Indian Economy: UPSC Previous Year Questions (Prelims)

Explanation

Statement 1 is incorrect: While there was some increase in tax revenue from 2014 to 2018, the growth was not always steady and was subject to fluctuations, especially due to changes in the economy and tax reforms like GST in 2017. Therefore, there was an overall increase, but it wasn’t a steady rise.

Statement 2 is incorrect: Fiscal deficit as a percent of GDP of India has not steadily increased in the last decade. Fig: Tax Revenue as a percentage of GDP.

Explanation

Statement 1 is correct: The National Intellectual Property Rights (IPR) Policy of India, adopted in 2016, serves as a comprehensive vision document to guide the future development of IPRs in the country. The policy reaffirms India’s dedication to international agreements, including the Doha Development Agenda and the TRIPS Agreement. This commitment ensures that India’s IPR framework aligns with global standards and obligations.

Statement 2 is correct: The Department for Promotion of Industry and Internal Trade (DPIIT), formerly known as the Department of Industrial Policy and Promotion (DIPP), under the Ministry of Commerce and Industry, is designated as the nodal agency for regulating intellectual property rights in India. DPIIT is responsible for overseeing the implementation and enforcement of IPR laws and policies.

Explanation

Statement 1 is incorrect: The National Career Service (NCS) is an initiative of the Directorate General of Employment, Ministry of Labour and Employment, not the Department of Personnel and Training.NCS offers dynamic job matching, career counselling, job notifications, vocational guidance, and information on skill development courses and internships.

Statement 2 is incorrect: It was launched in 2015 as a mission-mode project under the E-Governance Plan. It aims to bridge the gap between job-seekers and employers, as well as candidates seeking training and career guidance and agencies providing these services. It is for everyone seeking a job not just for the uneducated. It provides career counseling as well as skill and training if needed.

Explanation

All State Government employees joining the services after the date of notification by the respective State Governments are eligible for National Pension System (NPS). After the Central Government’s adoption of the NPS in 2004, many State Governments have also implemented the NPS for their employees joining after the respective notification dates. Options (a), (b) and (d) are incorrect:

National Pension System (NPS) is not limited to resident Indian citizens. It is open to all Indian citizens, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) provided they meet the age and KYC requirements. The NPS allows individuals between the ages of 18 and 70 (not only 21 to 55)to join. There is no upper age limit for years of age at the time of application. NPS was made mandatory for all Central Government employees (except the Armed Forces) joining services on or after January 1, 2004 and not April 1, 2004.

Explanation

Drip irrigation is a type of micro-irrigation system that applies small amounts of water and fertilizer uniformly across a specific area. Examples of drip irrigation methods include surface drip irrigation, subsurface drip irrigation (SDI), drip tape, and micro-sprinklers.

Option 1 is correct: Drip irrigation delivers water directly to the plant’s root zone, reducing water availability for weeds, which helps in minimizing weed growth.

Option 2 is incorrect: Some of the disadvantages of Drip Irrigation are sensitivity to clogging, problem of moisture distribution, salinity hazards and high cost compared to furrow.

Option 3 is correct: Drip irrigation generally doesn’t contribute to significant erosion since water is delivered at low pressures and in controlled amounts, unlike surface irrigation where water flow can lead to erosion.

Explanation

UDAY (Ujwal DISCOM Assurance Yojana), launched in November 2015, aims to address the financial and operational inefficiencies of power distribution companies (DIS-COMs). It seeks to improve their financial health by allowing state governments to take over 75% of their debt and service the remaining through bonds. The scheme focuses on reducing Aggregate Technical and Commercial (AT&C) losses to 15% by 2019, lowering power generation costs through energy efficiency, and enhancing service delivery with uninterrupted power supply and timely billing for consumers.

Explanation

Through the amendment in Mines & Minerals (Devel-opment & Regulation) (MMDR) Act, in 2015, Government of India has made provision for establishment of District Mineral Foundation in all the districts affected by mining.

