UPSC Civil Services (Preliminary) Examination, 2026: Analysis (Questions 81–100)

CSE

Aug 19

25 min read

81. 'X', born in the UK, was conferred the Nobel Prize in 2025. He was a professor in an American university when this prize was announced. Identify 'X':

(a) Michel H. Devoret (b) Richard Robson (c) John Clarke (d) Joel Mokyr

Answer: (c) John Clarke

John Clarke (born 1942 in Cambridge, UK) shared the 2025 Nobel Prize in Physics with Michel H. Devoret and John M. Martinis “for the discovery of macroscopic quantum mechanical tunnelling and energy quantisation in an electric circuit.” At the time of the award he was Professor Emeritus at the University of California, Berkeley.

Michel H. Devoret (option a) shared the same Physics prize but was born in Paris, France.
Richard Robson (option b) shared the 2025 Chemistry prize; he was born in England but has long been affiliated with the University of Melbourne, Australia.
Joel Mokyr (option d) shared the 2025 Economics prize; he was born in the Netherlands.

Proper nouns and their appearances

John Clarke: UK-born physicist; UC Berkeley affiliation. Widely covered in October 2025 Nobel announcements
Michel H. Devoret: French physicist; co-winner of the 2025 Physics Nobel (Yale / UC Santa Barbara / Google Quantum AI links).
Richard Robson: English-born chemist based in Australia; co-winner of the 2025 Chemistry Nobel for metal-organic frameworks (with Omar Yaghi and Susumu Kitagawa).
Joel Mokyr: Dutch-born economic historian at Northwestern University; co-winner of the 2025 Economics Nobel.
Nobel Prize in 2025: Refers to the October 2025 awards (Physics announced 7 October).

Sources These names and the 2025 prizes appear primarily in official Nobel Foundation materials, university press releases (UC Berkeley, Cambridge, Yale, Northwestern, Melbourne), and international English-language science/news coverage (BBC, Reuters, New York Times, Physics World, Britannica). In the Indian context, The Hindu, Indian Express and other English dailies typically carry brief international science wires or Nobel round-ups.

82. Which of the following statements with regard to the Grand Slam Tennis Tournaments is/are correct?

1. The tournaments have a shared governance structure establishing the partnership among the four Grand Slam tournaments.

2. They are open for entry to all internationally ranked tennis players above the age of 14.

3. There is a limitation on the number of Wild Cards' a player may receive to compete in a Grand Slam Tournament.

Select the answer using the code given below:

(a) 1 and 2 only (b) 2 and 3 only (c) 1 only (d) 1, 2 and 3

The statements regarding the Grand Slam Tennis Tournaments can be evaluated as follows:

· Statement 1 is correct: The four Grand Slam tournaments (Australian Open, Roland-Garros, Wimbledon, and the US Open) operate under a shared governance structure known as Grand Slam Tennis. This partnership coordinates activities of mutual interest, maintains a unified Grand Slam Rule Book, and manages overall policies for the tournaments.

· Statement 2 is incorrect: Entry is not open to all internationally ranked players above the age of 14. According to the Grand Slam Rule Book, entry is specifically open to players with a ranking of 500 or better. Additionally, the rule states that minors under the age of 14 are not eligible, meaning a player must meet both specific ranking criteria and the age requirement.

· Statement 3 is incorrect: There is no limitation on the number of Wild Cards an individual player may receive to compete in Grand Slam tournaments over their career. While each individual tournament draw has a fixed number of available Wild Card slots, there is no rule restricting the cumulative number of Wild Cards a specific player can be granted.

83. Which one of the following pairs of semiconductor plants in India and their locations is not correctly matched?

(a) CG Power and Industrial Solutions Pvt. Ltd. in partnership with Renesas Electronics and STARS Microelectronics : Gujarat

(b) Tata Semiconductor Assembly and Test Pvt. Ltd. : Assam

(d) SicSem Pvt. Ltd. : Odisha

Answer: (c)

The pair that is not correctly matched is HCL-Foxconn Joint Venture (India Chip Ltd.) with Madhya Pradesh. It is located in Jewar (YEIDA area, Greater Noida region), Uttar Pradesh.

(a) is correct: CG Power + Renesas Electronics + STARS Microelectronics (CG Semi) OSAT facility is in Sanand, Gujarat.
(b) is correct: Tata Semiconductor Assembly and Test (TSAT) is in Jagiroad/Morigaon, Assam.
(d) is correct: SicSem Pvt. Ltd. (SiC compound semiconductor fab + ATMP) is in Bhubaneswar / Info Valley, Odisha.

Proper nouns and where they appear

These are company/project names and state locations under India’s Semiconductor Mission (ISM) / Semicon India Programme. They feature heavily in official announcements and mainstream English media since the projects were approved (mainly 2024–2025).

