UPSC Prelims 2020 Economy questions: topic-wise weightage
UPSC Prelims 2020 asked 28 economy questions in GS Paper I, spread over 5 topics. See the economy weightage for 2020 below, then attempt each question with the official answer and an explanation.
Economy 2020: questions by topic
- Money, banking, monetary policy and inflation4
- External sector and international economic institutions8
- Financial markets and instruments3
- Agriculture, food security and allied sectors12
- Industry, infrastructure, poverty, employment and social sector1
Counted from the 28 questions on this page, tagged by topic in the Battle IAS PYQ bank.
Seeing 28 Economy questions spread over 5 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 4
If you withdraw ₹1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be
Answer (d) & explanation
The money supply stays unchanged (d). Money supply, both M1 (narrow money) and M3 (broad money), is mainly currency with the public plus deposits with banks. When you withdraw ₹1 lakh in cash from a demand deposit, such as a savings or current account, your deposit falls by ₹1 lakh, and currency with the public rises by the same ₹1 lakh. The total does not change; only its form does. So options (a), (b) and (c) are wrong. Over time, lower bank reserves can reduce lending, but the question asks only about the immediate effect.
Notice the other measures: M0 is reserve money, and M3 includes time deposits. The RBI uses M3 as its main measure of money supply.
Answer as per the official UPSC answer key.
In the context of the Indian economy, non-financial debt includes which of the following ?
- 1. Housing loans owed by households
- 2. Amounts outstanding on credit cards
- 3. Treasury bills
Select the correct answer using the code given below :
Answer (d) & explanation
All three are non-financial debt (d). Non-financial debt is the debt owed by the non-financial sectors of an economy: households, non-financial companies and the government. Statement 1 is right because a housing loan is household debt. Statement 2 is right because credit card dues are also household debt. Statement 3 is right because Treasury Bills are short-term borrowing by the government. The only debt left out is that owed by banks and other financial firms, because counting it would double-count money already lent on.
Notice the related measures: the debt-to-GDP ratio of each sector, and the Bank for International Settlements (BIS), which publishes data on total credit to the non-financial sector. Treasury Bills have maturities of 91, 182 and 364 days.
"non-financial" sounds like it excludes loans and bills. It refers to who owes the debt, not what kind it is.
Answer as per the official UPSC answer key.
If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do?
- 1. Cut and optimize the Statutory Liquidity Ratio
- 2. Increase the Marginal Standing Facility Rate
- 3. Cut the Bank Rate and Repo Rate
Select the correct answer using the code given below :
Answer (b) & explanation
The RBI would not raise the MSF rate (b). An expansionist monetary policy makes money cheaper and more plentiful to boost growth. Statement 1 fits it: cutting the Statutory Liquidity Ratio frees bank funds that were locked in government securities, so banks can lend more. Statement 3 fits it too: cutting the repo rate and bank rate lowers the cost of borrowing from the RBI. Statement 2 does not fit: raising the Marginal Standing Facility rate makes emergency overnight borrowing dearer, which is a tightening step. So 2 is the only thing it would not do.
Notice the Liquidity Adjustment Facility: since 2022, the Standing Deposit Facility is its floor and the MSF its ceiling. The Monetary Policy Committee has six members.
"would it not do". Mark the tightening step, not the easing ones.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
- 2. The WPI does not capture changes in the prices of services, which CPI does.
- 3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct ?
Answer (a) & explanation
Statements 1 and 2 are correct (a). Statement 1 is right because food has a weight of about 46% in CPI (Combined), but only about 24% in the WPI. Statement 2 is right because the WPI covers goods only, while the CPI includes services such as education, health, housing and transport. Statement 3 is wrong because, after the Urjit Patel Committee (2014), the RBI adopted CPI (Combined) as its key inflation measure, not WPI. Under flexible inflation targeting, the target is 4%, with a band of 2–6%.
