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DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE ASKED TO DO SO

PPP-PTS-4313/082023/10

GENERAL STUDIES

ECONOMY - 4
Time Allowed: One Hour Maximum Marks: 100

INSTRUCTIONS

1. IMMEDIATELY AFTER THE COMMENCEMENT OF THE EXAMINATION, YOU SHOULD CHECK THAT
THIS TEST BOOKLET DOES NOT HAVE ANY UNPRINTED OR TORN OR MISSING PAGES OR ITEMS,
ETC. IF SO, GET IT REPLACED BY A COMPLETE TEST BOOKLET.
2. Please note that it is the candidate’s responsibility to encode and fill in the Roll Number carefully
without any omission or discrepancy at the appropriate places in the OMR Answer Sheet. Any
omission/discrepancy will render the Answer Sheet liable for rejection.
3. You have to enter your Roll Number on the test booklet in the Box provided
alongside. DO NOT write anything else on the Test Booklet.
4. This Test Booklet contains 50 items (questions). Each item is printed in English. Each item comprises four
responses (answers). You will select the response which you want to mark on the Answer Sheet. In case you
feel that there is more than one correct response, mark the response which you consider the best. In any case,
choose ONLY ONE response for each item.
5. You have to mark all your responses ONLY on the separate Answer Sheet provided. See directions in the
Answer Sheet.
6. All items carry equal marks.
7. Before you proceed to mark in the Answer Sheet in response to various items in the Test Booklet, you have to
fill in some particulars in the Answer Sheet as per instructions sent to you with your Admission Certificate.
8. After you have completed filling in all your responses on the Answer Sheet and the examination has concluded,
you should hand over to the Invigilator only the Answer Sheet. You are permitted to take away with you the
Test Booklet.
9. Sheets for rough work are appended in the Test Booklet at the end.
10. Penalty for wrong answers:
THERE WILL BE PENALTY FOR WRONG ANSWERS MARKED BY A CANDIDATE IN THE OBJECTIVE
TYPE QUESTION PAPERS.
(i) There are four alternatives for the answer to every question. For each question for which a wrong answer
has been given by the candidate, one-third of the marks assigned to that question will be deducted as
penalty.
(ii) If a candidate gives more than one answer, it will be treated as a wrong answer even if one of the given
answers happens to be correct and there will be same penalty as above to that question.
(iii) If a question is left blank, i.e., no answer is given by the candidate, there will be no penalty for that
question.

DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE ASKED TO DO SO

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1. Which of the following statement regarding 4. Which of the following statements is/are
AgriStack is incorrect? correct regarding the Pradhan Mantri Fasal
Bima Yojana?
(a) It is a collection of digital databases
based on land records including a unique 1. It aims to provide financial support to
farmer identity number for each farmer. farmers suffering crop loss or damage
(b) It will act as a payment gateway for arising out of all non-preventable natural
expanding scope of DBT subsidies. calamities.

(c) It will act as the underlying platform 2. It is mandatory for the farmers to take
over which apps like Kisan Suvidha and insurance coverage under the scheme.
others will run. 3. Banks have to ensure that eligible loanee
(d) It aims to shift India’s agriculture farmers are not deprived of any benefit
towards precision farming. under the Scheme due to error otherwise,
the concerned agencies shall have to
make good of all such losses.
2. With reference to Public Distribution System,
consider the following statements: Select the correct answer using the code given
below:
1. Targeted Public Distribution System

RE
(TPDS) is notified under the Essential (a) 1 and 2 only
Commodities Act, 1955 (ECA).
(b) 1 and 3 only
2. There is only Centralized procurement
which is carried out by the Food (c) 3 only
Corporation of India. (d) 1, 2, and 3
Which of the above statements is/are correct?
O 5. Which of the following statements regarding
(a) 1 only
Codex Alimentarius Commission is/are
(b) 2 only correct?
SC
(c) Both 1 and 2 1. It is an international food standards body
(d) Neither 1 nor 2 established by International Food Policy
Research Institute.
3. While calculating the MSP of a crop, which 2. Codex standards defined by the
of the following determinants are analysed commission are voluntary in nature.
by the Commission for Agricultural Costs &
3. The Agreement on Application of Sanitary
Prices?
and Phytosanitary Measures (SPS) of
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1. Demand and supply the World Trade Organization (WTO)

recognizes Codex standards as reference
2. Cost of production
standards for international trade and
3. Inter-crop price parity trade dispute settlement.
4. A minimum of 100 percent as the margin Select the correct answer using the code given
over cost of production below:
5. Likely implications of MSP on consumers (a) 1 and 2 only
of that product
(b) 2 and 3 only
6. Price trends in the market, both domestic
and international (c) 1 and 3 only

Select the correct answer using the code given (d) 3 only
below:
(a) 1, 2, 3, 4 and 5 only 6. Consider the following statements with
reference to Mega Food Parks (MFP):
(b) 1, 2, 3, 5, and 6 only
1. State Government are required to form
(c) 1, 3, 4 and 6 only a separate Special Purpose Vehicle for
(d) 2, 5 and 6 only implementation of MFP.

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2. Scheme for Creation of Backward 9. The term like ‘Unicorn’, often seen in news,
and Forward under MFP Linkages implies which of the following?
is applicable only to perishable
horticulture. (a) A startup that reaches the valuation of
$1 billion.
3. Pradhan Mantri Kisan SAMPADA
Yojana provides 100% financial (b) Any startup that reaches the funding of
assistance for forming MFP in North- $1 billion.
Eastern states.
(c) A government aided startup.
How many of the statements given above is/
are incorrect? (d) A startup which has monopoly in
e-commerce.
(a) Only one
(b) Only two 10. Positive Indigenization List, details of which
are available on the ‘Srijan portal’, is related
(c) All three
to which of the following?
(d) None
(a) Incentivising private players in the
space sector
7. Consider the following statements:

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(b) Indigenization efforts of Defence Public
1. Sale of government stake to the tune of Sector Undertakings
49% is called minority stake sale.
(c) Incentivising Electronics Manufacturing
2. De-nationalization is the sale transfer
Service (EMS) Industry
of entire state ownership to the private
sector. (d) Disinvestment of Railways PSUs
3. Strategic Disinvestment always involves
transfer of managerial control.
O
Which of the above statements is/are correct?
11. “Industry 4.0 is based on six design principles
to support companies in identifying and
implementing Industry 4.0 scenarios.” Which
(a) 1 only of the following is not one of the principles?
SC
(b) 1 and 2 only (a) Decentralisation
(c) 2 and 3 only (b) Mass Production
(d) 1, 2 and 3 (c) Real Time Capability
(d) Interoperability
8. Which of the following statements regarding
National Monetization Pipeline (NMP) are
GS

correct? 12. Consider the following statements with

reference to Government e-Marketplace
1. It aims to unlock value in brownfield
(GeM):
projects by engaging the private sector.
1. GeM is paperless and cashless market
2. It will transfer the ownership of entire
projects to private sector and use the place for procurement of common use
funds so generated for infrastructure goods and services.
creation across the country. 2. It has been setup under the aegis of
3. Roads, railways and power sector Ministry of Commerce and Industry.
assets will comprise over 50% of the 3. SWAYATT initiative aims to promote
total estimated value of the assets to be
start-ups, women and youth through
monetized.
e-transaction on GeM.
Select the correct answer using the code given
below: Which of the above statements are correct?

(a) 1 and 2 only (a) 1 and 2 only

(b) 1 and 3 only (b) 1 and 3 only

(c) 2 and 3 only (c) 2 and 3 only

(d) 1, 2 and 3 (d) 1, 2 and 3

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13. Which of the following statements is/are Which of the above statements is/are
correct? incorrect?

1. Under the Most Favored Nation treatment (a) 1 and 3 only

agreement, countries can discriminate (b) 3 only
between their trading partners by
favoring some selected partners. (c) 1 and 2 only
(d) 2 only
2. The National Treatment means treating
foreigners and locals equally
16. Which of the following statement correctly
3. Charging customs duty on an import is defines the term ‘Soft Currency’?
not a violation of national treatment.
(a) A legal tender which is digitally traded
Select the correct answer using the code given across the financial system of a country.
below: (b) A Centrally backed digital crypto asset.
(a) 1 and 2 only (c) A legal tender which is hyper sensitive
(b) 2 only and fluctuates frequently.

RE
(d) Fiduciary money backed up by trust
(c) 1 and 3 only
between the payer and payee.
(d) 2 and 3 only
17. Which of the following statements is correct
14. The General Agreement on Trade in Services regarding Transfer Payments?
(GATS) distinguishes between four modes of (a) They are receipts which the residents of
O
supplying services. Regarding this which of a country receive for free, without having
the following statements is/are correct? to make any present or future payments
in return.
1. Consumption abroad means when a
tourist moves into another country. (b) It is a tool to redistribute income and
SC
wealth in an economy.
2. Commercial presence means when
doctors of one member country entering (c) Remittances, gifts and grants, and
government subsidies are considered as
the territory of another member to supply
transfer payments.
a service.
(d) It is included under revenue expenditure
Select the correct answer using the code given while calculating Gross Domestic
below: Product.
GS

(a) 1 only
18. Exchange-Traded Fund (ETF) is a basket
(b) 2 only of securities that can be traded on a stock
(c) Both 1 and 2 exchange. In this regard, consider the following
statements:
(d) Neither 1 nor 2
1. The return and risk on ETF are directly
related to the underlying index or asset
15. Consider the following statements regarding it tracks.
Predatory Dumping:
2. Bharat 22 is the first ETF launched
1. Predatory dumping refers to foreign by Finance ministry to speed up its
companies non-competitively pricing disinvestment programme.
their products at a loss. Which of the above statements is/are correct?
2. Predatory dumping is illegal under World (a) 1 only
Trade Organization (WTO) rules.
(b) 2 only
3. Anti-dumping measures are considered
(c) Both 1 and 2
protectionism, as predatory dumping is
not a fair trade practice. (d) Neither 1 nor 2

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19. Which of the following defines the concept of How many of the above statements are
Balance of Payments most appropriately? correct?

(a) It records the transactions in goods, (a) Only one

services, and assets between residents of (b) Only two
a country with the rest of the world for a
specified time period. (c) All three
(d) None
(b) It records the transactions in goods,
services, and assets between citizens of
a country with the rest of the world for a 22. Which of the following statements regarding
specified time period. Foreign Institutional Investment (FII) in India
are correct?
(c) It records exports and imports in goods
1. Non-Resident Indians (NRIs) are allowed
and services and transfer payments. to invest in the primary and secondary
(d) It records the net export levels of goods capital markets in India through the
and services and transfer payments. portfolio investment scheme (PIS) of
Reserve Bank of India.

RE
20. Consider the following statements: 2. The ceiling for overall investment for
FIIs is 24 per cent of the paid up capital
Assertion (A): A member country need not to of the Indian company.
present a declaration of balance of payments-
3. Securities and Exchange Board of
related needs to make a purchase in the India monitors the ceilings on FII
reserve tranche. investments in Indian companies on a
daily basis.

member country’s quota that is accessible

without any fees or economic reform
O
Reason (R): The reserve tranche is a segment
of an International Monetary Fund (IMF) Select the correct answer using the code given
below:
(a) 1 and 2 only
SC
conditions.
(b) 2 and 3 only
Select the correct answer using the code given
below: (c) 1 and 3 only

(a) Both A and R are correct and R is the (d) 1, 2 and 3

correct explanation of A.
23. Which of the following organizations make up
(b) Both A and R are correct but R is not the the World Bank?
GS

correct explanation of A.
1. International Development Association
(c) A is correct but R is incorrect. (IDA)
(d) R is correct but A is incorrect. 2. International Finance Corporation (IFC)
3. International Centre for the Settlement
21. Consider the following statements regarding of Investment Disputes (ICSID)
Agreement on Trade-Related Aspects of
4. International Bank for Reconstruction
Intellectual Property Rights (TRIPS): and Development (IBRD)
1. Compulsory licensing as one of the 5. Multilateral Investment Guarantee
flexibilities in the field of patent Agency (MIGA)
protection was agreed upon in the WTO
Select the correct answer using the code given
Doha Declaration in 2001.
below:
2. Compulsory licensing waves off the rights
(a) 1, 3 and 5 only
of the patent owner on the product.
(b) 2 and 4 only
3. The TRIPS Agreement does not
specifically list the reasons that might be (c) 1 and 4 only
used to justify compulsory licensing. (d) 1, 2 and 4 only

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24. Preparation and release of the India’s External 3. Asian Economic Asian
Debt report is vested with: Integration Report Development
(a) Reserve Bank of India. Bank

