UPPSC 2017 — Economy Questions with Answers
All 24 Economy previous-year questions from UPPSC 2017, each with the correct answer and a full explanation. Practise them as a free, timed mock test with instant scoring.
Practice Economy as a timed test →- Q1.Banking and Finance
What is the purpose of setting up of Small Finance Banks (SFBs) in India? 1. To supply credit to small business units. 2. To supply credit to small and marginal farmers. 3. To encourage young entrepreneurs to set up business particularly in rural areas. Select the correct answer using the code given below:
- a)1 and 3 only
- b)2 only
- c)3 only
- d)2 and 3 only
Explanation: Small Finance Banks further financial inclusion by providing savings and credit to small business units, small and marginal farmers, and micro and small industries. Encouraging young entrepreneurs specifically in rural areas is not a defined objective, so 3 is excluded; 1 and 2 are correct.
- Q2.Monetary Policy
Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? 1. It decides the RBI's benchmark interest rates. 2. It is a 12-member body including the Governor of RBI and is reconstituted every year. 3. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below:
- a)1 only
- b)1 and 2 only
- c)3 only
- d)2 and 3 only
Explanation: The MPC determines the policy repo rate (benchmark interest rate), so statement 1 is correct. It is a six-member body, not twelve, and is not reconstituted yearly, so statement 2 is wrong. It is chaired by the RBI Governor, not the Finance Minister, so statement 3 is wrong. Only statement 1 is correct.
- Q3.Banking and Finance
What is/are the purpose/purposes of the 'Marginal Cost of Funds based Lending Rate (MCLR)' announced by RBI? 1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances. 2. These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks. Select the correct answer using the code given below:
- a)1 only
- b)1 and 3 only
- c)2 and 3 only
- d)1, 2 and 3
Explanation: The MCLR framework was introduced to improve transparency in how banks set lending rates and to ensure interest rates are fair to both borrowers and banks while improving monetary-policy transmission. Both purposes are correct.
- Q4.International Organisations
India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 in order to comply with the obligations to:
- a)1 and 2 only
- b)3 only
- c)1 and 3 only
- d)1, 2 and 3
Explanation: The Geographical Indications of Goods Act, 1999 was enacted to comply with India's obligations under the TRIPS Agreement administered by the World Trade Organization. Hence option (d).
- Q5.Energy and Infrastructure
The term 'Domestic Content Requirement' is sometimes seen in the news with reference to:
- a)Developing solar power production in our country
- b)Granting licences to foreign T.V. channels in our country
- c)Exporting our food products to other countries
- d)Permitting foreign educational institutions to set up their campuses in our country
Explanation: 'Domestic Content Requirement' (DCR) appeared in the context of India's National Solar Mission, requiring developers to use domestically manufactured solar cells and modules; the USA challenged it at the WTO. Hence it relates to developing solar power production.
- Q6.Government Schemes
With reference to the 'Prime Minister's Employment Generation Programme (PMEGP)', consider the following statements: 1. It aims to generate self-employment opportunities through establishment of micro-enterprises in the non-farm sector. 2. The scheme is implemented by the Khadi and Village Industries Commission as the nodal agency. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: PMEGP aims to generate employment through micro-enterprises in the non-farm sector (statement 1 correct) and is implemented at the national level by the Khadi and Village Industries Commission as the nodal agency (statement 2 correct). Both are correct.
- Q7.Social Security
Who among the following can join the National Pension System (NPS)?
- a)Resident Indian citizens only
- b)Persons of age from 21 to 55 only
- c)All State Government employees joining the services after the date of notification by the respective State Governments
- d)All Central Government employees including those of Armed Forces joining the services on or after 1st April, 2004
Explanation: NPS is open to a wide range of subscribers, but among the given options, all State Government employees joining service after the date of notification by their respective State Governments are covered under NPS. Central Armed Forces personnel are excluded, so option (d) is wrong. Hence option (c).
