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 Liberalised Remittance Scheme, consider the following statements:

1. All resident individuals are allowed to freely remit up to USD 2,50,000 per financial year.

2. Remittance for trading in foreign exchange abroad is prohibited.

3. Minors are not included in this scheme.

4. The Scheme is not available to corporates.

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) Only three

(d) All four

Consider the following countries:

1. Sri Lanka

2. Nepal

3. UAE

4. France

5. Italy

How many of the above countries officially support Unified Payments Interface (UPI) payment?

(a) Only two

(b) Only three

(c) Only four

(d) All five

With reference to the System of Rice Intensification (SRI), consider the following statements:

1. It was first developed in the Madagascar.

2. It promises to save 15 to 20 per cent of groundwater.

3. The method’s drawback is substantial increase in the investments in external inputs.

How many of the above statements are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

The “Dotted Lands” were in the news. They are best defined as:

(a) Land which does not have clear ownership.

(b) Land dedicated for military purposes.

(c) Disputed land between two states.

(d) Land near the border with no clear boundary.

With reference to the liquidity of the banking system, consider the following statements:

1. It refers to readily available cash that banks need to meet short-term business and financial needs.

2. The system of liquidity is said to be a deficit if the bank is a net borrower to the Reserve Bank of India (RBI).

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

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

FYI:

— Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. Hence, statement 1 is correct and statement 3 is not correct.

— The resident individuals can avail of foreign exchange facility for the purposes mentioned in Para 1 of Schedule III of FEM (CAT) Amendment Rules 2015, dated May 26, 2015, within the limit of USD 2,50,000 only.

— The Scheme was introduced on February 4, 2004, with a limit of USD 25,000. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions.

— If the remitter is a minor, the LRS declaration form must be countersigned by the minor’s natural guardian.

— The Scheme is not available to corporates, partnership firms, HUF, Trusts, etc. Hence, statement 4 is correct.

— The remittance facility under the Scheme is not available for the following:

(i) Remittance for any purpose specifically prohibited under Schedule-I (like the purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000.

(ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty.

(iii) Remittances for the purchase of FCCBs issued by Indian companies in the overseas secondary market.

(iv) Remittance for trading in foreign exchange abroad. Hence, statement 2 is not correct.

(v) Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF) as “non-cooperative countries and territories”, from time to time.

(vi) Remittances directly or indirectly to those individuals and entities identified as posing a significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.

(vii) Gifting by a resident to another resident, in foreign currency, for the credit of the latter’s foreign currency account held abroad under LRS.

Therefore, option (b) is the correct answer.

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

FYI:

— Unified Payments Interface, commonly known as UPI, has been a game changer for digital payments in India.

— UPI is a mobile-first payment system developed in India by the National Payments Corporation of India (NPCI). It makes it easy to send and receive by just scanning a QR code or using a user’s phone number.

— The list of countries that officially support UPI payment:

Sri Lanka

Mauritius

France

UAE

Singapore

Bhutan

Nepal

— Bhutan was one of the first countries to adopt UPI payments outside India back in 2021 in collaboration with the Royal Monetary Authority (RMA) of Bhutan. Besides, Bhutan is also one of the first countries to adopt and issue RuPay bank cards.

Therefore, option (c) is the correct answer.

FYI:

— The Punjab government is promoting the Direct Seeding of Rice (DSR) technique of paddy, which saves water and labour costs against the conventional puddling method.

— The System of Rice Intensification (SRI) was first developed in Madagascar in the 1980s and since then several countries in the world have been practicing it, including India. Hence, statement 1 is correct.

— It promises to save 15 to 20 per cent of groundwater. Hence, statement 2 is correct.

— It improves rice productivity and it gives equal or more produce than conventional rice cultivation, with less water, less seed and fewer chemicals.

— The net effect is a substantial reduction in the investments in external inputs. This method is beneficial for the soil, environment and farmers. Hence, statement 3 is not correct.

Therefore, option (b) is the correct answer.

FYI:

— The Andhra Pradesh government has started removing “dotted lands” in the state from the prohibited list, restoring full rights of selling or pledging these lands to the farmers who own them.

— Dotted lands are disputed lands for which there are no clear ownership documents. Typically, one or more individuals as well as the government’s Revenue Department lay claim over the land.

— These lands came to be known as “dotted lands’’ because when, during the British era, land ownership surveys and resettlement of land records were taken up, local revenue officials who were tasked with identifying government-owned and privately-owned lands put dots in the ownership column if more than one person claimed ownership, or if ownership could not be clearly established.

— These lands were also noted as disputed lands in the resettlement register or land records register. The dots on the land documents indicated their disputed status.

Therefore, option (a) is the correct answer.

FYI:

— Liquidity in the banking system refers to readily available cash that banks need to meet short-term business and financial needs. Hence, statement 1 is correct.

— On a given day, if the banking system is a net borrower from the RBI under Liquidity Adjustment Facility (LAF), the system liquidity can be said to be in deficit and if the banking system is a net lender to the RBI, the system liquidity can be said to be in surplus. Hence, statement 2 is correct.

— The LAF refers to the RBI’s operations through which it injects or absorbs liquidity into or from the banking system.

— The deficit in the liquidity situation has been caused by an uptick in the bank credit, advance tax payments by corporates, the intervention of the RBI into the forex market, and also incremental deposit growth not keeping pace with credit demand.

Therefore, option (c) is the correct answer.

Daily subject-wise quiz — Polity and Governance (Week 46)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 46)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 46)

Daily subject-wise quiz — Economy (Week 45)

Daily subject-wise quiz – International Relations (Week 45)

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