(b) Department of Economic Affairs under 4. Fiscal Monitor Report IMF

Ministry of Finance. How many of the above pairs is/are correctly
(c) International Trade Policy Division of matched?
the Ministry of Commerce and Industry.
(a) Only one
(d) NITI Aayog.
(b) Only two

25. Consider the following statements: (c) Only three

1. Inclusix is an index prepared jointly by (d) All four

MOODY’S and CRISIL.
2. It is an index which measures financial 28. Consider the following statements regarding
inclusion of people. the Countervailing Duty:
1. Countervailing Duty is a specific kind

RE
3. While preparing the index, branch;
deposit; credit; and insurance penetration of duty imposed by the government on
are used as the indicators. imported products.
Which of the above statements is/are correct? 2. It is imposed to make subsidies given by
(a) 1 only the exporter country ineffective in the
importing country.
(b) 1 and 2 only
(c) 2 and 3 only
O 3. The duty increases the price of the
product and brings it at par with the
(d) 1, 2 and 3 market prices prevailing in the domestic
market.
SC
26. Which of the following statements regarding Which of the above statements is/are correct?
the capital and current account convertibility
in India is/are correct? (a) 1 and 2 only

1. A fully convertible currency would mean (b) 2 only

a reduced burden of foreign debt.
(c) 2 and 3 only
2. India has allowed full current account
convertibility since 1993. (d) 1, 2 and 3
GS

3. To bring full capital account convertibility

29. Select the most appropriate definition of
in India, internationalization of Rupee is
“Greenfield FDI:”
a prerequisite.
Select the correct answer using the code given (a) It is the foreign direct investment in
below: assets and capital of a country used to
build green corridors.
(a) 1 only
(b) It refers to the FDI permitted by the
(b) 2 only government of a country after it clears
(c) 1 and 2 only all the stages of Environment Impact
assessment.
(d) 2 and 3 only
(c) It is the investment done by a company
27. Consider the following pairs: in new assets and capital to set up its
base from ground up.
Reports Published By
(d) It is a recent initiative of the G20
1. Global Economic IMF group to promote foreign investment in
Prospects
environmental projects and accomplish
2. World Trade Report WTO the SDGs.

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30. The Global Minimum Corporate Tax rate of 3. India is a member of Nice Agreement,
15%, as endorsed by the G7 countries, best concerning the International
deals with which of the following burning Classification of Goods and Services
issues in global economy: for the Purposes of the Registration of
Marks.
(a) Crony capitalism
Which of the above statements is/are correct?
(b) Base Erosion and Profit Shifting
(a) 1 and 3 only
(c) Round tripping
(b) 1 and 2 only
(d) Transfer pricing
(c) 2 and 3 only
31. With respect to Balance of Trade, which of the (d) 1, 2 and 3
following statement is/are correct?
1. Balance of trade is the difference between 34. Consider the following statements regarding
the value of a country’s imports and the Balance of Payments (BoP):
exports for a given period.
1. Errors and Omissions in the Balance of
2. The Balance of Payment (BOP) combines

RE
Payments (BoP) account for statistical
only public investments to find out the discrepancies and are always negative.
money inflow and outflow in an economy
over a specific period. 2. A surplus in the Current Account can
be offset by a deficit in the Financial
3. Positive Balance of Payment (BOP) Account.
indicates deficit.
O Which of the statements given above is/are
Select the correct answer using the code given correct?
below:
(a) 1 only
(a) 1 only
(b) 2 only
(b) 1 and 3 only
SC
(c) Both 1 and 2
(c) 1 and 2 only
(d) Neither 1 nor 2
(d) 2 and 3 only
35. Consider the following statements regarding
32. Which of the following statements about factors Foreign Capital:
affecting exchange rate system is incorrect?
1. Greenfield investments are a form of
GS

(a) RBI sells dollars when Indian rupee Foreign Direct Investment where a parent
depreciates. company constructs new operational
(b) An increase in inflation rate can increase facilities in a foreign country.
the demand for foreign currency. 2. Portfolio investments, while volatile,
(c) Higher interest rates can lead to the do not influence a country’s external
outflow of foreign currency. vulnerability as they do not contribute to
external debt.
(d) An increase in exports, appreciates
domestic currency. 3. Bilateral Investment Treaties (BITs)
typically cover portfolio investments but
not FDIs.
33. Consider the following statements about Indian
patent regime: How many of the statements given above are
correct?
1. The original Indian Patents Act did not
grant patent protection to pharmaceutical (a) Only one
products.
(b) Only two
2. India has not yet joined the WIPO
(c) All three
Copyright Treaty and the WIPO
Performances and Phonograms Treaty. (d) None

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36. Consider the following statements about How many of the statements given above are
Exchange Rate Regimes: correct?

1. The crawling peg system allows a country (a) Only one

to adjust its pegged rate gradually in (b) Only two
response to economic indicators.
(c) All three
2. The gold standard is a system where (d) None
countries tie the value of their currency
to a specific amount of gold.
39. Consider the following statements:
3. The hybrid system combines features 1. REER is adjusted for both inflation and
of both fixed and floating exchange rate trade balances.
systems.
2. A country’s REER can be used as
How many of the statements given above are an indicator of the country’s export
correct? competitiveness.
3. NEER always provides a clearer picture
(a) Only one
of a country’s relative currency strength

RE
(b) Only two compared to REER.

(c) All three Which of the statements given above is/are

incorrect?
(d) None
(a) 3 only
(b) 1 and 3 only
37. Consider the following statements regarding
Currency fluctuations:
O (c) 1 only

1. A devaluation of the currency can make a (d) 1 and 2 only

country’s exports cheaper.
40. Consider the following statements:
SC
2. Appreciation of the currency may lead to
a decrease in the trade deficit. 1. The Reserve Bank of India’s directive
requires all system providers to store
3. Depreciation is always a result of the payment data exclusively in systems
government’s policy decision. located within India.

How many of the statements given above are 2. Payment System Operators (PSOs) are
prohibited from processing payment
correct?
transactions outside India.
GS

(a) Only one 3. The directive mandates that cross border

(b) Only two transaction data must be stored only in
India.
(c) All three
How many of the statements given above are
(d) None correct?
(a) Only one
38. Consider the following statements: (b) Only two
1. Capital Account Convertibility is (c) Only three
primarily related to transactions of assets
(d) None
and investments.
2. A fully convertible capital account can 41. Consider the following statements about the
lead to increased vulnerability to external Reserve Bank of India’s Composite Financial
economic shocks. Inclusion Index (FI-Index):

3. Current Account Convertibility allows 1. The FI-Index is a comprehensive

index that includes details of banking,
investors to bring in and take out capital
investments, insurance, postal, and
freely from a country. pension sectors.

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2. The FI-Index captures the extent of 44. Consider the following statements regarding
Financial Inclusion in India through the Gati Shakti scheme:
parameters such as Access, Usage, and
Quality of financial services. 1. The scheme aims to establish 11 new
3. Pradhan Mantri Jan-Dhan Yojana defence corridors.
(PMJDY) scheme was introduced with
2. One of the expected outcomes of the
the main aim to increase the level of
financial inclusion in the country. scheme is to provide immense clarity on
last-mile connectivity linking different
How many of the statements given above are
regions and industrial hubs.
correct?
(a) Only one 3. One of the aims of the scheme is to add
17,000 kms to the gas pipeline network.
(b) Only two
How many of the statements given above are
(c) All three
correct?
(d) None
(a) Only one
42. Consider the following statements related

RE
(b) Only two
to the Global Minimum Corporate Tax Rate
(GMCTR): (c) All three
1. The G7 has backed a minimum global (d) None
corporation tax rate of 10%.
2. The GMCTR will allow companies to 45. Consider the following statements about
continue shifting profits to tax havens
Credit Rating Agencies (CRAs) in India:
without any penalties.
O
3. A global minimum rate will increase the
tools that countries use to push policies
1. Financial institutions eagerly lend money
to businesses with poor credit ratings.
that suit them.
SC
2. CRAs are directly accountable to
How many of the statements given above are
investors.
correct?
(a) Only one 3. There is a conflict of interest when CRAs
have consultancy or advisory services
(b) Only two
registered in subsidiaries.
(c) All three
Which of the statements given above is/are
GS

(d) None correct?

43. Consider the following statements about the (a) 1 and 2 only
National Monetisation Pipeline (NMP):
(b) 1 only
1. The NMP plans to utilise capital from
only strategic government-owned assets. (c) 1 and 3 only

2. A envisages an aggregate monetisation (d) 3 only

potential of `100 lakh crore.
3. The NMP is anticipated to boost the 46. Which one of the following statements is
economy and drive the competitiveness correct?
of the Indian economy.
(a) Foreign direct investment (FDI) can lead
How many of the statements given above are
incorrect? to technology transfer, job creation, and
skill enhancement in the host country.
(a) Only one
(b) FDI involves purchasing a majority
(b) Only two
stock in foreign companies without any
(c) All three tangible assets or direct involvement in
(d) None the operations of the company abroad.

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(c) Greenfield Investments refer to the 49. Consider the following statements:
scenario where a foreign entity invests
1. The Trade-Related Investment Measures
in existing facilities in another country,
(TRIMS) prohibits certain measures that
typically by acquiring or merging with an
already established firm. violate the GATT national treatment and
quantitative restrictions.
(d) A Turnkey Project is a foreign investment
model where a foreign entity sets up a 2. The TRIMS Agreement applies only to
fully-equipped facility for a host country trade in goods.
party, often retaining rights to intellectual 3. India faced challenges under the Trade-
property and strategic decisions.
Related Aspects of Intellectual Property
Rights (TRIPS) Agreement due to its
47. Consider the following statements: local content requirements in the solar
1. Shanghai Cooperation Organisation power sector.
originated from a group called the How many of the statements given above are
“Shanghai Five.” correct?
2. China is a member of ASEAN.
(a) 1 and 2 only

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3. BIMSTEC was initially founded with
(b) 1 and 3 only
seven member countries.
(c) 2 and 3 only
How many of the statements given above are
correct? (d) None
(a) Only one
50. Consider the following statements concerning
(b) Only two
O the impact of globalization on the Indian
(c) All three economy:
(d) None 1. The post-1991 economic liberalization in
SC
India was primarily driven by internal
48. Consider the following statements: political pressures rather than global
influences.
1. Member countries of a Customs Union
maintain individual tariff policies for 2. Globalization has contributed to the
non-member countries. rapid growth of India’s IT and service
sector, making it a global hub for software
2. Within a Customs Union, member
services.
countries eliminate tariffs on goods
GS

traded among themselves. 3. The inflow of Foreign Direct Investment

(FDI) has consistently decreased post-
3. Common market does not allow the free
movement of capital and labor between globalization due to competition from
member countries. other emerging economies.

How many of the statements given above are Which of the statements given above is/are
correct? correct?

(a) Only one (a) 1 and 2 only

(b) Only two (b) 2 only

(c) All three (c) 2 and 3 only

(d) None (d) 1, 2 and 3

™™™™™

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IAS Prelims - 2024

PPP-PTS-4313/082023/10

GENERAL STUDIES

ECONOMY - 4

Answer Key

Q. 1 (b) Q. 11 (b) Q. 21 (b) Q. 31 (a) Q. 41 (c)

Q. 2 (a) Q. 12 (d) Q. 22 (a) Q. 32 (c) Q. 42 (d)

Q. 3 (b) Q. 13 (d) Q. 23 (c) Q. 33 (a) Q. 43 (b)

Q. 4 (b) Q. 14 (a) Q. 24 (b) Q. 34 (b) Q. 44 (b)

Q. 5 (b) Q. 15 (b) Q. 25 (c) Q. 35 (a) Q. 45 (d)

Q. 6 (c) Q. 16 (c) Q. 26 (d) Q. 36 (c) Q. 46 (a)

Q. 7 (d) Q. 17 (d) Q. 27 (c) Q. 37 (a) Q. 47 (a)

Q. 8 (b) Q. 18 (a) Q. 28 (d) Q. 38 (b) Q. 48 (a)

Q. 9 (a) Q. 19 (a) Q. 29 (c) Q. 39 (a) Q. 49 (a)

Q. 10 (b) Q. 20 (d) Q. 30 (b) Q. 40 (a) Q. 50 (b)

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1. Correct Option: (b) provided under TPDS are procured from
farmers, allocated to states and delivered to
Explanation: the ration shop where the beneficiary buys
 Option (b) is correct his entitlement. The centre and states share
the responsibilities of identifying the poor,
Supplementary Notes procuring grains and delivering food grains
AgriStack to beneficiaries.