Statement 1 is incorrect: DMFs are not directly involved in promoting mineral exploration activities. Their focus is on the welfare of affected communities and areas, not on exploration or mining activities.

Statement 2 is correct: The main purpose of DMFs is to protect the interests of persons and areas affected by mining operations. They use funds collected from miners to implement various developmental and welfare projects, such as healthcare, education, sanitation, and infrastructure, in mining-affected areas.

Statement 3 is incorrect: DMFs do not have any role in authorizing State Governments to issue licenses for mineral exploration. Licensing and regulation of mining activities are handled by the respective State Governments and the Central Government under the provisions of the Mines and Minerals (Development and Regulation) Act, 1957.

Explanation

Statement 1 is incorrect: Bitcoin operates on a decentralized blockchain technology, which eliminates the need for any central authority such as central banks to track transactions. The system is maintained by miners who validate transactions and add them to the public ledger called the blockchain. While central banks are increasingly exploring the implications of cryptocurrencies and some are even considering issuing their own digital currencies (CBDCs), they do not currently track Bitcoin transactions.

Statement 2 is correct: Anyone with a Bitcoin wallet (which generates a Bitcoin address) can send and receive Bitcoins to and from any other Bitcoin address, anywhere in the world. A Bitcoin address functions as a public key, similar to a digital bank account number. This address can be shared to receive payments. Sending or receiving bitcoins requires no intermediary, allowing for peer-to-peer transactions across borders which is often faster and cheaper than traditional banking systems.

Statement 3 is correct: Bitcoin transactions are pseudo-anonymous which means that while wallet addresses are visible on the blockchain but the users’ identities are not directly linked to those addresses. This makes Bitcoin ideal for privacy-conscious users. This anonymity is a key feature that has attracted some users to Bitcoin, but it has also raised concerns about its potential use in illicit activities.

Explanation

Gold Monetization Scheme and Sovereign Gold Bond Scheme were introduced to lower the physical demand for gold and remove the estimated 20,000 tonnes of the precious metal from households where it was sitting inert. Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold issued by the RBI on behalf of the Government.

Statement 1 is correct: Sovereign Gold Bond Scheme was launched along with the Gold Monetisation Scheme in November 2015. India has a strong cultural affinity for gold, and a significant amount of gold is held by households in the form of jewelry, bars, and coins. The objective is to reduce India’s gold imports and bring all the gold lying idle with individuals and households and put it to productive use in the economy.

Statement 2 is incorrect: Neither the SGB nor the GMS is explicitly designed to promote FDI in the gold and jewellery sector. Their primary focus is on domestic gold mobilization and reducing reliance on imports. While a more organized gold market resulting from these schemes could create a conducive environment for investment, promoting FDI is not a stated objective of these schemes.

Statement 3 is correct: By offering a non-physical form of gold investment, the scheme aims to curb the demand for imported gold thus reducing the country’s import bill. The SGB scheme offers investors bonds denominated in grams of gold. These bonds provide returns linked to the market price of gold along with periodic interest payments.

Explanation

Statement 1 is correct: The Reserve Bank of India’s guidelines for licensing Payments Banks specify that entities such as existing non-bank Prepaid Payment Instrument (PPI) issuers, mobile telephone companies, supermarket chains, and others owned and controlled by residents are eligible to promote Payments Banks. This initiative aims to leverage their extensive customer bases and distribution net-works to enhance financial inclusion.

Statement 2 is incorrect: Payments Banks are permitted to issue ATM or debit cards but are not allowed to issue credit cards. This restriction aligns with their mandate to provide basic banking services without engaging in credit risk activities. The restriction on credit cards is a key differentiator between Payment Banks and traditional banks.

Statement 3 is correct: As per RBI guidelines their primary role is to accept demand deposits, provide payment and remittance services, and distribute financial products like insurance and mutual funds, thereby promoting financial inclusion without assuming credit risk.