UPSC Prelims 2020 · GS Paper I: In India, which of the following can be considered as public investment in agriculture…
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.
Learn the concept
Same theme in UPSC Mains
- MAINS UPSC Mains 2026 · GS Paper III · Q14Discuss the different types of subsidies and supports provided by the Government of India to agricultural sector. Examine the related issues pertaining to Agreement on Agriculture…
- MAINS UPSC Mains 2026 · GS Paper II · Q7Malnutrition in India is not merely a public health concern; it is also a challenge of social equity, human development and effective welfare governance. Discuss.
- MAINS UPSC Mains 2025 · GS Paper III · Q4Elaborate the scope and significance of supply chain management of agricultural commodities in India.
Related questions from other years
Which one of the following best describes the key objective of India's 'Open Network for Digital Commerce' (ONDC) initiative ?
Answer (c) & explanation
ONDC aims to break the dominance of large platforms (c). The Open Network for Digital Commerce, a DPIIT initiative (2021-22), is an open set of rules, like UPI for shopping. A buyer on one app can buy from a seller listed on another app. This interoperability lets small sellers reach buyers without joining a giant platform. Option (a) is wrong: it does not give the government control of transactions. Option (b) is wrong: private players can join; they are not replaced. Option (d) is wrong: it does not force UPI payments.
Notice ONDC's design: it is a not-for-profit company and part of India's Digital Public Infrastructure, along with Aadhaar, UPI and DigiLocker. It now covers food, groceries and mobility too.
options (a), (b) and (d) use strong words: "all", "replace", "mandate". A public digital platform usually opens a market; it does not take it over.
Answer as per the official UPSC answer key.
Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct ?
Answer (d) & explanation
Statement (d) is not correct (d). Under UPI, money moves between bank accounts; the deposit is a liability of the bank. The Digital Rupee (e₹) is like a currency note in digital form, a direct liability of the RBI, not of users or banks. Option (a) is correct: UPI is a payment system, while the e-rupee is sovereign currency. Option (b) is correct: an e-rupee transfer moves value from wallet to wallet with no separate settlement. Option (c) is correct: e-rupee wallet transactions do not appear in bank statements.
Notice the legal base: the RBI Act was amended in 2022 to let the RBI issue a CBDC. Pilots began that year in wholesale (e₹-W) and retail (e₹-R) forms.
a "not correct" question. Look for the statement that puts the RBI's liability on someone else.
Answer as per the official UPSC answer key.
Which of the following statements about Real-World Assets (RWA) Tokenization are correct ?
- 1. Tokenization is the process of turning real world assets into digital tokens using blockchain technology.
- 2. Tokenization of real world assets offers 24x7 access, promoting financial inclusion.
- 3. Tokenization of real world assets will allow the access to high growth investment opportunities for individuals in India.
Select the answer using the code given below :
Answer (a) & explanation
All three statements are correct (a). Statement 1 is right: tokenization turns a real asset, like a building, bond or gold, into digital tokens recorded on a blockchain. Statement 2 is right: tokens can be traded 24x7, which widens financial inclusion. Statement 3 is right: small, fractional tokens let ordinary individuals get into high-growth investments that once needed crores. So options (b), (c) and (d) fail.
Notice the risks: unclear regulation, cyber threats and weak investor protection. In India, related steps include Fractional Ownership Platforms and REITs and InvITs, which already let small investors own slices of real estate and infrastructure. The RBI is also testing tokenized deposits and government securities in sandbox pilots.
Answer as per the official UPSC answer key.
A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called :
Answer (c) & explanation
This is a sustainability bond (c). Under the ICMA principles followed worldwide, a bond that funds a mix of environmental and social projects is a sustainability bond. Option (a) is wrong: a green bond funds only environmental projects, like solar power. Option (b) is wrong: a social bond funds only social projects, like affordable housing. Option (d) is wrong: a sovereign bond is any bond issued by a national government, whatever its use.
Notice India's practice: India has issued Sovereign Green Bonds since January 2023, with the money going to projects like metro rail and renewable energy. A sustainability-linked bond is different: its money can go anywhere, but its interest rate depends on meeting ESG targets.
"Green Bond" is the most familiar term. The words "both environmental and social" point to the combined label.
Answer as per the official UPSC answer key.
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