 The government is working on a digital Laws and Regulations governing TPDS

‘stack’ of agricultural datasets, with its core  Essential Commodities Act and PDS
as land records. (Control) Order: TPDS is administered
 Applications built over the stack will under the Public Distribution System
provide farmers with recommendations on (Control) Order 2001 notified under the
which seeds to buy, and best practices to Essential Commodities Act, 1955 (ECA).
maximize their yield, along with updates on The ECA regulates the production, supply,
weather, agricultural credit, insurance and and distribution of essential commodities
more. including edible oils, food crops such as
wheat, rice, and sugar, among others. It
 This will also help increase farmers’ income regulates prices, cultivation and distribution
and improve the efficiency of the agricultural of essential commodities. The PDS (Control)
sector, the government has said. Order, 2001 specifies the framework for

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 As a collection of digital databases, the implementation of TPDS. It highlights
AgriStack would have some core key aspects of the scheme including the
features including a unique farmer method of identification of beneficiaries, the
identity number for each farmer, issue of food grains, and the mechanism for
and some building blocks such as data on distribution of food grains from the centre
weather, the newest science and research on to states.
agriculture, agricultural commodity prices PUCL vs. Union of India, 2001: In 2001,
O

in India and abroad, information and access the People’s Union for Civil Liberties
to central government schemes, agricultural (PUCL) filed a writ petition in the Supreme
regulations and permissions. Court contending that the “right to food” is
 AgriStack is billed as the underlying essential to the right to life as provided in
SC
platform (like Android or iOS) over Article 21 of the Constitution. During the
which apps like Kisan Suvidha and ongoing litigation, the Court has issued
others will run. several interim orders, including the
implementation of eight central schemes
 The overall objective is that India
as legal entitlements. These include PDS,
moves to precision farming--the use
Antyodaya Anna Yojana (AAY), the Mid-
of all agricultural inputs in a specific,
Day Meal Scheme, and Integrated Child
measured quantity for high yields.
Development Services (ICDS). In 2008,
L1 : Elementary the Court ordered that Below Poverty Line
GS

(BPL) families be entitled to 35 kg of food

grains per month at subsidised prices.
2. Correct Option: (a)
 National Food Security Act, 2013: The
Explanation: National Food Security Act gives statutory
 Statement 1 is correct: TPDS is backing to the TPDS. This legislation
administered under the Public Distribution marks a shift in the right to food as a legal
System (Control) Order 2001 notified right rather than a general entitlement.
under the Essential Commodities Act, 1955 The Act classifies the population into three
(ECA). categories: excluded (i.e., no entitlement),
priority (entitlement), and Antyodaya Anna
 Statement 2 is incorrect: Two types of Yojana (AAY; higher entitlement).
procurement, Centralised Procurement,
and decentralized procurement. Procurement of foodgrains
Supplementary Notes  The center is responsible for procuring the
food grains from farmers at a Minimum
Public Distribution System Support Price (MSP). The MSP is the price
 India’s Public Distribution System (PDS) at which the FCI purchases the crop directly
is the largest distribution network. TPDS from farmers; generally, the MSP is higher
aims to provide subsidised food and fuel to than the market price. This is intended
the poor through a network of ration shops. to provide price support to farmers and
Food grains such as rice and wheat that are incentivize the production.

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 MSP: Commission for Agricultural Costs  Statement 2 is incorrect: In February
and Prices (CACP). 2020, the government made PMFBY
 Procurement: Two types of voluntary for farmers.
procurement, Centralised  Statement 3 is correct: The concerned
Procurement, and decentralized agencies shall have to make good of all
procurement. such losses in case of errors/omissions/
 Centralized procurement is carried out commissions of the concerned branch/
by the FCI (Food Corporation of India) PACS.
where FCI buys crops directly from Supplementary Notes
farmers.
 Decentralized procurement is a central Pradhan Mantri Fasal Bima Yojana
scheme under which 10 states/Union  PMFBY aims to provide financial support
Territories procure food grains for the to farmers suffering crop loss/damage
central pool at MSP on behalf of FCI. arising out of all non-preventable natural
 Why decentralized procurement? The risks from pre-sowing to post-harvest stage.
purpose is to encourage local procurement Any loss to the insurer arising from higher
of food grains and minimize expenditure claims by farmers will be offset by the state
incurred when transporting grains from governments.
surplus to deficit states over long distances.  In February 2020, the government made
PMFBY voluntary for farmers while

RE
L2: Approachable
previously it was mandatory for the farmers
to take insurance cover under the scheme.
3. Correct Option: (b)  National Crop Insurance Portal (NCIP) is
Explanation: the only source of enrolment for Pradhan
Mantri Fasal Bima Yojana (PMFBY), on
 Option (b) is correct
which farmer applications from various
Supplementary Notes designated sources including banks/

Calculation of MSP
O financial institutions are entered.
 Banks have to ensure that eligible loanee
 While recommending price policy of farmers are not deprived of any benefit
various commodities under its mandate, under the Scheme due to errors/omissions/
the Commission for Agricultural Costs &
SC
commissions of the concerned branch/ PACS,
Prices keeps in mind the various Terms of and in case of such errors, the concerned
Reference (ToR). Accordingly, it analyses: agencies shall have to make good of all such
 demand and supply; losses.
 cost of production; L3: Real Challenge
 price trends in the market, both
domestic and international; 5. Correct Option: (b)
inter-crop price parity;
GS


Explanation:
 terms of trade between agriculture
and non-agriculture;  Statement 1 is incorrect: The Codex
Alimentarius Commission (CAC) is
 a minimum of 50 percent as the an international food standards body
margin over cost of production; and established jointly by the Food and
 likely implications of MSP on Agriculture organization (FAO) and the
consumers of that product. World Health Organization (WHO).
 It may be noted that cost of production is Supplementary Notes
an important factor that goes as an input
in determination of MSP, but it is certainly Codex Alimentarius Commission
not the only factor that determines MSP.  The Codex Alimentarius Commission
L3: Real Challenge (CAC) is an international food standards
body established jointly by the Food
and Agriculture organization (FAO)
4. Correct Option: (b) and the World Health Organization
Explanation: (WHO) in May 1963 with the objective
of protecting consumer’s health and
 Statement 1 is correct: PMFBY aims ensuring fair practices in food trade.
to provide financial support to farmers
suffering crop loss/damage arising out of  The Agreement on Application of
all non-preventable natural risks from pre- Sanitary and Phytosanitary Measures
sowing to post-harvest stage. (SPS) of the World Trade Organization

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(WTO) recognizes Codex standards,  Mega food park typically consist of supply
guidelines and recommendations as chain infrastructure including collection
reference standards for international centers, primary processing centers, central
trade and trade dispute settlement processing centers, cold chain and around
 Currently the Codex Alimentarius 25-30 fully developed plots for entrepreneurs
Commission has 189 Codex Members made to set up food processing units.
up of 188 Member Countries and 1 Member  The Mega Food Park project is implemented
Organization (The European Union). by a Special Purpose Vehicle (SPV) which
 India became the member of Codex is a Body Corporate registered under the
Alimentarius in 1964. Companies Act.
 The Codex Secretariat is run by staff  State Government, State Government
designated by FAO and WHO, located at entities and Cooperatives are not
FAO headquarters in Rome. required to form a separate SPV for
implementation of Mega Food Park project.
 Voluntary in nature, Codex standards
can be general or specific and are Scheme for Creation of Backward and
recognised by WTO Agreements as Forward Linkages
reference standards.
 Scheme for Creation of Backward and
 These core Codex texts, typically deal with Forward Linkages is to provide effective
hygienic practice, labelling, contaminants, and seamless backward and forward
additives, inspection & certification,

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integration for processed food industry
nutrition and residues of veterinary drugs
by plugging the gaps in supply chain in
and pesticides and apply horizontally to
terms of availability of raw material and
products and product categories.
linkages with the market. Under the
 Codex standards are considered scientifically scheme, financial assistance is provided for
justified and are accepted as the benchmarks setting up of primary processing centers/
against which national measures and collection centers at farm gate and modern
regulations are evaluated. retail outlets at the front end along with
O
L3: Real Challenge connectivity through insulated/ refrigerated
transport.

6. Correct Option: (c)  The Scheme is applicable to perishable

horticulture and non-horticulture
SC
Explanation: produce such as fruits, vegetables, dairy
 Statement 1 is incorrect: State products, meat, poultry, fish, Ready to Cook
Government, State Government entities Food Products, Honey, Coconut, Spices,
and Cooperatives are not required to form Mushroom, Retails Shops for Perishable
a separate SPV. Food Products etc.
 Statement 2 is incorrect: The Scheme is  The Scheme would enable linking of farmers
applicable to perishable horticulture and to processors and the market for ensuring
non-horticulture produce remunerative prices for agri produce.
GS

The scheme is implemented by agencies/

 Statement 3 is incorrect: Special
organizations such as Govt./ PSUs/ Joint
concessions of 75% are provided for setting
Ventures/ NGOs/ Cooperatives/ SHGs /
up of such industries and Mega Food Parks
in North Eastern States. FPOs / Private Sector / individuals etc.

Supplementary Notes PMKSY

 Ministry of Food Processing industries
Mega Food Parks (MoFPI) has been implementing Central
 The Scheme of Mega Food Park aims Sector Umbrella Scheme - Pradhan Mantri
at providing a mechanism to link Kisan SAMPADA Yojana (PMKSY) since
agricultural production to the market by 2016-17 for overall growth and development
bringing together farmers, processors and of food processing sector including setting
retailers so as to ensure maximizing value up of Food Processing Industries.
addition, minimizing wastage, increasing
farmers’ income and creating employment  Under the component schemes of PMKSY,
opportunities particularly in rural sector. special concessions of 75% are provided for
setting up of such industries and Mega Food
 The Mega Food Park Scheme is based on Parks in North Eastern States (including
“Cluster” approach and envisages creation Sikkim) and difficult areas like Himalayan
of state of art support infrastructure in a
States/UTs, State notified Integrated Tribal
well-defined agri / horticultural zone for
Development Project (ITDP) areas and
setting up of modern food processing units
Islands.
in the industrial plots provided in the park
with well-established supply chain. L3: Real Challenge

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7. Correct Option: (d) brownfield projects by engaging the private
sector, transferring to them revenue rights
Explanation: and not ownership in the projects, and using
 All statements are correct the funds so generated for infrastructure
creation across the country.
Supplementary Notes
Supplementary Notes
Privatization
National Monetization Pipeline (NMP)
 Privatization describes the process by which
a piece of property or business goes from  The government unveiled a four-year
being owned by the government to being National Monetisation Pipeline (NMP)
privately owned. worth an estimated Rs 6 lakh crore.
 It generally helps governments save money  Under the NMP, the government has
and increase efficiency, where private identified 13 sectors — including airports,
companies can move goods quicker and railways, roads, shipping, gas pipeline
more efficiently. among others— which will be privatized
 The term ‘privatization’ has different as the government aims to monetize its
connotations. These are: brownfield infrastructure assets.

