperative banks that are situated in urban and
• Digi Yatra - Digital processing of passengers at semi-urban areas. These banks were only permitted
the airports. Passengers will be automatically to make loans until 1996 for non-agricultural uses.
Today, this distinction is no longer valid.
processed based on facial recognition system at
check points like; Entry point check, Entry in to • Based on the magnitude of the UCBs’ deposits,
Security Check, Aircraft Boarding, Additionally the Reserve Bank of India has categorized
UCBs into a four-tiered regulatory system. All
this will also facilitate self-Bag Drop and Check-
unit UCBs, salary earners’ UCBs (regardless
in, using facial recognition to identify pax and
of deposit amount), and all other UCBs with
data recall. Digi Yatra will facilitate paperless
deposits under $100 billion have been placed
travel and avoid identity check at multiple in Tier 1 by the RBI. It has UCBs with deposits
points. over $100 billion and up to $1 billion in Tier 2.
• Digi Yatra platform will be built on 4 key Banks having deposits of over $1,000,000,000
pillars, like Connected Passengers, Connected and up to $10,000,000,000 will fall under Tier 3.
Airports, Connected Flying and Connected Deposits of more above Rs. 10,000 crores have
Systems. been classified as Tier 4 UCBs.
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 The RBI has also released guidelines for these 86. Answer: (c)
banks’ capital requirements and net worth. Explanation:
• The minimum net worth requirement for Tier 1 • Tanpura is a long-necked plucked string
UCBs operating in a single district is Rs. 2 crores. instrument, originating in India, found in
The minimum net value for all other UCBs (in various forms in Indian music. It does not play
Tier 1, 2, and 3) should be Rs. 5 crore. Tier 1 melody, but rather supports and sustains the
UCBs are required to continuously maintain a melody of another instrument or singer by
minimum capital to risk weighted asset ratio of providing a continuous harmonic bourdon or
9% of risk weighted assets (RWAs). Tier 2 to 4 drone.
UCBs are required to continuously maintain a • Visually, the tanpura resembles a simplified
minimum capital to risk weighted assets ratio sitar or similar lute-like instrument, and is
of 12% of RWAs. likewise crafted out of a gourd or pumpkin.
84. Answer: (c) • A tanpura is not played in rhythm with the
Explanation: soloist or percussionist: as the precise timing of
• The Directorate of Revenue Intelligence is the plucking a cycle of four strings in a continuous
apex anti-smuggling agency of India, working loop is a determinant factor in the resultant
under the Central Board of Indirect Taxes & sound, it is played unchangingly during the
Customs, Ministry of Finance, Government of complete performance.
India. • Hindustani musicians favour the term tanpura
• It is tasked with detecting and curbing whereas Carnatic musicians say tambura;
smuggling of contraband, including drug tanpuri is a smaller variant sometimes used for
trafficking and illicit international trade in accompanying instrumental soloists.
wildlife and environmentally sensitive items, as 87. Answer: (c)
well as combating commercial frauds related Explanation:
to international trade and evasion of Customs • The Unified Payments Interface (UPI) is a system
duty. that integrates several bank accounts into a
• According to the DRI charter, the agency may
single mobile application (of any participating
submit cases recorded under the Customs Act
bank), combining different banking services,
to the Income Tax Department for action under
smooth fund routing, and merchant payments
the Income Tax Act.
under one umbrella. Hence, statement 1 is
Hence all the statements are correct.
correct.
85. Answer: (c) • It also caters to the “Peer to Peer” collect
Explanation: request which can be scheduled and paid as
First Loss Default Guarantee (FLDG) per requirement and convenience. Each Bank
• FLDG is an arrangement whereby a third party provides its own UPI App for Android, Windows
such as a financial technology (fintech) player and iOS mobile platform(s). Hence, statement 2
(LSP or lender service provider) compensates is correct.
lenders if the borrower defaults.
88. Answer: (c)
• On 8 June 2023, the Reserve Bank of India (RBI)
Explanation:
released the much anticipated guidelines on
• National Financial Reporting Authority is an
first loss default guarantee (FLDG Guidelines).
independent regulator set up to oversee the
• These guidelines have been released
consequent to the digital lending guidelines auditing profession and the Indian Accounting
released by the central bank in September Standards under the Companies Act 2013. It
last year which had in effect prohibited came into existence in October 2018.