PIB / government sources

Union Cabinet approvals (February 2024 for Tata Assam and CG Power Gujarat; May 2025 for HCL-Foxconn; August 2025 for SicSem Odisha) and subsequent updates appear on PIB.
MeitY / India Semiconductor Mission statements list the projects, investments, and locations.
State government releases (Gujarat, Assam, Uttar Pradesh, Odisha) and PM’s participation in ground-breaking/inaugurations are also covered via PIB.

The Hindu / The Hindu Business Line

CG Power–Renesas–Stars Gujarat JV and facility updates.
HCL-Foxconn naming as India Chip Private Limited and its Uttar Pradesh (Jewar/YEIDA) location.
Broader coverage of semiconductor project clearances and progress.

Indian Express

· SicSem ground-breaking and Odisha project details (India’s first end-to-end SiC facility).

· Cabinet approvals and state-wise semiconductor plant lists.

· Coverage of Tata Assam facility and overall ISM progress.

84. Which of the following statements with regard to India's indigenous new high resolution weather model, the Bharat Forecast System, is/are correct?

1. Its objective is to generate forecasts at the Panchayats cluster level.

2. It was developed by IIT Delhi.

Select the answer using the code given below:

(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

Answer: (a) 1 only

Statement 1 is correct: The Bharat Forecast System (BFS / BharatFS) was developed with the objective of generating high-resolution (6 km) forecasts at the cluster of panchayats / village level. Statement 2 is incorrect: It was developed by the Indian Institute of Tropical Meteorology (IITM), Pune (with support from NCMRWF and IMD), not by IIT Delhi. It became operational in May 2025 under the Ministry of Earth Sciences / IMD.

Proper nouns and sources

Bharat Forecast System (BFS / BharatFS)

Official indigenous high-resolution (6 km) numerical weather prediction model, launched/dedicated on 26 May 2025 by the Union Minister of Earth Sciences. It improves on the previous ~12 km GFS model and enables more localised (panchayat-cluster / village-level) forecasts, with reported gains in accuracy for monsoon and extreme rainfall.

Appearances

PIB: Multiple releases from the Ministry of Earth Sciences (May 2025 launch coverage and later Parliament questions, e.g., August 2025), explicitly stating the panchayat-cluster objective, 6 km resolution, development by IITM-Pune, and operational use by IMD.
The Hindu: Detailed explainers and news reports (26–27 May 2025) covering the launch, resolution improvement, panchayat-level forecasts, accuracy gains, and attribution to IITM Pune.
Indian Express / other English newspapers: Covered in Business Standard, Times of India, Firstpost, The Hindu Business Line, and similar outlets around the May 2025 launch, consistently noting the IITM-Pune origin, 6 km grid, village/panchayat-level capability, and performance improvements.

85. Consider the following statements with regard to the film 'Boong':

1. The film has recently won the British Academy of Film and Television Arts (BAFTA) Award in the Children's and Family Film category.

2. The film is directed by Lakshmipriya Devi.

3. This is the first Indian film to win a BAFTA award in the Children's and Family Film category.

Which of the statements given above is/are correct?

(a) 1, 2 and 3 (b) 2 and 3 only (c) 1 and 2 only (d) 3 only

Answer: (a) 1, 2 and 3

All three statements are correct. The Manipuri-language film Boong (directed by Lakshmipriya Devi and backed by Excel Entertainment) won the BAFTA Award for Best Children’s and Family Film at the 2026 ceremony. It is the first Indian film to win in this category.

Proper nouns and sources

Boong: Manipuri (Meitei) feature film; title means “little boy.” It follows a young boy’s journey amid family separation and regional tensions in Manipur. World premiere at TIFF 2024; Indian release in 2025.
British Academy of Film and Television Arts (BAFTA) Award / Children’s and Family Film category: Prestigious UK film award (the category is relatively new; Boong won at the 79th BAFTA Film Awards in February 2026).
Lakshmipriya Devi: Writer-director of Boong (her feature debut); previously worked as an assistant director on several Hindi films.

Where they appeared Extensive coverage in English newspapers and media immediately after the February 22–23, 2026 win:

The Hindu: Reported the win, director, producers, and competition (e.g., Zootopia 2, Lilo & Stitch, Arco).
The Indian Express: Multiple pieces detailing the victory as a first for Indian cinema in the category, the film’s Manipuri setting, Devi’s acceptance speech (praying for peace in Manipur), and production details.

86. Which of the following statements regarding the features of blockchain technology are correct?

1. Records stored in the database may be made visible to relevant stakeholders without risk of alteration.

2. Copies of the entire database are stored on multiple computers on a network, syncing within seconds.

3. Consortium blockchain is a blend of public and private blockchains allowing selective data access.

4. Mathematical algorithms make it impossible to change or delete any data once recorded and accepted.

Select the answer using the code given below:

(a) 1 and 3 (b) 2 and 4 only (c) 1, 2 and 4 (d) 1 and 4 only

Answer: (c) 1, 2 and 4 Statements 1, 2 and 4 correctly describe core blockchain features: selective/controlled visibility combined with immutability (records can be shared with relevant parties without easy alteration risk); distributed storage of the ledger across multiple networked nodes that stay synchronised; and cryptographic/mathematical algorithms (hashing + consensus) that make accepted records extremely difficult (practically impossible under normal conditions) to change or delete. Statement 3 is not accurate as worded. A consortium blockchain is a permissioned network jointly governed by a pre-selected group of organisations. The description of a structural “blend of public and private blockchains allowing selective data access” better fits a hybrid blockchain.