 De-nationalization is the transfer of  It aims to unlock value in brownfield projects

the state ownership of the assets to by engaging the private sector, transferring

RE
the private sector to the tune of 100 to them revenue rights and not ownership
per cent. It is privatization in its purest in the projects, and using the funds so
sense. This form of privatization is generated for infrastructure creation across
motivated by efforts to save government the country.
money and increase efficiency, where  The objective of NMP is to provide a clear
private companies are thought to be able framework for monetisation and give
to move goods and capital quicker and potential investors a ready list of assets to
more efficiently.
 If an asset has been sold out by
O 
generate investment interest.
In a monetisation transaction, the
the government to the tune of only government is basically transferring revenue
49 per cent the ownership remains rights to private parties for a specified
with the state though it is considered transaction period in return for upfront
SC
Privatisation. It is also called
money, a revenue share, and commitment
disinvestment through minority
of investments in the assets.
stake sale.
 Real estate investment trusts (REITs) and
 If the sale of shares of the state-owned
infrastructure investment trusts (InvITs),
assets has been to the tune of 51 per cent,
for instance, are the key structures used
the ownership is really transferred to
to monetise assets in the roads and power
the private sector even then it is termed
as privatisation. This is disinvestment sectors.
GS

through majority stake sale.  The entire (NMP) talks about brownfield
 Strategic disinvestment would projects where investments have already
imply the sale of substantial portion been made, where there is a completed asset
of the Government shareholding of which is either languishing or it is not fully
a central public sector enterprise monetised or is under-utilized.
(CPSE) of up to 50%, or such higher  Roads, railways and power sector assets will
percentage as the competent comprise over 66% of the total estimated
authority may determine, along with value of the assets to be monetised, with
transfer of management control. the remaining upcoming sectors including
L3: Real Challenge telecom, mining, aviation, ports, natural
gas and petroleum product pipelines,
warehouses and stadiums.
8. Correct Option: (b)
 Among the key challenges that may affect
Explanation: the NMP roadmap are: lack of identifiable
 Statement 2 is incorrect: In a monetisation revenues streams in various assets, level of
transaction, the government is basically capacity utilization in gas and petroleum
transferring revenue rights to private parties pipeline networks, dispute resolution
for a specified transaction period in return mechanism, regulated tariffs in power sector
for upfront money, a revenue share, and assets, and low interest among investors in
commitment of investments in the assets. national highways below four lanes.
As such, the NMP aims to unlock value in L3: Real Challenge

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9. Correct Option: (a)  Pursuant to ‘Atmanirbhar Bharat’
announcement, the Department of Defence
Explanation: Production/Ministry of Defence/Government
 Option (a) is correct of India has developed a portal named,
srijandefence.gov.in, as “Opportunities for
Supplementary Notes
Make in India in Defence”. The main objective
Unicorn of the portal is to partner the private sector
 In the venture capital industry, the term in indigenization efforts of Defence Public
unicorn refers to any startup that reaches Sector Undertakings (DPSUs), DPSU’s and
the valuation of $1 billion. the Armed Forces. The portal will be a non-
 Only a privately held startup can be a transactional online market place platform.
unicorn.  DPSUs/SHQs will display their items on
 The term initially was used to lay emphasis this portal, which they have imported or
on the rarity of such startups. going to import, each item having sizeable
 Disruptive Innovation, high on technology, import value. They will also display those
new ideas, consumer focus are some of the items which have been planned/targeted in
common features of unicorns. the coming years, for indigenization.
 As of 27th January 2022, India is home  The Indian industry will be able to show
to 84 unicorns with a total valuation of their interest in those items for which they
$ 286.27 Bn. Sequoia has been the most

RE
can design, develop and manufacture as per
active investor in Indian Unicorns, followed their capability or through joint venture with
by Tiger Global Management, Accel, and OEMs. The concerned DPSUs/SHQs, based
Softbank. on their requirement of the items and their
 A decacorn is company that has attained respective guidelines & procedures, will
a valuation of more than $ 10 Bn. As of interact with the interested Indian industry
January 2022, 46 companies world over for indigenization. The interested Indian
have achieved the decacorn status. India industry can also interact with concerned
O
has four startups namely, Flipkart, BYJU’s,
DPSUs/SHQs for their queries related to
Paytm and Swiggy, added in decacorn
cohort. indigenization through the contact details
given under each item.
 Recently, an Indian startup founder
quipped on Twitter that the definition of L2: Approachable
SC
a ‘Unicorn’ as used in the venture capital
industry should now change to $1 billion of
funding raised. The term currently refers 11. Correct Option: (b)
to a startup that reaches a valuation of $1
Explanation:
billion.
 He was commenting on the flurry of  Option (b) is correct
unicorns that have been created globally. Supplementary Notes
The term was originally coined by US
GS

venture capitalist Aileen Lee in 2013 when Fourth Industrial Revolution

there were just 39 startups globally that fit
the definition, which has not changed since  The fourth industrial revolution, 4IR or
then. Industry 4.0 embodies the rapid change
in technology, industry, and society in the
L1 : Elementary
21st century.
 Industry 4.0 is a complex Cyber-Physical
10. Correct Option: (b) Systems which synergizes production with
Explanation: digital technologies, the Internet of Things,
Artificial Intelligence, Big Data & Analytics,
 Option (b) is correct
Machine Learning and Cloud Computing.
Supplementary Notes  The term ‘Industry 4.0’ was coined by the
Positive Indigenization List and Srijan German government in 2011.
portal  Additive manufacturing, Internet of Things,
 Recently, a positive indigenisation list of Cyber Physical Systems, Augmented
sub-systems/assemblies/subassemblies/ Reality/Virtual Reality and data analytics
components has been notified by the are some of the technologies associated with
Ministry of Defence which will only be Industry 4.0.
procured from Indian Industry after the
timelines indicated in the list. Details of  With the help of these technologies,
these items are available on the Srijan the manufacturing industry will be able to
portal. make data-driven decisions.

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O
L2: Approachable
SC
12. Correct Option: (d)  Recently, the commerce ministry launched
SWAYATT-an initiative to promote
Explanation: Start-ups, Women and Youth through
 All statements are correct e-Transactions on GeM.
 Ministry of Commerce also launched GeM
Supplementary Notes
Start-up Runway-an initiative of GeM in
Government e-Marketplace association with Start -up India to facilitate
Start-ups registered with Start -up India
 Government e-Marketplace is a one stop
GS

to access the public procurement market

portal to facilitate online procurement of
and sell innovative products and services to
common use goods and services required by
government buyers.
various govt. departments, organizations or
PSU’s. L2: Approachable
 GeM is a completely paperless, cashless
and system driven e-market place 13. Correct Option: (d)
that enables procurement of common
use goods and services with minimal Explanation:
human interface.  Statement 1 is incorrect: Granting
 It is a 100 percent government owned someone a special favor (such as a lower
company setup under the aegis of customs duty rate for one of their products)
Ministry of Commerce and Industry leads to do the same for all other WTO
for procurement of common use goods members. This principle is known as most-
and services by Government ministries, favored-nation (MFN) treatment.
departments and CPSEs.
Supplementary Notes
 It aims to enhance transparency and
efficiency in public procurement. MFN treatment: treating other people
equally
 It provides tools for e-bidding, reverse
e-auctioning and demand aggregation to  Under the WTO agreements, countries
facilitate the government users achieve the cannot normally discriminate between
best value of their money. their trading partners. Grant someone a

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special favor (such as a lower customs duty  Consumption abroad refers to
rate for one of their products) and you have situations where a service consumer
to do the same for all other WTO members. (e.g. tourist or patient) moves into
This principle is known as most-favored- another member’s territory to obtain a
nation (MFN) treatment. service;
 It is so important that it is the first article  Commercial presence implies that
of the General Agreement on Tariffs and a service supplier of one member
Trade (GATT), which governs trade in goods. establishes a territorial presence,
MFN is also a priority in the General including through ownership or lease
Agreement on Trade in Services of premises, in another member’s
(GATS) (Article 2) and the Agreement on territory to provide a service (e.g.
Trade-Related Aspects of Intellectual
domestic subsidiaries of foreign
Property Rights (TRIPS) (Article 4),
although in each agreement the principle is insurance companies or hotel chains);
handled slightly differently. Together, those and
three agreements cover all three main areas  The presence of natural persons
of trade handled by the WTO. consists of persons of one member (for
National treatment: Treating foreigners instance doctors) entering the territory
and locals equally of another member to supply a service (e.g.
accountants, doctors or teachers). The Annex
 Imported and locally-produced goods on Movement of Natural Persons specifies,
should be treated equally — at least after

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however, that members remain free to
the foreign goods have entered the market.
operate measures regarding citizenship,
The same should apply to foreign and
domestic services, and to foreign and local residence or access to the employment
trademarks, copyrights and patents. market on a permanent basis.
 This principle of “national treatment” L2: Approachable
(giving others the same treatment as one’s
own nationals) is also found in all the three
15. Correct Option: (b)
O
main WTO agreements (Article 3 of GATT,
Article 17 of GATS and Article 3 of TRIPS), Explanation:
although once again the principle is handled
slightly differently in each of these.  Statement 3 is incorrect: Anti-dumping
 National treatment only applies once a measures are not considered protectionism,
SC
product, service or item of intellectual as predatory dumping is not a fair trade
property has entered the market. practice.
 Therefore, charging customs duty on Supplementary Notes
an import is not a violation of national
treatment even if locally-produced products Predatory Dumping
are not charged an equivalent tax.  Predatory dumping refers to foreign
L3: Real Challenge companies anti-competitively pricing their
products below market value to drive out
GS

domestic competition.
14. Correct Option: (a)
 Those who practice predatory dumping
Explanation: are forced to sell at a loss until the
 Statement 2 is incorrect: Commercial competition is wiped out and monopoly
presence implies that a service supplier status is achieved.
of one member establishes a territorial  Predatory dumping can be financed by
presence, including through ownership selling products at higher prices in other
or lease of premises, in another member’s countries or, if possible, by tapping into a
territory to provide a service.
company’s resources.
Supplementary Notes  Globalization and World Trade Organization
Modes of supplying services (WTO) rules banning predatory dumping
make it increasingly difficult to pull off.
 The GATS distinguishes between four
modes of supplying services: cross-border  Moreover, predatory dumping is illegal
trade, consumption abroad, commercial under World Trade Organization
presence, and presence of natural persons. (WTO) rules—if it is deemed to harm
 Cross-border supply is defined to cover producers in the targeted market. Countries
services flows from the territory of one that can prove this to be the case are given
member into the territory of another member permission by the WTO to implement anti-
(e.g. banking or architectural services dumping measures, enabling governments
transmitted via telecommunications or to impose stiff duties on products being
mail); shipped in from overseas.

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 Anti-dumping measures are not considered  They consist of remittances, gifts and
protectionism, as predatory dumping is grants, financial aid, social security,
not a fair trade practice. The WTO rules and government subsidies.
are designed to help ensure that any anti-
 In economics, a transfer payment
dumping measures that countries take are
justifiable and are not simply used as a is a redistribution of income and
guise to protecting local businesses and jobs wealth by means of the government making
from foreign competition. a payment, without goods or services being
received in return.
L3: Real Challenge
 These payments are considered to be non-
exhaustive because they do not directly
16. Correct Option: (c) absorb resources or create output.
Explanation:  For the purpose of calculating Gross
 Option (c) is correct Domestic Product (GDP), government
spending does not include transfer
Supplementary Notes payments, which are the reallocation of
money from one party to another rather
Soft Currency
than expenditure on newly-produced goods
 Soft currency is a currency which is hyper and services.
sensitive and fluctuates frequently.
L1 : Elementary

RE
 Such currencies react very sharply to the
political or the economic situation of a
country. 18. Correct Option: (a)
 It is also known as weak currency due to its Explanation:
unstable nature.
 Statement 1 is correct: The return and
 Such currencies mostly exist in developing
risk on ETF are directly related to the
countries with relatively unstable
underlying index like the BSE Sensex or
governments.
O asset like gold.
 Soft currencies cause high volatility in
exchange rates as well, making them  Statement 2 is incorrect: Bharat 22 is not
undesirable by foreign exchange dealers. the first ETF launched by Finance Ministry.
Ministry of Finance had launched Central
SC
 These currencies are the least preferred for
Public Sector Enterprise Exchange Traded
international trade or holding reserves.
Fund (CPSE ETF) in 2014.
 Soft currencies are unlikely to be held by
central banks as foreign reserves, unlike Supplementary Notes
U.S. dollar, euros and the Japanese yen,
Exchange-Traded Funds (ETF)
a fact which compounds the problems of
volatility.  ETFs hold a portfolio of securities that
 Zimbabwean dollar and Venezuelan Bolivar replicates an index and are listed and
GS

are a classic example of soft currency. Both traded on the stock exchange and its trading
of these countries have experienced political value is based on the net asset value of the
instability. underlying stocks that it represents.
 Their governments have instituted monetary  The return and risk on ETF are directly
policies which have led to hyperinflation. related to the underlying index like the
This in turn has led to a sharp devaluation BSE Sensex or asset like gold.
in the currency and the printing of high  ETFs offer low expense ratios and fewer
denominating notes. broker commissions than buying the stocks
L2: Approachable individually.
 ETFs also offer the individual investor a
17. Correct Option: (d) cost-effective approach to enhance portfolio
diversification as it can cover indices,
Explanation: sectors, countries and asset classes.
 Option (d) is correct  The ETF is aimed at helping speed up the
Supplementary Notes government’s disinvestment programme.

Transfer payments Bharat 22

 Transfer payments are receipts which  It is the second Exchange Traded
the residents of a country receive ‘for Fund (ETF) that will be launched by
free’, without having to make any the Union Finance Ministry (1st being
present or future payments in return. CPSE ETF, launched in 2014).

