HPAS MOCK TEST SERIES

HPAS-2023-24
Answer Key
ANSWER KEY
ECONOMY
TEST- 6
06
1.d 21.c 41.d 61.c 81.d
2.c 22.d 42.d 62.b 82.d
3.d 23b 43.b 63.b 83.a
4.a 24.a 44.c 64.c 84.c
5.c 25.b 45.c 65.d 85.b
6.d 26.d 46.c 66.c 86.c
7.a 27.c 47.b 67.d 87.c
8.a 28.b 48.b 68.a 88.c
9.b 29.d 49.a 69.a 89.c
10.d 30.d 50.b 70.b 90.d
11.b 31.c 51.d 71.a 91.a
12.d 32.b 52.c 72.c 92.b
13.c 33.a 53.b 73.a 93.d
14.d 34.a 54.c 74.d 94.a
15.b 35.c 55.c 75.c 95.d
16.b 36.a 56.c 76.c 96.a
17.b 37.c 57.b 77.b 97.c
18.c 38.b 58.c 78.d 98.b
19.a 39.b 59.d 79.d 99.d
20.c 40.c 60.d 80.a 100.d

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1 d
¾ Gross domestic product refers to the final
value of goods and services produced
within India. Non-Resident Indians (NRI)
work in other countries and their economic
contribution is calculated in the GDP of
their host country. So, statement 1 is not
correct.
¾ Gross National Product is a nationality-
based concept. It is the final value of
goods and services produced by nationals
(Indians). Thus, the profits earned by a
German-owned car factory located in India
is not counted in the GNP of India. So,
statement 2 is not correct. Therefore option
(d) is the correct answer.
2 c
¾ The RBI purchases (or sells) government
securities to the general public in a bid to
increase (or decrease) the stock of high
powered money in the economy. This is
known as Open Market operations. During
inflation, the RBI sells securities to absorb
the money from the public. It’s vice versa
during deflation. Therefore option (c) is
the correct answer.
3 d
In a modern economy, money consists mainly of
currency notes and coins issued by the monetary
authority of the country. In India, the Reserve
Bank has the sole right to issue currency notes,
except one rupee notes which are issued by the
Government of India. So, statement 1 is correct.
¾ However, coins are issued by the
Government of India. So, statement 2 is
correct. Therefore option (d) is the answer.
4 a
Flow Variables: • A flow is a quantity that is
measured with reference to a time. Thus, flows
are defined with reference to a specific period
(length of time), e.g., hours, days, weeks,
months or years. • All economic variables which
have time dimension, i.e., whose magnitude can
be measured over a period of time, are called
flow variables. For instance, the income of a
person is a flow which is earned during a week
or a month or any other period.
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¾ Other examples of flows are: expenditure,
savings, depreciation, interest, exports,
imports, change in inventories (not mere
inventories), change in money supply,
lending, borrowing, rent, profit, etc.
because the magnitude (size) of all these
are measured over a period of time.
5 c
GDP Deflator
¾ It is a price index (PI) that focuses on
showing the impact of inflation or deflation
on the current prices in the economy,
thereby showing how dependent and
relative GDP is to price changes.
GDP Deflator value is calculated using the
following formula: GDP deflator = (Nominal
GDP / Real GDP) * 100
Although at first glance it may seem that CPI
and GDP Deflator measure the same thing, there
are a few key differences.
¾ The GDP Deflator is a measure of the
prices of all goods and services while the
CPI is a measure of only goods bought by
consumers. So, statement 1 is correct.
¾ The first is that GDP Deflator includes only
domestic goods and not anything that is
imported. This is different because the CPI
includes anything bought by consumers
including foreign goods. So, statement 2
is correct.
6 d
Sample sheet of RBI
Assets (sources) Liabilities (uses)
Gold Currency
Foreign exchange Vault cash held by com-
mercial banks
Govt securities Currency held by public
(Loan to GOI)
Loan to commercial Deposits of commercial
banks banks with RBI
Treasury deposits of
Govt of India
7 a
Open Market Operations refers to buying and
selling bonds issued by the Government in

the open market. This purchase and sale are
entrusted to the Central bank on behalf of the
Government. When RBI buys a Government
bond in the open market, it pays for it by giving
a cheque. This cheque increases the total reserves
in the economy and thus increases the money
supply. Selling of a bond by the RBI (to private
individuals or institutions) leads to a reduction
in the quantity of reserves and hence the money
supply. So, statement 1 is correct and statement
2 is not correct. •
Reduction of the money supply may further
decrease down the inflation level in the economy
as the liquidity is sucked up by RBI OMO (Open 10
Market Operations). Hence, statement 3 is
correct.
8 a
¾ Current Account is the record of trade in
goods and services and transfer payments.
Borrowing by the government from World
Bank to finance the BOP deficit will be
recorded in the capital account as it
increases the government’s liability.
¾ Service exports are a part of Invisible
trades within the Current Account.
¾ Buying foreign goods is an expenditure
from our country, and it becomes the
income of that foreign country. Hence,
the purchase of foreign goods or imports
decreases the domestic demand for goods
and services in our country. Similarly, the
selling of foreign goods or exports brings
income to our country and adds to the
aggregate domestic demand for goods and
services in our country.
9 b
¾ A Giffen good is a low income, non-luxury
product that defies standard economic and
consumer demand theory. Demand for
Giffen goods rises when the price rises and
falls when the price falls. In econometrics,
this results in an upward-sloping demand
curve, contrary to the fundamental laws of
demand which create a downward sloping
demand curve. 11
¾ A Veblen good is a good for which demand
increases as the price increases, because of
its exclusive nature and appeal as a status
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symbol. A Veblen good has an upward-
sloping demand curve, which runs counter
to the typical downward-sloping curve.
However, a Veblen good is generally a
high-quality, coveted product, in contrast
to a Giffen good, which is an inferior
product that does not have easily available
substitutes. So, statement 1 is not correct.
¾ Demand for Giffen goods is heavily
influenced by a lack of close substitutes
and income pressures. So, statement 2 is
correct.
d
¾ Consumer Price Index or CPI as it is
commonly called is an index measuring
retail inflation in the economy by collecting
the change in prices of most common goods
and services used by consumers. Called
market basket, CPI is calculated for a
fixed list of items including food, housing,
medical care, education, etc.
¾ Four types of CPI are as follows:
¾ CPI for Industrial Workers (IW).
¾ CPI for Agricultural Labourer (AL).
¾ CPI for Rural Labourer (RL).
¾ CPI (Rural/Urban/Combined).
¾ Of these, the first three are compiled by the
Labour Bureau in the Ministry of Labour
and Employment. Fourth is compiled by
the Central Statistical Organisation (CSO).
So, statement 1 is correct.
¾ CPI-IW is used to compute DA of govt
employees and industrial workers. So,
statement 2 is correct.
¾ RBI is using CPI-combined as the sole
inflation measure for the purpose of
monetary policy.
As per the agreement on Monetary Policy
Framework between the Government and the
RBI dated February 20, 2015 the sole objective
of RBI is price stability and a target is set for
inflation as measured by the Consumer Price
Index-Combined. So, statement 3 is correct.
b
An Agriculture Accelerator Fund will be set-up
to encourage agristartups by young entrepreneurs
in rural areas. The Fund will aim at bringing
3

