UPSC Prelims 2024 Economy questions: topic-wise weightage
UPSC Prelims 2024 asked 17 economy questions in GS Paper I, spread over 5 topics. See the economy weightage for 2024 below, then attempt each question with the official answer and an explanation.
Economy 2024: questions by topic
- Money, banking, monetary policy and inflation3
- External sector and international economic institutions3
- Financial markets and instruments4
- Agriculture, food security and allied sectors2
- Industry, infrastructure, poverty, employment and social sector5
Counted from the 17 questions on this page, tagged by topic in the Battle IAS PYQ bank.
Seeing 17 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 3
Consider the following statements :
- 1. In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.
- 2. In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).
- 3. In India, Stock Exchanges can offer separate trading platforms for debts.
Which of the statements given above is/are correct ?
Answer (c) & explanation
All three statements are correct (c). Statement 1 is right: the Liquidity Adjustment Facility (repo and reverse repo) is open to banks and to standalone primary dealers, which are themselves NBFCs registered with the RBI. Statement 2 is right: foreign portfolio investors may hold G-Secs within limits, and some bonds are fully open to them under the Fully Accessible Route (FAR). Statement 3 is right: NSE and BSE run separate debt segments for trading bonds.
Notice the big change: from 2024, Indian government bonds entered global indices such as JP Morgan's, bringing in large foreign money. The FAR, introduced in 2020, made this possible. Primary dealers help the RBI sell government bonds.
statement 1 sounds wrong because the LAF is "for banks". Primary dealers are NBFCs, and they use it.
Answer as per the official UPSC answer key.
With reference to the rule/rules imposed by the Reserve Bank of India while treating foreign banks, consider the following statements :
- 1. There is no minimum capital requirement for wholly owned banking subsidiaries in India.
- 2. For wholly owned banking subsidiaries in India, at least 50% of the board members should be Indian nationals.
Which of the statements given above is/are correct ?
Answer (d) & explanation
Neither statement is correct (d). Statement 1 is wrong: under the RBI's 2013 scheme, a foreign bank's wholly owned subsidiary needs a minimum paid-up capital of ₹500 crore. Statement 2 is wrong as worded: on the board, at least 50% must be Indian nationals, NRIs or PIOs, and at least one-third must be Indian nationals resident in India. Statement 2 narrows the rule to Indian nationals alone, so UPSC treated it as wrong.
Notice why the RBI prefers subsidiaries to branches: a subsidiary is a separate Indian company with its own capital, so it is easier to control in a crisis. Subsidiaries also get near national treatment. SBM Bank and DBS Bank India were among the first to take this route.
statement 2 is close to the rule but not the rule. In regulatory questions, a changed group of people makes a statement wrong.
Answer as per the official UPSC answer key.
Consider the following statements in respect of the digital rupee :
- 1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
- 2. It appears as a liability on the RBI's balance sheet.
- 3. It is insured against inflation by its very design.
- 4. It is freely convertible against commercial bank money and cash.
Which of the statements given above are correct ?
Answer (d) & explanation
Statements 1, 2 and 4 are correct (d). Statement 1 is right: the e-rupee (Central Bank Digital Currency, pilots since 2022) is legal tender issued by the RBI in line with its monetary policy. Statement 2 is right: like a currency note, it is a liability on the RBI's balance sheet. Statement 4 is right: it can be swapped one-to-one for bank deposits and cash. Statement 3 is wrong: like any currency, it loses value with inflation; nothing in its design protects it.
Notice the difference from crypto: Bitcoin has no issuer and its price swings, while the e-rupee is just a digital form of the rupee. The RBI runs both a retail (e₹-R) and a wholesale (e₹-W) version, and has added offline and programmable features.
"insured against inflation". No currency, paper or digital, is.
Answer as per the official UPSC answer key.
External sector and international economic institutions 3
Consider the following statements :
Statement-I :
If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment.
Statement-II :
The USA Government debt is not backed by any hard assets, but only by the faith of the Government.
Which one of the following is correct in respect of the above statements ?
Answer (a) & explanation
Both statements are correct and Statement II explains Statement I (a). Statement II is right: US Treasury bonds are backed only by the "full faith and credit" of the US government, not by gold, land or any other hard asset. Statement I follows from it: there is no collateral a bondholder could seize, and a sovereign cannot be taken to court and forced to pay like a private borrower. So in a default, holders would have no asset to enforce their claim against. Options (b), (c) and (d) wrongly break this cause-and-effect link.