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 This Index is a unique blend of shares of 20. Correct Option: (d)
key CPSEs, Public Sector Banks (PSBs) and
also the Government-owned shares in blue- Explanation:
chip private companies like Larsen & Tubro  Option (d) is correct
(L&T), Axis Bank and ITC.
Supplementary Notes
 Compared to energy heavy CPSE ETF,
Bharat 22 is a well-diversified portfolio with Reserve position
6 sectors (Basic Materials, Energy, Finance,
 Reserve position in the IMF is the sum of
FMCG, and Industrials & Utilities).
(a) the “reserve tranche,” that is, the foreign
 ICICI Prudential AMC will be the ETF currency (including Special Drawing
Manager and Asia Index Private Limited Rights) amounts that a member country
(JV BSE and S& P Global) will be the Index may draw from the IMF at short notice; and
Provider. (b) any indebtedness of the IMF (under a
L2: Approachable loan agreement) in the General Resources
Account that is readily available to the
member country, including the reporting
19. Correct Option: (a) country’s lending to the IMF under the
General Arrangement to Borrow (GAB) and
Explanation: the New Arrangement to Borrow (NAB).
 Option (a) is correct While a member country must present

RE

Supplementary Notes a declaration of balance of payments-
related need to make a purchase in the
Balance of Payments (BoP) reserve tranche (reduction in reserve
 It records the transactions in goods, position), the IMF does not challenge a
services and assets between residents member’s request for reserve tranche
of a country with the rest of the world purchases. Convertible currencies from
for a specified time period typically a a reserve tranche purchase may be made
O
year. available within days.
 There are two main accounts in the BoP – the  The reserve tranche represents the
current account and the capital account. member’s unconditional drawing right on
the IMF, created by the foreign exchange
 The current account records exports and portion of the quota subscription, plus
SC
imports in goods and services and transfer increase (decrease) through the IMF’s sale
payments. (repurchase) of the member’s currency to
 The capital account records all international meet the demand for use of IMF resources
purchases and sales of assets such as money, by other members in need of balance of
stocks, bonds, etc. payments financing. It is accessible
without any fees or economic reform
 When exports exceed imports, there is a
conditions. A member’s reserve position in
trade surplus and when imports exceed
the IMF constitutes part of its reserve assets
exports there is a trade deficit.
GS

in the international investment position.

 Trade-in services is denoted as invisible
L2: Approachable
trade (because they are not seen to cross
national borders) and it includes both factor
income (net income from compensation 21. Correct Option: (b)
of employees and net investment income,
the latter equals, the interest, profits and Explanation:
dividends on our assets abroad minus  Statement 2 is incorrect: It does not wave
the income foreigners earn on assets they off the rights of the patent owner.
own in India) and net non-factor income
(shipping, banking, insurance, tourism, Supplementary Notes
software services, etc.).
Agreement on Trade-Related Aspects of
 Transfer payments are receipts which the Intellectual Property Rights (TRIPS)
residents of a country receive ‘for free’,
without having to make any present or  WTO is a 164-member multilateral body
future payments in return. which formulates rules for global exports
and imports and adjudicates disputes
 They consist of remittances, gifts, and between two or more than two countries on
grants. They could be official or private. trade-related issues.
 The balance of exports and imports of goods  India recently sent a letter to the General
is referred to as the trade balance. Council Chair to hold a virtual ministerial
L1 : Elementary meeting on the response of WTO (World

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Trade Organisation) to the pandemic,  Under this scheme, FIIs/NRIs can acquire
including the proposal to waive certain shares/debentures of Indian companies
provisions of the TRIPS agreement for through the stock exchanges in India.
COVID-19-related vaccines, therapeutics,
and diagnostics.  The ceiling for overall investment for FIIs
is 24 per cent of the paid up capital of the
 TRIPs came into effect in January 1995.
Indian company and 10 per cent for NRIs/
 It is a multilateral agreement on intellectual PIOs.
property (IP) rights such as copyright,
industrial designs, patents and protection  The limit is 20 per cent of the paid up capital
of undisclosed information or trade secrets. in the case of public sector banks, including
the State Bank of India.
 Compulsory licensing is one of the
flexibilities in the field of patent  The ceiling of 24 per cent for FII investment
protection agreed upon in the WTO can be raised up to sectoral cap/statutory
Doha Declaration on the TRIPS ceiling, subject to the approval of the
Agreement and Public Health, in 2001. board.
 Compulsory licensing is when a government  The ceiling for FIIs is independent of the
allows someone else to produce a patented ceiling of 10/24 per cent for NRIs/PIOs.
product or process without the consent of
the patent owner or plans to use the patent-  All FIIs in India must register with

RE
protected invention itself. the Securities and Exchange Board of
India (SEBI) to participate in the market.
 For compulsory licensing, it’s when the
generic copy is produced mainly for the  The Reserve Bank of India monitors the
domestic market, not for export. ceilings on FII /NRI/PIO investments in
 It does not wave off the rights of the Indian companies on a daily basis.
patent owner. The patent owner still has  Once the aggregate net purchases of equity
rights over the patent, including a right to be shares of the company by FIIs/NRIs/PIOs
O
paid compensation for copies of the products
reach the cut-off point, which is 2% below the
made under the compulsory licence.
overall limit, the Reserve Bank cautions all
 The TRIPS Agreement does not designated bank branches so as not to
specifically list the reasons that purchase any more equity shares of the
SC
might be used to justify compulsory respective company on behalf of FIIs/NRIs/
licensing.
PIOs without prior approval of the Reserve
 However, the Doha Declaration on TRIPS Bank.
and Public Health confirms that countries
are free to determine the grounds for granting L3: Real Challenge
compulsory licences, and to determine what
constitutes a national emergency.
23. Correct Option: (c)
L3: Real Challenge
GS

Explanation:
Option (c) is correct
22. Correct Option: (a) 

Explanation: Supplementary Notes

 Statement 3 is incorrect: RBI monitors World Bank

the ceilings on FII investments in Indian  World Bank was founded post the famous
companies on a daily basis.
Bretton Woods Conference also known as
Supplementary Notes the United Nations Monetary and Financial
Conference, held in July 1944 at Bretton
Foreign Institutional Investment (FII)
Woods in New Hampshire, USA.
 A foreign institutional investor (FII) is an
 The World Bank Group consists of five
investor or investment fund investing in
a country outside of the one in which it is organizations:
registered or headquartered. The International Bank for Reconstruction
 Foreign Institutional Investors (FIIs), Non- and Development
Resident Indians (NRIs), and Persons of
 The International Bank for Reconstruction
Indian Origin (PIOs) are allowed to invest in
the primary and secondary capital markets and Development (IBRD) lends to
in India through the portfolio investment governments of middle-income and
scheme (PIS) of Reserve Bank of India. creditworthy low-income countries.

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The International Development  Analysis of commodity composition and
Association direction of merchandise trade.
 The International Development Association  Matters relating to Short-term Balance of
(IDA) provides interest-free loans — called Payments (STBoP) Monitoring Group.
credits — and grants to governments of the  Drafting and finalizing the chapter on
poorest countries. Balance of Payments (BoP) for Economic
 Together, IBRD and IDA make up the Survey.
World Bank.  Providing policy advice on issues related
The International Finance Corporation to foreign trade.

 The International Finance Corporation  External Debt Management Unit

(IFC) is the largest global development  Preparing the Report on External Debt
institution focused exclusively on the private (Quarterly) for two quarters by collecting
sector. We help developing countries achieve data from different sources like SEBI,
sustainable growth by financing investment, RBI, CAAA and Ministry of Defence and
mobilizing capital in international financial also analyses them.
markets, and providing advisory services to
 Release of India’s External Debt: A
businesses and governments.
Status Report by updating the country’s
The Multilateral Investment Guarantee external debt position, along with

RE
Agency international comparisons. This is an
annual publication.
 The Multilateral Investment Guarantee
Agency (MIGA) was created in 1988 to  Collecting the base level data on defence
promote foreign direct investment into debt from the Ministry of Defence and
developing countries to support economic processing the same for inclusion in
growth, reduce poverty, and improve external debt data.
people’s lives. MIGA fulfills this mandate by Drafting the section on ‘External Debt’
O

offering political risk insurance (guarantees) for the chapter on External Sector for
to investors and lenders. Economic Survey and also for Mid-Year
Review.
The International Centre for Settlement
of Investment Disputes  Collection, compilation and supply of
SC
India’s external debt data to World Bank
 The International Centre for Settlement
for their centralized database system
of Investment Disputes (ICSID) provides
called ‘Quarterly External Debt Statistics
international facilities for conciliation and
(QEDS)’ to meet SDDS requirements.
arbitration of investment disputes.
This is done on a quarterly basis.
L2: Approachable
 Supply of data to CAA&A for onward
submission to the World Bank for their
24. Correct Option: (b) ‘Global Development Finance’.
GS

L1 : Elementary
Explanation:
 Option (b) is correct
25. Correct Option: (c)
Supplementary Notes
Explanation:
India’s External Debt Report
 Statement 1 is incorrect: INCLUSIX is
 External Sector Unit prepared exclusively by CRISIL.
 The External Sector Unit prepares  Statement 2 is correct: It measures
analytical notes on Monitoring of India’s financial inclusion per one lac of people.
merchandise trade, Balance of Payments
(BoP) developments, exchange rate  Statement 3 is correct: Branch, credit,
movements, foreign exchange reserves, deposit and insurance penetration are the
global economic developments, Analysis indicators used in the index.
of commodity composition and direction Supplementary Notes
of merchandise trade.
Inclusix
 Monitoring the exchange rate movements,
India’s merchandise trade, Balance of  It is a financial inclusion index prepared
Payments (BoP) developments, foreign by CRISIL ( Credit Rating Information
exchange reserves and global economic Services of India Limited) which is the first
developments. credit rating agency established in India.

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 This index includes four indicators for 27. Correct Option: (c)
measurement of financial inclusion namely,
branch penetration, deposit penetration, Explanation:
credit penetration, and insurance  Option (c) is correct
penetration.
Supplementary Notes
 It checks the availability of these services
Reports Published by International
amongst per one lac people on a scale of
Organisation
0-100.
 Global economic prospects report is
L3: Real Challenge published twice in a year by the World Bank.
It examines global economic development
and prospects with special focus on emerging
26. Correct Option: (d) markets and developing economies.
Explanation:  World trade report is an annual
 Statement 1 is incorrect: A fully publication, released by WTO to analyze
recent trends and issues in multilateral
convertible currency can lead to increase
trading and carve out a policy stance to help
in burden of foreign debt as businesses can countries capitalize upon the advantages of
easily raise loan but they are prone to the free and fair trade.
risk of high repayments if the exchange

RE
 Asian economic integration report is an
rates become unfavorable.
annually published by the ADB to analyze
 Statement 2 is correct: India had moved recent trends in regional cooperation and
towards a market determined exchange integration in Asia.
rate since 1993, after which the RBI had  Fiscal Monitor is prepared twice a year to
announced that India has become fully trace public finance trends globally.
convertible on current account. L1 : Elementary

O
Statement 3 is correct: India still has many
challenges to address before introducing
28. Correct Option: (d)
a fully convertible capital account. High
rates of inflation, NPAs, macroeconomic Explanation:
SC
instability and fiscal burden are some  All statements are correct
of the cornerstones which cannot be left
untouched if we want to capitalize upon Supplementary Notes
the fruits of capital account convertibility. Countervailing duty
Before addressing these challenges, any
 Countervailing duty is a specific tax imposed
step towards CAC would rather hit back by the importing country on imported
onto our economy. goods.
Supplementary Notes It is imposed to protect the domestic
GS


producers of the good because, subsidy on
Currency convertibility the product by the exporting country leads
 Currency convertibility: it is a situation in to a relatively cheaper price of the product,
which can harm the competition in the
which domestic currencies can be converted
domestic market.
into foreign currency at prevailing exchange
rate without government intervention, in  The duty increases the price of the product
order to make sale and purchases. and brings it at par with the market prices
prevailing in the domestic market.
 In India, 100% current account convertibility
L3: Real Challenge
is allowed without government intervention
but, there are partial restrictions on capital
account convertibility like, limited FDI and 29. Correct Option: (c)
FII in certain sectors of economy.
Explanation:
 Capital account convertibility: it effectively  Option (c) is correct
means the freedom to conduct financial
transactions without any constraints. Supplementary Notes
 India has allowed only partial convertibility FDI
of capital account with some limitations in  There are two types of foreign direct
form of restricted FDI and FII. investments, i.e., Greenfield and
L3: Real Challenge Brownfield.

