28 April 2023

Q1.  Consider the following statements regarding the Importance of Fiscal Policy in India:

• Fiscal policy plays a key role in elevating the rate of capital formation both in the public and private sectors.
• Fiscal policy aims to minimise the imbalance in the dispersal of income and wealth.
• Fiscal policy helps in providing stimulus to elevate the savings rate.

Which of the above statements is/are correct?

1. 1, 2
2. 1, 3
3. 2, 3
4. 1, 2, 3

D –  EXPLANATION

Importance of Fiscal Policy in India:

In a country like India, fiscal policy plays a key role in elevating the rate of capital formation both in the public and private sectors.

Through taxation, the fiscal policy helps mobilise considerable amount of resources for financing its numerous projects.

Fiscal policy also helps in providing stimulus to elevate the savings rate.

The fiscal policy gives adequate incentives to the private sector to expand its activities.

Fiscal policy aims to minimise the imbalance in the dispersal of income and wealth.

Q2. Consider the following statements:

• Primary deficit implies that the government is unable to contain recurring expenditure such as subsidies and other discretionary expenditures within the limits of recurring non-debt revenue.
• Increasing primary deficit will lead to higher revenue deficit and unsustainable debt servicing in future.

Which of the above statements is/are incorrect?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

D – EXPLANATION

Primary deficit is the revenue deficit net of interest payments and the implication is that the government is unable to contain recurring expenditure such as subsidies and other discretionary expenditures within the limits of recurring non-debt revenue. So, the primary deficit ratio is the leading indicator for the revenue deficit ratio to follow and increasing primary deficit is the surest route to higher revenue deficit and unsustainable debt servicing in future.

Q3. Consider the following statements regarding Variable Rate Reverse Repo (VRRR) auction:

• Reserve Bank of India (RBI) conducts Variable Rate Reverse Repo (VRRR) auction to absorb liquidity in the economy.
• It is usually conducted for a shorter period, say less than 3 days.

Which of the above statements is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

A – EXPLANATION

The Reserve Bank of India (RBI) has increased the amount of variable rate reverse repo (VRRR) auctions in December, as it is shifting out of the fixed-rate overnight reverse repo auction and re-establishing VRRR as the main liquidity management operations. The operations of 14-day VRRR would continue to be complemented by longer-term VRRRs, the size and maturities of which will be decided based on continuous assessment.

Q4. Consider the following statements regarding Goods and Services Tax (GST):

• GST is designed on the principle of destination-based consumption taxation, with seamless provision for input tax credit.
• GST Council is the key decision-making body, chaired by the Union Finance Minister with a Minister of State in charge of Finance and the Finance Ministers of States as members.
• GST is applicable to all goods and services except specified petroleum products.

Which of the above statements is/are correct?

1. 1 only
2. 1, 2
3. 1, 3
4. 1, 2, 3

B – EXPLANATION

• India’s GST architecture is built on the firm foundations of a GST Council and the GST Network (GSTN).
• The first is the key decision-making body, chaired by the Union Finance Minister with a Minister of State in charge of Finance and the Finance Ministers of States as members. GSTN generates high frequency data and subjects them to analytics for informed policy making. Designed on the principle of destination-based consumption taxation, with seamless provision for input tax credit.
• GST is applicable to all goods and services except alcohol for human consumption and five specified petroleum products with a common threshold exemption applicable to both CGST and SGST.

Q5. Consider the following statements regarding India’s gold imports:

• India is the largest importer of gold in the world.
• Majority of the gold demand is due to RBI’s requirements.

Which of the above statements is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

     A – EXPLANATION

India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually.

Q6. Consider the following statements:

• At present India is among the top five largest importing nations in the world.
• At present India’s share in global GDP is around 10 percent.

Which of the above statements is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

D – EXPLANATION

With a growing middle class and its rising discretionary spending, India will become the world’s third largest importer by 2050 with a share of 5.9% of global imports, right behind China and the US, a new report said. At present, India is ranked eighth among largest importing nations with a 2.8% import share and is set to become the fourth largest importer by 2030. At present, India is ranked fifth in size of world’s economies with a share of 3.3% in global GDP.

