UPSC Prelims 2017 Economy questions: topic-wise weightage
UPSC Prelims 2017 asked 23 economy questions in GS Paper I, spread over 6 topics. See the economy weightage for 2017 below, then attempt each question with the official answer and an explanation.
Economy 2017: questions by topic
- Money, banking, monetary policy and inflation5
- Fiscal policy, budget and taxation3
- External sector and international economic institutions4
- Financial markets and instruments2
- Agriculture, food security and allied sectors3
- Industry, infrastructure, poverty, employment and social sector6
Counted from the 23 questions on this page, tagged by topic in the Battle IAS PYQ bank.
Seeing 23 Economy questions spread over 6 topics can feel overwhelming. That's exactly why the Battle IAS PYQ Book maps every question topic by topic, so you know what to study first. Download free sample
Money, banking, monetary policy and inflation 5
Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC) ?
- 1. It decides the RBI's benchmark interest rates.
- 2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
- 3. It functions under the chairmanship of the Union Finance Minister.
Select the correct answer using the code given below :
Answer (a) & explanation
Only statement 1 is correct (a). The Monetary Policy Committee, set up in 2016 under the amended RBI Act, 1934 (Section 45ZB), fixes the repo rate to meet the inflation target of 4% ± 2% (1). Statement 2 is wrong because it has six members, not twelve, and it is not reconstituted every year. Three are from the RBI, including the Governor as chair, who has a casting vote. Three outside experts are appointed by the government for four years. Statement 3 is wrong because the Finance Minister has no seat on it.
It meets at least four times a year, usually six. Notice that if inflation stays outside the band for three quarters in a row, the RBI must write to the government explaining why, as it did in 2022.
"12-member" and "Finance Minister". Both are invented; the six-member, Governor-led design keeps it independent.
Answer as per the official UPSC answer key.
What is the purpose of setting up of Small Finance Banks (SFBs) in India ?
- 1. To supply credit to small business units
- 2. To supply credit to small and marginal farmers
- 3. To encourage young entrepreneurs to set up business particularly in rural areas.
Select the correct answer using the code given below :
Answer (a) & explanation
Statements 1 and 2 are correct (a). The RBI's 2014 guidelines say Small Finance Banks exist for financial inclusion. They offer savings services and give credit to small business units (1), small and marginal farmers (2), micro and small industries and the unorganised sector. Statement 3 is wrong because encouraging young entrepreneurs in rural areas is not a stated purpose. At least 75% of their loans must go to the priority sector, and at least half their loans must be up to ₹25 lakh.
Many SFBs, such as AU, Ujjivan and Equitas, began as NBFCs or microfinance lenders. Notice how they differ from Payments Banks: payments banks take deposits (up to ₹2 lakh) but cannot lend, and AU later applied to become a universal bank.
statement 3 sounds like a good aim. UPSC tests the RBI's stated objectives, word for word.
Answer as per the official UPSC answer key.
Which of the following is a most likely consequence of implementing the 'Unified Payments Interface (UPI)' ?
Answer (a) & explanation
With UPI, mobile wallets are no longer needed for online payments (a). The Unified Payments Interface, launched by NPCI in 2016, moves money straight from one bank account to another using a phone and a virtual payment address or QR code. There is no need to first load money into a mobile wallet. Option (b) is exaggerated because cash is still widely used. Option (c) has no link to FDI. Option (d) is wrong because subsidies go through DBT using the Aadhaar Payment Bridge, not UPI.
UPI now handles about 20 billion transactions a month and is going global, with links to Singapore's PayNow, the UAE and France. Notice the newer features too: UPI Lite, credit cards on UPI, and UPI 123PAY for feature phones.
option (d) sounds good and is linked to digital payments. The "most likely" direct result is the end of the need for wallets.
Answer as per the official UPSC answer key.
Which of the following statements best describes the term 'Scheme for Sustainable Structuring of Stressed Assets (S4A)', recently seen in the news ?
Answer (b) & explanation
S4A was an RBI scheme for reworking big companies' stressed loans (b). The Scheme for Sustainable Structuring of Stressed Assets, launched in June 2016, let banks split a large stressed loan of over ₹500 crore into two parts. The sustainable part was what the company's cash flows could repay. The unsustainable part was turned into equity or similar instruments. It was not about ecological costs (a) or disinvestment (c). It was not part of the IBC (d); it was one of several restructuring schemes before the IBC.
The RBI scrapped all such schemes, including CDR and SDR, in February 2018. Notice how stressed loans are handled now: the IBC, the RBI's June 2019 framework, and the NARCL "bad bank" (2021).
