Indian Economy Mixed Quiz: Set 42

The correct answer is C, 2008. NPCI was incorporated in 2008 as a not-for-profit umbrella organisation for retail payments, promoted by the Reserve Bank of India and the Indian Banks' Association under the framework of the Payment and Settlement Systems Act, 2007. Option A is wrong because 2005 is the year the Reserve Bank asked banks to offer no-frills accounts for financial inclusion. Option B is wrong because 2007 is the year of the Payment and Settlement Systems Act, the law under which payment systems are authorised and regulated, which examiners deliberately place next to the year of NPCI. Option D is wrong because 2010 is the year IMPS was launched by NPCI, two years after the organisation itself was set up, with RuPay following in 2012 and UPI in 2016.

The correct answer is B, 40 per cent. The Hybrid Annuity Model was adopted to revive road construction after both the toll and the annuity models ran into trouble. The authority releases forty per cent of the bid project cost as a construction grant in instalments while the work proceeds, and the concessionaire raises the remaining sixty per cent from its own funds and from lenders. That sixty per cent is returned after completion as a series of annuities with interest linked to a bank rate, and the toll is collected by the authority itself. A, twenty per cent, is the ceiling for central viability gap funding, not the HAM grant. C, sixty per cent, is the share the concessionaire brings, so the option inverts the split. D would make it an EPC contract rather than a partnership.

The correct answer is C, Hyderabad. The Insurance Regulatory and Development Authority of India was constituted under the Act of 1999, became a statutory body in April 2000 and has its head office at Hyderabad, having moved there from Delhi in its early years. Option A is wrong because Mumbai is the head office of the Life Insurance Corporation of India, of the General Insurance Corporation and of the Securities and Exchange Board of India, which makes it a natural but incorrect choice here. Option B is wrong because New Delhi is where the Pension Fund Regulatory and Development Authority sits, so the two regulators in this topic have different cities and are frequently interchanged in questions. Option D is wrong because Bengaluru hosts no financial sector regulator of this kind. The pairing to memorise is insurance regulator at Hyderabad and pension regulator at New Delhi.

The correct answer is C, the National Payments Corporation of India. NPCI, set up in 2008 as the umbrella organisation for retail payments in the country, built and runs the Unified Payments Interface, along with RuPay, IMPS, the Aadhaar Enabled Payment System, the National Automated Clearing House and FASTag. Option A is wrong because the Reserve Bank promoted NPCI with the Indian Banks' Association and regulates payment systems under the Payment and Settlement Systems Act, 2007, but it does not itself operate UPI; it does operate RTGS and NEFT. Option B is wrong because the State Bank of India is only one of the member banks on the system. Option D is wrong because SEBI regulates the securities market and has no role in retail payments.

The correct answer is B, NITI Aayog. The National Monetisation Pipeline was released in August 2021 in two volumes, the second of which lists the assets ministry by ministry, with an aggregate monetisation potential of about six lakh crore rupees over four years from roads, power transmission, railways, pipelines, warehouses, stadiums and airports. Monetisation means leasing the right to operate a completed asset for a period; the ownership stays with the government and the asset comes back at the end. A, the Reserve Bank, is the monetary authority and has no role here. C regulates securities markets and would be involved only when an InvIT is listed. D is one of the ministries whose assets appear in the pipeline, not the body that prepared it.

The correct answer is B, it is a price lower than the market price. Issue price is the subsidised rate at which grain from the government's buffer stock is sold through ration shops, and it is deliberately kept below the market price.

India's food security system works in three steps. The Food Corporation of India buys grain from farmers at the minimum support price, stores it as a buffer stock, and releases it to fair price shops under the public distribution system. The rate charged at those shops is the issue price, and the gap between what the government pays and what it charges is the food subsidy. Keeping the issue price low is exactly what makes grain affordable to poor households.

A is wrong: if it matched the market price there would be no subsidy and no reason for ration shops. C is wrong: the issue price is fixed by the government, not by the farmer. D is wrong: a price above the market rate would drive buyers away from ration shops altogether.

Exam tip: the farmer gets the MSP, the ration shop charges the issue price, and the difference between them is the food subsidy.

The correct answer is C, Brazil. India has no bilateral free trade agreement with Brazil. Its only preferential link with Brazil is through the limited India-MERCOSUR Preferential Trade Agreement, which covers a short list of products at reduced duty and is not a free trade agreement. Option A is wrong because India signed a Comprehensive Economic Partnership Agreement with South Korea that came into force in 2010, covering goods, services and investment. Option B is wrong because the India-Japan Comprehensive Economic Partnership Agreement came into force in 2011 and removes duties on the great majority of goods traded between the two countries. Option D is wrong because India has an Early Harvest Scheme with Thailand from 2004 and, more importantly, covers Thailand through the India-ASEAN Trade in Goods Agreement, since Thailand is a member of ASEAN.