Notice the agencies: the NSO (MoSPI) compiles CPI, and the Office of the Economic Adviser (DPIIT) compiles WPI. Both use the base year 2011–12 for WPI and 2012 for CPI, with revisions under way.
Answer as per the official UPSC answer key.
External sector and international economic institutions 8
"Gold Tranche" (Reserve Tranche) refers to
Answer (d) & explanation
The Gold Tranche is an IMF credit system for members (d). Each IMF member has a quota, which sets its contribution, its voting power and how much it can borrow. Part of the quota, originally 25%, is paid in gold or hard currency; this is the reserve tranche, once called the gold tranche. A member can draw it at any time, with no conditions and no interest, because it is really its own money. It is not a World Bank loan system (a), a central bank operation (b), or a WTO credit (c).
Notice that the reserve tranche counts as part of India's forex reserves, with gold, foreign currency assets and SDRs. India's IMF quota share is about 2.75%, and the 16th review aims at a quota increase.
the word "gold" points to a central bank vault. The tranche is a slice of the member's IMF quota.
Answer as per the official UPSC answer key.
If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India ?
- 1. Not depending on short-term foreign borrowings
- 2. Opening up to more foreign banks
- 3. Maintaining full capital account convertibility
Select the correct answer using the code given below :
Answer (a) & explanation
Only statement 1 is correct (a). In a crisis, short-term foreign loans are the first to leave or not be renewed. This happened in the East Asian crisis of 1997, when countries such as Thailand and Indonesia had borrowed heavily short-term. So avoiding them gives protection (1). Statement 2 is wrong because more foreign banks would tie India more closely to world markets. In a crisis, they may pull money back to their home countries. Statement 3 is wrong because full capital account convertibility would let money flow out freely, spreading a shock faster.
India's partial convertibility and large forex reserves helped it weather the 2008 crisis. Notice the Tarapore Committees (1997, 2006), which set preconditions for full convertibility, such as low inflation and a strong banking system.
Answer as per the official UPSC answer key.
With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic ?
Answer (b) & explanation
FDI is largely a non-debt creating flow (b). Foreign Direct Investment buys ownership (equity) in an Indian business, usually with a say in management. There is no fixed interest to pay and no loan to return, so it adds no external debt and is a stable source of capital. Option (a) is wrong because FDI can go into listed or unlisted companies; in a listed company, a holding of 10% or more counts as FDI, below that as portfolio investment. Option (c) describes External Commercial Borrowings, which need debt-servicing. Option (d) describes FPI in government securities, which is portfolio debt.
Notice the two FDI routes: automatic (no prior approval) and government approval. Singapore and Mauritius have long been the top sources of FDI into India.
option (a) says "essentially in a listed company". FDI often goes into unlisted companies too.
UPSC repeats traps like this year after year. The PYQ Book gathers every trap in one place, so you see them coming. Try the free sample
Answer as per the official UPSC answer key.
With reference to the international trade of India at present, which of the following statements is/are correct ?
- 1. India's merchandise exports are less than its merchandise imports.
- 2. India's imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
- 3. India's exports of services are more than its imports of services.
- 4. India suffers from an overall trade/current account deficit.
Select the correct answer using the code given below :
No official answer (question dropped) & notes
UPSC dropped this question, so no answer was scored. The likely reason is statement 4: India usually runs a current account deficit, but in 2020–21 it posted a small surplus as imports collapsed during COVID. The lasting facts are clear. Statement 1 is right: India's merchandise imports (crude oil, gold, electronics) exceed its exports, giving a large trade deficit. Statement 3 is right: India has a big services surplus from software and IT exports. Statement 2 is wrong: imports of iron and steel, chemicals, fertilisers and machinery have generally risen, not fallen.
Notice the full balance of payments: the current account (goods, services, remittances) and the capital account (FDI, FPI, loans). India is the world's largest receiver of remittances.
UPSC did not evaluate this question, so no official answer exists. Use it for practice only.
UPSC dropped this question from evaluation; there is no official answer.