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 Under the Greenfield FDI, a company will  Statement 3 is incorrect: The ideal status
build its own brand new facilities and assets of BOP should be zero, which indicates
to set up itself. that the money coming into the country is
equal to the money going out of the country.
 While, under the Brownfield FDI, the However, this situation is highly unlikely.
investing company leases or purchases an Therefore, if it is negative, then it indicates
existing facility. deficit, and if positive, it means a surplus.
L1 : Elementary
Supplementary Notes
Balance of Payments
30. Correct Option: (b)
 The Balance of Payments provides a
Explanation: framework that is applicable for a range
of economies, from the smallest and least
 Option (b) is correct developed economies to the more advanced
Supplementary Notes and complex economies.
 As a result, it is recognized that some items
G-7 corporate tax may not be relevant in all cases. The balance
 Advanced economies making up the G7 of payments is a statistical statement that
grouping reached a “historic” deal on taxing summarizes transactions between residents
multinational companies. and non-residents during a period.
They agreed to counter tax avoidance  It consists of the goods and services account,

RE

through measures to make companies pay the primary income account, the secondary
income account, the capital account, and
in the countries where they do business.
the financial account.
 They also agreed in principle to ratify a global
 Under the double-entry accounting system
minimum corporate tax rate to counter the that underlies the balance of payments,
possibility of countries undercutting each each transaction is recorded as consisting
other to attract investments. of two entries and the sum of the credit
Under base erosion and profit shifting, entries and the sum of the debit entries is
O

multinational companies shift their tax the same.
base or profits from high tax countries like  The different accounts within the balance of
India, to tax havens like Switzerland by payments are distinguished according to the
using different techniques and accounting nature of the economic resources provided
SC
manipulations. and received.
L1 : Elementary L3: Real Challenge

31. Correct Option: (a) 32. Correct Option: (c)

Explanation: Explanation:
 Statement 1 is correct: The  Option (c) is correct
term ‘trade’ refers to buying and selling of Supplementary Notes
GS

goods. However, when it is performed on an

international scale, it is called imports and Factors affecting exchange rate system
exports. Balance of Trade (BOT) mentions  The exchange rate is the value of a currency
the import and exports made by a nation’s in terms of a different currency. Many
economy within a specific year. BOT only buyers and sellers are engaged in the foreign
records tangible items. Balance of trade currency market, including students,
(BOT) is the difference between the value of commercial banks, brokers, and more.
a country’s imports and exports for a given  Foreign Exchange Reserves are important
period and is the largest component of a assets held by the central bank in foreign
country’s balance of payments (BOP). currencies as reserves. They are commonly
 Statement 2 is incorrect: Balance of used to support the exchange rate and
set monetary policy. Most of the reserves
Payment is a combination of accounts
are usually held in US dollars, given the
that shows the commercial transactions
currency’s importance in the international
concluded by a country within a specific financial and trading system.
period with other countries. These accounts
reflect every monetary transaction, i.e.  India’s foreign exchange reserves include:
commodities, services, and incomes during  Foreign Currency Assets
that period. The Balance of Payment  Gold Reserves
(BOP) combines every private and public
investment to find out the money inflow  Special Drawing Rights (SDR)
and outflow in an economy over a specific  Reserve position with International
period. Monetary Fund (IMF)

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Factors Affecting the Exchange Rate of  Statement 2 is incorrect: India joined
India the WIPO Copyright Treaty and the WIPO
Performances and Phonograms Treaty -
 Intervention of The Reserve Bank known together as the “Internet Treaties”.
of India: During high volatility in the  Statement 3 is correct: India becomes the
exchange rate, RBI intervenes to prevent 88th member of the Nice Agreement.
the exchange rate going out of control.
Supplementary Notes
 For example, the RBI sells dollars when
Indian rupee depreciates too much, while Indian patent regime
it purchases dollars when the Indian  Right granted for an invention- A
rupee appreciates beyond a certain patent is an exclusive set of rights granted
level. for an invention, which may be a product or
process that provides a new way of doing
 Inflation rate: The increase in inflation something or offers a new technical solution
rate can increase the demand for foreign to a problem. Indian patents are governed
currency which can negatively impact the by the Indian Patent Act of 1970.
exchange rate of the national currency.  Patent protection of
pharmaceuticals -The original Indian
 For example, an increase in the inflation Patents Act did not grant patent protection
level of petroleum oil can increase the to pharmaceutical products to ensure that
demand for foreign currency leading to medicines were available at a low price.
the depreciation of Indian rupee. Patent protection of pharmaceuticals were

RE
reintroduced after the 2005 amendment to
 Interest rate: Interest rates on government comply with TRIPS
securities and bonds, corporate securities
 Recent situation- The USTR report
etc affect the outflow and inflow of foreign
highlighted a range of issues in domains
currency. ranging from copyright and piracy to
 If the interest rates on government trademark counterfeiting and trade secrets,
bonds are higher compared to saying that India “remained one of the
world’s most challenging major economies
O
other country forex markets, it
can increase the inflow of foreign
with respect to protection and enforcement
of IP.”
currency, while lower interest rates
can lead to the outflow of foreign Internet Treaties
currency. This affects the exchange India joined the WIPO Copyright Treaty and
SC

rate of Indian rupee. the WIPO Performances and Phonograms
Treaty - known together as the “Internet
 Exports and imports: Exports and Treaties”. India’s accession brings the
imports affect exchange rate as exports earn total number of contracting parties to the
of foreign currency while imports require “Internet Treaties” to 97 each.
payments in foreign currency.  The WIPO Internet Treaties update the
 Thus, if the overall exports increases, multilateral copyright system set forth in
older treaties such as the Berne Convention
the national currency appreciates, while from 1886 and the Rome Convention from
GS

an increase in imports leads to the 1961 for the digital era. By joining these
depreciation of the national currency. treaties, India is taking an important step
to support the development of its renowned
 Apart from above, the Indian foreign
creative industries and to allow them to
exchange market is also affected by factors distribute their creative outputs worldwide
such as the receipts in the accounts of within the copyright framework.
exports in invisibles in the current account,
inflow in the capital account such as FDI, Nice Agreement
external commercial borrowings, foreign  The Nice Agreement is an important
institutional investments, NRI deposits, administrative tool that establishes a
classification of goods and services for
tourism activities etc.
registering trademarks and service marks
L2: Approachable (the Nice Classification).
 The trademark offices of member states
must indicate, in official documents and
33. Correct Option: (a) publications in connection with each
registration, the numbers of the classes
Explanation: of the Classification to which the goods or
 Statement 1 is correct: The original services for which the mark is registered
Indian Patents Act did not grant patent belong.
protection to pharmaceutical products to  India becomes the 88th member of the Nice
ensure that medicines were available at a Agreement.
low price. L3: Real Challenge

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34. Correct Option: (b) overseas. This direct investment method
lets businesses control the entire process,
Explanation: from construction to operation
 Statement 1 is incorrect: Errors and  Statement 2 is incorrect: Portfolio
Omissions in the BoP account can be investments, while more fluid than FDIs,
both positive and negative. They address influence a country’s external vulnerability.
statistical discrepancies between recorded Rapid pullouts by foreign investors can
international transactions and should prompt financial turbulence. Additionally,
balance out the BoP components. These when a country’s private sector borrows
discrepancies arise from factors like timing, from global bond markets, external debt can
reporting variations, and valuation methods. escalate, highlighting the impact of these
Treating Errors and Omissions as always investments on national economic stability.
negative is incorrect and doesn’t account for
the full scope of their role in balancing the  Statement 3 is incorrect: BITs are
accounts. pacts between two countries to protect
and encourage investments. Contrary to
 Statement 2 is correct: When a country some beliefs, these treaties predominantly
has a surplus in its Current Account, it safeguard Foreign Direct Investments
means it’s earning more from exports and
(FDIs) rather than portfolio investments.
services than it is spending on imports and
They act as a framework ensuring investors
payments. This extra income can be used to
receive equal treatment, protection against

RE
balance out a deficit in its Financial Account,
expropriation, and means for dispute
where the country might be borrowing
resolution.
more money or selling more assets to other
countries than its receiving. This helps Supplementary Notes
maintain a balance in overall international
transactions. Foreign Capital:
 Brownfield Investment: This is when a
Supplementary Notes
company or government entity purchases an
O
Balance of Payments existing facility to begin new production.
 The Balance of Payments (BoP) is a  Hot Money: Refers to funds that are
comprehensive and systematic record of all controlled by investors who actively seek
economic transactions between residents of short-term returns.
SC
a country and the rest of the world within a
L2: Approachable
specified timeframe, usually a year.
 It provides a detailed snapshot of a
country’s financial interactions with the 36. Correct Option: (c)
global community, capturing both the value
of goods and services exchanged and the
Explanation:
associated financial transfers. The BoP is  Statement 1 is correct: The crawling peg
divided into three main accounts: system allows a country to adjust its pegged
GS

 Current Account: The Current Account rate gradually and systematically over
primarily captures trade in goods and time. This adjustment can be in response
services, as well as unilateral transfers. to certain economic indicators, such as
inflation differentials between the pegging
 Capital Account and Financial Account: country and its major trading partners.
It tracks net flows of investments and
financial assets. Ideally, these transactions  Statement 2 is correct: The gold standard
should balance out, with the inflows and was a system in which countries tied the
outflows equating, but discrepancies often value of their currency to a specific amount
arise, leading to surpluses or deficits. of gold. This provided a measure of stability
to currency values, but it limited the ability
L2: Approachable of central banks to adjust their money
supply and address economic conditions.
35. Correct Option: (a)  Statement 3 is correct: A hybrid or
managed float system combines features
Explanation: of both fixed and floating exchange rate
 Statement 1 is correct: Greenfield systems. Under this system, the currency’s
investments pertain to establishing new value is allowed to float within a certain
businesses from scratch in foreign nations. range, but the government or central bank
Rather than merging or acquiring existing may intervene when it deems necessary
enterprises, companies opt for Greenfield to stabilize or increase the value of its
investments to initiate fresh operations currency.

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Supplementary Notes made by a country’s government or central
bank to intentionally lower the value of its
Exchange Rate Regimes: currency. Typically, this is done to boost
 Exchange rate regimes dictate how a exports or address trade imbalances.
country’s currency value is determined in
relation to other currencies. Supplementary Notes

 There are primarily three types: a fixed Depreciation

regime, where the currency’s value is pegged  A decrease in the value of a currency in terms
to another stable currency or gold; a floating of other currencies due to market forces. It
regime, where market forces of demand and makes exports cheaper and imports more
supply set the rate; and a hybrid regime, expensive.
which combines features of both.
Appreciation
 Fixed Exchange Rate: A system where a
country’s currency value is fixed or pegged  An increase in the value of a currency in
to another major currency or basket of terms of other currencies due to market
currencies. forces. It makes imports cheaper and exports
more expensive.
 Floating Exchange Rate: A system
where the currency value is determined Devaluation
by market forces without any government
 A deliberate downward adjustment to
intervention.

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the official exchange rate established by
 Crawling Peg: A system that adjusts a country’s government or central bank.
the pegged rate gradually in response to Generally, undertaken to improve the trade
economic indicators. balance.
 Gold Standard: A historical system where Revaluation
currency values were tied to gold.
 A deliberate upward change in the value
 Hybrid System: Combines features of both of a country’s currency relative to other
O
fixed and floating exchange rate systems, currencies. It is the opposite of devaluation.
allowing for occasional government
intervention. L2: Approachable

L3: Real Challenge

SC
38. Correct Option: (b)
37. Correct Option: (a) Explanation:
Explanation:  Statement 1 is correct: Capital Account
Convertibility (CAC) pertains to the ease
 Statement 1 is correct: When a country of movement of financial assets into and
devalues its currency, its exports become out of a nation. It governs transactions
more affordable for foreign buyers. This involving financial investments like direct
is because they utilize fewer of their own investments, portfolio investments, and
GS

currency units for the same purchase. As loans. When a country has full CAC, it
a result, the country’s exports can see an signifies minimal restrictions on these types
uptick, potentially leading to a reduction in of financial transactions, enabling free
trade deficits by balancing out imports and mobility of capital across borders.
exports.
 Statement 2 is correct: Capital Account
 Statement 2 is incorrect: When a Convertibility can draw foreign investments
currency appreciates, the purchasing power due to its open nature, fostering economic
for foreign goods rises, making imports growth. However, it poses risks: a nation
more affordable. Conversely, the country’s can be vulnerable to external shocks. For
exports become pricier for foreign buyers, instance, unpredictable massive capital
causing a potential drop in export sales. outflows can destabilize its economy. Such
This dual effect—increased imports and sudden departures of capital influenced by
decreased exports—can widen the trade global events or perceived risks, can strain
deficit, reflecting an imbalance in the the country’s financial system and lead to
country’s trade relation crises.
 Statement 3 is incorrect: Depreciation  Statement 3 is incorrect: This statement
occurs when market forces, such as supply inaccurately refers to Capital Account
and demand dynamics, lead to a decrease in Convertibility. Instead, it details Current
a currency’s value. It’s an organic change not Account Convertibility, which involves
orchestrated by government intervention. transactions for goods and services,
Devaluation, however, is a conscious decision like imports and exports. While Capital

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Account Convertibility is tied to financial currency strength relative to a basket
and investment flows, Current Account of other currencies. However, it doesn’t
Convertibility relates to trade activities. consider inflation, which can skew perceived
It’s crucial to distinguish between these competitiveness. REER addresses this
two, as they represent different aspects of by adjusting for inflation differentials,
international financial transactions and presenting a more accurate depiction of
come with distinct implications. actual currency competitiveness. Thus,
REER often provides a more insightful
Supplementary Notes gauge of a country’s relative economic
Current Account Convertibility position than NEER alone.
 It refers to the freedom in converting Supplementary Notes
domestic currency into foreign currency
and vice versa for transactions explicitly Nominal Effective Exchange Rate
classified as current account transactions, (NEER)
which mainly includes trade and services  An index representing the relative value of
related transactions. a currency against a weighted average of
several foreign currencies. It is “nominal”
Capital Account Convertibility
because it doesn’t adjust for price level
 It refers to the freedom in converting differences (inflation rates) among
domestic currency into foreign currency and countries.