Proper nouns / key terms and their appearances

Blockchain technology / blockchain: Ubiquitous term for distributed ledger technology. Appears extensively in PIB releases (e.g., government pilots, National Blockchain Framework, MeitY initiatives), The Hindu and Indian Express explainers on cryptocurrency regulation, digital payments, supply-chain tracking, CBDC, and policy (frequent since ~2017–18 and continuing into 2020s coverage of RBI, Ministry of Electronics & IT, and crypto debates). Also common in other English dailies (Business Standard, Economic Times, etc.).
Consortium blockchain: Technical term for a multi-organisation permissioned ledger. Discussed in specialised tech and business reporting (occasional The Hindu / Indian Express pieces on enterprise blockchain use-cases in banking, trade finance or logistics). More detailed treatment appears in PIB-linked technology policy notes and industry analyses rather than routine daily news. Often contrasted with public, private and hybrid models in educational/tech explainers.
Related concepts (public/private/hybrid blockchains, distributed ledger, immutability via mathematical/cryptographic algorithms): Appear in the same PIB, The Hindu and Indian Express coverage of blockchain applications, CBDC (Digital Rupee), and regulatory frameworks, typically in “explained” or technology sections rather than as daily headlines.

87. An e-commerce revenue model where the seller has control over pricing but doesn't keep products in stock and instead transfers customer orders and shipment details to a third-party supplier, who then ships the goods directly to the customer, is called:

(a) Dropshipping Model

(b) Affiliate Revenue Model

(d) Agency Revenue Model

Answer: (a) Dropshipping Model

This matches the description exactly: the seller sets the retail price and markets the product but holds no inventory; customer orders (and shipping details) are passed to a third-party supplier/wholesaler who fulfils and ships directly to the buyer. The seller earns the margin between the retail price and the supplier’s cost.

Evaluation of the proper nouns / terms

Dropshipping Model (also written “drop shipping”): Core e-commerce fulfilment/revenue approach in which the retailer never stocks goods. Standard definition appears across business education, platform documentation (Shopify, Amazon Seller Central, NetSuite, etc.), and industry analyses. It is routinely contrasted with inventory-holding, marketplace, or print-on-demand models.
Affiliate Revenue Model: Performance-based marketing in which a promoter earns a commission for driving sales or leads to a merchant’s site (via links, coupons, content). Common in Indian digital marketing reports and discussions of creator/influencer economies.
Transaction Fee Revenue Model: Platform or intermediary charges a fee per completed transaction (common on marketplaces or payment gateways).
Agency Revenue Model: Typically refers to commission or fee structures used by marketing/advertising agencies (retainer, percentage of spend, revenue share, etc.), less specific to pure product e-commerce fulfilment.

88. Which one of the following correctly represents the three key sub-indices of the Financial Inclusion Index (FI-Index) of the Reserve Bank of India (RBI)?

(a) Credit access, Insurance depth, and Pension coverage

(b) Banking access, GDP contribution, and Financial literacy

(d) Access, Affordability, and Transparency

Answer: (c) Access, Usage, and Quality

The RBI’s Financial Inclusion Index (FI-Index) comprises three broad parameters/sub-indices: Access (weight 35%), Usage (weight 45%), and Quality (weight 20%). It was introduced in August 2021 and is published annually.

Proper nouns and sources

Key terms:

Financial Inclusion Index (FI-Index) — RBI’s composite annual index measuring the extent of financial inclusion (scale 0–100). It covers banking, investments, insurance, postal, and pension sectors.
Reserve Bank of India (RBI) — The central bank that constructs and releases the index.

Where they appear

RBI official sources / PIB-linked: The index was formally introduced via an RBI press release on 17 August 2021 (detailing the three parameters Access, Usage, and Quality). Subsequent annual updates appear in RBI press releases (e.g., for March 2024, 2025, and 2026 values) and RBI Bulletins. These are routinely picked up or mirrored on PIB and government portals.
The Hindu / The Hindu Business Line: Covered in reports on annual index releases (e.g., July 2024 on the rise to 64.2; July 2025 on the rise to 67), consistently noting the three sub-indices Access, Usage, and Quality along with their weights.
Indian Express: Multiple business-section articles on the yearly updates (e.g., July 2024 and July 2025 pieces explicitly stating “all the three sub-indices of the FI-Index — access, usage and quality” and explaining the parameters).

89. Which one of the following best describes the key objective of India's 'Open Network for Digital Commerce' (ONDC) initiative?