"Sustainable" makes option (a) look ecological. The words "Stressed Assets" point to bank loans.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country.
- 2. NPCI has launched RuPay, a card payment scheme.
Which of the statements given above is/are correct ?
Answer (c) & explanation
Both statements are correct (c). The National Payments Corporation of India (NPCI), set up in 2008, is a not-for-profit company under Section 8 of the Companies Act. It was formed by banks under RBI guidance through the Payment and Settlement Systems Act, 2007. It runs RuPay (2), India's own card network, which is issued free with Jan Dhan accounts, as well as UPI, IMPS, AePS, NACH, FASTag (NETC) and BBPS. These cheap domestic payment systems support financial inclusion (1).
The international arm, NIPL, takes UPI and RuPay abroad. Notice that RuPay is now accepted in Singapore, the UAE, Bhutan and Nepal, and RuPay credit cards can link to UPI. NPCI also limits any one UPI app's share of the market.
Answer as per the official UPSC answer key.
Fiscal policy, budget and taxation 3
With reference to the 'Prohibition of Benami Property Transactions Act, 1988 (PBPT Act)', consider the following statements :
- 1. A property transaction is not treated as a benami transaction if the owner of the property is not aware of the transaction.
- 2. Properties held benami are liable for confiscation by the Government.
- 3. The Act provides for three authorities for investigations but does not provide for any appellate mechanism.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Only statement 2 is correct (b). The 2016 amendment to the Benami Act made benami property liable to confiscation by the government (2), along with jail of up to seven years and fines. Statement 1 is wrong because a transaction where the owner denies knowing about it, or which is held in a fictitious name, is specifically counted as benami. Statement 3 is wrong because the Act sets up four authorities: the Initiating Officer, Approving Authority, Administrator and Adjudicating Authority. It also provides an Appellate Tribunal, with further appeal to the High Court.
In Ganpati Dealcom (2022), the Supreme Court said the 2016 changes cannot apply to past transactions and struck down the 1988 penalty clause. Notice the link with India's fight against black money, alongside demonetisation and the Black Money Act, 2015.
Answer as per the official UPSC answer key.
What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'?
- 1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
- 2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves.
- 3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below :
Answer (a) & explanation
Only statement 1 is correct (a). GST, launched on 1 July 2017 under the 101st Amendment, replaced central excise, service tax, State VAT, entry tax, octroi and other levies with one tax, collected at each stage on the value added. This created a single national market (1). Statements 2 and 3 are exaggerated. GST may help growth a little through efficiency, but "drastically" cutting the current account deficit or helping India overtake China are not results any tax reform can promise.
The GST Council (Article 279A) is chaired by the Union Finance Minister. In September 2025, the "GST 2.0" reform cut the rates to two main slabs, 5% and 18%, plus a 40% rate on sin and luxury goods. Notice the key Supreme Court case: in Mohit Minerals (2022), it said the Council's recommendations are not binding.
words like "drastically", "enormously" and "overtake China". Exaggerated claims are rarely the right answer.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. Tax revenue as a percent of GDP of India has steadily increased in the last decade.
- 2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct ?
Answer (d) & explanation
Neither statement is correct (d). Between about 2007 and 2017, India's tax-to-GDP ratio fell after the 2008 global crisis, when stimulus tax cuts were made, and recovered only later, so it did not rise steadily (1). The fiscal deficit jumped from about 2.5% of GDP in 2007-08 to about 6.5% in 2009-10. It then came down to about 3.5% by 2016-17 under the FRBM path (2). Neither figure moved "steadily" in one direction.
The word "steadily" is the trap here. Notice the current numbers: the fiscal deficit target was 4.4% for 2025-26. From 2026-27, the government moved to a debt-to-GDP anchor of about 50% by 2031, under the revised FRBM approach.
"steadily" in both statements. In a decade with a world crisis, few numbers move in a straight line.
Answer as per the official UPSC answer key.
External sector and international economic institutions 4
The term 'Domestic Content Requirement' is sometimes seen in the news with reference to
Answer (a) & explanation
Domestic Content Requirement is linked to solar power (a). Under the Jawaharlal Nehru National Solar Mission (2010), some projects had to use solar cells and modules made in India. The USA challenged this at the WTO. In 2016, the Appellate Body ruled the DCR against India's national treatment duties under GATT Article III and the TRIMs Agreement, and India changed the rule. DCR has nothing to do with foreign TV channels (b), food exports (c), or foreign university campuses (d).