Q7. Consider the following statements regarding Hedge Funds:

• Hedge funds are included in the category of Alternative Investment Fund (AIF).
• These funds are not regulated by SEBI.

Which of the above statements is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

A – EXPLANATION

Hedge funds are included under Category III Alternative Investment Fund (AIFs). These are     regulated by SEBI.

Q8. Consider the following statements regarding Credit / Debit Card tokenisation:

• Tokenisation is a process in which the customer would need to manually key in their card details each time they complete an online purchase.
• Tokenisation would allow online purchases to go through without exposing card details, in a bid to improve data security.

Which of the above statements is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

B – EXPLANATION

Tokenisation is a process by which card details are replaced by a unique code or token, generated by an algorithm, allowing online purchases to go through without exposing card details, in a bid to improve data security.

The RBI has ordered all companies in India to purge saved credit and debit card data from their systems from Jan. 1, 2022.

Opting out of tokenisation would mean a customer would need to manually key in their card details each time they completed an online purchase.

Q9. Movements in the foreign currency assets (FCA) in India occur mainly on account of:

• Purchase and sale of foreign exchange by the RBI
• Income arising out of the deployment of the foreign exchange reserves
• External aid receipts of the Central Government
• Effects of revaluation of the assets

Select the correct answer code:

1. 1, 2, 3
2. 1, 3, 4
3. 2, 3, 4
4. 1, 2, 3, 4

D – EXPLANATION

“Movements in the FCA occur mainly on account of purchases and sales of foreign exchange by the RBI, income arising out of the deployment of the foreign exchange reserves, external aid receipts of the Central Government and the effects of revaluation of the assets,”

Q10. In India, in the last 10 years the maximum number of elephants were killed due to:

1. Train hits
2. Poaching
3. Electrocution
4. Poisoning

Explanation: C

Q11. Consider the following statements regarding Intergovernmental Panel on Climate Change (IPCC):

• IPCC is a joint initiative of World Meteorological Organization (WMO) and United Nations Development Programme (UNDP).
• IPCC reports are a key input into international climate change negotiations.

Which of the above statements is/are incorrect:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

A – EXPLANATION

Created in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP). IPCC reports are also a key input into international climate change negotiations.

The IPCC is an organization of governments that are members of the United Nations or WMO. Thousands of people from all over the world contribute to the work of the IPCC. The IPCC does not conduct its own research. The Intergovernmental Panel on Climate Change (IPCC) was established by the United Nations to provide the public scientific information on climate change.

Q12. Under the Wild Life (Protection) Act, 1972, Wildlife Crime Control Bureau (WCCB) is mandated to:

• Collect and collate intelligence related to organized wildlife crime activities and to disseminate the same to State and other enforcement agencies.
• Establish a centralized wildlife crime data bank.
• Assists and advises the Customs authorities in inspection of the consignments of flora & fauna.
• Assist international organizations concerned for universal action for wildlife crime control.

Select the correct answer code:

1. 1, 2, 4
2. 1, 3
3. 1, 2, 3
4. 1, 2, 3, 4

D – EXPLANATION

Wildlife Crime Control Bureau is a statutory multi-disciplinary body established by the Government of India under the Ministry of Environment and Forests, to combat organized wildlife crime in the country. Under Section 38 (Z) of the Wild Life (Protection) Act, 1972, it is mandated to collect and collate intelligence related to organized wildlife crime activities and to disseminate the same to State and other enforcement agencies for immediate action so as to apprehend the criminals; to establish a centralized wildlife crime data bank; co-ordinate actions by various agencies in connection with the enforcement of the provisions of the Act; assist foreign authorities and international organization concerned to facilitate co-ordination and universal action for wildlife crime control; capacity building of the wildlife crime enforcement agencies for scientific and professional investigation into wildlife crimes and assist State Governments to ensure success in prosecutions related to wildlife crimes; and advise the Government of India on issues relating to wildlife crimes having national and international ramifications, relevant policy and laws. It also assists and advises the Customs authorities in inspection of the consignments of flora & fauna as per the provisions of Wild Life Protection Act, CITES and EXIM Policy governing such an item.