(a) To allow government control over all digital commerce transactions

(b) To replace private e-commerce players

(d) To mandate UPI-based payments for all online transactions

Answer: (c) To break the dominance of large e-commerce platforms by enabling interoperability across networks

ONDC (launched under DPIIT, Ministry of Commerce) is a government-backed open protocol/network (not a platform or app itself) that allows buyers and sellers on different apps to discover and transact with each other. Its core goal is to shift e-commerce from a few closed, platform-centric models to an open, interoperable system, thereby democratising access especially for MSMEs and smaller sellers.

Proper noun evaluation: Open Network for Digital Commerce (ONDC)

Primary official sources

PIB / Government: Frequently featured in Press Information Bureau releases (e.g., January 2025 note “Revolutionizing Digital Commerce: The ONDC Initiative”; July 2025 updates on SHG/seller onboarding; January 2026 India Post logistics integration). Described as a DPIIT initiative (Section 8 non-profit company) to promote open networks, interoperability, and reduced platform dependence.

English newspapers

The Hindu and Indian Express: Regular coverage since the 2021–2022 pilot/launch phase on ONDC’s aim to democratise e-commerce, enable interoperability (often compared to UPI), empower small sellers/MSMEs, and counter the dominance of large platforms. Ongoing stories track transaction volumes, seller onboarding, logistics partnerships, and inclusivity for tier-2/3 and rural businesses.

90. Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct?

(a) UPI is a real-time payment system but Digital Rupee is akin to sovereign paper currencу.

(b) In case of UPI, settlement for end users happens instantly as the money gets immediately debited or credited but in case of Digital Rupee, there is no settlement as the wallet balance gets transferred to another wallet.

(c) UPI transactions are recorded by banks and reflected in bank statements but in case of Digital Rupee, no data is captured in bank statements as transactions are from one wallet to another.

(d) In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks.

Answer: (d)

Statement (d) is not correct. In UPI, the underlying funds are commercial-bank deposits, so liability rests with the respective banks. The Digital Rupee (e₹) is a direct liability of the Reserve Bank of India (like physical currency notes), not of commercial banks or users’ banks. Statements (a), (b) and (c) correctly describe the distinctions in nature, settlement and recording.

Proper nouns and sources

Unified Payments Interface (UPI) Real-time inter-bank payment system developed by the National Payments Corporation of India (NPCI) under RBI oversight; launched in 2016. It moves existing bank-deposit money between accounts.

Central Bank Digital Currency / Digital Rupee (e₹ or CBDC) Sovereign digital fiat currency issued by the RBI (retail pilot from December 2022; wholesale earlier). It is legal tender and a direct liability of the central bank, held in digital wallets and functioning like cash (including potential offline use).

Where they appear

PIB / government sites: Frequent official coverage of UPI’s growth (transaction volumes, global leadership in real-time payments, bank linkages, international expansion) and of the Digital Rupee pilots, features, and distinctions from UPI (RBI FAQs and press notes emphasise that e₹ is RBI liability and legal tender).
The Hindu, Indian Express and other English newspapers: Regular reporting since UPI’s launch (2016 onward) on its adoption, records and policy; extensive coverage of CBDC concept notes, pilots (2022–), comparisons with UPI (liability, settlement, privacy, offline capability) and RBI statements. Differences in liability, settlement finality and bank-statement recording are routinely explained in business and economy sections.

91. 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 24 x7 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:

(a) 1, 2 and 3 (b) 2 and 3 only (c) 1 and 2 only (d) 1 and 3 only

Answer: (a) 1, 2 and 3

All three statements are correct. Tokenization converts ownership rights in physical or traditional assets (real estate, bonds, commodities, etc.) into blockchain-based digital tokens. Key claimed benefits include continuous (24×7) tradability that supports broader access and financial inclusion, plus fractional ownership that can open high-value/high-growth opportunities to smaller individual investors in India. These align with ongoing regulatory discussions, pilots (e.g., SEBI-related work on bonds and securities), and emerging frameworks in India.

Proper nouns / key terms and sources

Real-World Assets (RWA) Tokenization (or “asset tokenisation” / “tokenization of real-world assets”) is the central term. It refers to representing rights in tangible or traditional financial assets as blockchain tokens.

PIB / official government sources: Related coverage appears via regulators (SEBI annual reports and pilots on corporate-bond tokenization using DLT/blockchain, RBI sandbox and CBDC integration discussions, MeitY blockchain initiatives). A Private Member’s Bill (Asset Tokenisation (Regulation) Bill, 2026) introduced in the Rajya Sabha in March 2026 has drawn official and legal commentary.
The Hindu / Indian Express / other English newspapers: Coverage is primarily in business and fintech sections rather than front-page news. Mint (Livemint) has run explanatory and opinion pieces (e.g., May 2026 articles framing tokenisation as a potential “next financial rail” for India, emphasising fractional ownership, liquidity, and wider investor access). Other English-language business outlets and specialised platforms discuss SEBI pilots, GIFT City/IFSCA experimentation, and the 2026 Bill.