innovative and affordable solutions for challenges
faced by farmers
12 d If RBI wishes to control credit and discourage
Priority Sector refers to those sectors which
the Government of India and Reserve Bank of
India consider as important for the development
of the basic needs of the country. They are
assigned priority over other sectors. The banks
are mandated to encourage the growth of such
sectors with adequate and timely credit.
14
The Priority Sector Lending classifications and
guidelines released by the RBI are intended
to align with emerging national priorities and
bring a sharper focus on inclusive development,
building a consensus among all stakeholders.
Priority Sector Lending (PSL) norms of RBI
include the following categories:
1. Agriculture
2. Micro, Small and Medium Enterprises
3. Export Credit
4. Education
5. Housing
6. Social Infrastructure
HPAS MOCK TEST SERIES
portion of deposits with the banks which
it has to keep with itself as liquid assets
(Gold, approved govt. securities etc.).
credit it would increase CRR & SLR.
Credit Rationing is the qualitative tool of credit
control while Prompt Corrective Action is a tool
used by RBI to solve NPA problem in the Indian
banks.
d
A Non-Banking Financial Company (NBFC) is
a company registered under the Companies Act,
1956 or2013 engaged in the business of loans
and advances, acquisition of shares, leasing,
hire-purchase, insurance business, chit business
etc.
NBFCs lend and make investments and hence
their activities areakin to that of banks.
However, they are different from the Banks on
the following parameters -:
Banks can do almost all financial services and
products generally authorized to them. They can
accept demand deposits. NBFCs can’t accept
demand deposits.

7. Renewable Energy
13 c issue cheques drawn on it.
Quantitative measures of credit control used by
RBI:
1 Bank Rate: The bank rate is the interest
rate at which RBI long term credit to
commercial banks. For controlling the
credit, inflation and money supply, RBI
will increase the Bank Rate.
2. Open Market Operations: OMO The Open
market Operations refer to direct sales
and purchase of securities and bills in the
open market by RBI to control credit in the
market.
3. Cash Reserve Ratio: Cash reserve ratio
refers to that portion of total deposits in
commercial Bank which it has to keep with
RBI as cash reserves
4. Statutory Liquidity Ratio: It refers to that
While the Banks are part of the payment and
settlement system, NBFCs do not form part of
the payment and settlement system and cannot
The deposit insurance facility of Deposit
Insurance and Credit Guarantee Corporation is
not available to depositors of NBFCs, unlike in
case of banks.
15 b
Statement 1 is correct. Manthan is a platform that
promotes collaboration at scale between industry
and the scientific research and development
ecosystem. Manthan empowers multiple
stakeholders to collaborate for co-creating
solutions aligned with the United Nations’
Sustainable Development Goals (SDGs) and our
national scientific missions.
Statement 2 is incorrect. The development of the
platform was conceptualized and implemented
by the Office of the Principal Scientific Adviser
(PSA) to the Government of India.

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 HPAS MOCK TEST SERIES
16 b being and wealth within a given country, but
focuses also on how this wealth and well-being
Statement 1 is incorrect. The term Urban Co-
is distributed between different groups within
operative Banks (UCBs), though not formally
society. The HDI and the GDI as well as the
defined, refers to primary cooperative banks
GEM were created to rival the more traditional
located in urban and semiurban areas. These
general income-based measures of development
banks, till 1996, were allowed to lend money only
such as gross domestic product (GDP) and gross
for non-agricultural purposes. This distinction
national product (GNP).
does not hold today.
It addresses gender-gaps in life expectancy,
Statement 2 is correct. Reserve Bank of
education, and incomes. It uses an “inequality
India has classified UCB’s into a four-tiered
aversion” penalty, which creates a development
regulatory framework based on size of deposits
score penalty for gender gaps in any of
of the UCBs. The RBI has categorised all unit
the categories of the Human Development
UCBs and salary earners’ UCBs (irrespective of
Index which include life expectancy, adult
deposit size), and all other UCBs having deposits
literacy, school enrolment, and logarithmic
up to ₹100 crore in Tier 1. In Tier 2, it has
transformations of per-capita income.
placed UCBs with deposits more than ₹100 crore
and up to ₹1,000 crore. Tier 3 will cover banks In terms of life expectancy, the GDI assumes that
with deposits more than ₹1,000 crore and up to women will live an average of five years longer
₹10,000 crore. UCBs with deposits more than than men. Additionally, in terms of income,
₹10,000 crore have been categorised in Tier 4. the GDI considers income gaps in terms of
actual earned income. The GDI cannot be used
Statement 3 is also incorrect. RBI also has
independently from the Human Development
come out with norms pertaining to the net worth
Index (HDI) score and so, it cannot be used on
and capital adequacy of these banks. Tier 1
its own as an indicator of gender-gaps. Only the
UCBs operating in a single district should have
gap between the HDI and the GDI can actually
minimum net worth of ₹2 crore. For all other
be accurately considered; the GDI on its own is
UCBs (in Tier 1, 2 and 3) tiers), the minimum
not an independent measure of gender-gaps.
net worth should be ₹5 crore. Tier 1 UCBs have
to maintain a minimum capital to risk weighted
assets ratio of 9 percent of Risk Weighted Assets 18 c
(RWAs) on an ongoing basis. Tier 2 to 4 UCBs
The Physical Quality of Life Index (PQLI) was
have to maintain a minimum capital to risk
developed for Overseas Development Council
weighted assets of 12 per cent of RWAs on an
in the mid-1970s by Morris David Morris. It
ongoing basis.
was created due to dissatisfaction with the use
of GNP as an indicator of development. The
17 b Physical Quality of Life Index measures the
quality of life or well-being of a country based
Gender Development Index (GDI) together
on three variables- basic literacy rate, infant
with the Gender Empowerment Measure
mortality, and life expectancy at age one. All
(GEM) were introduced in 1995 in the Human
equally weighted on a 0 to 100 scale.
Development Report written by the United
Nations Development Program. The aim of these
measurements was to add a gender-sensitive 19 a
dimension to the Human Development Index
Statement 1 is correct. It is the only tripartite
(HDI). The first measurement that they created
U.N. agency that brings together governments,
as a result was the Gender-related Development
employers and workers’ representatives of
Index (GDI).
187-member States to set labour standards,
The GDI is defined as a “distribution- develop policies and devise programmes
sensitive measure that accounts for the human promoting decent work for all women and men.
development impact of existing gender gaps in
Statement 2 is correct. The International Labour
the three components of the HDI”. Distribution
Organization (ILO) is a United Nations agency
sensitive means that the GDI takes into account
whose mandate is to advance social and economic
not only the averaged or general level of well-