Notice the wider idea: most modern government debt and fiat money rest on trust, not on gold. That is why fights over the US debt ceiling shake world markets, and why rating agencies watch them closely.
it feels as if a bondholder can always "claim" payment. A claim needs something to enforce it against; sovereign debt has only trust behind it.
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Answer as per the official UPSC answer key.
Consider the following statements :
Statement-I :
India does not import apples from the United States of America.
Statement-II :
In India, the law prohibits the import of Genetically Modified food without the approval of the competent authority.
Which one of the following is correct in respect of the above statements ?
Answer (d) & explanation
Statement I is wrong, Statement II is right (d). Statement II is right: under the Food Safety and Standards Act, 2006, no genetically modified food may be imported or sold without the approval of the FSSAI. Statement I is wrong: India does import Washington apples from the USA. In 2023, India even removed the extra retaliatory duty on US apples after settling disputes at the WTO. So options (a), (b) and (c) fail.
Notice India's GM picture: Bt cotton is the only GM crop grown commercially; GM mustard (DMH-11) got environmental release approval but is stuck in court. The Genetic Engineering Appraisal Committee (GEAC) clears GM crops. India's main apple-growing states are Jammu and Kashmir and Himachal Pradesh.
Answer as per the official UPSC answer key.
Consider the following statements :
Statement-I :
Recently, Venezuela has achieved a rapid recovery from its economic crisis and succeeded in preventing its people from fleeing/emigrating to other countries.
Statement-II :
Venezuela has the world's largest oil reserves.
Which one of the following is correct in respect of the above statements ?
Answer (d) & explanation
Statement I is wrong, Statement II is right (d). Statement II is right: Venezuela holds the world's largest proven oil reserves, about 300 billion barrels, ahead of Saudi Arabia. Most of it is heavy crude in the Orinoco Belt. Statement I is wrong: years of hyperinflation, falling output, mismanagement and US sanctions led over seven million people to leave the country. There was no rapid recovery, so options (a), (b) and (c) fail.
Notice the lesson: big reserves did not save the economy, a case of the "resource curse". India's Reliance and ONGC Videsh have dealt in Venezuelan crude. Venezuela is a founder member of OPEC, set up in 1960.
Answer as per the official UPSC answer key.
Financial markets and instruments 4
With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of :
Answer (c) & explanation
CBLO was a money market instrument (c). Collateralised Borrowing and Lending Obligation (CBLO) was a short-term borrowing tool run by the Clearing Corporation of India (CCIL), using government securities as collateral, for periods from one day up to a year. Anything that lends and borrows for up to one year belongs to the money market. Option (a) is wrong: the bond market deals in long-term debt. Option (b) is wrong: the forex market deals in currencies. Option (d) is wrong: the stock market deals in shares.
Notice that CBLO was replaced in 2018 by TREPS (tri-party repo), which works the same way and is now the largest part of India's money market. Mutual funds and banks use it to park spare cash.
the word "collateral" makes one think of bonds. Look at the time period: short-term funds mean money market.
Answer as per the official UPSC answer key.
In India, which of the following can trade in Corporate Bonds and Government Securities ?
- 1. Insurance Companies
- 2. Pension Funds
- 3. Retail Investors
Select the correct answer using the code given below :
Answer (d) & explanation
All three can trade in corporate bonds and G-Secs (d). Item 1 is right: insurance companies are among the biggest long-term buyers of bonds; IRDAI rules require them to hold a share of their funds in G-Secs. Item 2 is right: pension funds, such as those under the NPS, also invest heavily in government and corporate bonds, as rules require. Item 3 is right: retail investors can buy corporate bonds on stock exchanges and G-Secs directly through the RBI Retail Direct portal, launched in November 2021.
Notice that India was among the first countries to let ordinary people open a gilt account directly with the central bank. SEBI also cut the minimum face value of corporate bonds to ₹10,000 to widen retail access.
one may think G-Secs are only for banks. Retail Direct opened them to individuals.
Answer as per the official UPSC answer key.