Q13. The coastal ecosystems of mangroves, tidal marshes, and seagrass meadows provide numerous benefits and services along coasts like:

• Regulation of coastal water quality
• Sequester and store coastal blue carbon from the atmosphere
• Protection from storms and sea level rise.
• Provision of habitat for commercially important fisheries.
• Food security for many coastal communities.

Select the correct answer code:

1. 1, 2, 3
2. 1, 3, 4, 5
3. 1, 2, 3, 4
4. 1, 2, 3, 4, 5

D – EXPLANATION

The coastal ecosystems of mangroves, tidal marshes, and seagrass meadows provide numerous benefits and services that are essential for climate change adaptation along coasts globally, including protection from storms and sea level rise, prevention of shoreline erosion, regulation of coastal water quality, provision of habitat for commercially important fisheries and endangered marine species, and food security for many coastal communities. Additionally, these ecosystems sequester and store significant amounts of coastal blue carbon from the atmosphere and ocean and hence are now recognized for their role in mitigating climate change.

Q14. When coal is burned, it releases a number of airborne toxins and pollutants like:

• Lead
• Mercury
• Nitrogen oxides
• Sulphur dioxide

Select the correct answer code:

1. 1, 2, 3
2. 1, 3, 4
3. 2, 3, 4
4. 1, 2, 3, 4

D – EXPLANATION

When coal is burned it releases a number of airborne toxins and pollutants. They include Carbon dioxide, mercury, lead, sulphur dioxide, nitrogen oxides, particulates, and various other heavy metals. Health impacts can range from asthma and breathing difficulties, to brain damage, heart problems, cancer, neurological disorders, and premature death.

Q15. Consider the following statements regarding Carbon offsetting:

• Carbon offsetting allows a country to help reach its own emissions reduction targets by funding emission reductions in another country.
• The United Nation’s Clean Development Mechanism (CDM) set up under the 1997 Kyoto Protocol is first major Carbon offsetting scheme.
• Carbon offsets can be bought by individuals, companies or countries.

Which of the above statements is/are correct?

1. 1, 2
2. 1, 3
3. 2, 3
4. 1, 2, 3

D – EXPLANATION

Carbon offsetting allows a country to help reach its own emissions reduction targets by funding emission reductions in another country.

Companies are also increasingly using carbon credits to offset their emissions.

The first major offsetting scheme, the U.N.s clean development mechanism (CDM), was set up under the 1997 Kyoto Protocol, in which 190 countries agreed country-by-country emission reduction targets.

The scheme was designed to help fund emission reduction projects in developing countries, while also providing offset credits to the developed world to help meet its Kyoto targets.

More than 8,100 projects in 111 countries have registered with the CDM scheme, which has handed out over 2 billion carbon credits, called Certified Emission Reductions (CERs), representing 2 billion tonnes of carbon dioxide reduction.

Projects registered under the scheme range from capturing and using methane gasses in pig manure to create electricity to replacing traditional wood and coal burning cookstoves with cleaner alternatives such as ethanol. Offsets can be bought by individuals, companies or countries.

Q16.  Consider the following statements regarding Sperm whales.

1. Sperm whales are a protected species under the Wildlife Protection Act.
2. Ambergris is a waxy substance that originates from the digestive system of the sperm whales.  3. In India, Ambergris is a tradable commodity, since they have high medicinal properties.

Which of the above statements is/are correct?

1. 1, 2
2. 1 only
3. 1, 3
4. 1, 2, 3

A – EXPLANATION     

Ambergris, which means grey amber in French, is a waxy substance that originates from the digestive system of the protected sperm whales.

While there is a ban on possession and trade of ambergris in countries like the USA, Australia and India, in several other countries it is a tradable commodity, though with limitations in some of them.

In the Indian context, the sperm whales are a protected species under Schedule 2 of the Wildlife Protection Act and possession or trade of any of its by-products, including Ambergris and its by products, is illegal under provisions of the Wildlife Protection Act, 1972.

