UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today’s subject quiz on Economy to check your progress. Come back tomorrow to solve the International Relations Quiz.

With reference to the India’s edible oil imports, consider the following statements:

1. India’s total edible oil import has increased from 2022-23 to 2023-24.

2. The import of palm oil has consistently increased in the last decade.

3. The import of sunflower oil has decreased from 2022-23 to 2023-24.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Explanation

— The United Nations Food and Agriculture Organization’s vegetable oils price index (base value: 2014-16=100) rose from 98.7 points in August 2020 to a peak of 251.8 points in March 2022, post Russia’s invasion of Ukraine. Global prices have eased since, with the index reading at 136 points for August 2024.

— This has prompted the Indian government to modify its tariff strategy from unduly pro-consumer to more pro-producer.

— Economic and political concerns have driven the increase in import taxes and MSP procurement permission for soyabean.

— India’s edible oil imports reached an all-time high of 16.5 million tonnes (mt) in the fiscal year ended October 2023. Imports for the first ten months of this oil year were 13.5 mt, 3.6% lower than the 14 mt recorded from November to August 2022-23.

— India’s total edible oil import has decreased from 139.75 mt in 2022-23 to 134.71 mt in 2023-24. Hence, statement 1 is not correct.

— The import of palm oil has varied from year to year. (See table for reference) Hence, statement 2 is not correct.

— The import of sunflower oil has increased from 25.46 mt in 2022-23 to 31.14 mt in 2023-24. Hence, statement 3 is not correct.

Therefore, option (d) is the correct answer.

With reference to the green deposits, consider the following statements:

1. There is no restriction on premature withdrawal of green deposits.

2. The regulated entities (REs) are not bound to pay interest on green deposits to their customers.

Which of the statement(s) given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Explanation

— The financial sector can play a pivotal role in mobilising resources and their allocation thereof in green activities/projects. Green finance is also progressively gaining traction in India, RBI said as it issued the framework for acceptance of green deposits by regulated entities.

— A green deposit is a fixed-term bank deposit that allows investors to fund ecologically friendly projects. The Reserve Bank of India (RBI) launched the Green Deposit Scheme in June 2023.

— If regulated companies (REs) want to raise green deposits from their clients, they must follow the structure outlined therein.

— Regardless of how the funds are allocated or used, REs must pay interest on green deposits to their customers in accordance with the agreed-upon terms and circumstances and the aforementioned guidelines. Hence, statement 2 is not correct.

— There is no restriction on premature withdrawal of green deposits. Hence, statement 1 is correct.

— REs can temporarily park proceeds from green deposits pending allocation to green activities/projects in liquid instruments with a maximum maturity of one year.

— The framework does not include any penalties for not allocating funds to green activities/projects; however, it will be subject to supervisory evaluation.

— REs cannot finance green activities/projects first and then collect green deposits. Under the current structure, green deposits can only be denominated in Indian rupees.

Therefore, option (a) is the correct answer.

(Other Source: http://www.rbi.org.in)

Consider the following:

1. Foreign currency assets of the Reserve Bank

2. Special Drawing Rights (SDRs)

3. Gold reserves held by RBI

Which of the above are included in India’s foreign exchange reserves?

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3

Explanation

— India’s foreign exchange reserves surged by $12.59 billion to hit an all-time high of $704.885 billion in the week ended September 27, the Reserve Bank of India (RBI) data showed.

— With this, the country becomes the fourth economy to have foreign exchange reserves over $700 billion.

— India’s gross foreign exchange reserves comprise foreign currency assets of the Reserve Bank, gold held by RBI and Special Drawing Rights (SDRs) of the Government of India.

— India’s Reserve Position in the International Monetary Fund is not included as part of foreign exchange reserves as they may not be available on immediate demand.

— The RBI has the primary responsibility of collection, compilation and dissemination of data relating to foreign exchange reserves.

Therefore, option (d) is the correct answer.

With reference to the Carbon Border Adjustment Mechanism (CBAM), consider the following statements:

1. It is a tool to put a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the European Union (EU).

2. It will apply in its definitive regime from 2030.

3. The CBAM will initially not apply to the iron and steel industries.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 1 only

(d) 2 and 3 only

Explanation

— Finance Minister Nirmala Sitharaman said on Wednesday that the European Union’s Carbon Border Adjustment Mechanism (CBAM) is “unilateral and arbitrary”, and that it is a barrier to trade for the Indian industry.

— The Carbon Border Adjustment Mechanism (CBAM) is the EU’s instrument for putting a fair price on carbon emissions from the manufacture of carbon-intensive commodities entering the EU, as well as encouraging cleaner industrial output in non-EU nations. Hence, statement 1 is correct.

— The CBAM will ensure that the carbon price of imports is equal to the carbon price of domestic production, and that the EU’s climate goals are not jeopardised. The CBAM is intended to be consistent with WTO norms.

— CBAM will go into effect in its definitive regime from 2026, after a transitional period that runs from 2023 to 2025. Hence, statement 2 is not correct.

— The CBAM will initially apply to imports of certain goods and selected precursors whose production is carbon intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Hence, statement 3 is not correct.

Therefore, option (c) is the correct answer.

(Other Source: taxation-customs.ec.europa.eu)

With reference to the Indo-Pacific Economic Framework for Prosperity (IPEF), consider the following statements:

1. It aims to strengthen anti-corruption measures and promote tax transparency within member countries.

2. India refused to sign the IPEF bloc’s agreements on a clean and fair economy.

3. IPEF has a total of 28 members.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Explanation

— India signed the US-led 14-member Indo-Pacific Economic Framework for Prosperity (IPEF) bloc’s agreements on a clean and fair economy. Hence, statement 2 is not correct.

— The agreements signed during Prime Minister Narendra Modi’s visit to the US are aimed at facilitating development, access, and deployment of clean energy and climate-friendly technologies. They also aim to strengthen anti-corruption measures and promote tax transparency within member countries. Hence, statement 1 is correct.

— The Commerce and Industry Ministry said that the agreement on clean economy intends to accelerate efforts of IPEF partners towards energy security, GHG (greenhouse gas) emissions mitigation, developing innovative ways of reducing dependence on fossil fuel energy and promoting technical cooperation.

— The agreement on a fair economy intends to create a more transparent and predictable business environment, which can spur greater trade and investment in the markets of member countries.

— IPEF also provides platforms for technical assistance, concessional funding, and viability gap funding.

— There are 14 IPEF members: Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam, and the United States. Hence, statement 3 is not correct.

Therefore, option (a) is the correct answer.

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