all kinds of FLDG arrangement between a • The NFRA’s responsibilities are outlined in
lending service provider (LSP) / digital lending Subsection (2) of Section 132 of the Companies
application (DLA) (used as “fintech entity(s)” Act of 2013, and include the following:
interchangeably) and the regulated entities Recommend accounting and auditing rules
(REs). and standards that companies should adopt for
• However, the new guidelines have now the Central Government’s approval; auditing
permitted such FLDG arrangements between standards and accounting standards are
fintech entities and REs, which are the banks monitored and enforced; oversee the level of
and the non-banking financial companies service provided by the professions involved in
(NBFCs), albeit with certain conditions, assuring compliance with such standards and
restrictions and caps. make recommendations for ways to raise the
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 level of service; Perform any additional tasks or (ICC or ICCt). It is the first and only permanent
obligations that may be related to or essential international court with the authority to try
for the aforementioned tasks and obligations. people for crimes against humanity, war crimes,
• Its members are a chairperson, who must be and other international offences including
a distinguished individual with knowledge of aggression.
accounting, auditing, finance, or law, chosen • The Assembly of States Parties, which is made
by the Central Government, and up to 15 up of the nations that have ratified the Rome
additional members. Statute, is in charge of overseeing the ICC.
• The Comptroller and Auditor General of India The Assembly chooses the Court’s officers,
keeps an eye on the NFRA’s account. approves the Court’s budget, and accepts
• Hence all thew statements are correct. changes to the Rome Statute. The Presidency,
Judicial Divisions, Office of the Prosecutor, and
89. Answer: (c)
Registry are the four parts that make up the
Explanation: Court itself.
• The restructured National Bamboo Mission • Either territorial or personal jurisdiction must
primarily focuses on the development of exist for the Court to have the authority to bring
complete value chain of bamboo sector to link a case against a particular person. All natural
growers with consumers starting from planting persons who commit crimes come under the
material, plantation, creation of facilities, skilled Court’s personal jurisdiction, regardless of
manpower and brand processing marketing, where they are located or where the crimes
micro, small & medium enterprises, skilled were committed, as long as they are citizens of
manpower and brand building initiative in a either
cluster approach mode. (1) States that have ratified the Rome Statute or
• Presently the scheme is being implemented in (2) States that have declared their acceptance
24 States/UTs. of the Court’s jurisdiction in a declaration
• The NBM has provisions to raise bamboo submitted to the Court. Similar to territorial
plantations as well as to establish units for bio- jurisdiction, if the Security Council refers a case
energy extraction, activated carbon product, to the Court, the Court’s personal jurisdiction
charcoal making, pellet making, Ethanol may be increased.
gasifier, etc for government agencies and
92. Answer: (d)
private entrepreneurs.
Explanation:
90. Answer: (b) • India is a founding member of GPAI, having
Explanation: joined the multi-stakeholder initiative in
• According to a new report compiled by Global June 2020. The initiative aims “to bridge the
Energy Monitor, the coal industry is expected gap between theory and practice on AI by
to shed more than four lakh mining jobs, supporting cutting-edge research and applied
equivalent to nearly 100 workers per day, by activities on AI-related priorities.”
2035, even without climate pledges or policies • It also brings together people involved in the
to phase out coal, with China and India likely to fields of science, industry, and civil society,
be the hardest hit. along with governments, international
• The primary reason will be the market shift organisations and academia for greater
toward cheaper wind and solar power international cooperation. The first three GPAI
generation and a lack of planning to manage a summits were held in Montreal, Paris and
transition to a post-coal economy. Tokyo, respectively.
• The northern provinces of Shanxi, Henan and Hence all the statements are correct.
Inner Mongolia mine more than a quarter of
93. Answer: (b)
the world’s coal and employ 32 per cent of
Explanation:
the global mining workforce, approximately
• The Securities and Exchange Board of India
8,70,400 people.
(SEBI) has proposed the introduction of a
• India, the world’s second-largest coal producer,
facility for clearing and settlement of funds and
has a workforce approximately half the size of
securities on T+0.
Shanxi.
• SEBI has shortened the settlement cycle to T+3
91. Answer: (b) from T+5 in 2002 and subsequently to T+2 in
Explanation: 2003. At present, the settlement of funds and
• An intergovernmental body and international securities happens on the T+1 cycle. It was
court with its headquarters in The Hague, introduced in 2021 in a phased manner and
Netherlands, is the International Criminal Court was fully implemented in January 2023.
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 • SEBI has suggested that, to begin with, T+0 • By establishing global labour standards, the
settlement shall be made available in the top International Labour Organization (ILO), a
500 listed equity shares based on the market United Nations agency, works to advance
capitalisation. Hence, statement 2 is correct. social and economic justice.
• The surveillance measures applicable in the T+1 • It is the first and oldest specialized agency of
settlement cycle will also apply to securities in the UN, having been established in October
the T+0 settlement cycle. Hence, statement 1 1919 as a branch of the League of Nations.
is correct. • ILO agreements enter into force once a
• Securities under the trade-for-trade settlement sufficient number of nations have ratified
will not be permitted for T+0. Hence, statement them. Regardless of ratification, ILO treaties are
3 is not correct. regarded as global labour standards.