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justice by setting international labour standards.
Founded in October 1919 under the League of
Nations, it is the first and oldest specialised
agency of the UN.
Statement 3 is also incorrect. If ILO conventions
are ratified by enough governments, they
come in force. However, ILO conventions
are considered international labour standards
regardless of ratification. When a convention
comes into force, it creates a legal obligation for
ratifying nations to apply its provisions. A two-
thirds majority of votes is required for a standard
to be adopted.
20 c development.
Statement 1 is correct. Foreign direct investment
(FDI) is an investment from a party in one
country into a business or corporation in another
country with the intention of establishing a
lasting interest. With FDI, foreign companies
are directly involved with day-to-day operations
in the other country.
Statement 2 is also correct. The Foreign Direct
Investment into India is continuously increasing
since 2014-15. In the last seven financial years,
over 443 US billion dollars worth of FDI inflows
have come into the country.
21 c
Statement 1 is correct. The main objective of the
Krishi Udan Scheme 2.0 is to increase share of
air carriage in the modal mix for transportation
of Agri-produce, which includes horticulture,
fishery, livestock and processed products.
The scheme assists farmers in transporting
agriculture products so that it improves their
value realisation.
Statement 2 is incorrect. There is no specific
budget allocation under Krishi Udan Scheme.
Statement 3 is correct. Krishi Udan Scheme is
a convergence scheme where eight Ministries/
Departments namely Ministry of Civil Aviation,
Department of Agriculture & Farmers’
Welfare, Department of Animal Husbandry and
Dairying, Department of Fisheries, Ministry
of Food Processing Industries, Department of
Commerce, Ministry of Tribal Affairs, Ministry
of Development of North-Eastern Region.
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22 d
¾ In 1980, the International Union for the
Conservation of Nature published a world
conservation strategy that included one of the
first references to sustainable development
as a global priority and introduced the term
“sustainable development”.
¾ In 1987, the United Nations World
Commission on Environment and
Development released the report Our
Common Future, commonly called the
Brundtland Report. The report included
what is now one of the most widely
recognised definitions of sustainable
¾ “Sustainable development is development
that meets the needs of the present
without compromising the ability of future
generations to meet their own needs.
It contains within it two key concepts:
¾ The concept of ‘needs’, in particular, the
essential needs of the world’s poor, to
which overriding priority should be given;
and
¾ The idea of ‘limitations’ imposed by the
state of technology and social organization
on the environment’s ability to meet present
and future needs.
23 b
Statement 1 is incorrect. Circular trading refers
to fraudulently availing input tax credit by traders
by issuing of invoices without availing any real
goods or service. In simple words, circular
trading refers to the transaction of selling and
buying of goods (without actual movement of
goods) through shell companies. Round tripping
refers to money that leaves the country though
various channels and makes its way back into the
country often as foreign investment.
Statement 2 is correct. The main objective of
circular trading is inflating turnover of the
business. However, through circular trading,
companies may also aim to: To increase the
valuation of the company/business; To benefit
higher loans from the Banks or Non-Banking
Financial Corporation (NBFC); To bring black
money into the system; To avail fake input tax
credit.

24 a 27
Statement 1 is correct. The Pradhan Mantri
Surakshit Matritva Abhiyan has been launched
by the Ministry of Health & Family Welfare
28
(MoHFW), Government of India.
Statement 2 is correct. One of the critical
components of the Abhiyan is identification and
follow up of high risk pregnancies. A sticker
indicating the condition and risk factor of the
pregnant women would be added onto MCP card
for each visit: Green Sticker- for women with
no risk factor detected Red Sticker – for women
with high risk pregnancy.
Statement 3 is incorrect. The program aims
to provide assured, comprehensive and quality
antenatal care, free of cost, universally to all
pregnant women on the 9th of every month. It
guarantees a minimum package of antenatal care
services to women in their 2nd / 3rd trimesters
of pregnancy at designated government health
facilities.
25 b
Ministry of MSME, through Khadi and Village 29
Industries Commission (KVIC), has launched
a unique pilot project named “Project BOLD”
(Bamboo Oasis on Lands in Drought). The
objective of this initiative is to scientifically
harness the environmental benefits and economic
potential of bamboo cultivation to protect
environment and strengthen rural economy
through various village industries.
26 d 2014, for Financial Inclusion.
Statement 1 is incorrect. Gold bonds are
government securities denominated in grams of
gold. They are substitutes for holding physical
gold. Investors have to pay the issue price in
cash and the bonds will be redeemed in cash
on maturity. The bond is issued by the RBI on
behalf of the government. 30
Statement 2 is incorrect. The bonds are held in
the books of the RBI or in demat form eliminating
risk of loss. While the tenor of bonds is eight
years, it can be redeemed after five years.
Investors are assured of the market value of gold
at the time of maturity and periodical interest.
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C
Refer union budget 2023-24
B
Explanation
Statement 1 is incorrect. Restriction on imports
and restrictions on entry of foreign companies
to India leads to lesser competition for domestic
players and lesser choice for the consumers. The
Indian consumers will have to purchase whatever
the Indian producers produce.
Statement 2 is correct. Because of lesser
competition, domestic players have greater
incentive to sell their goods at higher price.
Statement 3 is correct. This policy by ways
of tariffs and quotas helps domestic industries
compete against foreign players.
Statement 4 is incorrect. As a result of
protectionism, import of goods are restricted.
This results in lesser imports and thus helps in
saving of precious forex reserve.
D
DifferentiatedBanking The banks which could
be differentiated on the account of capital
requirement, scope of activities and serve the
needs of a certain demographic segment of the
population are called as Differentiated Banks or
Niche Banks.
¾ The idea of Differentiated Bank was
mooted by Nachiket More Committee
¾ It can be classified as Payment Banks,
Small Finance Banks, Regional Rural
Banks, Local Area Banks Wholesale and
Long-Term Finance (WLTF) banks etc.
Hence, All statements are correct
d
Statement 1 is incorrect. The list is maintained
by the United States Department of Treasury.
Currency Monitoring List consists of major
trading partners that merit close attention to their
currency practices and macroeconomic policies.
Statement 2 is incorrect. There are three criteria
the US Treasury looks at in placing a country on
the watch list:
7

1. Significant trade surplus with the US (at least
$20 billion in 12 months)
2. A large current account surplus (at least 2 per
cent of GDP over a 12-month period)
3. “Persistent”, one-sided intervention (when net
purchases of foreign currency totalling at least 2
per cent of the country’s GDP over a 12-month
period are conducted repeatedly, in at least six
out of 12 months). The countries that meet two
out of the three criteria are placed on the watch
list.
31 c gives the economic output from the consumer’s
Statement 1 is correct. Stampede liquidation is
the act of multiple market participants wanting
to withdraw their deposits at once, or willing to
sell a specific asset in panic leading to a severe
correction in the price.
Statement 2 is correct. Stampede liquidation, at
a large scale, generally occurs post-economic
booms, with highly leveraged investments first
in line.
32 b
Statement 1 is incorrect. Project RE-HAB
(Reducing Human Attacks using Honey Bees)
is a sub-mission of KVIC’s National Honey
Mission. Under this project fencing of bee boxes
is installed in such areas from where elephants
move towards the human settlements and
farmers’ agriculture.
Statement 2 is correct. It is an initiative under
Khadi & Village Industries Commission
(KVIC). It is running this project in 7 states of
the country, namely in Karnataka, Maharashtra,
West Bengal, Assam and Orissa.
33 a Explanation
Statement 1 is correct. The non-OPEC countries
which export crude oil are termed as OPEC plus
countries. These countries also participate in the
organisation’s initiatives such as voluntary supply
cuts in order to further bind policy objectives
between OPEC and non-OPEC members.
Statement 2 is incorrect. OPEC+ includes
Azerbaijan, Bahrain, Brunei, Kazakhstan,
Malaysia, Mexico, Oman, Philippines, Russia,
Sudan and South Sudan. United Arab Emirates
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is a member of OPEC.
34 a
Statement 1 is correct. The Gross National
Product (GNP) measures the production levels
of any Indian or Indian-owned entity regardless
of the location where as the Gross Domestic
Product (GDP) measures the production levels of
any person or entity working in India regardless
of their nationality.
Statement 2 is incorrect. GNP gives the economic
output from the supplier’s side whereas GDP
side.
35 c
While the GDP calculates national income by
adding up all expenditures in the economy, the
GVA calculates the national income from the
supply side by looking at the value added in each
sector of the economy.
Simply put, GDP provides the demand side of
the economy, and GVA the supply side.
36 a
GeM is a one stop government e-Market place
where common user goods and services can be
procured. GeM is dynamic, self sustaining and
user friendly portal for making procurement by
Government officers.
The Union Cabinet expanded the scope of
the public procurement portal Government
eMarketplace (GeM) to allow cooperative
societies to register as buyers.
37 C
Balance of payments summarizes an
economy’s transactions with the rest of
the world for a specified time period.
To correct deficit in BoP, a country will have
to take steps which would attract more foreign
investment,increase exports and decrease
unnecessary imports.
Statement 1 is incorrect as Reducing import duty
would lead to increase in imports and hence
would lead to more deficit in BoP.

