Previous Year UPSC Questions

Explanation

Statement 1 is correct: Revenue Deficit = Revenue Expenditure - Revenue Receipts = 80,000 - 60,000 = 20,000

Statement 2 is correct: Fiscal Deficit = Total Expenditure - Total Receipts (excluding borrowings). A fiscal deficit is equal to borrowing. Here, total borrowing = 10,000 crores, which is the fiscal deficit as per budget accounting, because borrowings fill the gap between total expenditure and non-borrowed receipts.

Statement 3 is correct: Primary Deficit = Fiscal Deficit - Interest Payments = 10,000 - 6,000 = 4,000

Explanation

The International North-South Transport Corridor (INSTC) is a multimodal network connecting India to Central Asia and Europe via Iran. The route links the Indian Ocean and Persian Gulf to the Caspian Sea through Iran, and then extends to Russia and Northern Europe, facilitating trade between India, Iran, Azerbaijan, Russia, Central Asia, and Europe. INSTC (International North-South Transport Corridor) is India’s vision and initiative to reduce the time taken for EXIM shipments to reach Russia, Europe and enter the central Asian markets. Successful activation of the corridor will help connect India to Russia and Central Asian countries. The Chabahar Port, located in Iran, is the commercial transit centre for the region, especially Central Asia.

Explanation

Statement 1 is incorrect: The United States is the largest producer of ethanol in the world, accounting for about 52% of global production, while Brazil produces about 28%. For example, in 2024, the U.S. produced 16,219 million gallons, and Brazil produced 8,780 million gallons. Brazil was the top producer until 2005, but since then, the U.S. has consistently outproduced Brazil.

Statement 2 is correct: In the U.S., the principal feedstock for ethanol production is made corn. In Brazil, sugarcane is the main feedstock for ethanol production.

Explanation

Wet-bulb temperature is the lowest temperature that air can reach through the process of evaporation of water under current atmospheric conditions. It is measured by wrapping a thermometer bulb in a wet cloth and exposing it to air flow; as water evaporates from the cloth, it cools the thermometer, and the resulting temperature is the wet-bulb temperature.

Statement 1 is incorrect: Flooding, tropical cyclones and droughts in the Peninsular India are significant impacts of climate change. These are not the direct implications of the wet-bulb temperatures exceeding 35°C. The World Bank’s warning in its report titled Climate Investment Opportunities in India’s Cooling Sector, specifically relates to heat and humidity, not to hydrometeorological events like floods or cyclones.

Statement 2 is correct: This statement directly reflects the core implication of the World Bank’s report titled "Climate Investment Opportunities in India’s Cooling Sector". At wet-bulb temperatures above 35°C, humans and animals cannot cool themselves through sweating, leading to life-threatening conditions.

Explanation

A fiscal deficit occurs when a government’s total expenditure exceeds its total revenue (excluding borrowings) in a financial year. It represents the amount the government needs to borrow to meet its expenses. Primary deficit is the fiscal deficit of the current year minus interest payments on previous borrowings. It shows the government’s borrowing requirement excluding interest obligations. To find the gross primary deficit, use the formula:

Gross Primary Deficit = Fiscal Deficit - Interest Payments It is given that:

Fiscal Deficit = 50,000 crores Interest Liabilities = 1,500 crores Placing these values in the above formula we get, Gross Primary Deficit = 50,000 - 1,500 = 48,500 crores Non-debt creating capital receipts are already accounted for in the fiscal deficit calculation and do not need to be subtracted again. Thus, Option (a) is the correct answer.

Explanation

The 15th Finance Commission of India was constituted by the President of India in November 2017 under Article 280 of the Constitution. The Commission was chaired by N.K. Singh and its recommendations cover the five-year period from 2021-22 to 2025-26.

Statement 1 is correct: The 15th Finance Commission did recommend grants of Rs. 4,800 crore (Rs. 1,200 crore each year) from 2022-23 to 2025-26 for incentivising the States to enhance educational outcomes.

Statement 2 is incorrect: The 15th Finance Commission recommended a devolution of 41% of net Union taxes to states, not 45%.

Statement 3 is correct: The Commission recommended 45,000 crores as performance-based incentives for agricultural reforms.

Statement 4 is correct: The 15th Finance Commission reintroduced fiscal (tax) effort as a criterion for horizontal devolution.

Explanation

The International Bank for Reconstruction and Development (IBRD) is a global development cooperative owned by 189 member countries. As the largest development bank in the world, it supports the World Bank Group’s mission by providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries, as well as by coordinating responses to regional and global challenges.

Statement 1 is correct: The International Bank for Reconstruction and Development (IBRD) provides loans, guarantees, and advisory services to middle-income and creditworthy low-income countries.

Statement 2 is incorrect: The International Bank for Reconstruction and Development (IBRD) is part of the World Bank Group and works in coordination with other institutions (like IDA), governments, and partners; IBRD does not work alone. IBRD works closely with all institutions of the World Bank Group and the public and private sectors in developing countries to reduce poverty and build shared prosperity.

Statement 3 is correct: The IBRD was created in 1944 with the initial mission of financing the reconstruction of European nations after World War II.

Explanation

RTGS and NEFT are examples of Inter Bank Transfer is a special service that allows you to transfer funds electronically to accounts in other banks in India.

Statement 1 is correct:

RTGS (Real Time Gross Settlement) processes transactions instantly and in real time. NEFT (National Electronic Funds Transfer) processes transactions in half-hourly batches, so settlement is not instantaneous and can take up to 2 hours.

Statement 2 is incorrect: As per RBI guidelines, no charges are levied for inward transactions (receiving funds) in both RTGS and NEFT systems. Charges, if any, are typically for outward transactions (sending money).

Statement 3 is incorrect: Both RTGS and NEFT are now available 24x7x365, including weekends and bank holidays. There are no restricted hours for either system as per current RBI guidelines.

Explanation

Unified Payments Interface (UPI) is an instant, real-time payment system developed by the National Payments Corporation of India (NPCI) in 2016. It enables users to transfer funds between bank accounts, pay bills, and make merchant payments seamlessly through a single mobile application. UPI supports both peer-to-peer and person-to-merchant transactions, operates 24x7, and eliminates the need to enter bank details for each transaction, making digital payments fast, secure, and convenient. List of countries where international merchant payments are accepted at select merchant outlets. Sr. No. Country Name

1. Bhutan

2. France

3. Mauritius

4. Nepal

5. Singapore

6. Sri Lanka

7. UAE Therefore, only three countries among the given options (UAE, France, Singapore) accept international merchant payments via UPI, apart from India.

Explanation

Article 123 of the Constitution empowers the President to promulgate ordinances during the recess of Parliament. These ordinances have the same force and effect as an act of Parliament, but are in the nature of temporary laws.

Statement 1 is correct: An ordinance, issued under Article 123 of the Constitution when Parliament is not in session, has the same force and effect as an Act of Parliament. Therefore, it can amend any existing Central Act, just like a regular law passed by Parliament.

Statement 2 is incorrect: Although an ordinance has the force of law, it is subject to constitutional limitations. As per Article 13(2), the State cannot make any law--including an ordinance--that abridges or takes away Fundamental Rights. Any such ordinance would be unconstitutional and liable to be struck down by the judiciary.

Statement 3 is correct: An ordinance can be given retrospective effect, similar to laws passed by the legislature. There is no constitutional bar on making an ordinance effective from a back date, as long as the ordinance explicitly provides for it.