- Q8.Standards and Quality
Consider the following statements: 1. The Standard Mark of Bureau of Indian Standards (BIS) is mandatory for automotive tyres and tubes. 2. AGMARK is a quality certification mark issued by the Food and Agriculture Organisation (FAO). Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: The BIS Standard Mark (ISI mark) is mandatory for automotive tyres and tubes, so statement 1 is correct. AGMARK is issued by the Directorate of Marketing and Inspection under the Government of India, not by the FAO, so statement 2 is wrong. Only statement 1 is correct.
- Q9.Agriculture
What is/are the advantage/advantages of implementing the 'National Agriculture Market' scheme? 1. It is a pan-India electronic trading portal for agricultural commodities. 2. It provides the farmers access to nationwide market, with prices commensurate with the quality of their produce. Select the correct answer using the code given below:
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: The National Agriculture Market (e-NAM) is a pan-India electronic trading portal networking agricultural produce market committees (statement 1 correct), giving farmers access to a nationwide market with better, quality-linked prices (statement 2 correct). Both are correct.
- Q10.Banking and Finance
Consider the following statements: 1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country. 2. NPCI has launched RuPay, a card payment scheme. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: NPCI is the umbrella organisation for retail payments and contributes to financial inclusion (statement 1 correct), and it launched RuPay, an indigenous card payment scheme (statement 2 correct). Both are correct.
- Q11.Standards and Quality
With reference to 'Quality Council of India (QCI)', consider the following statements: 1. QCI was set up jointly by the Government of India and the Indian Industry. 2. Chairman of QCI is appointed by the Prime Minister on the recommendations of the industry to the Government. Which of the above statements is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: QCI was set up jointly by the Government of India and Indian industry associations (statement 1 correct), and its Chairman is appointed by the Prime Minister on the recommendations of the industry to the Government (statement 2 correct). Both are correct.
- Q12.Government Schemes
With reference to the 'Stand Up India Scheme', consider the following statements: 1. Its purpose is to promote entrepreneurship among SC/ST and women entrepreneurs. 2. It provides for refinance through SIDBI. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: The Stand Up India Scheme facilitates bank loans to promote entrepreneurship among Scheduled Castes/Scheduled Tribes and women (statement 1 correct) and provides for refinance support through SIDBI (statement 2 correct). Both are correct.
- Q13.Government Schemes
With reference to 'Pradhan Mantri Fasal Bima Yojana', consider the following statements: 1. It provides crop insurance against non-preventable natural risks from pre-sowing to post-harvest stage. 2. There is a uniform premium of 2% to be paid by farmers for all Rabi crops. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: PMFBY covers non-preventable natural risks across the crop cycle (statement 1 correct). The farmer premium is 1.5% for Rabi crops, not a uniform 2%, so statement 2 is wrong. Only statement 1 is correct.
- Q14.Taxation
Which of the following statements is/are correct regarding the deductions and rebate available under the Income Tax Act for individuals? Consider the following: 1. Investments made in certain instruments qualify for deduction under Section 80C. 2. The maximum deduction available is uniform across all age groups for medical insurance. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: Specified investments qualify for deduction under Section 80C (statement 1 correct). The deduction limit for medical insurance under Section 80D is higher for senior citizens, so it is not uniform across age groups (statement 2 wrong). Only statement 1 is correct.
- Q15.Infrastructure Finance
With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct? 1. It is an organ of NITI Aayog. 2. It has a corpus of Rs. 4,00,000 crore at present. Select the correct answer using the code given below:
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: The National Investment and Infrastructure Fund is a fund managed by NIIF Ltd. under the Ministry of Finance, not an organ of NITI Aayog (statement 1 wrong), and its proposed corpus was about Rs. 40,000 crore, not Rs. 4,00,000 crore (statement 2 wrong). Hence neither is correct.