Statement 2 is correct as restrictive monetary
policy(lower money supply) would lead to fall
in prices of goods in country which would make
exports competitive in international market.
Statement 3 is incorrect as Appreciation of
increase in value of domestic currency would
make exports less competitive.
38 B education and health services, etc. Hence
Explanation
HPAS MOCK TEST SERIES
liability. Hence statement 1 and 3 are correct.
An expenditure which neither creates assets
nor reduces liability is called Revenue
Expenditure. Examples of revenue
expenditure are salaries of government
employees, interest payment on loans taken
by the government, pensions, subsidies,
grants given by Central Government to
state governments, rural development,
statement 2 is not correct.

Special drawing rights (SDR) refer to an

international financing instrument created by the 40 C
International Monetary Fund (IMF) in 1969 that Explanation
operates as a supplement to the existing currency
Net national product (NNP) refers to gross
reserves of member countries. Created in response
national product (GNP), i.e. the total market
to concerns about the limitations of gold and
value of all final goods and services produced
dollars as the sole means of settling international
by the factors of production of a country or
accounts, SDRs augment international liquidity
other polity during a given time period, minus
by supplementing the standard reserve
depreciation.
currencies. The SDR is neither a currency, nor a
claim on the IMF. Rather, it is a potential claim NNP=GNP-DepreciationHence, Statement 1 is
on the freely usable currencies of IMF incorrect.
members. Hence, Statement 1 is correct.
NNP (at factor cost) = NNP at market price -
Every member is allocated SDR in proportion
indirect tax + subsidies Hence, Statement 3 is
to their respective quotas. Quota subscriptions
correct and 2 is incorrect
are a central component of the IMF‘s financial
resources. Each member country of the IMF is
assigned a quota, based broadly on its relative 41 D
position in the world economy. Hence, Statement
3 is correct
42 D
The SDR basket consists of the U.S. dollar,
Explanation
euro, Japanese yen, pound sterling and Chinese
renminbi. So it is different from LIBOR. Hence, The Phillips curve is an economic concept
statement 2 is incorrect stating that inflation and unemployment have a
stable and inverse relationship. According to the
Phillips curve, the lower an economy’s rate of
39 B unemployment,the more rapidly wages paid to
An expenditure which either creates an asset labor increase in that economy.
(e.g., school building) or reduces liability (e.g.,
repayment of loan) is called capital expenditure.
43 B
Capital expenditure which leads to creation of
assets are
44 C
(a) Expenditure on purchase of land, buildings,
machinery. Refer to the calculation of GNP in Indian
economy 5th edition by Ramesh Singh page
(b) Investment in shares, loans by Central
1.16. Sovereign bonds and loans from abroad
government to state government, foreign
form part of the capital account and do not count
governments and government companies,
in the category of Income from abroad as they
cash in hand and
are not related to any production process. They
(c) Acquisition of valuables. Repayment of loan are just borrowings.
is also capital expenditure because it reduces

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45 C Fiscal stimulus :
Amongst given parameters in the options, only
real per capita income adjusted for Purchasing
power parity (PPP) is selected as the determining
factor of Human Development Index (HDI).
46 C ¾
¾ Exim policy promotes agricultural exports.
¾ Bharat Nirmaan builds necessary
infrastructure such as roads, electricity,
communication etc. These directly affect
agricultural productivity and marketing of
produce.
¾ Under MGNREGA several agricultural
related works can be taken up such as
recharging groundwells, rejuvenating
fallow lands, flood protection works etc.
¾ PURA deals with other kinds of
infrastructure which stops distress
migration. It affects agriculture directly. It
also creates the much-needed infrastructure.
¾ Food Security Act would increase
government procurement of agricultural
produce from farmers apart from
strengthening the marketing network and
delivery system. This would result in better
returns for farmers.
47 b physical or financial asset ownership for a
There has been increase in production and
productivity of the cereals.
So the statement 1 is wrong.
Increasing incomes has led to changes in
consumption patterns, there has been switch
over to processed foods, milk and milk products
and so on.This increase in demand for different
products has led to increase in cost of high
end products. Eg Organic products Structural
constraints like cold chain infrastructure,
transportation (rising fuel prices) etc increases
the cost of supply contributing to inflation.
48 b
An increase in public spending or a reduction in
the level of taxation that might be performed by
a government in order to encourage and support
economic growth is called as fiscal stimulus.
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¾ It is action by the government to encourage
private sector economic activity by
engaging in targeted, expansionary
monetary or fiscal policy based on the
ideas of Keynesian economics.
The term economic stimulus is based on
an analogy to the biological process of
stimulus and response, with the intention
of using government policy as a stimulus
to elicit a response from the private sector
economy.
¾ An economic stimulus is
commonly employed during times of
recession.
¾ Policy tools often used to implement
economic stimulus include lowering
interest rates, increasing government
spending, and quantitative easing.
49 a
Inflation brings benefit to borrowers (debtors)
while the profit on the bonds gets eroded (higher
the inflation lower the return on bonds through
interest).
50 b
Capital account shows the net change in the
country. It includes Foreign Direct Investment,
Portfolio Investment, foreign loans, changes in
reserve account etc. Private remittances come
under Current account and not Capital account.
51 d
¾ The chances of inflation will
increase more when the government
plans to print new currency to
finance a budget deficit.
¾ When the supply of money increases in the
market, the customer demand automatically
increases, resulting in the rise of Aggregate
Demand.
Key Points
¾ A budget deficit refers to a situation
where total expenditure exceeds the total
revenue.
¾ Deficit financing is a tool that is used