The term 'West Texas Intermediate', sometimes found in news, refers to a grade of
Answer (a) & explanation
WTI is a grade of crude oil (a). West Texas Intermediate is a light, sweet (low-sulphur) crude from US oilfields, priced at the delivery hub of Cushing, Oklahoma. It is one of the three main world price benchmarks, along with Brent (North Sea) and Dubai/Oman (Gulf). In April 2020, WTI futures briefly traded below zero as storage ran out during COVID. It has nothing to do with bullion (b), which means gold and silver bars; rare earth elements (c), which are metals such as neodymium; or uranium (d).
Notice that the Indian crude basket is mostly Dubai-Oman (sour grades) and Brent (sweet). Light, sweet crude is easier and cheaper to refine into petrol and diesel.
Answer as per the official UPSC answer key.
With reference to Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct ?
- 1. Quantitative restrictions on imports by foreign investors are prohibited.
- 2. They apply to investment measures related to trade in both goods and services.
- 3. They are not concerned with the regulation of foreign investment.
Select the correct answer using the code given below :
Answer (c) & explanation
Statements 1 and 3 are correct (c). The WTO's TRIMs Agreement bans investment rules that distort trade in goods. Statement 1 is right because it prohibits quantitative restrictions on what a foreign investor may import, along with local content requirements and trade-balancing rules. Statement 3 is right because TRIMs does not regulate foreign investment itself; a country may still decide who may invest and how much, as long as the rules do not distort trade. Statement 2 is wrong because TRIMs covers goods only; investment in services falls under GATS.
Notice the other Uruguay Round agreements: TRIPS (intellectual property), GATS (services) and the Agreement on Agriculture. The US once challenged India's solar mission at the WTO over local content rules.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
- 2. "Textile and textile articles" constitute an important item of trade between India and Bangladesh.
- 3. In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Only statement 2 is correct (b). Statement 1 is wrong because India–Sri Lanka trade rose and fell with Sri Lanka's troubles, including its 2022 economic crisis; it did not rise "consistently". Statement 2 is right because cotton, yarn and textiles are a major part of India's exports to Bangladesh, which is one of the world's biggest garment exporters and needs raw material. Statement 3 is wrong because Bangladesh, not Nepal, is India's largest trading partner in South Asia.
Notice the India–Sri Lanka Free Trade Agreement (1998, in force 2000) and SAFTA (2004/2006) for South Asia. Nepal is a landlocked country that depends heavily on India for transit and trade, but its total trade is smaller than Bangladesh's.
"consistently" in statement 1. One bad year breaks the claim.
Answer as per the official UPSC answer key.
In which one of the following groups are all the four countries members of G20 ?
Answer (a) & explanation
Argentina, Mexico, South Africa and Turkey are all G20 members (a). The G20 has 19 countries plus the European Union, and the African Union joined in 2023 at India's New Delhi summit. The 19 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK and the USA. Option (b) fails because of Malaysia and New Zealand. Option (c) fails because of Iran and Vietnam. Option (d) fails because of Singapore.
Notice that the G20 began in 1999 as a meeting of finance ministers after the Asian financial crisis and became a leaders' summit in 2008. It has no permanent secretariat; the troika of past, present and next presidencies guides it.
each wrong option has three members and one outsider. Find the outsider: Malaysia, Iran, Singapore.
Answer as per the official UPSC answer key.
Financial markets and instruments 3
In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits ?
- 1. Cost of restoration of the computer system in case of malware disrupting access to one's computer
- 2. Cost of a new computer if some miscreant wilfully damages it, if proved so
- 3. Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion
- 4. Cost of defence in the Court of Law if any third party files a suit
Select the correct answer using the code given below :
Answer (b) & explanation
Items 1, 3 and 4 are covered (b). Personal cyber insurance in India covers losses from online fraud and attacks, as shaped by IRDAI guidelines. Item 1 is right: it pays to restore data and the computer system after malware blocks access. Item 3 is right: in cyber extortion, such as ransomware, it pays for a specialist consultant to limit the loss. Item 4 is right: it pays legal defence costs if a third party sues, say for a privacy breach. Item 2 is wrong: it does not buy a new computer after deliberate physical damage; that falls under ordinary property insurance.
