Previous Year UPSC Questions

Explanation

Statement-I is incorrect: Apples are one of the major imports from the USA. After India removed "retaliatory import duty" on US apples in September, imports of American apples have surged 40 times in three months, while traders are hopeful of regaining market share. In 2017-18, the import of US apples was a record of over 7 million boxes, which dropped to 50,000 boxes in the 2022-23. Statement-II is correct: In India, the Food Safety and Standards Act, 2006, prohibits import, manufacture, use or sale of GM food without FSSAI’s approval.

Explanation

The Central Bank Digital Currency (CBDC), or Digital Rupee (e), is the Reserve Bank of India’s official digital currency, interchangeable one-to-one with fiat currency and recognized as legal tender. It can be used by individuals, businesses, and government entities for transactions without needing a bank account, especially in the case of retail CBDC, which works like digital cash. CBDCs help reduce the costs of printing, transporting, and storing physical currency while improving transaction efficiency by minimizing intermediaries and enabling faster payments.

Statement 1 is correct: The Digital Rupee (e) is issued by the RBI as Central Bank Digital Currency (CBDC) and functions as legal tender, just like physical cash. Its issuance is aligned with monetary policy objectives, including promoting financial inclusion and reducing dependency on cash.

Statement 2 is correct: Since the Digital Rupee is an obligation of the central bank, it is recorded as a liability on RBI’s balance sheet, similar to physical currency notes issued by the central bank.

Statement 3 is incorrect: The Digital Rupee, like any fiat currency, is not inherently protected against inflation. Its value depends on broader economic factors, including monetary policy, demand-supply conditions, and RBI’s inflation management strategies.

Statement 4 is correct: The digital rupee can be exchanged for physical cash or commercial bank money at par value without any restrictions. CBDC is freely convertible into cash and money from commercial banks.

Explanation

Fifth-generation fighter aircraft typically have features like stealth, advanced avionics, sensor fusion, and supercruise capability. Examples include the F-35 Lightning II (USA), F-22 Raptor (USA), Su-57 (Russia), and J-20 (China). They differ from fourth-generation aircraft primarily in their stealth features. Fifth-generation aircraft have a low electromagnetic signature, which makes it difficult for enemy radar to detect them. At the same time, fifth-generation aircraft have powerful sensors and new weapons, so they are able to register the signature of enemy aircraft and take them out.

Option 1 is incorrect: Rafale is a 4.5-generation multirole fighter developed by Dassault Aviation (France). It features advanced avionics, stealth enhancements, and superior maneuverability but lacks full stealth and sensor fusion, which are key traits of fifth-generation aircraft.

Option 2 is incorrect: MiG-29 is a fourth-generation fighter developed by Russia, primarily designed for air superiority with high agility but lacks stealth technology.

Option 3 is incorrect: Tejas MK-1 is an indigenously developed fourth-generation light combat aircraft (LCA) by India with modern avionics but does not meet fifth-generation requirements.

Explanation

Statement 1 is incorrect: The Reserve Bank of India (RBI) mandates a minimum capital requirement for wholly owned subsidiaries (WOS) of foreign banks operating in India. As per current regulations, the minimum paid-up equity capital required is 500 crore to ensure financial stability and a strong capital base. The WOS was to be treated on par with the existing branches of foreign banks for branch expansion with branches in a year and preference for branch expansion in under-banked areas.

Statement 2 is incorrect: According to RBI guidelines, the board of directors of a Wholly Owned Subsidiary (WOS) of a foreign bank must follow these rules:

At least 51% of the board members must meet the qualifications specified under Section 10A of the Banking Regulation Act, 1949. At least two-thirds of the directors must be non-executive, meaning they are not involved in the day-to-day operations. At least one-third of the directors must be independent, with no ties to the subsidiary, its parent bank, or any related entity. At least 50% of the directors must be Indian nationals, NRIs (Non-Resident Indians), or PIOs (Persons of Indian Origin), with at least one-third being Indian nationals residing in India. The WOS must have a Part-time Chairman and a full-time CEO. Under the scheme for establishing wholly owned subsidiaries of foreign banks in India, at least 50% of the directors must be either Indian nationals, Non-Resident Indians (NRIs), or Persons of Indian Origin (PIOs). Additionally, one-third of the directors must be Indian nationals residing in India. However, since PIOs are not necessarily classified as Indian nationals, the requirement of having at least 50% Indian nationals is not mandatory.