to generate funds in order to come out 54
with a budget deficit.
¾ There are three ways to finance a budget:
1 ​
Creating new currency
2 Borrowing from internal sources like RBI,
issuing bonds, etc.
3 Borrowing from External sources like WB,
IMF, etc.
55
¾ ​ orrowing from the public by issuing bonds
B
at a lower interest rate will not create
inflation.
¾ Similarly, borrowings from banks
will not generate inflation.
52 c nation imports are more than it exports.
Regional Rural Banks   and Land development
banks provide direct credit assistance to rural
households in the form of loans etc. NABARD
do not provide direct assistance. It “refinance”
the assistance by other institutions.
53 B ¾
¾ Statutory Reserve Requirement is an
instrument to manage liquidity.
¾ RBI requires commercial banks to keep
reserves in order to ensure that banks have
sufficient assets to draw on when account
holders want to be paid. Hence statement
2 is correct. 56
¾ The first instrument is the Cash Reserve
Ratio in which is the fraction of their
deposits that banks must keep with RBI.
¾ Another tool is the Statutory Liquidity
Ratio which requires the banks to
maintain a given fraction of their total
demand and time deposits in the form of
specified liquid assets.
¾ When the central bank wants to increase
the money supply in the economy, it
lowers the reserve ratio. Hence it enables
the Central Bank to control the number
of advances the banks can create. Hence
statement 1 is correct.
¾ Reserve requirements are designed
as “precautionary measures” to control
the economy and not to stop banks from
“excessive” profit and not to force the
banks to have sufficient cash to meet
their day-to-day requirements. Hence
statement 3 and 4 is incorrect.
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c
Union Budget speech 2023-24, Page no 30,
paragraph 134 MSMEs are growth engines of
our economy. Micro enterprises with turnover
up to Rs2 crore and certain professionals with
turnover of up to Rs50 lakh can avail the benefit
of presumptive taxation.
c
¾ The balance of payment is a record of all
monetary transactions made between the
residents of one country and the rest of the
world.
¾ A balance of payments deficit means the
¾ The two components of the Balance of
Payments are the current account and
capital account.
¾ The current ccount includes trade in goods
& services (Invisibles) & transfer payments
etc.
The capitalaccount includes Foreign Direct
Investment, Foreign Portfolio Investment,
External Commercial Borrowings, SDR.
¾ The capital account records all international
purchases and sales of assets such as
money, stocks, bonds, etc.
c
Theory of Demographic transition-
¾ It suggests that population growth is linked
to overall levels of economic development
and that every society follows a typical
pattern of development-related population
growth.
¾ There are three basic phases of
population growth.
¾ The first stage is that of low
population growth in a society that is
underdeveloped and technologically
backward. Growth rates are low
because both the death rate and the
birth rate are very high so that the
difference between the two (or the
net growth rate) is low.
¾ Stage 2 of the Demographic
Transition Model (DTM) is
characterized by a rapid decrease in
a country’s death rate while the birth
11

rate remains high.
¾ The third (and last) stage is also
one of low growth in a developed
society where both the death rate
and birth rate have been reduced
considerably and the difference
between them is again small.
57 b
Statement 1 is incorrect It aims to enhance
livelihood security in rural areas by providing
at least 100 days of wage employment in a
financial year to at least one member of every
household whose adult members volunteer to do
unskilled manual work. Women are guaranteed
one third of the jobs made available under the
MGNREGA.
Statement 2 is correct Section 17 of the
MGNREGA has mandated Social audit of all
Works executed under the MGNREGA. The
Ministry of Rural Development (MRD), Govt of
India is monitoring the entire implementation of
this scheme in association with state governments.
Statement 3 is correct. For core-of-the-core
schemes like Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA), the
Union government gives majority of the funding
to states.
58 c of the Consumer Protection Act, 2019. • CCPA
Statement 1 is correct. FRP is the price declared
by the government, which mills are legally
bound to pay to farmers for the cane procured
from them. Mills have the option of signing an
agreement with farmers, which would allow
them to pay the FRP in installments. Delays in
payment can attract an interest up to 15% per
annum, and the sugar commissioner can recover
unpaid FRP as dues in revenue recovery by
attaching properties of the mills.
59 d Statement 3 is correct. Central Consumer
Statement 1 is correct. Correct Correct. Trade
deficit is one factor used to calculate a country’s
Gross Domestic Product (GDP), a measure of
the size of the economy. If the trade deficit
increases, the GDP decreases.
Statement 2 is correct. A higher trade deficit
can decrease the local currency’s value. This is
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because the demand for foreign currency is more
than the foreign demand for local currency.
60 d
Statement 1 is incorrect. Earlier known as
National Illness Assistance Fund, Rashtriya
Arogya Nidhi (RAN) is a centrally sponsored
scheme set up a fund under the Ministry of
Health & Family Welfare in 1997 with an aim to
provide for financial assistance to patients, living
below poverty line who are suffering from major
life threatening diseases, to receive medical
treatment at any of the super specialty hospitals/
institutes or other Govt. hospitals. The states are
needed to create their own State Illness funds in
which central government provides funding to
the extent of 50% of contribution made by State
Govt/Union Territories.
Statement 2 is incorrect. Assistance in RAN is
not directly provided to the Patient but is given
to the Superintendent of the hospital in which
treatment is being taken. Assistance admissible
for treatment in Government Hospital only.
Central Government/State Government/PSU
employees NOT eligible.
61 c
Statement 1 correct. • CCPA is a regulatory
body established in 2020 based on the provisions
works under the administrative control of the
Ministry of Consumer Affairs.
Statement 2 is incorrect. • The objective of the
Central Consumer Protection Authority (CCPA)
is to promote, protect and enforce the rights of
consumers as a class. • Powers: The CCPA
will have the powers to inquire or investigate
into matters relating to violations of consumer
rights or unfair trade practices suo motu, or on
a complaint received, or on a direction from the
central government.
Protection Authority shall consist of following
members appointed by Central Government. •
Chief Commissioner • Two Commissioners.
One commissioner each will represent for goods
and services.