Notice CERT-In, India's agency for cyber incidents, and the national cybercrime helpline 1930. Other covers include identity theft and phishing losses.
Answer as per the official UPSC answer key.
What is the importance of the term "Interest Coverage Ratio" of a firm in India ?
- 1. It helps in understanding the present risk of a firm that a bank is going to give loan to.
- 2. It helps in evaluating the emerging risk of a firm that a bank is going to give loan to.
- 3. The higher a borrowing firm's level of Interest Coverage Ratio, the worse is its ability to service its debt.
Select the correct answer using the code given below :
Answer (a) & explanation
Statements 1 and 2 are correct (a). The Interest Coverage Ratio = earnings before interest and tax (EBIT) divided by the interest payable. It shows how many times a firm's profit covers its interest bill. Statement 1 is right because banks use it to judge a borrower's present risk. Statement 2 is right because a falling ratio warns of emerging risk before the firm defaults. Statement 3 is wrong because a higher ratio means a better, not worse, ability to service debt. A ratio below 1 means the firm cannot meet its interest from its earnings.
Notice related ratios: the debt-to-equity ratio and the Debt Service Coverage Ratio. Firms with a ratio below 1 for years are often called "zombie" companies.
Answer as per the official UPSC answer key.
With reference to the Indian economy, consider the following statements :
- 1. 'Commercial Paper' is a short-term unsecured promissory note.
- 2. 'Certificate of Deposit' is a long-term instrument issued by the Reserve Bank of India to a corporation.
- 3. 'Call Money' is a short-term finance used for interbank transactions.
- 4. 'Zero-Coupon Bonds' are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.
Which of the statements given above is/are correct ?
Answer (c) & explanation
Statements 1 and 3 are correct (c). Statement 1 is right: Commercial Paper is a short-term unsecured promissory note issued by companies, usually for 7 days to a year. Statement 3 is right: call money is very short-term lending between banks, from overnight (call) up to 14 days (notice money). Statement 2 is wrong: a Certificate of Deposit is a short-term deposit receipt issued by banks and some financial institutions, not by the RBI. Statement 4 is wrong: a zero-coupon bond pays no interest; it is sold at a discount and redeemed at face value.
Notice that these are all money market instruments, along with Treasury Bills and repos. The Treasury Bill itself is a zero-coupon instrument.
a "zero-coupon" bond described as "interest bearing". The name itself says no coupon.
Answer as per the official UPSC answer key.
Agriculture, food security and allied sectors 12
Consider the following statements :
- 1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks.
- 2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Only statement 2 is correct (b). Statement 1 is wrong because Scheduled Commercial Banks give the largest share of short-term crop loans in India, well ahead of cooperative banks and Regional Rural Banks. Statement 2 is right. India's short-term cooperative credit system has three tiers: the State Cooperative Bank at the top, the District Central Cooperative Banks in the middle, and the Primary Agricultural Credit Societies in villages. A key job of the DCCBs is to fund the PACS, which lend straight to farmers.
Notice NABARD, which refinances these banks. The Ministry of Cooperation (2021) is now computerising PACS. Since 2020, cooperative banks also come under fuller RBI regulation after amendments to the Banking Regulation Act.
Answer as per the official UPSC answer key.
In India, which of the following can be considered as public investment in agriculture ?
- 1. Fixing Minimum Support Price for agricultural produce of all crops
- 2. Computerization of Primary Agricultural Credit Societies
- 3. Social Capital development
- 4. Free electricity supply to farmers
- 5. Waiver of agricultural loans by the banking system
- 6. Setting up of cold storage facilities by the governments
Select the correct answer using the code given below :
Answer (c) & explanation
Items 2, 3 and 6 are public investment (c). Investment creates lasting assets that raise future output. Item 2 is right because computerising PACS builds systems that last. Item 3 is right because social capital, such as farmer groups and trained cooperatives, is a lasting asset. Item 6 is right because cold storage cuts post-harvest losses for years. Item 1 is wrong: MSP is a price policy, not an asset. Items 4 and 5 are wrong: free electricity and loan waivers are subsidies or transfers; they support current income but build nothing.