- Q16.Digital Currency
With reference to 'Bitcoins', sometimes seen in the news, which of the following statements is/are correct? 1. Bitcoins are tracked by the Central Banks of the countries. 2. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address. 3. Online payments can be sent without either side knowing the identity of the other. Select the correct answer using the code given below:
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
Explanation: Bitcoins are decentralised and not tracked by central banks, so statement 1 is wrong. Anyone with a Bitcoin address can transact with anyone else (statement 2 correct), and payments can be made pseudonymously without revealing identities (statement 3 correct). Hence 2 and 3 only.
- Q17.Agriculture
The nation-wide 'Soil Health Card Scheme' aims at: 1. expanding the cultivable area under irrigation. 2. enabling the banks to assess the quantum of loans to be granted to farmers on the basis of soil quality. 3. checking the overuse of fertilizers in farmlands. Select the correct answer using the code given below:
- a)1 and 2 only
- b)3 only
- c)2 and 3 only
- d)1, 2 and 3
Explanation: The Soil Health Card Scheme provides farmers crop-wise recommendations on nutrients and fertilizers based on soil testing, helping check overuse of fertilizers (statement 3 correct). It is not aimed at expanding irrigated area or at bank loan assessment, so statements 1 and 2 are wrong. Hence 3 only.
- Q18.Economic Reforms
Which of the following has/have occurred in India after its liberalization of economic policies in 1991? 1. Share of agriculture in GDP increased enormously. 2. Share of India's exports in world trade increased. 3. FDI inflows increased. 4. India's foreign exchange reserves increased enormously. Select the correct answer using the code given below:
- a)1 and 2 only
- b)2, 3 and 4 only
- c)2 and 4 only
- d)1, 3 and 4 only
Explanation: After 1991 liberalization, the share of agriculture in GDP declined (statement 1 wrong). India's share in world exports rose (2), FDI inflows increased (3), and foreign exchange reserves increased enormously (4). Hence 2, 3 and 4 only.
- Q19.Banking and Finance
Consider the following statements: 1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country. 2. NPCI has launched RuPay, a card payment scheme. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: NPCI promotes retail digital payments and financial inclusion (statement 1 correct) and launched the indigenous RuPay card payment scheme (statement 2 correct). Both are correct.
- Q20.Industrial Indicators
In the 'Index of Eight Core Industries', which one of the following is given the highest weight?
- a)1 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
Explanation: In the Index of Eight Core Industries, among the listed options, electricity generation carries the highest weight. Hence option (b).
- Q21.International Trade
Consider the following statements: 1. India has ratified the Trade Facilitation Agreement (TFA) of WTO. 2. TFA is a part of WTO's Bali Ministerial Package of 2013. 3. TFA came into force in January 2016. Which of the statements given above is/are correct?
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
Explanation: India ratified the Trade Facilitation Agreement (statement 1 correct), which was part of the WTO's Bali Ministerial Package of 2013 (statement 2 correct). The TFA came into force in February 2017, not January 2016, so statement 3 is wrong. Hence 1 and 2 only.
- Q22.Agriculture
With reference to the 'Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)', consider the following statements: 1. It aims to achieve convergence of investments in irrigation at the field level. 2. It seeks to provide end-to-end solution in irrigation supply chain. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: PMKSY aims to achieve convergence of investments in irrigation at the field level (statement 1 correct) and to provide end-to-end solutions in the irrigation supply chain, from water source to field application (statement 2 correct). Both are correct.
- Q23.Development Indices
Which of the following is/are the indicator/indicators used by IFPRI to compute the Global Hunger Index Report? 1. Undernourishment 2. Child stunting 3. Child mortality. Select the correct answer using the code given below:
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: The Global Hunger Index computed by IFPRI uses indicators including undernourishment, child stunting (and wasting), and child mortality. All three listed indicators are used, so 1, 2 and 3.
- Q24.Social Security
With reference to 'Pradhan Mantri Vaya Vandana Yojana', consider the following statements: 1. It is a pension scheme for senior citizens. 2. It is implemented through the Life Insurance Corporation of India. Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Explanation: Pradhan Mantri Vaya Vandana Yojana is a pension scheme for senior citizens (statement 1 correct), operated and implemented through the Life Insurance Corporation of India (statement 2 correct). Both are correct.
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