92. A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called:

(a) Green Bond (b) Social Bond (c) Sustainability Bond (d) Sovereign Bond

Answer: (c) Sustainability Bond

A Sustainability Bond is a use-of-proceeds bond whose funds are exclusively applied to finance or refinance a combination of both eligible environmental (green) projects and social projects. This follows the International Capital Market Association (ICMA) Sustainability Bond Guidelines (aligned with both the Green Bond Principles and Social Bond Principles).

Green Bond → environmental projects only
Social Bond → social projects only
Sovereign Bond → government-issued debt (not defined by project type)

Proper nouns / key terms and their appearances

Green Bond Widely reported. India’s Sovereign Green Bonds (SGrBs) have been covered extensively since the framework approval (2022) and first issuances (FY 2022-23 onward). Frequent mentions in PIB releases on government issuances, RBI auctions, and use of proceeds for green infrastructure. Regular coverage in The Hindu, The Hindu BusinessLine, Indian Express, Business Standard, Mint, and Economic Times on issuance volumes, “greenium,” investor demand, municipal green bonds (e.g., Surat, Indore, Vadodara), and SEBI regulations. Also appears in Climate Bonds Initiative reports on India’s sustainable debt market.

Social Bond Less frequent than green bonds but present in broader sustainable-finance reporting. Appears in discussions of India’s growing GSS+ (green, social, sustainability, sustainability-linked) market, SEBI frameworks, and reports noting social projects (affordable housing, microfinance, healthcare, education). Covered in The Hindu, Business Standard, Mint, and specialised outlets when analysing overall sustainable debt issuance (e.g., Climate Bonds Initiative / MUFG reports citing social and sustainability instruments alongside green).

Sustainability Bond Defined in ICMA guidelines and referenced in Indian market analyses as the instrument that combines green + social use of proceeds. Appears in reports on India’s sustainable debt market (Climate Bonds Initiative notes growth in green, social, sustainability, and sustainability-linked debt). Mentioned in The Hindu BusinessLine, Business Standard, Mint, and ET Edge Insights-type pieces on SEBI’s ESG debt framework and diversification beyond pure green bonds. Less headline-driven than sovereign green bonds but standard in sustainable-finance coverage.

Sovereign Bond (and Sovereign Green Bond) Very common. Sovereign bonds in general and India’s Sovereign Green Bonds specifically feature regularly in PIB announcements, RBI notifications, and newspaper reporting (The Hindu, Indian Express, Business Standard, Mint, etc.) on government borrowing, greenium, and climate finance. “Sovereign” simply denotes government issuance and is not restricted to sustainability themes.

93. Which of the following statements about M1xchange's role in Micro, Small & Medium Enterprises (MSMES) financing is/are correct?

1. M1xchange provides collateral based loans to MSMEs.

2. M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs.

3. M1xchange functions as a credit rating agency for MSMEs.

Select the answer using the code given below:

(a) 1, 2 and 3 (b) 2 only (c) 2 and 3 only (d) 1 only

Answer: (b) 2 only

M1xchange is an RBI-licensed TReDS (Trade Receivables Discounting System) platform. It enables MSMEs to discount invoices and bills of exchange (factoring/receivables financing) on a digital marketplace with banks/NBFCs, typically collateral-free and without recourse. It does not provide collateral-based loans and does not function as a credit rating agency.

Proper noun evaluation: M1xchange

M1xchange (also styled M1xchange TReDS) is a digital platform operated by Mynd Solutions Pvt Ltd. It received RBI in-principle approval in 2015 under the Payment and Settlement Systems Act, 2007, and was launched on 7 April 2017 as one of the first three TReDS exchanges. Its core role is facilitating invoice/bill discounting for MSME suppliers against corporate (or other MSME) buyers.

Appearances in sources

Newspapers and business media: Covered in The Hindu BusinessLine (e.g., growth in MSME registrations and invoice volumes), The Economic Times, and other English business outlets reporting platform milestones, MSME-to-MSME (S2S) financing, and partnerships with state governments. Mentions focus on working-capital solutions, volumes discounted (tens of thousands of crores), and onboarding of MSMEs, corporates, and financiers.
PIB / government releases: TReDS as a policy tool for MSME financing appears in broader RBI/MSME Ministry communications; specific M1xchange references are more common in private-sector and state-level MoU announcements than in high-volume central PIB releases.

94. Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?

(a) A situation where private investment increases due to increased Government spending

(b) A situation where Government borrowing leads to higher interest rates, which reduces private investment

(d) A situation where Government spending has no impact on aggregate demand

Answer: (b) A situation where Government borrowing leads to higher interest rates, which reduces private investment. This is the standard definition of the crowding-out effect in fiscal policy: increased government borrowing (to finance higher spending or deficits) raises demand for loanable funds, pushes up interest rates, and thereby discourages (crowds out) private investment.

Proper nouns / key term evaluation

The central proper noun/phrase is “Crowding Out Effect” (also written as crowding-out effect), used in the context of fiscal policy.