India now backs local manufacturing differently: the ALMM list of approved modules, the PLI scheme for high-efficiency modules, and DCR only for government-funded projects such as PM-KUSUM and PM Surya Ghar, which WTO rules allow under government procurement.
Answer as per the official UPSC answer key.
The Global Infrastructure Facility is a/an
Answer (b) & explanation
The Global Infrastructure Facility is a World Bank collaboration for infrastructure PPPs (b). It was launched in 2014, endorsed by the G20, and is hosted by the World Bank. It helps governments prepare and structure complex public-private partnerships so that private and institutional investors, such as pension funds and insurers, will put money into them. It is not an ASEAN or ADB initiative (a), it is not a group of banks working with the OECD (c), and UNCTAD does not fund it (d).
The basic problem it tackles is that there is plenty of money, but there are few "bankable" projects. Notice the Indian versions: the India Infrastructure Project Development Fund, the Viability Gap Funding scheme, and the NIIF.
Answer as per the official UPSC answer key.
'Broad-based Trade and Investment Agreement (BTIA)' is sometimes seen in the news in the context of negotiations held between India and
Answer (a) & explanation
The BTIA was negotiated between India and the European Union (a). The Broad-based Trade and Investment Agreement was the name for the India–EU free trade talks that began in 2007. They stalled in 2013 over car and wine tariffs, data security and the movement of professionals. They were relaunched in 2022 as three tracks: a trade agreement, an investment protection agreement, and a geographical indications pact. India and the EU concluded the FTA on 27 January 2026 at the 16th India–EU Summit. The GCC (b), OECD (c) and SCO (d) are not linked to the BTIA.
The FTA still needs signing and ratification, and is expected to take effect around 2027. Notice the sticking point that remains: the EU's CBAM carbon border tax.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
- 2. TFA is a part of WTO's Bali Ministerial Package of 2013.
- 3. TFA came into force in January 2016.
Which of the statements given above is/are correct ?
Answer (a) & explanation
Statements 1 and 2 are correct (a). The Trade Facilitation Agreement, part of the WTO's Bali Ministerial Package (2013) (2), simplifies and speeds up customs procedures to cut trade costs. It is the WTO's first multilateral agreement since 1995. India ratified it in April 2016 (1), after linking its support to a permanent solution on food stockholding. Statement 3 is wrong because it came into force on 22 February 2017, once two-thirds of WTO members had ratified it.
India uses the SWIFT single-window and Turant Customs under its National Trade Facilitation Action Plan. Notice the Bali "peace clause", which protects India's public food stocks for the MSP and PDS from legal challenge.
a date one year early. Remember: TFA needed two-thirds ratification and got it in February 2017.
Answer as per the official UPSC answer key.
Financial markets and instruments 2
Who among the following can join the National Pension System (NPS) ?
Answer (c) & explanation
State Government employees who join after their State notifies NPS can join (c). The National Pension System, regulated by PFRDA, is open to Indian citizens, resident or non-resident, so (a) is wrong. The age range was 18–60 then and is now 18–70, not 21–55, so (b) is wrong. It is compulsory for Central Government employees joining on or after 1 January 2004, but the Armed Forces are kept out, so (d) is wrong twice over. Each State joins from the date it notifies NPS, so (c) is correct.
The Unified Pension Scheme (UPS), in force from April 2025, now lets central employees under NPS choose an assured pension of 50% of their average last-year basic pay. Notice that some States, such as Rajasthan and Himachal, have gone back to the old pension scheme.
option (d) slips in "including those of Armed Forces". One added group spoils the whole option.
Answer as per the official UPSC answer key.
With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct ?
- 1. It is an organ of NITI Aayog.
- 2. It has a corpus of ₹4,00,000 crore at present.
Select the correct answer using the code given below :
Answer (d) & explanation
Neither statement is correct (d). The National Investment and Infrastructure Fund (NIIF), set up in 2015, is a fund manager registered with SEBI as an Alternative Investment Fund. It was set up by the Ministry of Finance (Department of Economic Affairs), not NITI Aayog, so statement 1 is wrong. Its planned corpus was ₹40,000 crore, with the government putting in up to 49% and the rest coming from investors such as Abu Dhabi's ADIA, Temasek and AIIB. Statement 2 adds an extra zero.
It runs a Master Fund, a Fund of Funds and a Strategic Opportunities Fund. Notice the other infrastructure-finance bodies: NaBFID (2021) is a development finance institution, and the National Infrastructure Pipeline listed the projects.
the extra zero. Count the digits in big figures.
Answer as per the official UPSC answer key.
Agriculture, food security and allied sectors 3
What is/are the advantage/advantages of implementing the 'National Agriculture Market' scheme ?