62 b Statement 3 is Correct • Bonds can be used
Statement 1 is Incorrect • Union Minister of
State for Health launched ‘Paalan 1000’ National
Campaign and Parenting App. • ‘Paalan 1000’
focuses on the cognitive development of children
in the first two years of their life. • The app will 65
provide practical advice to caregivers on what
they can do in their everyday routine and will
help clear doubts.
Statement 2 is Correct • The app combines
coaching for parents, families and other
caregivers with services designed to meet the
families’ basic needs. The programme is aligned
with the mission of the Rashtriya Bal Swasthya
Karyakram (RBSK), emphasising responsive
care and focused interventions during the first
1,000 days.
63 b
Namaste is a Central Sector Scheme of the
Ministry of Social Justice and Empowerment
(MoSJE) as a joint initiative of the MoSJE and
the Ministry of Housing and Urban Affairs
(MoHUA).
NAMASTE envisages safety and dignity of
sanitation workers in urban India by creating
an enabling ecosystem that recognizes sanitation 66
workers as one of the key contributors in
operations and maintenance of sanitation
infrastructure thereby providing sustainable
livelihood and enhancing their occupational
safety through capacity building and improved
access to safety gear and machines.
64 c 1.
Statement 1 is Correct • The Government of
India, in consultation with the Reserve Bank of
India, has decided to issue Sovereign Gold Bonds
in tranches for 2022-23. • The Gold Bonds are
issued as Government of India Stock under the
Government Securities (GS) Act, 2006. • These
are issued by the Reserve Bank of India (RBI) on
behalf of the Government of India.
Statement 2 is Incorrect • Bonds are sold through 67
Commercial banks, Stock Holding Corporation
of India Limited (SHCIL), designated post
offices and recognised stock exchanges viz.,
National Stock Exchange of India Limited and
Bombay Stock Exchange, either directly or
through agents.
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as collateral for loans. • The capital gains tax
arising on redemption of SGB to an individual
has been exempted.
d
Africa has adopted a new strategy to boost access
to the diagnosis, treatment and care of severe
non-communicable diseases (NCD). • Called
‘PEN-PLUS, A Regional Strategy to Address
Severe Non-communicable Diseases at First-
Level Referral Health Facilities’, the strategy is
aimed at bridging the access gap in treatment
and care of patients with chronic and severe
NCDs. • Health ministers of African countries
endorsed the plan at the 72nd session of the
World Health Organization (WHO) Regional
Committee for Africa in Lome, Togo to reduce
premature mortality from NCDs. • NCDs
include heart diseases, cancers, diabetes, asthma
among others. • Globally, NCDs are the main
cause of morbidity and mortality. They account
for 71 per cent of global mortality, according to
WHO. In the African Region, the proportion of
mortality due to NCDs ranges from 27-88 per
cent.
c
Statement 1 is correct. The Bharatmala Pariyojana
(‘India garland project’) is a centrally-sponsored
and funded Road and Highways project of the
Government of India.
Statement 2 is correct. Bharatmala Project
Components:
Economic Corridor
2. Feeder Route or Inter Corridor
3. National Corridor Efficiency Improvement
4. Border Road and International Connectivity
5. Port Connectivity and Coastal Road Port
6. Green Field Expressway
d
Arth Ganga Concept
¾ It focuses on the sustainable development
of the Ganga and its surrounding areas, by
focusing on economic activities related to
the river.
13

Features
Under Arth Ganga, the government is working
on six verticals.
¾ The first is Zero Budget Natural Farming,
which involves chemical-free farming on
10 km on either side of the river, and the
promotion of cow dung as fertiliser through
the GOBARdhan scheme.
¾ The Monetization and Reuse of Sludge &
Wastewater is the second, which seeks to
reuse treated water for irrigation, industries
and revenue generation for Urban Local
Bodies (ULBs).
¾ It involves Livelihood Generation
Opportunities, by creating haats where
people can sell local products, medicinal
plants and ayurveda.
¾ The fourth is to increase public participation
by increasing synergies between the
stakeholders involved with the river.
¾ The model promotes the cultural heritage
and tourism of Ganga and its surroundings,
through boat tourism, adventure sports and
by conducting yoga activities.
¾ Lastly, the model seeks to promote
institutional building by empowering
local administration for improved water
governance.
68 a
Statement 1 is Correct. Proceeds from
disinvestment in India form a part of capital
receipts in the budget of the Government of
India.
Statement 2 is incorrect. Disinvestment earnings
have varied over the last five years.
69 a CVD is thus an import tax by the importing
Foreign portfolio investment (FPI) refers to the
purchase of securities and other financial assets
by investors from another country. Examples
of foreign portfolio investments include stocks,
bonds, mutual funds, exchange traded funds,
American depositary receipts (ADRs), and
global depositary receipts (GDRs).
70 b The World Investment Report has been
Statement 1 is incorrect. Stagflation is a
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portmanteau of stagnant growth and persistently
high inflation. Stagflation is a condition where an
economy experiences the worst of both worlds -
the growth rate is largely stagnant (along with
rising unemployment) and inflation is not only
high but persistently so.
Statement 2 is incorrect. Higher inflation would
decrease the purchasing power, thus bringing
down the overall demand.
Statement 3 is correct. Private consumer demand
is the biggest driver of growth in India. Such
aggregate demand — the monetary sum of all
the soaps, phones, cars, refrigerators, holidays
etc. that we all spend on in our personal capacity
— accounts for more than 55% of India’s total
GDP.
71 A
Dumping is said to occur when the goods are
exported by a country to another country at a
price lower than its normal value. This is an
unfair trade practice which can have a distortive
effect on international trade. Anti dumping is a
measure to rectify the situation arising out of the
dumping of goods and its trade distortive effect.
Thus, the purpose of anti dumping duty is to
rectify the trade distortive effect of dumping and
re-establish fair trade. The use of anti dumping
measure as an instrument of fair competition is
permitted by the WTO. In fact, anti dumping is
an instrument for ensuring fair trade and is not a
measure of protection for the domestic industry.
It provides relief to the domestic industry against
the injury caused by dumping. Countervailing
duty (CVD) is an additional import duty imposed
on imported products (by the importing country)
when such products enjoy benefits like export
subsidies and tax concessions in the country of
their origin (where it is produced and exported).
country on imported products. It is an attempt
to ensure fair and market-oriented pricing
of imported products and thereby protecting
domestic industries and firms. It is possible to
have both ADD and countervailing duty on a
product. Hence, Statement 2 is incorrect
72 C
published annually, since 1991, by United

Nations Conference on Trade and Development
(UNCTAD)
UNCTAD is a permanent intergovernmental
body established by the United Nations 76
General Assembly in 1964, dealing with trade,
investment, and development issues It is part of
the UN Secretariat and reports to the UN General
Assembly and the Economic and Social Council.
73 a thought that industrialization is a colonial
Statement 1 is correct. A neobank is a type
of direct bank that operates exclusively online
without traditional physical branch networks.
Statement 2 is incorrect. There is no such
category of banks under the RBI rules.
Statement 3 is incorrect. They provide banking
services use such as savings accounts, instant 77
loans, credit cards, mutual funds, and fixed
deposits. They do this via tieups with Reserve
Bank of India (RBI)-licensed banks.
74 d based on locally felt needs to the District
Statement 1 is incorrect. e-RUPI is backed by
existing Indian rupee as underlying asset and it’s
specificity of purpose makes it different from a
virtual currency and puts it closer to a voucher-
based payment system.
Statement 2 is incorrect. It has been developed
by the National Payments Corporation of India
on its UPI platform, in collaboration with the 78
Department of Financial Services, RBI and GOI.
75 c While revenue deficit is the difference
Statement 1 is correct. Tokenisation refers to
replacement of card details with an alternative
code called a ‘token’, which is unique for a
combination of card, token requestor (the entity
that accepts a request from the customer for
tokenization of a card and passes it on to the
card network to issue a token) and the device.
Statement 2 is incorrect. With effect from
January 1, 2022, no entity in the card transaction/
payment chain, other than the card issuers and/or
card networks, shall store the actual card data.
Statement 3 is correct. The guidelines extend
the tokenization guidelines to every device that
connects with the internet, including mobile
phones, tablets, laptops, desktops, wrist watches,
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bands, Internet of Things devices as well as
payment aggregators.
C
¾ While the Gandhian plan asked for self-
government; cottage industries and
decentralization of economic structure; the
NPC plan asked for more centralization and
the promotion of heavy industries. Gandhi
legacy and will not solve the problem of
poverty in India and will instead aggravate
it. NPC holded a contrary view to this
and thought that every problem of India
can be solved by industrialization and
modernization.
B
¾ NDC takes the concern of states into
account before finalizing the five year
plans.
¾ In MPLADS, local MPs recommend works
Magistrate who then implements it.
¾ In MGNREGA, at least 50% of the works
are to be planned and executed by the
Panchayats. All of them show that economic
planning in India has been decentralized to
a certain extent if not fully.
D
¾ Effective Revenue deficit is a new term
introduced in the Union Budget 2011-12.
between revenue receipts and revenue
expenditure, the present accounting
system includes all grants from the Union
Government to the state governments/
Union territories/other bodies as revenue
expenditure, even if they are used to create
assets. Such assets created by the sub-
national governments/bodies are owned by
them and not by the Union Government.
Nevertheless they do result in the creation
of durable assets.
¾ According to the Finance Ministry, such
revenue expenditures contribute to the
growth in the economy and therefore,
should not be treated as unproductive in
nature. In the Union Budget (2011-12) a
15