94. Answer: (c) • When a convention enters into force, ratifying
GRBs are potent, high-energy gamma-ray bursts countries are obligated by law to implement
that occur in the universe. GRBs have two unique its provisions. A standard can only be adopted
emission phases: the brief prompt emission (the with a two-thirds majority of votes.
initial burst phase that releases gamma rays), 97. Answer: (a)
followed by a long-lasting multi-wavelength Explanation:
afterglow phase. GRBs emit more energy in a few • A digital banking unit is a specialised fixed
seconds than our Sun will emit in its entire lifetime. point business unit or hub, housing a certain
• A unique phenomenon known as a kilonova minimum digital infrastructure for delivering
of visible and infrared light with short-period digital banking products and services. Hence,
GRBs, also known as a potential source of statement 1 is correct.
gravitational waves, has been identified by • DBUs will service existing financial products
scientists in recent years. and services digitally in self-service mode at
• The possibility of kilonova emission from the any time.
heat generated by the radioactive decay of • Commercial banks (other than regional
heavier materials has been hypnotised. rural banks, payment banks and local area
• As a result of this process, heavier substances banks) with past digital banking experience
like gold and platinum are also produced. are permitted to open DBUs in tier 1 to tier 6
centres, unless otherwise specifically restricted,
95. Answer: (d)
without having the need to take permission
Explanation:
from the RBI in each case. Hence, statement 2
• SpIN is a one-of-its-kind public-private
is not correct.
collaboration for start-ups and SMEs in the
• The services include saving bank accounts
space industry.
under various schemes, current accounts, fixed
• This novel partnership is a significant step
deposit and recurring deposit accounts, digital
forward in providing further stimulus to India’s
kits for customers, mobile banking, Internet
recent space reform policies and will work
banking, debit cards, credit cards, and mass
towards identifying and unleashing the market
transit system cardss, digital kits for merchants,
potential of the most promising space tech
UPI QR codes, BHIM Aadhaar and point of sale
innovators and entrepreneurs in India.
(PoS). Hence, statement 3 is not correct.
• It will primarily focus on facilitating space tech
entrepreneurs in three distinct innovation 98. Answer: (a)
categories: Geospatial Technologies and Explanation:
Downstream Applications; Enabling • A Management Authority that issues export or
Technologies for Space & Mobility; and import permits for the exchange of specimens
Aerospace Materials, Sensors, and Avionics. may be chosen by the central government.
Anyone who deals in a scheduled specimen is
96. Answer: (a)
required to disclose the specifics of the trade to
Explanation: the relevant authority.
• It is the only tripartite U.N. organization • By deleting the schedule for pest species and
that brings together representatives of 187 cutting the number of schedules for highly
member states’ governments, employers, and protected animals to two, the modified bill
labour unions to set labour standards, create reduces the overall number of schedules to
laws, and create initiatives to support decent four. Additionally, it adds a new schedule for
work for all women and men. specimens that are CITES-listed.

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 • The legislation allows anybody to voluntarily 100. Answer: (d)
turn in any confined animals or animal Explanation:
products, with no payment given in exchange; • The Reserve Bank of India (RBI) has directed
instead, the commodities become the property banks, non-banking financial companies
of the state government. (NBFCs), and other lenders not to invest in any
99. Answer: (b) scheme of alternative investment funds (AIFs)
Explanation: that has downstream investments in a debtor
• The technical requirements for a party to be company.
recognized as a national party are outlined in • An AIF meAnswer: (a)ny fund established
the Political Parties and Election Symbols, 2019 or incorporated in India which is a privately
manual published by the ECI. Depending on pooled investment vehicle, and which collects
how often these requirements are met, a party funds from sophisticated investors, whether
may occasionally earn or lose national party Indian or foreign, for investing it in accordance
status.
with a defined investment policy for the benefit
• A political party is deemed a national party
of its investors.
if one of the following conditions is met:
• Banks and NBFCs, which are Regulated Entities
it is “recognized” in four or more states; its
(RE) under the Reserve Bank of India (RBI),
candidates received at least 6% of all valid
votes cast in four or more states during the make investments in units of AIFs as part of
most recent Lok Sabha or Assembly elections; their regular investment operations.
it had at least four MPs in the most recent Lok • Venture capital funds, angel funds,
Sabha elections; or it won at least 2% of all Lok infrastructure funds, private equity funds and
Sabha seats from at least three states. hedge funds, among others, are AIFs.

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