UPSC 2015 Prelims Questions with Answers

Explanation

Statement 1 is correct: In a hydrogen fuel cell, hydrogen (H₂) reacts with oxygen (O₂) from the air in an electrochemical reaction. This process generates electricity along with water (H₂O) and heat as by-products. Since no harmful emissions are released, this is considered a clean energy technology.

Statement 2 is incorrect: Fuel cells are highly adaptable and can be designed for various applications, ranging from powering large buildings and vehicles to smaller portable devices such as laptops. Proton Exchange Membrane Fuel Cells (PEMFCs) are particularly suitable for portable devices due to their compact size and efficiency.

Statement 3 is incorrect: Fuel cells generate electricity in the form of Direct Current (DC). However, many applications require Alternating Current (AC) to operate and thus an inverter is typically used to convert the DC produced by the fuel cell into AC.

Explanation

Statement 1 is correct: The National Innovation Foundation-India (NIF) was established in 2000 with the support of the Department of Science and Technology (DST), Government of India. In 2010 NIF became an autonomous body under the DST.

Statement 2 is incorrect: NIF’s primary mission is to strengthen grassroots technological innovations and outstanding traditional knowledge in India. It focuses on scouting, supporting, and scaling up innovations developed by individuals and local communities at the grassroots level rather than concentrating on advanced scientific research in collaboration with foreign institutions. Its primary goal is to support and scale up innovations by common people, especially in rural areas.

Explanation

In 2014, the award was conferred upon ISRO for its remarkable achievements in space technology and its role in scientific advancement and national development. The Indira Gandhi Prize for Peace, Disarmament, and Development is awarded annually for exemplary contributions to peace, sustainable development, and scientific progress. ISRO continues to make strides in space technology, with projects like Chandrayaan-3, Gaganyaan, and Aditya-L1. The Mars Orbiter Mission (Mangalyaan) was a key factor in ISRO receiving this award, making India the first country to reach Mars in its maiden attempt and at a low cost.

Explanation

The Planning Commission, which followed a centralized economic planning model, was replaced by NITI Aayog (National Institution for Transforming India) on January 1, 2015. NITI Aayog is leading initiatives like Aspirational Districts Programme, Atal Innovation Mission, and National Data and Analytics Platform. NITI Aayog emphasizes ‘cooperative federalism’, where states are given more autonomy in policy-making. Unlike the Planning Commission, which imposed five-year plans, NITI Aayog focuses on long-term policy strategies, innovation, and sustainable development goals (SDGs). It functions as India’s premier policy think tank and promotes digital governance, social sector reforms, and economic competitiveness.

Explanation

PMJDY (Pradhan Mantri Jan Dhan Yojana) is a na-tional initiative for financial inclusion, aiming to ensure that every household in the country has access to comprehensive financial services. The objective of "Pradhan Mantri Jan-Dhan Yojana (PMJDY)" is ensuring access to various financial services like availability of basic savings bank account, access to need based credit, remittances facility, insurance and pension to the excluded sections i.e. weaker sections & low income groups. This deep penetration at affordable cost is possible only with effective use of technology. The plan includes providing universal banking access, with at least one basic bank account per household, as well as promoting financial literacy, credit access, insurance, and pension services. Beneficiaries will receive a RuPay Debit card, which includes accident insurance coverage of 1 lakh. The program also plans to direct all government benefits (from central, state, and local bodies) into beneficiaries’ accounts and promote the Direct Benefits Transfer (DBT) scheme.

Explanation

Option (a) is incorrect: While reducing the SLR can stimulate economic activity by increasing liquidity but it does not directly lead to a drastic increase in GDP growth. GDP growth is influenced by a multitude of factors, including investment levels, consumption, and government spending.

Option (b) is incorrect: The SLR reduction primarily affects domestic liquidity and does not directly influence foreign investment decisions. Foreign Institutional Investors (FIIs) are more influenced by factors such as market potential, regulatory environment, and economic stability.

Option (c) is correct: The Statutory Liquidity Ratio (SLR) cut by the RBI is likely to give more room for banks to cut rates. When the RBI reduces the SLR banks are required to keep a smaller portion of their net demand and time liabilities (NDTL) in liquid asset freeing up additional funds. This boost in liquidity allows banks to lend more to borrowers. To encourage borrowing and make use of the increased liquidity, banks may lower their lending rates, thereby making credit more accessible to consumers and businesses.