Notice the common critique that heavy farm subsidies crowd out public investment in irrigation, research and roads. Public investment is part of gross capital formation in agriculture.
loan waivers and free power cost the government a lot. Big spending is not the same as investment.
Answer as per the official UPSC answer key.
Which of the following factors/policies were affecting the price of rice in India in the recent past ?
- 1. Minimum Support Price
- 2. Government's trading
- 3. Government's stockpiling
- 4. Consumer subsidies
Select the correct answer using the code given below :
Answer (d) & explanation
All four affect rice prices (d). The government shapes the rice market at every step. Item 1 is right: the Minimum Support Price sets a floor for farmers and lifts market prices. Item 2 is right: government trading, such as open-market sales by FCI and export curbs (like the 2023 ban on non-basmati white rice exports), changes supply in the market. Item 3 is right: stockpiling by the Food Corporation of India takes grain off the market and keeps buffer stocks. Item 4 is right: consumer subsidies through the PDS lower what poor buyers pay and reduce market demand.
Notice the National Food Security Act, 2013, and PM Garib Kalyan Anna Yojana, which now gives free grain to about 81 crore people.
Answer as per the official UPSC answer key.
Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes ?
- 1. Working capital for maintenance of farm assets
- 2. Purchase of combine harvesters, tractors and mini trucks
- 3. Consumption requirements of farm households
- 4. Post-harvest expenses
- 5. Construction of family house and setting up of village cold storage facility
Select the correct answer using the code given below :
Answer (b) & explanation
Items 1, 3 and 4 are covered (b). The Kisan Credit Card scheme (1998) gives farmers a revolving short-term credit limit. It covers crop cultivation, post-harvest expenses (item 4), consumption needs of the farm household (item 3), and working capital for maintaining farm assets and allied work (item 1). Item 2 is wrong because tractors, harvesters and mini trucks are long-term assets financed by term loans. Item 5 is wrong because a family house and a village cold storage are also long-term investments, not short-term credit.
Notice the interest subvention scheme: KCC loans up to ₹3 lakh carry a low rate, with an extra rebate for prompt repayment. KCC was extended to animal husbandry and fisheries in 2018–19.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
- 2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.
Which of the statements given above is/are correct ?
Answer (d) & explanation
Neither statement is correct (d). Statement 1 is wrong because MSP is announced for 22 crops, but open-ended procurement happens mainly for wheat and rice, and only in some States. Pulses and oilseeds are bought under PM-AASHA (Price Support Scheme), usually only up to about 25% of output in a State. Statement 2 is wrong because MSP is a floor, not a ceiling. Market prices often rise above MSP, as with pulses and many oilseeds in recent years.
Notice that the Commission for Agricultural Costs and Prices (CACP) recommends MSP and the Cabinet Committee on Economic Affairs approves it. Since 2018–19, MSP has been set at least 1.5 times the A2+FL cost of production. MSP has no legal backing.
"unlimited" and "never". Two absolute words make both statements fail.
Answer as per the official UPSC answer key.
What is/are the advantage/advantages of zero tillage in agriculture ?
- 1. Sowing of wheat is possible without burning the residue of previous crop.
- 2. Without the need for nursery of rice saplings, direct planting of paddy seeds in the wet soil is possible.
- 3. Carbon sequestration in the soil is possible.
Select the correct answer using the code given below :
Answer (d) & explanation
All three are advantages of zero tillage (d). In zero tillage, the field is not ploughed before sowing. Statement 1 is right: machines like the Happy Seeder sow wheat straight into rice stubble, so farmers need not burn the residue. Statement 2 is right: Direct Seeded Rice drills paddy seed into the soil, with no nursery or transplanting, saving water and labour. Statement 3 is right: undisturbed soil keeps more organic matter, so carbon stays locked in the soil instead of escaping as CO₂.