The correct answer is C, 2016. The Code was passed in 2016 on the recommendations of the Bankruptcy Law Reforms Committee and replaced a scatter of older laws, among them the Sick Industrial Companies Act and parts of the Companies Act, with a single time-bound process in which control passes from the defaulting promoter to the creditors. Option A is wrong because 2002 is the year of the SARFAESI Act, which deals with enforcement of security rather than with insolvency as a whole. Option B is wrong because 2013 is the year of the Companies Act, under which the National Company Law Tribunal itself was provided for. Option D is wrong because 2019 saw only amendments, including the outer limit of 330 days for the resolution process, not the enactment of the Code.

The correct answer is A, the Aadhaar number and fingerprint. The Aadhaar Enabled Payment System lets a customer withdraw or deposit cash, check a balance or transfer money at a micro ATM held by a business correspondent, identifying himself with the bank name, the Aadhaar number and a biometric such as a fingerprint, so neither a card nor a cheque is needed. It is the instrument that carries banking to villages without branches. Option B is wrong because a card and PIN belong to an ATM or point-of-sale transaction. Option C is wrong because a cheque and passbook are branch instruments and defeat the purpose of a system meant for those without easy branch access. Option D is wrong because a virtual payment address with a UPI PIN describes UPI.

The correct answer is A, BHEL. Bharat Heavy Electricals Limited is a public sector undertaking, which means the government holds the majority of its shares and controls its management. Set up in 1964 with its headquarters at New Delhi, BHEL is the country's largest maker of power plant equipment such as boilers, turbines and generators, and it carries Maharatna status, the highest grade given to a central public sector enterprise. A public sector unit works for national priorities and balanced regional growth, not only for profit. Option B is wrong because Reliance Industries is a private company promoted by the Ambani family. Option C is wrong because the Tata group, founded by Jamsetji Tata, is a privately owned house of companies, even though many of them matter to the nation. Option D is wrong because the Adani group is likewise a private business house. Exam tip: a public sector undertaking is government owned, and BHEL, SAIL, ONGC, GAIL, NTPC and IOC are Maharatna companies, while Reliance, Tata and Adani are private.

The correct answer is A, R. N. Malhotra. The committee on insurance sector reforms was appointed in 1993 under R. N. Malhotra, a former Governor of the Reserve Bank of India. It recommended allowing private and foreign participation, raising the capital requirement for insurers and setting up an independent regulatory authority, and from it came the Insurance Regulatory and Development Authority Act of 1999. Option B is wrong because the Narasimham committees of 1991 and 1998 dealt with banking sector reform, prudential norms and the structure of the banking system, not insurance. Option C is wrong because Raghuram Rajan chaired a committee on financial sector reforms in 2008 and later served as Governor of the Reserve Bank, but the insurance regulator predates that work. Option D is wrong because Y. V. Reddy was a Governor of the Reserve Bank and is associated with the finance commission and monetary policy, not this committee.

The correct answer is C, 2020. The Aatmanirbhar Bharat Rojgar Yojana was announced in October 2020 as part of the Aatmanirbhar Bharat package, to bring back the jobs lost during the Covid-19 lockdown. Under it the central government paid the provident fund contribution for new employees taken on by establishments registered with the EPFO: in units with up to 1,000 workers it paid both the employee's twelve per cent and the employer's twelve per cent, and in larger units only the employee's share, for two years from the date of joining. The benefit covered workers drawing less than fifteen thousand rupees a month who were newly hired or had lost a job earlier that year. A is wrong because 2010 belongs to an earlier period of schemes. B is wrong because 2015 is the year of the Atal Pension Yojana. D is wrong because by 2022 registration under this scheme had already closed. Exam tip: ABRY, 2020, an EPFO-linked wage subsidy for new jobs after Covid.

The correct answer is A, a GIS-based digital platform that brings the project layers of infrastructure ministries onto one map. Launched on 13 October 2021, PM Gati Shakti is an institutional answer to the old complaint that a road is dug up soon after it is laid because a pipeline or a cable was planned separately. Each infrastructure ministry puts its existing and planned assets on a common geographic information system, so that alignments, utility crossings and clearances are seen together before work begins, and multi-modal connectivity to economic zones is planned as one network. B is incorrect because the plan carries no lending window. C is invented; no such cess accompanies it. D describes the Western Dedicated Freight Corridor, a separate railway project. Note also that Gati Shakti is a planning platform and carries no money of its own.