Appearances

Government sources: The underlying concept (government borrowing, interest rates, private investment, fiscal deficit) appears regularly in Budget documents, Economic Survey discussions, FRBM-related statements, and RBI publications. RBI research papers explicitly analyse financial crowding-out of private credit by government securities holdings.
The Hindu / The Hindu Business Line: Discussed in opinion and analysis pieces on fiscal discipline, debt, and private investment (e.g., critiques of the “myth of crowding out” when banks hold excess G-secs, or debates on whether public capital expenditure crowds in or out private investment).
Indian Express / Business Standard / other English newspapers: Appears in economic reporting and op-eds on India’s fiscal stance, high public borrowing, weak private capex, interest-rate pressures, and growth models (e.g., Business Standard pieces on the state “crowding out” private investment amid rising debt-to-GDP; broader coverage in financial dailies linking fiscal deficits to credit availability).

95. Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct?

1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs).

2. China has the highest share in mining of REEs followed by India.

3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector.

4. Rare Earth Elements are a set of 13 metallic elements.

Select the answer using the code given below:

(a) 1 and 3 only (b) 3 only (c) 1, 3 and 4 (d) 1, 2 and 4

Answer: (a) 1 and 3 only

Statement 1 is correct: REEs are critical for magnets, batteries, electronics, and high-tech applications in AI, robotics, electric vehicles, renewables, and space/defence technologies.
Statement 2 is incorrect: China dominates global REE mining (around 60–70% share in recent years). India ranks far lower in production (typically under 1–2%), behind the US, Myanmar, Australia, and others, despite holding significant reserves.
Statement 3 is correct: The Union Cabinet approved the National Critical Mineral Mission (NCMM) on 29 January 2025 (covering FY 2024-25 to 2030-31) to secure supply chains, boost exploration/mining/processing/recycling, and reduce import dependence.
Statement 4 is incorrect: Rare Earth Elements comprise 17 metallic elements (the 15 lanthanides plus scandium and yttrium).

Proper nouns and their appearances

Rare Earth Elements (REEs) / Critical Minerals These appear routinely in PIB releases, Ministry of Mines documents, and English newspapers (The Hindu, Indian Express, Business Standard, Economic Times, The Hindu BusinessLine) in coverage of supply-chain security, China’s dominance, India’s reserves vs. production gap, EVs/green energy, and strategic minerals lists (30 critical minerals identified by India). Frequent since the early 2020s and intensifying with global restrictions and India’s policy push.

National Critical Mineral Mission (NCMM)

PIB / government sources: Officially announced and detailed in PIB releases and Ministry of Mines statements from late January 2025 onward (Cabinet approval 29 January 2025; outlay ₹16,300 crore + expected PSU investment; targets for 1,200 exploration projects, overseas assets, processing parks, recycling, etc.). Also covered in Ministry annual reports and related portals.
The Hindu / Indian Express / other English newspapers: Widely reported from 29–30 January 2025 (Cabinet decision, outlay figures, self-reliance goals) and in follow-up stories through 2025–2026 on exploration progress, auctions, Independence Day mentions, and UPSC-oriented explainers. Coverage appears in The Hindu, Indian Express (including UPSC Essentials), Economic Times, Business Standard, and The Hindu BusinessLine.

96. Which of the following statements about insurance in aviation sector is/are correct?

1. 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment.

2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.

Select the answer using the code given below:

(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

Answer: (c) Both 1 and 2

Statement 1 is correct: Aviation Hull Insurance (also called aircraft hull or physical damage insurance) covers loss of or damage to the physical aircraft itself—the airframe/body, engines, and permanently installed/on-board equipment—typically on an agreed-value basis. It is distinct from liability cover for passengers or third parties.

Statement 2 is correct: The Montreal Convention 1999 (Convention for the Unification of Certain Rules for International Carriage by Air) establishes a two-tier liability system. In the first tier, airlines are strictly liable (no need for the claimant to prove fault) up to a periodically adjusted Special Drawing Rights (SDR) limit per passenger for death or bodily injury. India ratified it (effective 2009) and incorporated it via the Carriage by Air Act. The number of parties is well over 130 (currently around 140+ states/parties).

Proper nouns and sources

Aviation Hull Insurance

Appeared prominently in Indian English newspapers after the June 2025 Air India Ahmedabad crash: The Hindu and The Indian Express reported on “aviation hull all-risk” policies covering the aircraft’s valuation, spares and equipment, with quotes from insurers/reinsurers on hull payouts versus passenger liability. Similar coverage in Business Today, Fortune India and other business outlets.

Montreal Convention (1999)

Official multilateral treaty adopted in Montreal on 28 May 1999; entered into force 2003. India deposited its instrument of accession in 2009 (PIB release noted India as the 91st country at the time; the Convention was incorporated into the Carriage by Air (Amendment) Act, 2009).
Extensive recent coverage in The Hindu, The Indian Express, The Hindu BusinessLine, Hindustan Times and other English papers following the 2025 Air India crash—focusing on strict (no-fault) liability limits in SDRs, interim/ex-gratia payments, final compensation to families/nominees, and the distinction between international and domestic carriage.