new methodology has been introduced to
capture the ‘effective revenue deficit’,
which excludes those revenue expenditures
(or transfers) in the form of grants
for creation of capital assets. If this
methodology is taken into account, the
effective revenue deficit (revised estimates)
for 2010-11 is only 2.3 per cent as against
83
the revenue deficit of 3.4 per cent of GDP.
The effective revenue deficit for 2011-12
is projected at 1.8 per cent as against the
revenue deficit estimates of 3.4 per cent.
¾ It may be noted that even though some
grants may be allocated towards the
creation of assets, financial allocation does
not always result in physical outcomes.
79 D
¾ Cheap money supply means easy monetary
policy which means lower interest rates 84
and more economic activity. Expansionary
fiscal policy means more and more
government spending to revive demand in
the economy leading to recovery from a
period of recession.
80 A 85
¾ MSP can be anything that the government
feels the farmers should fairly get. This is
to help them get fair remuneration for their
produce and to motivate or demotivate
them to produce a particular crop. Hence it
can be anything as compared to the market 86
price. For e.g. if the government wishes to
discourage rice farming, it would lower the
MSP of rice.
¾ The procurement system decentralization
was started in 1997 where states play a
very important role in the supply chain.
81 D
¾ The proceeds go to the National Investment
fund (NIF). From there they are invested
in MFs and the returns: 75% is used in
social sector schemes and the rest goes for
87
reviving sick PSUs which can be turned
around.
82 d
The Cash Reserve Ratio (CRR) is the percentage
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of total deposits a bank must have in cash to
operate risk-free. The Reserve Bank of India
decides the amount and is kept with them for
financial security. The bank cannot use this
amount for lending and investment purposes and
does not get any interest from the RBI.
A
¾ Refer to the section on PSL in Ramesh
Singh for more details. Basically the
government is trying to push the growth
in these sectors/areas for public interest.
Software industries are a booming area in
our country. Similarliy Agro=Processing
industries are also growing. These sectors
need a facelift for which PSL provides
them the much-needed fiscal support. This
is to ensure equitable growth.
c
¾ Import and export would be covered under
the current account convertibility. ECBs
and foreing investment comes under capital
account convertibility.
B
¾ There is no such budgeting as Development
or Programmes budgeting.
¾ Zero-base; and Output and outcome have
been in practice in India.
C
ZBB can be applied to the evaluation of schemes
also, and that too quite objectively. But it is not
possible to adopt ZBB fully, because a) it is
not possible to measure the efficiency of every
government process; and b) a lot of expenditure
charged on the consolidated fund of India will
not be scrutinized under ZBB.
¾ For detailed explanation and other reasons
refer to the relevant section in Ramesh
Singh.
c
Statement 1 is correct. GST was constituted
by 101st constitutional amendment act 2016 by
adding Article 279A.
Statement 2 is incorrect. One-half of the total

numbers of members of the Council is the
quorum for conducting a meeting.
Statement 3 is correct. Every decision of the
Council is to be taken by a majority of not less 90
than threefourths of the weighted votes of the
members present and voting at the meeting.
The vote of the central government shall have
a weightage of onethird of the total votes cast
in the meeting. (ii) The votes of all the state
governments combined shall have a weightage of
two-thirds of the total votes cast in that meeting.
88 c ¾
Statement 1 is incorrect. The Competition
Commission of India (CCI) is the chief national
competition regulator in India. It is a statutory
body within the Ministry of Corporate Affairs
and is responsible for enforcing the Competition
Act, 2002 in order to promote competition
and prevent activities that have an appreciable
adverse effect on competition in India.
Statement 2 is correct. The commission is also
required to give an opinion on competition issues
on a reference received from a statutory authority
established under any law and to undertake
competition advocacy, create public awareness
and impart training on competition issues.
Statement 3 is correct. CCI also approves
combination under the act so that two merging
entities do not overtake the market.
91
89 c
Statement 1 is incorrect. Any country may apply
to be a part of the IMF. Post-IMF formation,
in the early post war period, rules for IMF
membership were left relatively loose. Members
needed to make periodic membership payments
towards their quota, to refrain from currency
restrictions unless granted IMF permission,
to abide by the Code of Conduct in the IMF
Articles of Agreement, and to provide national
economic information. However, stricter rules
were imposed on governments that applied to the
IMF for funding. Membership in the IMF is a
prerequisite to membership in the IBRD.
Statement 2 is correct. The present share of India
is 2.75. India is the 8th largest in the IMF quota.
Statement 3 is incorrect. Extended Fund
Facility(EFF), is one such instrument, through
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which the IMF extends loans to various countries
to come out of Economic crises.
d
Explanation:
¾ Ways and Means Advances (WMA):
¾ The Reserve Bank of India gives temporary
loan facilities to the centre and state
governments as a banker to government.
This temporary loan facility is called Ways
and Means Advances (WMA).
It is a mechanism to provide to States to
help them tide over temporary mismatches
in the cash flow of their receipts and
payments.
¾ It was introduced on April 1, 1997, after
putting an end to the four-decade old
system of adhoc (temporary) Treasury Bills
to finance the Central Government deficit.
¾ This facility can be availed by the
government if it needs immediate cash
from the RBI. The WMA is to be vacated
after 90 days.
¾ There are two types of WMA – normal
and special. While Normal WMA are
clean advances, Special WMA are secured
advances provided against the pledge of
government of India–dated securities.
a
Statement 1 is correct. The Financial Services
Institutions Bureau will select the chiefs of public
sector banks and insurance companies. The FSIB
will have the clear mandate to issue guidelines
and select general managers and directors of
state-run nonlife insurers, general insurers and
Financial Institutions.
Statement 2 is correct. FSIB will be the
single entity for making recommendations for
appointments of WTD (Whole-time Director)
and NEC (Non-executive Chairman) in Public
Sector Banks, India Private Limited company
and Financial Institutions.
Statement 3 is incorrect. The FSIB will
comprise a chairperson nominated by the central
government; the secretaries of the departments
of financial services and public enterprises;
the chairman of the Insurance Regulatory and
Development Authority of India; and a deputy
17