The correct answer is B, Mahatma Gandhi National Rural Employment Guarantee Act. This law makes the right to work a legal guarantee: every rural household whose adult members are willing to do unskilled manual work is entitled to at least 100 days of wage employment in a financial year. The Act was passed in 2005 as NREGA, came into force from 2 February 2006 in 200 districts, was extended to the whole country by 2008 and renamed after Mahatma Gandhi in 2009. If work is not given within fifteen days, the worker is paid an unemployment allowance, and one third of the days are reserved for women. Option A is wrong because the IIM Act of 2017 only gives those management institutes the power to grant degrees. Option C is wrong because the Payment of Wages amendment merely allowed wages by cheque or bank transfer. Option D is wrong because the Citizenship Act deals with who is a citizen. Exam tip: NREGA 2005, in force 2 February 2006, 100 days of work.

The correct answer is B, European Free Trade Association. TEPA was signed on 10 March 2024 in New Delhi with the four EFTA states, Iceland, Liechtenstein, Norway and Switzerland, and came into force on 1 October 2025. Option A is wrong because the European Union is a separate bloc of which none of the EFTA four is a member; India's negotiations with the European Union are a different track altogether and this is the commonest trap in the question. Option C is wrong because India has no bloc-level agreement with the Gulf Cooperation Council; its Gulf deal is a bilateral Comprehensive Economic Partnership Agreement with the United Arab Emirates alone. Option D is wrong because the agreement with ASEAN is the India-ASEAN Trade in Goods Agreement, which came into force in 2010, well before TEPA was even negotiated.

The correct answer is B, Rural Cooperatives. Rural cooperative credit societies were the microfinance structure already in place when India became independent. They began with the Cooperative Credit Societies Act of 1904, which was passed to free village borrowers from moneylenders, and by 1947 a three tier structure of primary societies, district central cooperative banks and state cooperative banks was working across the provinces. The later forms of microfinance came much later. A is wrong because Joint Liability Groups were introduced by NABARD only in 2004 05 for small tenant farmers who lack land papers. C is wrong because the Self Help Group movement grew from the 1980s, and the SHG Bank Linkage Programme started as a pilot in 1992. D is wrong because the Grameen model belongs to Bangladesh, where Muhammad Yunus began it in the 1970s, and it reached India afterwards. Exam tip: cooperatives 1904, SHG Bank Linkage 1992, Joint Liability Groups 2004.

The correct answer is B, 1975. Regional Rural Banks were set up from 1975 on the recommendation of a working group chaired by M. Narasimham, to provide credit to small and marginal farmers, agricultural labourers and rural artisans, and the Regional Rural Banks Act followed in 1976. Each is sponsored jointly by the Union government, the concerned state government and a commercial bank, which hold its capital in fixed shares. Option A is wrong because 1969 is the year fourteen commercial banks were nationalised and the Lead Bank Scheme began. Option C is wrong because 1980 is the year six more banks were nationalised. Option D is wrong because 1982 is the year NABARD was established as the apex institution for rural and agricultural credit.

The correct answer is B, 1956. The Life Insurance Corporation of India came into being on 1 September 1956 under the Life Insurance Corporation Act, which nationalised life insurance in India and took over the business of about two hundred and forty-five insurers; its head office is at Mumbai. Option A is wrong because 1938 is the year of the Insurance Act, which remains the principal law governing the sector but did not create the Corporation. Option C is wrong because 1972 is the year of the General Insurance Business Nationalisation Act, which nationalised general insurance and created the General Insurance Corporation with its four subsidiaries. Option D is wrong because 1999 is the year of the Act that set up the insurance regulator, which became a statutory body in April 2000. The sequence 1938, 1956, 1972, 1999 is worth memorising as a chain.

The correct answer is C, 2021. Infrastructure needs loans of twenty years or more, while a commercial bank takes deposits for a few years, and the mismatch between the two had crippled infrastructure lending after earlier development finance institutions were converted into banks. Parliament therefore passed the National Bank for Financing Infrastructure and Development Act in 2021, setting up NaBFID as a development financial institution with paid-up capital of twenty thousand crore rupees and a grant of five thousand crore rupees from the Central Government, with the mandate to lend long term and to deepen the bond and derivatives market for infrastructure. A and B are the years of other reforms and are offered only as near misses, and D is later than the Act.

The correct answer is C, Denmark. The European Free Trade Association has exactly four members today: Iceland, Liechtenstein, Norway and Switzerland. Denmark was among the seven countries that set up EFTA in 1960, but it left to join the European Communities and is today a member of the European Union, not of EFTA. Option A is wrong because Norway is an EFTA member and has chosen to stay outside the European Union. Option B is wrong because Switzerland is an EFTA member and is India's largest trading partner among the four, which is why gold was kept out of the TEPA duty cuts. Option D is wrong because Iceland is an EFTA member; the fourth member, Liechtenstein, is the smallest of them and is often left out of the options to test recall.