97. Which of the following statements about Crowdfunding is/are correct?

1. Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.

2. Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.

Select the answer using the code given below:

(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

Answer: (c) Both 1 and 2

Statement 1 matches the standard definition used by SEBI (e.g., in its 2014 consultation paper on crowdfunding): raising small amounts from many investors via online platforms or social networking sites for a specific project, venture, or cause. Statement 2 is also treated as correct in the same policy and analytical context—crowdfunding is positioned as an alternative financing route that can help SMEs/start-ups access capital at relatively lower cost and with fewer of the formalities associated with traditional bank loans, IPOs, or private placements (though equity crowdfunding itself remains restricted/regulated in India).

Proper nouns and key terms

Crowdfunding: The practice of soliciting small contributions from a large number of people, typically online, to fund a project, business, or cause. Variants include donation-, reward-, debt-/P2P-, and equity-based models.
Small and Medium Enterprises (SMEs): (Often used interchangeably with MSMEs in Indian policy discussion) Firms that face financing constraints and for which crowdfunding has been proposed as an alternative source of capital.

Where they appear

PIB / official sources Crowdfunding and SME financing appear in broader discussions of alternative finance, start-up funding, and financial inclusion. SEBI’s 2014 consultation paper (“Consultation Paper on Crowdfunding in India”) is the key official reference; it uses language very close to Statement 1 and explicitly links the mechanism to improving access to capital for start-ups and SMEs.

The Hindu / The Hindu BusinessLine

2014 coverage of SEBI’s consultation paper defined crowdfunding almost identically to Statement 1 and discussed its potential for start-ups.
Later articles (e.g., 2022 opinion pieces and updates) revisited the lack of a full equity-crowdfunding framework, P2P lending (RBI-regulated), and the continuing need for easier capital access for early-stage firms and SMEs.
Related topics such as Social Stock Exchange fundraising and accredited-investor frameworks also appear periodically.

98. With reference to different Committees in India, consider the following details:

Sl. No. Committee Objective Organization under which it was formed

R.N. Malhotra Committee

Comprehensive reforms of Insurance sector in India

Insurance Regulatory and Development Authority of India

2. L.C. Gupta Committee

Preparing a roadmap for the introduction of derivatives trading in India

Securities and Exchange Board of India

3. Urjit R. Patel Committee

Preparing a roadmap for reforming bank lending to the Housing sector

Reserve Bank of India

4. Y.H. Malegam Committee

Preparing a roadmap for reforms in Microfinance sector in India

Reserve Bank of India

In which of the above rows are all the details correctly matched?

(a) 2 only (b) 2 and 3 (c) 1, 3 and 4 (d) 2 and 4

Answer: (d) 2 and 4

Row 1 is incorrect: The R.N. Malhotra Committee (1993–94) recommended comprehensive insurance-sector reforms and the creation of an independent regulator (leading to IRDAI), but it was constituted by the Government of India (Ministry of Finance), not under IRDAI.
Row 2 is correct: The L.C. Gupta Committee was appointed by SEBI (1996) to develop the regulatory framework/roadmap for introducing derivatives trading in India.
Row 3 is incorrect: The Urjit R. Patel Committee (2013–14, RBI) focused on revising the monetary-policy framework (inflation targeting and the Monetary Policy Committee), not on bank lending to the housing sector.
Row 4 is correct: The Y.H. Malegam Committee (sub-committee of the RBI Central Board, 2010) examined issues in the microfinance sector and recommended reforms (including the NBFC-MFI category).

Proper nouns and sources

R.N. Malhotra Committee: Appears in official records of the Ministry of Finance / Government of India (1993–94 report on insurance reforms), IRDAI-related histories, and standard financial-sector references. Covered in PIB releases on insurance liberalisation, The Hindu, Indian Express, and Business Standard (especially around the IRDA Act 1999 and later FDI/insurance reforms).
L.C. Gupta Committee: Documented on the SEBI website (circulars and reports from 1996–98 and later reviews). Contemporary coverage in The Indian Express and The Hindu (late 1990s) on the phased introduction of equity derivatives; still referenced in SEBI and NSE/BSE historical material.
Urjit R. Patel Committee: Official RBI report (2014) on the monetary-policy framework. Extensively reported in The Hindu, Indian Express, Business Standard, and Livemint (2013–16) in the context of inflation targeting and the subsequent RBI Act amendment creating the MPC. No matching RBI committee of this name exists for housing-lending reforms.
Y.H. Malegam Committee: Explicitly a sub-committee of the RBI Central Board (constituted October 2010; report January 2011). Covered in PIB (Ministry of Finance releases), RBI website/publications, The Hindu Business Line, The Hindu, and Indian Express (especially 2010–12 coverage of the Andhra Pradesh microfinance crisis and subsequent NBFC-MFI regulations).

99. Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India:

1. NBFCs cannot accept demand deposits.

2. All the NBFCs operating in India have to be registered with the RBI.

3. NBFCs form part of the payment and settlement system and can issue cheque drawn on itself.

4. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.

Which of the statements given above is/are correct?

(a) 1 and 4 (b) 1, 2 and 3 (c) 4 only (d) 2, 3 and 4

Answer: (a) 1 and 4

Statement 1 is correct: NBFCs cannot accept demand deposits (only certain deposit-taking NBFCs can accept term/fixed deposits under strict conditions).
Statement 2 is incorrect: Not all NBFCs must register with the RBI; entities regulated by other bodies (e.g., SEBI for stock brokers/AIFs, IRDAI for insurers, Nidhi companies, chit funds) are exempt to avoid dual regulation.
Statement 3 is incorrect: NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves.
Statement 4 is correct: DICGC deposit insurance (up to ₹5 lakh) is available only for bank deposits, not for depositors of NBFCs.

Evaluation of proper nouns and their appearances

Key proper nouns

Non-Banking Financial Companies (NBFCs): Companies registered under the Companies Act that undertake financial activities (loans, advances, leasing, hire-purchase, investments, etc.) but are not banks.
RBI (Reserve Bank of India): Primary regulator of most NBFCs under the RBI Act, 1934 (Section 45-IA).
Deposit Insurance and Credit Guarantee Corporation (DICGC): Wholly-owned subsidiary of the RBI that provides deposit insurance cover exclusively for banks (not NBFCs).

Where they appear

PIB / government sites: PIB and RBI press releases frequently cover NBFC regulatory updates, scale-based regulation, Upper Layer classifications, and deposit-related norms. DICGC is routinely mentioned in the context of bank deposit protection.
The Hindu / Indian Express and other English newspapers: Regular coverage in the business/economy sections on NBFC credit growth, RBI norms for Upper/Middle Layer NBFCs, revolving credit restrictions, asset-size thresholds (e.g., ₹1 lakh crore for Upper Layer), and comparisons with banks. The specific “cannot accept demand deposits / no DICGC cover / no cheque-issuing powers” points appear in explanatory articles, investor advisories, and analyses of NBFC risks versus bank deposits. Recent examples (2025–2026) include pieces on revolving credit limits, Upper Layer framework revisions, and fintech/NBFC licence approvals.

100. Consider the following statements about Multidimensional Poverty Index (MPI):

1. MPI is calculated using Alkire-Foster methodology.

2. MPI calculated by NITI Aayog has total of twelve indicators.

3. Maternal Health and Bank Account are common indicators in the MPI of NITІ Aayog and MPI of United Nations Development Programme (UNDP).

Which of the statements given above is/are correct ?

(a) 1 and 2 only (b) 1, 2 and 3 (c) 1 and 3 only (d) 2 only

Answer: (a) 1 and 2 only

Statement 1 is correct: Both the global MPI (UNDP-OPHI) and India’s National MPI use the Alkire-Foster (AF) methodology. Statement 2 is correct: NITI Aayog’s National MPI has 12 indicators across three dimensions (Health, Education, Standard of Living). Statement 3 is incorrect: Maternal Health and Bank Account are India-specific additions in the NITI Aayog MPI; they are not part of the UNDP Global MPI (which uses only 10 indicators). The National MPI retains the global 10 and adds these two.

Proper nouns and key terms – sources of appearance

Multidimensional Poverty Index (MPI): Global measure developed by OPHI and published annually with UNDP since 2010; India’s National MPI first released by NITI Aayog in 2021 (baseline) and updated in the 2023 Progress Review.
Alkire-Foster methodology: Named after Sabina Alkire and James Foster (OPHI); the dual-cutoff counting approach used for both global and national MPIs. Routinely explained in official reports.
NITI Aayog: Nodal agency for India’s National MPI; reports available on its website.
United Nations Development Programme (UNDP): Co-publisher of the Global MPI; collaborated with NITI Aayog and OPHI on India’s National MPI.
Maternal Health and Bank Account: The two additional indicators unique to India’s National MPI (Health and Standard of Living dimensions respectively). Explicitly stated as national priorities not present in the global index.

Where they appear

Official / government: NITI Aayog National Multidimensional Poverty Index reports (Baseline 2021 and Progress Review 2023); detailed methodology, the 12 indicators, and the note that Maternal Health and Bank Account were added to the global 10. PIB has covered India’s poverty reduction and MPI progress in related factsheets and releases.
English newspapers (The Hindu, Indian Express and others): Coverage of the 2021 and especially the July 2023 NITI Aayog Progress Review (headline reductions in multidimensional poverty, state/district data, and the 12-indicator framework). The Hindu Centre hosted the 2023 report; both papers and other English dailies carried explainers on the Alkire-Foster method, the difference between global (10) and national (12) indicators, and the role of Maternal Health/Bank Account as India-specific. These topics recur whenever new MPI data is released.

UPSC Civil Services (Preliminary) Examination, 2026: Analysis (Questions 81–100)

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