Notice the wider package, called conservation agriculture: minimal tillage, crop residue cover and crop rotation. Zero tillage also saves diesel and lets wheat be sown on time after the rice harvest.
Answer as per the official UPSC answer key.
According to India's National Policy on Biofuels, which of the following can be used as raw materials for the production of biofuels ?
- 1. Cassava
- 2. Damaged wheat grains
- 3. Groundnut seeds
- 4. Horse gram
- 5. Rotten potatoes
- 6. Sugar beet
Select the correct answer using the code given below :
Answer (a) & explanation
Cassava, damaged wheat, rotten potatoes and sugar beet are allowed (a). The National Policy on Biofuels, 2018 widened the raw materials for ethanol. It allows sugarcane juice, sugar beet and sweet sorghum (sugar crops); cassava, corn and other starchy crops; damaged food grains such as wheat and broken rice unfit for eating; and rotten potatoes. So items 1, 2, 5 and 6 are right. Items 3 and 4 are wrong: groundnut (an oilseed) and horse gram (a pulse) are food crops that are not on the list.
Notice the 2022 amendment, which advanced the target of 20% ethanol blending in petrol (E20) to 2025–26; India reached about 20% in 2025. Second-generation (2G) ethanol uses crop waste such as straw.
Answer as per the official UPSC answer key.
With reference to pulse production in India, consider the following statements :
- 1. Black gram can be cultivated as both kharif and rabi crop.
- 2. Green gram alone accounts for nearly half of pulse production.
- 3. In the last three decades, while the production of kharif pulses has increased, the production of rabi pulses has decreased.
Which of the statements given above is/are correct ?
Answer (a) & explanation
Only statement 1 is correct (a). Statement 1 is right: black gram (urad) is grown in both kharif and rabi, especially in the south and in rice fallows. Statement 2 is wrong: gram (chickpea), a rabi crop, gives nearly half of India's pulses; green gram (moong) has a much smaller share. Statement 3 is wrong: rabi pulse output, led by chickpea, has grown strongly over the past three decades, so the statement is reversed.
Notice that India is the world's largest producer, consumer and importer of pulses. Pulses are legumes that fix nitrogen. The Mission for Aatmanirbharta in Pulses (2025) aims to cut imports, focusing on tur, urad and masoor.
"gram" and "green gram" are different crops. Chickpea is the big one.
Answer as per the official UPSC answer key.
With reference to the current trends in the cultivation of sugarcane in India, consider the following statements :
- 1. A substantial saving in seed material is made when 'bud chip settlings' are raised in a nursery and transplanted in the main field.
- 2. When direct planting of setts is done, the germination percentage is better with single-budded setts as compared to setts with many buds.
- 3. If bad weather conditions prevail when setts are directly planted, single-budded setts have better survival as compared to large setts.
- 4. Sugarcane can be cultivated using settlings prepared from tissue culture.
Which of the statements given above is/are correct ?
Answer (c) & explanation
Statements 1 and 4 are correct (c). Statement 1 is right: in the bud chip method, only a small chip with one bud is raised in a nursery and then transplanted, saving about 80% of seed cane. Statement 2 is wrong: when planted directly in the field, single-bud setts dry out and germinate poorly; two- or three-bud setts do better. Statement 3 is wrong for the same reason: in bad weather, larger setts survive better. Statement 4 is right: tissue culture produces disease-free settlings for planting.
Notice the Sustainable Sugarcane Initiative (SSI), which combines nursery-raised seedlings, wide spacing and drip irrigation. Uttar Pradesh is the top sugarcane producer; Maharashtra often leads in sugar.
Answer as per the official UPSC answer key.
In the context of India, which of the following is/are considered to be practice(s) of eco-friendly agriculture?