Consider the following :
- 1. Exchange-Traded Funds (ETF)
- 2. Motor vehicles
- 3. Currency swap
Which of the above is/are considered financial instruments ?
Answer (d) & explanation
ETFs and currency swaps are financial instruments (d). A financial instrument is a contract that gives one party a financial asset and another a liability or equity. Item 1 is right: an Exchange-Traded Fund unit is a share in a fund that tracks an index, and it trades on the stock exchange like a share. Item 3 is right: a currency swap is a derivative contract in which two parties exchange payments in different currencies. Item 2 is wrong: a motor vehicle is a physical asset. A loan taken to buy it is a financial instrument, but the car itself is not.
Notice India's CPSE ETF and Bharat 22 ETF, used by the government for disinvestment. The RBI also signs currency swap deals with other central banks, such as Japan and SAARC countries.
Answer as per the official UPSC answer key.
Consider the following statements :
Statement-I :
Syndicated lending spreads the risk of borrower default across multiple lenders.
Statement-II :
The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line.
Which one of the following is correct in respect of the above statements ?
No official answer (question dropped) & notes
UPSC dropped this question, so no answer was counted. Learn the idea anyway. Statement I is right: in a syndicated loan, a group of banks, led by an arranger or lead bank, lends together to one large borrower, so each bank carries only part of the default risk. Statement II is wrong: a syndicated loan can be a lump sum (a term loan), a revolving credit line that the borrower draws on as needed, or a mix of both. So, on the facts, option (c) would fit best.
Notice where this matters: big infrastructure, airline and power projects need more money than one bank should risk. The RBI's rules on large exposures also push banks to share such loans rather than lend alone.
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.
Agriculture, food security and allied sectors 2
Consider the following statements :
- 1. India is a member of the International Grains Council.
- 2. A country needs to be a member of the International Grains Council for exporting or importing rice and wheat.
Which of the statements given above is/are correct ?
Answer (a) & explanation
Only statement 1 is correct (a). Statement 1 is right: India is a member of the International Grains Council (IGC), based in London. It runs the Grains Trade Convention of 1995, shares market data and promotes cooperation in trade in wheat, maize, rice, barley and oilseeds. Statement 2 is wrong: membership is not a licence. Any country can export or import grain without joining; trade rules come from the WTO and national laws.
Notice the related Food Aid Convention, linked to the IGC, on food aid commitments. India is a top rice exporter, and its export curbs (such as on non-basmati rice in 2023, later eased) move world prices. Do not confuse the IGC with the FAO.
statement 2 makes a forum sound like a gatekeeper. Membership bodies rarely control who may trade.
Answer as per the official UPSC answer key.
With reference to the Digital India Land Records Modernisation Programme, consider the following statements :
- 1. To implement the scheme, the Central Government provides 100% funding.
- 2. Under the Scheme, Cadastral Maps are digitised.
- 3. An initiative has been undertaken to transliterate the Records of Rights from local language to any of the languages recognized by the Constitution of India.
Which of the statements given above are correct ?
Answer (d) & explanation
All three statements are correct (d). Statement 1 is right: the Digital India Land Records Modernisation Programme (DILRMP) has been a Central Sector scheme with 100% central funding since 2016. Statement 2 is right: it digitises cadastral maps and links them to the computerised Records of Rights. Statement 3 is right: Records of Rights are being transliterated into any of the 22 Eighth Schedule languages, so people can read them in their own language.
Notice the ULPIN, a 14-digit unique land parcel number, called "Bhu-Aadhaar", and NGDRS, a single system for registering property. The aim is conclusive titling, fewer land disputes and easier loans. The SVAMITVA scheme maps village homes using drones.
Answer as per the official UPSC answer key.
Industry, infrastructure, poverty, employment and social sector 5
The total fertility rate in an economy is defined as :
Answer (d) & explanation
TFR is the average number of children a woman would bear (d). The Total Fertility Rate is the average number of live births a woman would have over her child-bearing years (15–49), if current age-wise birth rates held. Option (a) is wrong: that is the crude birth rate, births per 1,000 people a year. Option (b) is wrong: TFR is measured per woman, not per couple. Option (c) is wrong: birth rate minus death rate is the natural growth rate.