RE
vice versa for capital account transactions,
which are largely transactions of assets and Real Effective Exchange Rate (REER)
investments. This can lead to increased  An adjusted version of NEER that takes
foreign investments but also expose the into account the inflation rate of the country
country to higher financial risks. and its trading partners. It provides a more
 A balance between both types of convertibility accurate representation of a country’s
is essential for a country to ensure economic currency’s value and competitiveness.
O
stability while promoting growth.  Both indices are crucial for policymakers,
L3: Real Challenge especially in countries heavily reliant
on exports or imports, as they reflect the
relative price level of a country’s goods
39. Correct Option: (a)
SC
compared to its trading partners.
Explanation: L3: Real Challenge
 Statement 1 is correct: REER, or Real
Effective Exchange Rate, builds upon 40. Correct Option: (a)
NEER (Nominal Effective Exchange Rate)
by incorporating inflation differentials Explanation:
among countries. While NEER presents  Statement 1 is correct: The Reserve Bank
the weighted average of a currency’s
GS

of India’s directive explicitly states that all

relative rates against multiple currencies,
data related to payment systems operated
REER adjusts for price level differences by
by system providers must be stored in
factoring in inflation rates. This inclusion
systems located exclusively within India.
offers a more comprehensive perspective on
This includes end-to-end transaction details
currency strength, especially considering
and various payment-related information.
both trading balances and inflation.
 Statement 2 is incorrect: The directive
 Statement 2 is correct: REER is a vital
does not prohibit the processing of payment
indicator of a country’s external trade
transactions outside India by Payment
competitiveness. A rising REER implies
System Operators (PSOs). It allows PSOs to
that, after accounting for exchange rates
process payment transactions abroad if they
and inflation, a country’s goods and
services may be pricier for foreign buyers. so desire. However, in such cases, the data
Conversely, a lower REER suggests processed abroad must be brought back to
increased competitiveness, making exports India within 24 hours.
more attractive. Therefore, understanding  Statement 3 is incorrect: The directive
REER shifts can provide insights into does not explicitly require cross border
potential trade balance movements and the transaction data to be stored only in India.
overall economic health. It does mention that for cross border
 Statement 3 is incorrect: NEER transactions consisting of both foreign and
represents the Nominal Effective Exchange domestic components, a copy of the domestic
Rate, offering a raw view of a country’s component may also be stored abroad.

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Supplementary Notes  Statement 2 is correct: The primary aim
of the FI-Index is to measure and capture
Reserve Bank of India’s Directive on the extent of financial inclusion in India.
‘Storage of Payment System Data: It evaluates financial inclusion through
 The Reserve Bank of India (RBI) issued a three main parameters: Access, Usage,
directive regarding the storage of payment and Quality of financial services. These
parameters reflect the ease of access to
system data to ensure data security and
financial services, the extent of their usage,
compliance with regulatory standards. The and the quality of services provided.
key points of the directive include:
 Statement 3 is correct: Pradhan Mantri
Data Storage in India: Jan-Dhan Yojana (PMJDY) aimed to
 The directive mandates that all data related enhance financial inclusion by providing
every household access to basic banking
to payment systems, including customer
services, insurance, credit, and pension
details, transaction data, and payment facilities, fostering economic empowerment.
credentials, must be stored within systems
located only in India. This is to enhance data Supplementary Notes
security and maintain control over sensitive
Composite Financial Inclusion Index (FI-
information.
Index)
Processing of Payment Transactions:  The Composite Financial Inclusion Index
The directive does not bar the processing of (FI-Index) is a comprehensive measure

RE

payment transactions outside India if the introduced by the Reserve Bank of India
(RBI) to assess the level of financial inclusion
Payment System Operators (PSOs) choose to
in the country. Here are some additional
do so. However, any data processed abroad
details:
must be brought back to India within 24
hours to ensure that customer data remains Development and Scope
within the country’s jurisdiction.  The FI-Index covers multiple sectors of
Cross Border Transactions: the financial industry, including banking,


O
The directive does not explicitly require cross
investments, and insurance, postal services,
and pensions. It was introduced in 2021
border transaction data to be stored only by the RBI in collaboration with relevant
in India. It mentions that for transactions sectoral regulators and the government.
with both foreign and domestic components,
SC
Parameters and Objectives
a copy of the domestic component may also
be stored abroad. This indicates a level of  The FI-Index aims to capture the extent of
flexibility in managing cross border data financial inclusion by evaluating three main
storage. parameters: Access, Usage, and Quality
of financial services. These parameters
Access to Data: are further broken down into various
dimensions, reflecting the multifaceted
 Data stored in India can be accessed when
nature of financial inclusion.
needed for handling customer disputes and
GS

other processing activities. The data may Scoring System

also be shared with overseas regulators,  The FI-Index is designed on a scale of 0
subject to prior approval from the RBI. to 100. A higher score indicates better
 The directive aims to strike a balance financial inclusion, whereas a lower score
between data security and operational implies greater financial exclusion. The
efficiency in the payment system while index doesn’t have a specific base year and
is published annually in July.
allowing some flexibility for cross border
transactions and processing. Parameter Weights
L3: Real Challenge  The FI-Index assigns different weights to
its parameters: Access (35%), Usage (45%),
and Quality (20%). These weights reflect the
41. Correct Option: (c) importance of each parameter in assessing
overall financial inclusion.
Explanation:
 Statement 1 is correct: The FI-Index is Comprehensiveness
a comprehensive index that incorporates  The index encompasses a total of 97
details of various financial sectors, including indicators, making it a comprehensive
banking, investments, insurance, postal, tool for evaluating financial inclusion.
and pension sectors. It was developed by the It measures not only the availability of
RBI in consultation with the government financial services but also their accessibility
and the quality of services provided.
and sectoral regulators to provide a holistic
view of financial inclusion. L3: Real Challenge

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42. Correct Option: (d) a global minimum tax rate might hinder
countries’ policy-making freedom and
Explanation: inadequately address tax evasion.
 Statement 1 is incorrect: The G7 has  The OECD has been at the forefront,
backed a minimum global corporation tax negotiating taxation norms with 140
rate of at least 15%, not 10%. The move is countries, focusing on digital services
to ensure that corporations are fairly taxed and curbing tax base erosion. India views
and prevents them from moving profits to this move positively, as the domestic tax
low-tax jurisdictions. rate already exceeds the proposed global
minimum, positioning it advantageously in
 Statement 2 is incorrect: The GMCTR
attracting investments.
aims to counteract the advantage of shifting
profits to tax havens. If companies pay L3: Real Challenge
lower rates in a particular country, their
home countries can “top-up” their taxes
to the agreed minimum rate, effectively
43. Correct Option: (b)
neutralizing the benefit of using tax Explanation:
havens.
 Statement 1 is incorrect: The National
 Statement 3 is incorrect: Rather than Monetisation Pipeline (NMP) focuses on
increasing the tools, a global minimum unlocking the capital from non-strategic
rate could restrict the policy tools countries underperforming government-owned assets

RE
have. Historically, countries have used rather than just the strategic assets. Its
competitive tax rates to attract businesses. aim is to reinvest these funds into new
With a standardized global minimum, their infrastructure projects, enhancing the
ability to offer lower rates as an incentive economic utility of these assets.
will be limited.  Statement 2 is incorrect: NMP envisages
an aggregate monetisation potential of 6-
Supplementary Notes
lakh crore. This is expected to be achieved
O
GMCTR through the leasing of core assets of the
Central government in diverse sectors such
 The G7 nations have proposed a Global
as roads, railways, power, and more over a
Minimum Corporate Tax Rate (GMCTR) of
four-year period (FY 2022-25). The aim is
at least 15% to ensure companies pay taxes to enhance the efficiency of the assets and
SC
in the countries where they operate. This generate funds for further development
tax would apply to firms’ overseas profits, projects.
allowing governments to set their local
corporate tax rates.  Statement 3 is correct: NMP is an
innovative initiative designed to rejuvenate
 However, if businesses pay below the the economy by tapping into the potential
minimum rate in any country, their home of underutilised public assets. By doing so,
countries would compensate by raising the it aims to create employment opportunities,
tax to the agreed minimum, thus negating generate funds for new infrastructure
GS

the benefits of transferring profits to tax projects, and enhance the overall
havens. competitiveness of the Indian economy.
 Tax havens are essentially offshore nations Supplementary Notes
that offer minimal or no tax liabilities.
The push for GMCTR arises from the National Monetisation Pipeline
need to reduce tax losses, especially when  The National Monetisation Pipeline (NMP),
intangible assets, such as software or introduced in August 2021, aims to tap into
patents, allow businesses to evade higher institutional and long-term capital to unlock
taxes in their primary nations by using the value of investments in brownfield public
intricate subsidiary structures. sector assets. It anticipates a monetisation
 Notably, India faces a tax loss of over potential of 6-lakh crore by leasing core
USD 10 billion annually due to corporate assets in sectors including roads, railways,
power, and telecom, over a four-year period
tax evasion. The GMCTR also seeks to
(FY 2022-25).
standardize corporate taxation globally,
halting the competitive lowering of tax rates  The initiative stems from the
by countries to attract corporate entities. underperformance of Public Sector
Enterprises due to reasons such as cost
 However, implementing GMCTR is overruns, overcapitalisation, and excessive
challenging. Gaining consensus among government control. The NMP promises
nations is tough, primarily when the to revitalize the economy, capitalize on
initiative affects sovereign rights concerning underutilised public assets, and further the
tax policies. There’s also the argument that competitive edge of the Indian market.

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 However, the NMP isn’t devoid of challenges.  To address challenges like fragmented
Concerns arise from the taxpayers’ planning and lack of standardisation, the
perspective, as they’ve already financed scheme embodies an integrated approach,
these public assets. Critics also fear a cycle intending to unify 16 infrastructure-related
where assets are created and then monetised ministries. This strategy will streamline
once they become governmental liabilities. clearances and optimise infrastructure
capabilities.
 There are sector-specific challenges, like
capacity underutilisation and regulated  A significant component is the Gati Shakti
tariffs. A crucial criticism is the potential Digital Platform, designed to facilitate
monopolisation in sectors like highways and coordinated and real-time planning and
railways, which could increase prices. implementation of infrastructure projects
across ministries.
 The broader scope of the initiative is also in
question, given the current global challenges  Anticipated outcomes include clear mapping
like climate change and geopolitical turmoil, of connectivity projects, enhanced clarity
alongside India’s internal issues like on interlinking different regions, and
endemic poverty and institutional erosion. bolstering the ‘Make in India’ initiative by
providing integrated transport connectivity.
L2: Approachable This holistic approach positions India to
emerge as the global business capital.
44. Correct Option: (b) L2: Approachable

