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. Each day, we will cover one new subject. Attempt today’s subject quiz on Economy to check your progress. Come back tomorrow to solve the MCQs on International Relations. Don’t miss checking the answers and explanations at the end of the quiz.

With reference to the Government Security (G-Sec), consider the following statements:

1. It is a tradeable instrument issued only by the Central Government.

2. Short term securities have maturities of less than one year.

3. It can be used as collateral to borrow funds in the repo market.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

With reference to the inoperative account, consider the following statements:

1. A savings or current account is treated as inoperative when they are not operated for 10 years.

2. Account holders cannot reactivate their inactive accounts once they have been declared inoperative.

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

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

This crop grows well in semi-arid conditions and can be grown up to 500 metres above mean sea level. It is only grown commercially in Maharashtra, with some small-scale plantations in Gujarat and Rajasthan. It thrives in hot, dry summers and cold winters as long as irrigation is available. It can withstand frost to some extent in the dormant stage, but is injured at temperatures below -11 degrees Celsius. It is vegetatively propagated through cuttings, air layering, or gootee. Planting is usually done in spring (February-March) and July-August in sub-tropical and tropical regions respectively.

The above-mentioned lines refer to which crop?

(a) Pomegranate

(b) Red gram

(c) Turmeric

(d) Pearl Millet

With reference to the “off-budget borrowings”, consider the following statements:

1. The off-budget borrowings allow the Central Government to finance its expenditures.

2. It is not included in fiscal deficit calculation.

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

With reference to the India and Italy relations, consider the following statements:

1. The bilateral relationship between India and Italy has elevated to the level of Strategic Partnership.

2. India and Italy are part of the India-Middle East-Europe economic corridor.

3. Italy is India’s 2nd largest trading partner in the EU.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) Only three

(d) All four

FYI:

— In the first weekly auction for January-March, six states—Andhra Pradesh, Karnataka, Gujarat, Punjab, Rajasthan, and Bihar—tapped the market to borrow Rs 16,000 crore. As a result, the spread between the yields on state development loans (SDL) and the government securities issued by the Centre increased to more than 50 basis points (bps).

— A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. Hence, statement 1 is not correct.

— The Government’s debt obligation is acknowledged. These securities can be classified as long-term (usually referred to as government bonds or dated securities with an original maturity of one year or more) or short-term (usually referred to as treasury bills, with original maturities of less than one year). Hence, statement 2 is correct.

— In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).

— G-Secs are available in a wide range of maturities from 91 days to as long as 40 years to suit the duration of varied liability structure of various institutions.

— G-Secs can be sold easily in the secondary market to meet cash requirements.

— G-Secs can also be used as collateral to borrow funds in the repo market. Hence, statement 3 is correct.

— Securities such as State Development Loans (SDLs) and Special Securities (Oil bonds, UDAY bonds etc) provide attractive yields.

Therefore, option (b) is the correct answer

 

FYI:

— The Reserve Bank of India (RBI) has revised guidelines for classifying accounts and deposits as inoperative accounts and unclaimed deposits by banks.

— A savings or current account is treated as inoperative, if there are no ‘customer induced transactions’ in the account for a period of over two years. Hence, statement 1 is not correct.

— A transaction prompted by a customer may be financial in nature, initiated by the bank or another third party at the account holder’s request, non-financial in nature, or a KYC (know your customer) update completed in person or via digital channels like the bank’s mobile banking app or internet banking. It is estimated that there are between Rs 1 and Rs 1.30 lakh crore in dormant bank accounts.

— Balances in savings / current accounts which are not operated for 10 years, or term deposits not claimed within 10 years from date of maturity are classified as ‘unclaimed deposits’.

— As per the norms, account holders can reactivate their inoperative accounts/ unclaimed deposits by submitting know your customer (KYC) documents afresh at all branches, including non-home branches, of banks in which they have an account. Hence, statement 2 is not correct.

Therefore, option (d) is the correct answer.

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

FYI:

— Pomegranate (Punica granatum) is one of India’s most important commercial fruit crops. It is indigenous to Iran (Persia).

— Pomegranate is only grown commercially in Maharashtra. Small-scale plantations can also be found in Gujarat, Rajasthan, Karnataka, Tamil Nadu, Andhra Pradesh, Uttar Pradesh, Punjab, and Haryana.

— Pomegranate is a relatively new crop to Rajasthan, grown in an estimated 12,500 hectares, which includes 10,000 hectares over south Barmer, Sanchore, Jalore and Sirohi, and 2,500 hectares covering north Barmer, Jodhpur and Phalodi districts.

— India exports pomegranate mainly to Bahrain, Kuwait, Oman, Saudi Arabia, U.A.E., Netherlands etc.

— Pomegranate grows well under semi-arid conditions and can be grown upto an altitude of 500 m. above m.s.l.. It thrives well under hot, dry summer and cold winter provided irrigation facilities are available. The tree requires hot and dry climate during fruit development and ripening. Pomegranate tree is deciduous in areas of low winter temperature and an evergreen or partially deciduous in tropical and sub-tropical conditions. It can tolerate frost to a considerable extent in dormant stage, but is injured at temperature below – 11 degree C.

Therefore, option (a) is the correct answer.

FYI:

— Off-budget borrowings are loans that are taken not by the Centre directly, but by another public institution which borrows on the directions of the central government.

— Off-budget borrowings are used to fulfil the government’s expenditure needs. Hence, statement 1 is correct.

— However, the loan is not included in the national fiscal deficit because the loan’s liability is not officially on the Centre. This keeps the nation’s budget deficit within manageable bounds. Hence, statement 2 is correct.

— The off-budget borrowings raised by the government can ask an implementing agency to raise the required funds from the market through loans or by issuing bonds.

Therefore, option (c) is the correct answer.

FYI:

— India and Italy are ancient civilisations with links going back 2,000 years. Italian port cities were important trading posts on the spice route.

— In the 13th century, Venetian merchant Marco Polo travelled to India and wrote about his experiences.

— During World War II, Indian troops with the British Indian Army fought against the Germans and Mussolini’s forces in Italy.

— After Independence, political relations between India and Italy were established in 1947. Since then, there has been a regular exchange of visits at political and official levels between both countries, including several visits by Heads of States.

— The bilateral relationship between the two countries has been elevated to level of Strategic Partnership. Hence, statement 1 is correct.

— A startup bridge between Indian and Italian startup companies was also established. She was also the Chief Guest and Keynote Speaker at the Raisina Dialogue 2023.

— Italy is India’s 4th largest trading partner in the EU. Hence, statement 3 is not correct.

— India and Italy are on the same page for the India-Middle East-Europe economic corridor. Hence, statement 2 is correct.

Therefore, option (b) is the correct answer.

Daily subject-wise quiz — Polity and Governance (Week 39)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 39)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 39)

Daily subject-wise quiz — Economy (Week 38)

Daily subject-wise quiz – International Relations (Week 38)

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