Notice the trend: India's TFR fell to 2.0 in NFHS-5 (2019–21), just below the replacement level of 2.1, the level at which a population just replaces itself. Later sample surveys show it slightly lower still. Bihar has the highest TFR and Sikkim the lowest, below 1.1.
option (b) says "a couple". TFR is always measured per woman.
Answer as per the official UPSC answer key.
With reference to the sectors of the Indian economy, consider the following pairs :
| | Economic activity | Sector
| 1. | Storage of agricultural produce | Secondary
| 2. | Dairy farm | Primary
| 3. | Mineral exploration | Tertiary
| 4. | Weaving cloth | Secondary
How many of the pairs given above are correctly matched ?
Answer (b) & explanation
Two pairs are correctly matched (b). The primary sector takes things directly from nature: farming, dairy, fishing, forestry, mining and mineral exploration. The secondary sector changes the form of goods: weaving, manufacturing, construction. The tertiary sector gives services: transport, trade, storage, banking. Pair 2 is right: a dairy farm is primary. Pair 4 is right: weaving cloth is secondary. Pair 1 is wrong: storage of farm produce is a tertiary service. Pair 3 is wrong: mineral exploration is primary.
Notice India's mix: services give over half of GDP, while farming still employs about 45% of workers. This gap, with low manufacturing, is why India pushes Make in India and PLI schemes.
storage happens in a warehouse building, so it feels industrial. It changes nothing in the goods; it is a service.
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Answer as per the official UPSC answer key.
With reference to physical capital in Indian economy, consider the following pairs :
| | Items | Category
| 1. | Farmer's plough | Working capital
| 2. | Computer | Fixed capital
| 3. | Yarn used by the weaver | Fixed capital
| 4. | Petrol | Working capital
How many of the above pairs are correctly matched ?
Answer (b) & explanation
Two pairs are correctly matched (b). Fixed capital is used again and again over many years: a plough, a computer, a machine, a building. Working capital is used up in one round of production: raw materials like yarn, and fuel like petrol, plus cash in hand. Pair 2 is right: a computer is fixed capital. Pair 4 is right: petrol is working capital. Pair 1 is wrong: a farmer's plough is fixed capital. Pair 3 is wrong: yarn used by a weaver is working capital.
Notice that this idea comes straight from the NCERT Class IX economics chapter "The Story of Village Palampur". It lists four factors of production: land, labour, physical capital and human capital.
Answer as per the official UPSC answer key.
With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements :
- 1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
- 2. CSR rules do not specify minimum spending on CSR activities.
Which of the statements given above is/are correct ?
Answer (a) & explanation
Only statement 1 is correct (a). Statement 1 is right: the CSR Rules, 2014 exclude spending that benefits only the company's own employees or is done in the normal course of business. Statement 2 is wrong: Section 135 of the Companies Act, 2013 requires a company above a set size, with net worth of ₹500 crore, turnover of ₹1,000 crore or net profit of ₹5 crore, to spend at least 2% of its average net profit of the last three years on CSR.
Notice that India was the first country to make CSR spending mandatory by law. Since 2019, unspent money must go to a special account or to funds like the PM CARES or PM's National Relief Fund. Education and health get the most CSR money.
Answer as per the official UPSC answer key.
With reference to the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) Yojana, consider the following statements :
- 1. The entry age group for enrolment in the scheme is 21 to 40 years.
- 2. Age specific contribution shall be made by the beneficiary.
- 3. Each subscriber under the scheme shall receive a minimum pension of ₹3,000 per month after attaining the age of 60 years.
- 4. Family pension is applicable to the spouse and unmarried daughters.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Statements 2 and 3 are correct (b). The PM Shram Yogi Maan-dhan (PM-SYM, 2019) is a voluntary pension scheme for unorganised workers earning up to ₹15,000 a month. Statement 2 is right: the worker pays an age-based monthly amount, and the Centre adds an equal sum. Statement 3 is right: from 60, the subscriber gets an assured ₹3,000 a month. Statement 1 is wrong: entry age is 18 to 40, not 21 to 40. Statement 4 is wrong: on death, only the spouse gets 50% as family pension, not unmarried daughters.
Notice a similar scheme for traders, the NPS-Traders scheme, and Atal Pension Yojana. Workers enrol through Common Service Centres and the e-Shram portal.
two numbers changed slightly: 21 instead of 18, and daughters added to the family pension.
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.