RE
Explanation:
 Statement 1 is incorrect: The scheme
45. Correct Option: (d)
intends to have 11 industrial corridors, but Explanation:
only two new defence corridors - one in Tamil
 Statement 1 is incorrect: Financial
Nadu and the other in Uttar Pradesh.
institutions are typically wary of lending
 Statement 2 is correct: One of the
O
anticipated results of the scheme is to
to businesses with poor credit ratings.
Such businesses are viewed as high-risk
provide a clear vision on how different borrowers. A poor credit rating indicates
regions and industrial hubs in the nation a higher likelihood of default, which poses
are interconnected, emphasizing the a financial risk to lenders. Consequently,
SC
significance of last-mile connectivity. lenders are hesitant and more cautious
while extending credit to such businesses to
 Statement 3 is correct: One of the specific
avoid potential losses.
objectives of the Gati Shakti scheme is to
add 17,000 kms to the existing gas pipeline  Statement 2 is incorrect: Credit
network, thus enhancing the energy Rating Agencies (CRAs) are not directly
infrastructure of the country. accountable to investors. This lack of
direct accountability has raised regulatory
Supplementary Notes concerns. Investors rely on CRAs for
GS

unbiased financial evaluations. However,

Gati Shakti scheme
without a direct line of responsibility, there
 The Gati Shakti scheme, initiated to ensure can be potential biases and influences in
cohesive planning and implementation of their ratings, which might not always serve
infrastructure projects over the next four the best interests of the investors.
years, aims to expedite on-ground works,  Statement 3 is correct: A conflict of
generate jobs, and reduce expenses. interest arises when CRAs have consultancy
 This scheme will incorporate the Rs 110 or advisory services registered in
lakh crore National Infrastructure Pipeline subsidiaries. This can potentially influence
initiated in 2019. Objectives include the impartiality of their ratings. CRAs
enhancing logistics efficiency, expanding should ideally offer unbiased evaluations.
cargo handling, reducing port turnaround When they provide consultancy or advisory
times, developing 11 industrial corridors, services, it could compromise the neutrality
two defense corridors, extending 4G of their assessments, as they might have
connectivity to all villages, and adding vested interests in the entities they rate.
17,000 kms to the gas pipeline network. Supplementary Notes
 With the vision to meet the government’s
2024-25 goals, the scheme aims to increase Credit Rating Agencies
the national highway network to 2 lakh  Credit Rating Agencies (CRAs) in India play
kms and commission over 200 new aviation a pivotal role in the financial landscape,
facilities. offering an independent assessment of

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creditworthiness, which aids investors  In Turnkey Projects, a company constructs
and lenders in decision-making. They and equips a facility, then hands it over once
standardize credit ratings, thereby it’s ready to operate. The buyer generally
augmenting transparency and efficiency in has the control to operate, make strategic
financial markets. decisions, and manage intellectual property.
 These ratings serve as vital benchmarks for The statement misleadingly implies that
financial market regulations. Consequently, the seller retains strategic and intellectual
they can potentially lower the borrowing property rights after handover.
costs for companies by curbing information L2: Approachable
asymmetry and bolstering investor trust.
 Notably, a robust credit rating can
significantly enhance a country’s ability 47. Correct Option: (a)
to allure high-value investors and foreign Explanation:
direct investments.
 Statement 1 is correct: The Shanghai
 However, CRAs have also faced criticism.
Cooperation Organisation (SCO) originated
Some are seen as prioritizing shareholder
as the “Shanghai Five” in 1996, comprising
returns, often exhibiting unsustainable
China, Russia, Kazakhstan, Kyrgyzstan,
high profits. There are concerns about their
direct accountability to investors, which and Tajikistan. Uzbekistan joined in 2001,
presents a regulatory challenge. transforming it into the SCO. Current SCO

RE
members are -China, India, Kazakhstan,
 Additionally, some CRAs have been Kyrgyzstan, Russia, Pakistan, Tajikistan,
criticized for protective stances that might
Uzbekistan and Iran.
influence their objectivity. A notable conflict
of interest emerges when CRAs operate  Statement 2 is incorrect: China is not
consultancy or advisory services through a member of ASEAN. The Association of
subsidiaries, which many argue should be Southeast Asian Nations (ASEAN) comprises
disallowed due to the potential compromise ten member countries from Southeast Asia.
O
on impartiality. These are Brunei Darussalam, Cambodia,
L3: Real Challenge Indonesia, Laos (officially known as Lao
PDR), Malaysia, Myanmar (formerly
known as Burma), Philippines, Singapore,
46. Correct Option: (a)
SC
Thailand, and Vietnam. These nations have
come together with the aim of promoting
Explanation:
political and economic cooperation and
 Option (a) is correct: Foreign Direct regional stability among its members.
Investment (FDI) has the potential to
stimulate economic growth in the host  Statement 3 is incorrect: BIMSTEC
country by establishing new production was not founded with seven member
facilities, transferring advanced countries. Initially, it was formed with four
technologies, generating employment Member States with the acronym ‘BIST-
GS

opportunities, and improving the skill set of EC’ (Bangladesh, India, Sri-Lanka and
the local workforce, contributing to overall Thailand Economic Cooperation, which
development. later expanded to seven.

Supplementary Notes Supplementary Notes

Foreign direct investment (FDI) ASEAN (Association of Southeast Asian
 FDI typically implies a strong influence or Nations):
control over the acquired foreign entity.  Established in 1967, it comprises ten
It’s not merely passive, as it often involves Southeast Asian countries: Brunei
tangible assets and direct involvement or at Darussalam, Cambodia, Indonesia, Laos,
least the potential for such involvement in Malaysia, Myanmar, Philippines, Singapore,
the company’s operations. The core essence Thailand, and Vietnam.
of DFI is active participation and decision-
making in the foreign entity.  Founded during the Cold War era, its main
goals include fostering economic growth,
 Greenfield Investments refer to starting social progress, and cultural development
new operations or building new facilities in among members, alongside promoting
another country from scratch, rather than regional peace and stability.
acquiring or merging with existing entities.
The statement incorrectly defines it as an  Over the years, ASEAN has played a pivotal
investment in existing facilities. role in regional diplomacy, mitigating
disputes and encouraging collaboration.

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BIMSTEC (Bay of Bengal Initiative for  Statement 3 is incorrect: While free
Multi-Sectoral Technical and Economic movement of goods and services is
Cooperation): fundamental, a Common Market extends its
principles further. It ensures the unhindered
 Formed in 1997, BIMSTEC links South and flow of not only goods and services but also
Southeast Asian countries along the coast capital and labor. This broader integration
of the Bay of Bengal, namely Bangladesh, fosters an interconnected economic
Bhutan, India, Myanmar, Nepal, Sri Lanka, landscape where resources, including human
and Thailand. and capital, can move freely, optimizing
economic benefits and growth.
 Its primary objective is to foster socio-
economic cooperation, technological Supplementary Notes
collaboration, and facilitate trade ties.
Customs Union:
 BIMSTEC also aims to harness shared  A Customs Union is an agreement between
interests and common histories, thereby two or more countries to eliminate tariffs
boosting regional development and on trade among themselves and to adopt
integration. a common external tariff for non-member
countries.
SCO (Shanghai Cooperation
Organisation):  This ensures that all member countries
maintain a unified trade policy towards
 Founded in 2001 in Shanghai, the SCO is a nations outside the union, preventing trade

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comprehensive regional organization which diversion.
includes China, Russia, India, Pakistan,  Example: The Southern Common Market
Kazakhstan, Kyrgyzstan, Tajikistan, and (Mercosur), which includes countries like
Uzbekistan. Argentina, Brazil, Paraguay, Uruguay, and
 Iran has officially joined the SCO, becoming Venezuela.
the group’s ninth permanent member. The Common Market:
organization focuses on promoting political,
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economic, and security-related cooperation
 Building on the foundation of a Customs
Union, a Common Market not only
among its members. allows free trade of goods and services
 Originally established to resolve border but also permits the free movement
disputes, its remit has since expanded of capital and labor across member
SC
to combat terrorism, separatism, and countries. It aims to remove non-tariff
extremism, while also endorsing cultural barriers.
exchanges and enhancing economic  Example: The European Economic Area
partnerships. (EEA), which combines the European Union
(EU) members and some non-EU countries.
L3: Real Challenge
Economic Union:
An Economic Union is a deeper form of
48. Correct Option: (a) 
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integration that combines the features of

Explanation: a Common Market with unified monetary,
fiscal, and social policies.
 Statement 1 is incorrect: A distinctive
trait of a Customs Union is the institution  This often means member countries will
have harmonized taxation, shared public
of a common external tariff (CET). This
procurement, and more closely integrated
CET signifies that every member state economic policies.
uniformly levies the same tariffs on imports
from countries outside of the union. This  Example: The European Union (EU) started
as an economic union, though it has since
uniformity aims to streamline trade policies
evolved further.
toward non-member nations and provide a
level playing field for all members within Economic and Monetary Union:
the union.  This is a type of economic union that adopts
 Statement 2 is correct: Within the a single currency, centralizing the monetary
framework of a Customs Union, member policy under one central bank and aligning
nations concur on abolishing tariffs on fiscal policies.
intra-union trade. By removing these trade  By doing so, it seeks to achieve higher
barriers, there’s an encouragement and levels of economic integration and stability.
enhancement of trade activities between Example: The Eurozone, where 19 of the 27
member countries, leading to economic EU member countries use the Euro as their
benefits and closer ties between the official currency.
nations. L3: Real Challenge

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49. Correct Option: (a)  Examples of restricted measures under
TRIMS include requirements to achieve a
Explanation: given level of local content or to purchase or
 Statement 1 is correct: The Trade- use products of domestic origin.
Related Investment Measures (TRIMS)
India’s Relationship with TRIMS and
recognizes specific investment measures
TRIPS:
that infringe upon fundamental GATT
(General Agreement on Tariffs and Trade)  India has had to make significant changes
principles. Key among these are the principle in its intellectual property laws, especially
of national treatment, which ensures equal patent law, to become TRIPS-compliant.
treatment between domestic and foreign  In the arena of TRIMS, India’s policies,
goods, and the prohibition of quantitative especially in sectors like solar energy,
restrictions, which forbids limits on the faced scrutiny because of local content
quantity of imports or exports. requirements. India has been active in
 Statement 2 is correct: The TRIMS the WTO’s discussions on both TRIPS
Agreement specifically addresses trade and TRIMS, seeking to ensure that its
in goods. It does not encompass trade in development and public policy objectives
services or intellectual property matters. are addressed.
These areas, important in their own
L3: Real Challenge
right, fall under distinct World Trade

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Organization (WTO) agreements, ensuring
a comprehensive trade framework for 50. Correct Option: (b)
member nations.
Explanation:
 Statement 3 is incorrect: India faced
challenges under the TRIMS Agreement  Statement 1 is incorrect: The economic
due to its local content requirements in liberalization of India in 1991 was not solely
the solar power sector, as some measures an outcome of internal political pressures.
O
were deemed inconsistent with its national It was mainly a response to an external
treatment obligations under the TRIMS payments crisis and was influenced by
Agreement and the GATT 1994. international organizations such as the
International Monetary Fund (IMF) and the
Supplementary Notes: World Bank. These organizations proposed
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TRIPS (Trade-Related Aspects of structural adjustment programs that
Intellectual Property Rights): advocated for open market policies and the
reduction of state control in the economy,
 This is one of the most comprehensive
pushing India towards globalization.
multilateral agreements on intellectual
property.  Statement 2 is correct: One of the most
pronounced impacts of globalization on the
 TRIPS cover copyright and related rights
Indian economy has been the rise of the
(like performers), trademarks, geographical
IT and service sector. The global demand
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indications, industrial designs, patents,

for software services, coupled with India’s
integrated circuit layout-designs, and
skilled workforce and favorable policies,
undisclosed information like trade secrets.
positioned India as a significant player in the
 It incorporates many IP standards from global IT landscape. Cities like Bangalore,
various conventions, mainly the Berne Hyderabad, and Pune transformed into IT
Convention (for copyrights) and the Paris hubs, attracting investments and creating
Convention (for industrial property). millions of jobs.
 It has a special provision for the protection  Statement 3 is incorrect: Post-
of test data submitted for the approval globalization, especially after the 1991
of pharmaceuticals and agricultural reforms, there has been a substantial
chemicals. increase in FDI inflows into India.
TRIMS (Trade-Related Investment While competition from other emerging
Measures): economies has indeed grown, India’s
large market, improving infrastructure,
 It recognizes that certain investment and favorable policy environment have
measures can restrict and distort trade. made it an attractive destination for
 The main objective is ensuring that foreign investments. Various sectors, from
investment measures do not discriminate manufacturing to telecommunications, have
against foreign products or lead to seen significant foreign investments, which
quantitative restrictions, both of which have contributed to growth, technology
violate basic WTO principles. transfer, and job creation.

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Supplementary Notes  The positive effects of globalization
include increased access to global markets,
Impact of Globalization on the Indian technological advancements, and enhanced
Economy: competition leading to better products
and services. However, challenges such as
 Globalization refers to the increasing
increased economic disparity and threats to
interdependence and integration of indigenous industries have also emerged.
economies around the world through trade,
 Globalization also led to cultural and social
investment, and information exchange. influences, with India absorbing global
 Post-1991, India witnessed transformative trends while simultaneously impacting the
changes, shifting from an insular, protected, global cultural landscape with its media,
and primarily agrarian economy to an open, cuisine, and art.
market-driven, and diversified one. L2: Approachable

™™™™™

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SC
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