governor of the Reserve Bank of India (RBI).
Apart from them, there will be three members
with knowledge of banks and other financial
institutions, and three more with knowledge of
insurance, according to the order.
92 b full-time and four part-time members appointed
Statement 1 is incorrect. The Patents Act, 1970
is the legislation that till date governs patents
in India. It first came into force in 1972. The
Office of the Controller General of Patents,
Designs and Trade Marks or CGPDTM is the
body responsible for the Indian Patent Act. It
comes under the Ministry of Commerce and
Industry.
Statement 2 is correct. The jurisdiction for filing
the patent application depends upon: Indian
applicant(s): determined according to place of
residence, place of business of the applicant or
where the invention actually originated. Foreign
applicant(s): determined by the address for
service in India.
Statement 3 is incorrect. Term for protection of
product patent shall be for 20 years.
93 d Tripura has obtained the first rank. Himachal
Statement 1 is incorrect. The SCO is governed by
the Heads of State Council (HSC), its supreme
decision-making body, which meets once a year.
Military exercises are also regularly conducted
among members to promote cooperation and
coordination against terrorism and other external
threats, and to maintain regional peace and
stability.
Statement 2 is incorrect. The Headquarters of
SCO is in Beijing(china) and the RATS(Regional
Anti-terrorist structure) executive committee is
based in Tashkent(Uzbekistan). SCO-RATS is a
permanent body of the SCO and is intended to
facilitate coordination and interaction between
the SCO member states in the fight against
terrorism, extremism and separatism.
94 a
Statement 1 is correct. The Insurance Regulatory
and Development Authority of India (IRDAI)
is a regulatory body under the jurisdiction of
Ministry of Finance, Government of India
and is tasked with regulating and licensing the
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insurance and reinsurance industries in India.
It was constituted by the Insurance Regulatory
and Development Authority Act, 1999 an Act of
Parliament passed by the Government of India.
Statement 2 is incorrect. IRDAI is a ten-
member body consisting of a chairman, five
by the government of India. And is tasked
with regulating and licensing the insurance and
reinsurance industries in India.
95 d
Statement 1 is incorrect. The index does not
cover programs and schemes implemented
by other ministries and departments under the
NFSA. The Index denotes only the efficiency
of TPDS operations, it does not reflect the level
of hunger, if any or malnutrition, or both, in
a particular state or union territory, the report
clarified. Odisha has topped the ranking of
states for implementation of the National Food
Security Act (NFSA), followed by Uttar Pradesh
and Andhra Pradesh in the index released by the
Ministry of Food and Consumer Affairs. Among
the special category states (the North Eastern
states, Himalayan states, and the Island states),
Pradesh and Sikkim are at the second and third
positions.
Statement 2 is incorrect. Odisha has topped
the ranking of states for implementation of the
National Food Security Act (NFSA), followed by
Uttar Pradesh and Andhra Pradesh in the index
released by the Ministry of Food and Consumer
Affairs. Among the special category states (the
North Eastern states, Himalayan states, and the
Island states), Tripura has obtained the first
rank. Himachal Pradesh and Sikkim are at the
second and third positions.
96 a
Statement 1 is correct. The Global Gender Gap
Index is released by the World Economic Forum.
Statement 2 is incorrect. Although no country
achieved full gender parity, the top 10 economies
closed at least 80% of their gender gaps, with
Iceland (90.8%) leading the global ranking.
Iceland is followed by Finland (86%, 2nd),
Norway (84.5%, 3rd).
Statement 3 is incorrect. Educational Attainment

subindex includes metrics such as literacy rate
and the enrolment rates in primary, secondary
and tertiary education. Here India ranks 107th
out of 146. Political Empowerment sub-index
includes metrics such as the percentage of
women in Parliament, the percentage of women
in ministerial positions etc. Of all the subindices,
this is where India ranks the highest (48th out of
146).
97 c
Statement 1 is correct. PMFBY aims to provide
a comprehensive insurance cover against failure
of the crop thus helping in stabilizing the income
of the farmers. The Scheme covers all Food
& Oilseeds crops and Annual Commercial/
Horticultural Crops for which past yield data is
available and for which requisite number of Crop
Cutting Experiments (CCEs) are being conducted
under General Crop Estimation Survey (GCES).
Statement 2 is incorrect. The scheme was
earlier compulsory for loanee farmers availing
Crop Loan /KCC account for notified crops
and voluntary for other others, but has been
made voluntary since 2020 when reforms in the
scheme were introduced. The scheme is being
administered by Ministry of Agriculture and
Farmers Welfare.
Statement 3 is correct. The Maximum Premium
payable by the farmers will be 2% for all Kharif
Food & Oilseeds crops, 1.5% for Rabi Food &
Oilseeds crops and 5% for Annual Commercial/
Horticultural Crops. The difference between
premium and the rate of Insurance charges
payable by farmers shall be shared equally by
the Centre and State.
98 b monetary policy tool of Reserve Bank of
Statement 1 is correct. The World Trade
Organization (WTO) is an intergovernmental
organization that regulates and facilitates
international trade. Governments use the
organization to establish, revise, and enforce the
rules that govern international trade. It officially
commenced operations on 1 January 1995,
pursuant to the 1994 Marrakesh Agreement, thus
replacing the General Agreement on Tariffs and
Trade (GATT) that had been established in 1948.
The WTO is the world’s largest international
economic organization, with 164 member states
JOKTA ACADEMY SCO 78-79 SECTOR 15 D CHANDIGARH PH 9779464470
HPAS MOCK TEST SERIES
representing over 98% of global trade and global
GDP.
Statement 2 is correct. According to WTO norms,
countries are not allowed to export foodgrains
from their public stockholding because those are
procured at subsidised rates.
Statement 3 is incorrect. The WTO is
‘memberdriven’, with decisions taken by
consensus among all member governments. Not
by any majority.
99 d
Statement 1 is correct. In 2019, the Ministry
of Textiles notified a new scheme by the name
Rebate of State and Central Taxes and Levies
(RoSCTL). Under this scheme, the exporters
are issued a Duty Credit Scrip for the value
of embedded taxes and levies contained in the
exported product. Exporters can use this scrip
to pay basic Customs duty for the import of
equipment, machinery or any other input.
Statement 2 is incorrect. The scheme was notified
by Ministry of Textiles in 2019.
Statement 3 is incorrect. At present, the RoSCTL
scheme is applicable only to the exporters of
apparel and made-ups. Continuation of RoSCTL
for Apparel/Garments and Made-ups is expected
to make these products globally competitive by
rebating all embedded taxes/levies which are
currently not being rebated under any other
mechanism.
100 d
Explanation:
¾ Liquidity Adjustment Facility (LAF) is a
India for modulatingliquidity & transmitting
interest rate signals to the market. It is
used to aid banks in adjusting the day today
mismatches in liquidity.
¾ The two components of LAF are repo rate
and reverse repo rate. Under Repo,the
banks borrow money from RBI to meet
short term needs by putting government
securities ascollateral. Under Reverse
Repo, RBI borrows money from banks by
lending securities.
¾ Other than Regional Rural Banks, all the
Scheduled Commercial Banks are eligible
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to participatein auctions. Primary Dealers
(PDs) and NBFCs are also eligible to
participate in auctions.
¾ Primary dealers are registered entities
with the RBI who have the license to
purchase and sell governmentsecurities.
They are entities who buy the government
securities directly from the RBI (the RBI
issuesgovernment securities on behalf of
the government), aiming to resell them to
other buyers.

20 JOKTA ACADEMY SCO 78-79 SECTOR 15 D CHANDIGARH PH 9779464470