Q17.  Trace metals like cadmium or copper are essential for ocean productivity. Studying the interactions of trace metals and marine plant and animal life helps to

1. Track the movement of water masses responsible for ocean circulation
2. Study the biological, geochemical and ecosystem processes and food web analyses in the oceans.
3. Understand the nutrient cycling and productivity of the oceans.

Select the correct answer code:

1. 1, 2
2. 1, 3
3. 2, 3
4. 1, 2, 3

D – EXPLANATION

What is the objective of studying the interactions of trace metals and marine plant and animal life?

Trace metals like cadmium or copper are supplied to oceans via continental run-offs, atmospheric deposition, hydrothermal activities and continental shelf interaction.

They are essential for ocean productivity. Scientists say that it is important to understand the interactions of trace metals with marine biota “for having a holistic understanding about nutrient cycling and productivity of the oceans”.

Apart from their reactions on marine life, isotopic forms of trace metals can be utilised to track the movement of water masses responsible for ocean circulation and as tools to study the biological, geochemical and ecosystem processes and food web analyses.

Q18. Consider the following statements regarding Green Hydrogen.

1. Green Hydrogen is the hydrogen generated through renewable energy sources and the carbon generated from the process is captured and stored without dispersing it in the atmosphere.
2. The major challenge in the usage of green hydrogen will be its storage, because it requires large volumes for its storage.

Which of the above statements is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

B – EXPLANATION

While hydrogen generated through renewable energy sources is green, it is blue when the carbon generated from the process is captured and stored without dispersing it in the atmosphere. When the carbon is not captured, the generated hydrogen is labelled grey.

The major challenge in the usage of green hydrogen will be its storage. Given the very low density of hydrogen, it will require large volumes for its storage.

Alternatively, if one chooses to store it in the liquid form, reducing the storage space requires the maintenance of temperatures as low as minus 253° C. This will entail huge costs.

The ‘production cost’ of ‘Green hydrogen’ has been considered to be a prime obstacle to the usage of green hydrogen.

Q19. Consider the following statements regarding Sea buckthorn.

1. It is a shrub which produces an orange-yellow coloured edible berry.
2. It is a soil-binding plant which prevents soil-erosion, checks siltation in rivers and helps preserve floral biodiversity.
3. In India, it is found in the Himalayan region, generally in dry areas such as the cold deserts of Ladakh and Spiti.

Which of the above statements is/are correct?

1. 1, 2
2. 1, 3
3. 2, 3

D.1, 2, 3

    D – EXPLANATION

What is sea buckthorn?

It’s a shrub which produces an orange-yellow coloured edible berry. In India, it is found above the tree line in the Himalayan region, generally in dry areas such as the cold deserts of Ladakh and Spiti.

In Himachal Pradesh, it is locally called chharma and grows in the wild in Lahaul and Spiti and parts of Kinnaur.

As a folk medicine, seabuckthorn has been widely used for treating stomach, heart and skin problems. In the last few decades, scientific research worldwide has backed many of its traditional uses.

“Its fruit and leaves are rich in vitamins, carotenoids and omega fatty acids, among other substances, and it can help troops in acclimatising to high-altitude Besides being an important source of fuelwood and fodder, seabuckthorn is a soil-binding plant which prevents soil-erosion, checks siltation in rivers and helps preserve floral biodiversity.

Q20. Kinnow, a high yield citrus tree fruit is grown extensively in which state?

1. Kerala
2. Uttarakhand
3. Punjab
4. Sikkim

C – EXPLANATION

The start of kinnow season in Punjab also brings with it the falling fruit, which is considered a total waste by farmers.

Farmers can collect these dropped fruits from their kinnow fields and prepare bio-enzymes (BEs) at a low cost.

Kinnow is a year-long duration crop and the main harvesting period is from November-end to March, but some varieties of citrus fruit start coming into the markets in October.

Horticulture department experts say nearly 15- 20 per cent (1.5 lakh to 2 lakh tonnes) of the total kinnow production falls from the tree before and during the harvesting period.