- 1. It is a pan-India electronic trading portal for agricultural commodities.
- 2. It provides the farmers access to nationwide market, with prices commensurate with the quality of their produce.
Select the correct answer using the code given below :
Answer (c) & explanation
Both statements are correct (c). e-NAM, launched in April 2016, is a pan-India online trading portal (1) that connects existing APMC mandis. Produce is assayed for quality, and farmers can get bids from traders across the country. This brings prices that match quality and wider demand (2), with online payment. The Small Farmers' Agribusiness Consortium (SFAC) runs it for the Agriculture Ministry. About 1,500 mandis across more than 20 States and UTs are now on it.
It also allows inter-mandi and inter-state trade, and FPOs can trade directly. Notice the hurdles: weak assaying labs, low inter-state trade, and States' APMC laws. The Model APLM Act, 2017 tried to fix these.
Answer as per the official UPSC answer key.
Which of the following practices can help in water conservation in agriculture ?
- 1. Reduced or zero tillage of the land
- 2. Applying gypsum before irrigating the field
- 3. Allowing crop residue to remain in the field
Select the correct answer using the code given below :
Answer (c) & explanation
Practices 1 and 3 save water (c). Reduced or zero tillage (1) leaves the soil structure intact, so less moisture is lost and more rain soaks in. Leaving crop residue on the field (3) works as a mulch that shades the soil, cuts evaporation and adds organic matter. The Happy Seeder machine sows wheat straight into rice stubble, which also cuts down stubble burning. Statement 2 is wrong because gypsum (calcium sulphate) is used to reclaim sodic (alkaline) soils and supply calcium and sulphur. It is not a water-saving practice.
Both 1 and 3 are parts of conservation agriculture, along with crop rotation. Notice the related water-saving methods: direct-seeded rice (DSR), alternate wetting and drying, and laser land levelling.
Answer as per the official UPSC answer key.
Consider the following statements :
The nation-wide 'Soil Health Card Scheme' aims at
- 1. expanding the cultivable area under irrigation.
- 2. enabling the banks to assess the quantum of loans to be granted to farmers on the basis of soil quality.
- 3. checking the overuse of fertilizers in farmlands.
Which of the above statements is/are correct ?
Answer (b) & explanation
Only statement 3 is correct (b). The Soil Health Card Scheme, launched in February 2015 at Suratgarh, Rajasthan, tests each farm's soil every two years for 12 parameters. These are macronutrients (N, P, K, S), micronutrients (Zn, Fe, Cu, Mn, Bo) and physical properties (pH, EC, organic carbon). It then recommends the right fertiliser doses, so it helps check overuse of fertilisers (3). It does nothing to expand irrigation (1), which comes under PMKSY. Banks do not use it to decide loan amounts (2).
It is now part of the Rashtriya Krishi Vikas Yojana. Notice the problem it targets: India's N:P:K ratio is far from the ideal 4:2:1 because urea is heavily subsidised, which led to neem-coated urea and nano urea.
Answer as per the official UPSC answer key.
Industry, infrastructure, poverty, employment and social sector 6
Consider the following statements :
- 1. The Standard Mark of Bureau of Indian Standards (BIS) is mandatory for automotive tyres and tubes.
- 2. AGMARK is a quality Certification Mark issued by the Food and Agriculture Organisation (FAO).
Which of the statements given above is/are correct ?
Answer (a) & explanation
Only statement 1 is correct (a). The BIS Standard Mark (ISI) is mandatory for certain products through Quality Control Orders, including automotive tyres and tubes, cement, LPG cylinders, electrical appliances and packaged water (1). Statement 2 is wrong because AGMARK is not issued by the FAO. It is India's own mark for farm products such as ghee, honey, spices and pulses. It is given by the Directorate of Marketing and Inspection under the Agricultural Produce (Grading and Marking) Act, 1937.
BIS got statutory status under the BIS Act, 1986, replaced by the 2016 Act. Notice the other quality marks: Hallmark (gold, mandatory since 2021), FPO (processed fruit), Ecomark and FSSAI licensing.
Answer as per the official UPSC answer key.
With reference to the 'National Intellectual Property Rights Policy', consider the following statements :
- 1. It reiterates India's commitment to the Doha Development Agenda and the TRIPS Agreement.
- 2. Department of Industrial Policy and Promotion is the nodal agency for regulating intellectual property rights in India.
Which of the above statements is/are correct ?