- 1. Crop diversification
- 2. Legume intensification
- 3. Tensiometer use
- 4. Vertical farming
Select the correct answer using the code given below :
Answer (a) & explanation
Items 1, 2 and 3 are eco-friendly practices (a). Item 1 is right: crop diversification breaks pest cycles, improves soil and spreads risk. Item 2 is right: legumes fix atmospheric nitrogen, cutting the need for chemical fertiliser. Item 3 is right: a tensiometer measures soil moisture, so farmers water only when needed and save water. Item 4 was not counted: in India, vertical farming is a high-energy, indoor urban technique using artificial light and controlled climate, so UPSC did not treat it as eco-friendly farm practice.
Notice other sustainable practices: zero tillage, mulching, integrated pest management, drip irrigation and natural farming. The National Mission on Natural Farming was launched in 2024.
Answer as per the official UPSC answer key.
What are the advantages of fertigation in agriculture ?
- 1. Controlling the alkalinity of irrigation water is possible.
- 2. Efficient application of Rock Phosphate and all other phosphatic fertilizers is possible.
- 3. Increased availability of nutrients to plants is possible.
- 4. Reduction in the leaching of chemical nutrients is possible.
Select the correct answer using the code given below :
Answer (c) & explanation
Statements 1, 3 and 4 are correct (c). Fertigation feeds dissolved fertiliser through drip or sprinkler lines. Statement 1 is right: acids can be added to the water to correct its alkalinity, which also keeps drippers clean. Statement 3 is right: nutrients reach the roots in small, timely doses, so plants take up more. Statement 4 is right: because less fertiliser is applied at once, less is leached below the roots into groundwater. Statement 2 is wrong: rock phosphate does not dissolve in water, so it cannot be applied this way, and nor can all phosphatic fertilisers.
Notice that fertigation pairs naturally with micro-irrigation, promoted under Per Drop More Crop (PMKSY). Fertigation is common in Israel.
the word "all" in statement 2. Fertigation needs fully water-soluble fertilisers.
Answer as per the official UPSC answer key.
With reference to chemical fertilizers in India, consider the following statements :
- 1. At present, the retail price of chemical fertilizers is market-driven and not administered by the Government.
- 2. Ammonia, which is an input of urea, is produced from natural gas.
- 3. Sulphur, which is a raw material for phosphoric acid fertilizer, is a by-product of oil refineries.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Statements 2 and 3 are correct (b). Statement 1 is wrong: the retail price of urea is fixed by the government (about ₹242 for a 45 kg bag), and P and K fertilisers get a fixed subsidy under Nutrient Based Subsidy (2010), so prices are not purely market-driven. Statement 2 is right: ammonia, the input for urea, is made mostly from natural gas, much of it imported as LNG. Statement 3 is right: sulphur recovered from oil refining is used to make sulphuric acid, which then makes phosphoric acid for DAP.
Notice neem-coated urea (100% since 2015) and nano urea from IFFCO. Fertiliser subsidy is among the biggest items in the Union budget.
Answer as per the official UPSC answer key.
Industry, infrastructure, poverty, employment and social sector 1
With reference to the Indian economy after the 1991 economic liberalization, consider the following statements :
- 1. Worker productivity (₹ per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
- 2. The percentage share of rural areas in the workforce steadily increased.
- 3. In rural areas, the growth in non-farm economy increased.
- 4. The growth rate in rural employment decreased.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Statements 3 and 4 are correct (b). The answer draws on the NITI Aayog paper on India's changing rural economy (2017). Statement 1 is wrong because worker productivity rose in both rural and urban areas after 1991, though faster in towns. Statement 2 is wrong because the rural share of the workforce fell, as people moved to cities and towns. Statement 3 is right because within villages the non-farm economy (construction, trade, transport, services) grew fast and now makes up most of rural output. Statement 4 is right because rural employment growth slowed.
Notice the term "jobless growth", used for India's high GDP growth with weak job creation. The PLFS (Periodic Labour Force Survey) is now the main source on jobs.
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.