Option (d) is incorrect: It does not drastically reduce the liquidity to the banking system. Reducing the SLR increases liquidity in the banking system by freeing up funds that banks can use for lending or investment.

Explanation

The Basel III Accord is a set of international regulatory reforms developed by the Basel Committee on Banking Super-vision in response to the global financial crisis of 2008. Its main objective is to enhance the regulation, supervision, and risk management of the banking sector making banks more resilient to financial and economic shocks and reducing the risk of future crises. Key Aspects of Basel III:

Capital Requirements: It increases both the quality and quantity of capital banks must hold, helping them absorb losses and reducing the risk of insolvency. Liquidity Standards: It enforces stricter liquidity requirements to ensure that banks maintain enough liquid assets to meet short-term obligations, especially in times of financial stress, addressing the risk of liquidity crises. Leverage Ratio: The accord introduces a leverage ratio to curb excessive borrowing by banks, preventing them from becoming overleveraged. Countercyclical Capital Buffer: It requires banks to accumulate additional capital during periods of rapid credit growth, which can be used to absorb losses during economic downturns.

Explanation

Monetary policy refers to actions undertaken by the central bank (in India, the Reserve Bank of India - RBI) to manipulate the money supply, interest rates, and credit conditions to stimulate or restrain economic activity. Its primary goal is to maintain price stability (control inflation) while supporting economic growth.

Statement 1 is correct: The bank rate in India is defined as the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks for long-term loans. It serves as a tool to control the money supply in the economy and manage inflation. Changes in the bank rate influence other inter-est rates in the economy. An increase in the bank rate makes borrowing more expensive which can slow down economic activity and inflation. Decreasing the bank rate has the opposite effect.

Statement 2 is correct: Open Market Operations (OMO) involve the buying and selling of government securities by the RBI in the open market. When the RBI purchases government securities, it injects money into the economy, thereby increasing the money supply. Conversely, when the RBI sells government securities, it removes money from circulation, reducing the money supply. These actions influence interest rates and the availability of credit in the economy. Statements 3 and 4 are incorrect: Public Revenue and debt are not part of monetary policy. They are related to fiscal policy. Public debt also known as government debt represents the total amount of money the government owes to its creditors. It arises from borrowing to finance government spending. Public debt is a consequence of fiscal policy decisions. Public revenue refers to the income the government generates through taxes and other channels. Public revenue is an element of fiscal policy rather than monetary policy.

Explanation

Keibul Lamjao National Park in the Bishnupur district of the Indian state of Manipur is the only floating park in existence and is a crucial component of Loktak Lake, which lies in North East India. Locally known as "Phumdi," the national park is distinguished by floating decaying plant matter. It was established in 1966 as a wildlife sanctuary to protect the Eld’s deer’s natural habitat, which is in risk of extinction (Cervus eldi eldi). It was declared a national park in 1977. The park is unique in that it is "too shallow to be a lake, too deep to be marsh." The park offers a diverse array of aquatic, wetland, and terrestrial ecosystems and is mostly made up of damp, semi-evergreen forests. Fauna found in the park include the brow-antlered deer (Cervus eldi eldi), which is its emblematic species, as well as the Asian Golden Cat, Marbled Cat, Malayan Bear, Hog Deer, Himalayan Black Bear, and others.

Explanation

The Namdapha National Park is located at the inter-national border between India and Myanmar (Burma) in Changlang District, Arunachal Pradesh in northeast India. It is known for its unique climate that ranges from tropical to subtropical, temperate, and arctic due to its vast altitude variation. Spanning from 200 meters to 4,500 meters above sea level, the park encompasses a wide range of ecosystems. The lower altitudes experience tropical and subtropical climates with rich biodiversity, including dense forests and diverse wildlife. As you move higher, the climate shifts to temperate, and eventually, at the highest elevations, it reaches an arctic-like climate, hosting snow-covered peaks. This diversity in climate allows the park to support an incredible variety of flora and fauna, including species like the snow leopard, clouded leopard, and tiger.