Answer (c) & explanation
Both statements are correct (c). The National IPR Policy (May 2016), with the slogan "Creative India; Innovative India", reaffirms India's commitment to the Doha Development Agenda and the TRIPS Agreement (1). It keeps flexibilities such as compulsory licensing for public health. It made DIPP (now DPIIT) the nodal department for IPR (2), moving copyright and semiconductor layout designs there from other ministries. It has seven objectives, including awareness, IP commercialisation and enforcement.
CIPAM was set up to carry it out. Notice India's careful approach under Section 3(d) of the Patents Act, which blocks "evergreening" of drug patents, as upheld in the Novartis (Glivec) case of 2013.
Answer as per the official UPSC answer key.
With reference to 'Quality Council of India (QCI)', consider the following statements :
- 1. QCI was set up jointly by the Government of India and the Indian Industry.
- 2. Chairman of QCI is appointed by the Prime Minister on the recommendations of the industry to the Government.
Which of the above statements is/are correct ?
Answer (c) & explanation
Both statements are correct (c). The Quality Council of India, set up in 1997, is an autonomous body formed jointly by the Government of India and industry bodies ASSOCHAM, CII and FICCI (1). It works as India's national accreditation system, through bodies such as NABL (laboratories), NABH (hospitals) and NABCB. Its chairman is appointed by the Prime Minister on the industry's recommendation (2). DPIIT (formerly DIPP) is its nodal department.
QCI also runs ZED certification for MSMEs and checks cleanliness rankings under Swachh Survekshan. Notice how it differs from BIS: QCI accredits the bodies that check quality, while BIS sets standards and issues product marks.
Answer as per the official UPSC answer key.
With reference to 'National Skills Qualification Framework (NSQF)', which of the statements given below is/are correct ?
- 1. Under NSQF, a learner can acquire the certification for competency only through formal learning.
- 2. An outcome expected from the implementation of NSQF is the mobility between vocational and general education.
Select the correct answer using the code given below :
Answer (b) & explanation
Only statement 2 is correct (b). The National Skills Qualification Framework (NSQF), notified in 2013, arranges qualifications in ten levels based on what a learner can actually do. Statement 1 is wrong because certification is possible through formal, non-formal or informal learning, including Recognition of Prior Learning. Statement 2 is right because a key aim is to let learners move between vocational and general education, and between study and jobs, without losing credit.
The National Credit Framework (2023) and NEP 2020 build on this by joining vocational and academic credits. Notice the bodies involved: NCVET (2018) regulates vocational training, and Sector Skill Councils under NSDC set the job standards.
"only" in statement 1. Recognising skills learnt outside school is a core purpose of NSQF.
Answer as per the official UPSC answer key.
Consider the following in respect of 'National Career Service' :
- 1. National Career Service is an initiative of the Department of Personnel and Training, Government of India.
- 2. National Career Service has been launched in a Mission Mode to improve the employment opportunities to uneducated youth of the country.
Which of the above statements is/are correct ?
Answer (d) & explanation
Neither statement is correct (d). The National Career Service (NCS), launched in July 2015, is run by the Ministry of Labour and Employment, through the Directorate General of Employment, not by DoPT, so statement 1 is wrong. Statement 2 is wrong because it is not limited to uneducated youth. It is an online portal and a network of Model Career Centres that link all job seekers with employers. It also offers career counselling, skill information and job fairs, and it modernised the old employment exchanges.
Notice the related platforms: e-Shram for unorganised workers, Skill India Digital Hub, and the Employment Linked Incentive scheme from the 2024 Budget, which encourages formal hiring.
Answer as per the official UPSC answer key.
Which of the following has/have occurred in India after its liberalization of economic policies in 1991 ?
- 1. Share of agriculture in GDP increased enormously.
- 2. Share of India's exports in world trade increased.
- 3. FDI inflows increased.
- 4. India's foreign exchange reserves increased enormously.
Select the correct answer using the codes given below :
Answer (b) & explanation
Statements 2, 3 and 4 are correct (b). After the 1991 reforms (the LPG model), FDI rose from almost nothing to tens of billions of dollars a year (3). Forex reserves climbed from about $1 billion in mid-1991, when India pledged gold, to over $300 billion by 2008 (4). They are now about $700 billion. India's share of world exports rose from about 0.5% to around 2% (2). Statement 1 is wrong because agriculture's share of GDP fell, from about 30% to under 20%, as services grew. Agriculture still employs about 45% of workers.
Notice this pattern: India's growth skipped a manufacturing phase and went from agriculture straight to services. That is why schemes like Make in India and PLI aim to raise manufacturing's share.
Answer as per the official UPSC answer key.
All years by topic
Every question from 2011 to 2026, grouped by syllabus topic, with year-wise trends.