Explanation

Statement 1 is incorrect: Liquidity Adjustment Facility(LAF) is monetary policy tool of RBI to inject or absorb liquidity. Under the LAF Scheme, the Reserve Bank will continue to have the discretion to conduct overnight repo or longer term repo auctions at fixed rate or at variable rates depending on market conditions and other relevant factors. NBFCs generally do not have direct access to the LAF window of the RBI. The LAF is primarily available to scheduled commercial banks and primary dealers. While NBFCs can indirectly benefit through banks accessing LAF, they cannot access it directly. Primary Dealers (PDs) are eligible to access the Liquidity Adjustment Facility (LAF) of the Reserve Bank of India (RBI). According to RBI guidelines, a non-bank entity intending to operate as a Primary Dealer must first register as a Non-Banking Financial Company (NBFC) under Section 45-IA of the RBI Act, 1934. Thus, while NBFCs generally do not have direct access to the LAF, those meeting specific regulatory requirements may be granted access under certain conditions.

Statement 2 is correct: FIIs are allowed to invest in G-Secs within prescribed limits set by the RBI and the government. These limits have been periodically increased to encourage foreign investment in India’s debt market. The Reserve Bank of India (RBI) on April 26, 2024 kept the investment limit by Foreign Portfolio Investors (FPI) in government securities unchanged at 6 percent of the outstanding securities stocks for 2024-25. The RBI has announced that it would maintain the FPI limits for investment in state government securities and corporate bonds at 2 percent and 15 percent, respectively, of the outstanding securities stocks for FY25.

Statement 3 is correct: Stock exchanges in India, such as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), can offer separate trading platforms for debt instruments. For instance, the NSE operates the NDS-OM (Negotiated Dealing System-Order Matching) platform for government securities, facilitating real-time trading among institutional investors.

Explanation

Statement I is correct: In syndicated lending, multiple lenders share the loan amount, which reduces the exposure of any single lender to default risk. If the borrower faces financial trouble, the loss is distributed among multiple lenders, rather than falling entirely on one institution. This mechanism enhances financial stability and ensures that large borrowers can still access capital.

Statement II is incorrect: The loan can involve a fixed amount of funds, a credit line, or a combination of the two. Thus, syndicate lending offers flexibility of structuring and customization of the loan according to the specific needs of the borrower.

Explanation

RTGs are lightweight and compact devices that generate electricity from the heat produced by the natural radioactive decay of isotopes, typically Plutonium-238. They are commonly used in space missions where solar power is insufficient, such as deep-space probes and rovers.

Statement 1 is incorrect: RTGs generate heat through natural radioactive decay, not by controlled nuclear fission, which involves splitting atomic nuclei to release energy. Therefore, they cannot be classified as miniature fission reactors.

Statement 2 is correct: Due to their lightweight, compact design, RTGs have been extensively used in space missions such as Voyager, Curiosity Rover, and Perseverance Rover. They offer a durable and reliable power source, especially for spacecraft operating in deep space, where solar panels are ineffective.

Statement 3 is correct: Plutonium-238 is widely used in RTGs due to its high heat output during decay and low levels of unwanted radiation. While Pu-238 is not naturally occurring, it is mainly produced as a by-product of nuclear weapons development. For example, during the Cold War, it was generated as a by-product of reactions involved in nuclear weapons production.

Explanation

Statement 1 is incorrect: The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of estimated receipts and expenditure of the Government of India for that year. The Union Finance Minister on behalf of the President, lays the annual Financial Statement before both the houses of Parliament.

Statement 2 is correct: As per Article 113(3) of the Constitution, no demand for a grant can be made except on the recommendation of the President. Note: UPSC has given option (c) as the official answer.

Explanation

Statement 1 is correct: As per Article 96 of the Constitution, the Speaker shall not preside while a resolution for their removal is under consideration.

Statement 2 is incorrect: The Speaker has the right to speak and participate in the proceedings related to the resolution for their removal.

Statement 3 is incorrect: At such a time he can vote in the first instance, though not in the case of an equality of votes.

Explanation

When the Lok Sabha is dissolved, all business, including bills, motions, resolutions, notices, petitions and so on pending before it or its committees lapse. They (to be pursued further) must be reintroduced in the newly constituted Lok Sabha. However, some pending bills do not lapse on the dissolution of the Lok Sabha. The position with respect to the lapsing of bills is as follows:

Statement 1 is correct: As per Rule 206 of the Lok Sabha Rules and Article 107(5) of the Constitution, any bill (whether it originated in the Lok Sabha or was transmitted to it by the Rajya Sabha) pending in the Lok Sabha automatically lapses upon its dissolution

Statement 2 is correct: If the Lok Sabha passes a bill, but it is pending in the Rajya Sabha, the bill lapses on the dissolution of the Lok Sabha (Article 107(5)).

Statement 3 is incorrect: If the President has already notified their intention to convene a joint sitting, then the bill remains alive and does not lapse even if the Lok Sabha is dissolved. Example: In 1970, the Banking Service Commission (Repeal) Bill was scheduled for a joint sitting, but before the sitting could take place, the Lok Sabha was dissolved. Since the President had already issued the notification for a joint sitting, the bill did not lapse and was carried forward.