UPSC Static Quiz – Economy : 28 January 2026

UPSC Static Quiz – Economy : 28 January 2026 We will post 5 questions daily on static topics mentioned in the UPSC civil services preliminary examination syllabus. Each week will focus on a specific topic from the syllabus, such as History of India and Indian National Movement, Indian and World Geography, and more. We are excited to bring you our daily UPSC Static Quiz, designed to help you prepare for the UPSC Civil Services Preliminary Examination. Each day, we will post 5 questions on static topics mentioned in the UPSC syllabus. This week, we are focusing on Indian and World Geography.

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• Question 1 of 5 1. Question Consider the following statements about Conditional cash transfers (CCTs): Conditional cash transfers impose no requirements on how recipients spend the money. They are always provided as loans that must be repaid. Examples of CCTs include universal basic income programs. How many of the above statements is/are incorrect? (a) Only one (b) Only two c) All three d) None Correct Solution: C Statement 1: Conditional cash transfers require recipients to fulfill specific conditions, such as school attendance or vaccinations. Statement 2: Conditional cash transfers are not loans; they are financial aids tied to specific actions, like school attendance or vaccinations. Statement 3: Universal basic income programs are examples of universal transfers, not conditional cash transfers. What Are Cash Transfers? Cash transfers are direct payments made by governments to individuals or households to provide social protection or incentivize specific actions. Types of Cash Transfers: Unconditional Transfers:No strings attached; recipients can use the money as needed (e.g., PM-KISAN). Conditional Transfers:Linked to specific actions like school attendance or vaccinations (e.g., Maternity Benefit Program). Universal Transfers:Provided to all citizens regardless of income or status. Targeted Transfers:Focused on specific vulnerable groups like elderly pensions under NSAP. Incorrect Solution: C Statement 1: Conditional cash transfers require recipients to fulfill specific conditions, such as school attendance or vaccinations. Statement 2: Conditional cash transfers are not loans; they are financial aids tied to specific actions, like school attendance or vaccinations. Statement 3: Universal basic income programs are examples of universal transfers, not conditional cash transfers. What Are Cash Transfers? Cash transfers are direct payments made by governments to individuals or households to provide social protection or incentivize specific actions. Types of Cash Transfers: Unconditional Transfers:No strings attached; recipients can use the money as needed (e.g., PM-KISAN). Conditional Transfers:Linked to specific actions like school attendance or vaccinations (e.g., Maternity Benefit Program). Universal Transfers:Provided to all citizens regardless of income or status. Targeted Transfers:Focused on specific vulnerable groups like elderly pensions under NSAP.

#### 1. Question

Consider the following statements about Conditional cash transfers (CCTs):

• Conditional cash transfers impose no requirements on how recipients spend the money.

• They are always provided as loans that must be repaid.

• Examples of CCTs include universal basic income programs.

How many of the above statements is/are incorrect?

• (a) Only one

• (b) Only two

• c) All three

Solution: C

Statement 1: Conditional cash transfers require recipients to fulfill specific conditions, such as school attendance or vaccinations.

Statement 2: Conditional cash transfers are not loans; they are financial aids tied to specific actions, like school attendance or vaccinations.

Statement 3: Universal basic income programs are examples of universal transfers, not conditional cash transfers.

What Are Cash Transfers?

Cash transfers are direct payments made by governments to individuals or households to provide social protection or incentivize specific actions.

Types of Cash Transfers:

• Unconditional Transfers:No strings attached; recipients can use the money as needed (e.g., PM-KISAN).

• Conditional Transfers:Linked to specific actions like school attendance or vaccinations (e.g., Maternity Benefit Program).

• Universal Transfers:Provided to all citizens regardless of income or status.

• Targeted Transfers:Focused on specific vulnerable groups like elderly pensions under NSAP.

Solution: C

Statement 1: Conditional cash transfers require recipients to fulfill specific conditions, such as school attendance or vaccinations.

Statement 2: Conditional cash transfers are not loans; they are financial aids tied to specific actions, like school attendance or vaccinations.

Statement 3: Universal basic income programs are examples of universal transfers, not conditional cash transfers.

What Are Cash Transfers?

Cash transfers are direct payments made by governments to individuals or households to provide social protection or incentivize specific actions.

Types of Cash Transfers:

• Unconditional Transfers:No strings attached; recipients can use the money as needed (e.g., PM-KISAN).

• Conditional Transfers:Linked to specific actions like school attendance or vaccinations (e.g., Maternity Benefit Program).

• Universal Transfers:Provided to all citizens regardless of income or status.

• Targeted Transfers:Focused on specific vulnerable groups like elderly pensions under NSAP.

• Question 2 of 5 2. Question Consider the following statements about Green Banks: Green Banks primarily rely on individual savings accounts as their main source of funding. They finance only large-scale renewable energy projects, excluding smaller community initiatives. Recovered capital from loans is reinvested into new green projects to sustain funding cycles. How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None Correct Solution: A Statement 1 is Incorrect. Green Banks are funded through government grants, environmental cesses, and green bonds, not individual savings accounts. Statement 2 is Incorrect. Green Banks finance projects of various scales, including small-scale and community-level initiatives, to maximize environmental impact. Statement 3 is Correct. A key feature of Green Banks is the reinvestment of returned capital into new green projects, ensuring a self-sustaining financing mechanism. What Are Green Banks? Green Banks are mission-driven financial institutions designed to accelerate clean energy adoption and fight climate change. Unlike traditional banks, they focus on financing proven, environmentally friendly projects while ensuring capital recovery for reinvestment. How Green Banks Work: Capital Mobilization:Funds are sourced via government grants, environmental cesses, and issuing green bonds. Targeted Lending:Loans focus on viable clean energy projects with assured repayment potential. Market Development:Green Banks identify and finance opportunities to maximize environmental and economic returns. Circular Investment:Returned capital is reinvested into new green projects, creating a self-sustaining financing loop. Incorrect Solution: A Statement 1 is Incorrect. Green Banks are funded through government grants, environmental cesses, and green bonds, not individual savings accounts. Statement 2 is Incorrect. Green Banks finance projects of various scales, including small-scale and community-level initiatives, to maximize environmental impact. Statement 3 is Correct. A key feature of Green Banks is the reinvestment of returned capital into new green projects, ensuring a self-sustaining financing mechanism. What Are Green Banks? Green Banks are mission-driven financial institutions designed to accelerate clean energy adoption and fight climate change. Unlike traditional banks, they focus on financing proven, environmentally friendly projects while ensuring capital recovery for reinvestment. How Green Banks Work: Capital Mobilization:Funds are sourced via government grants, environmental cesses, and issuing green bonds. Targeted Lending:Loans focus on viable clean energy projects with assured repayment potential. Market Development:Green Banks identify and finance opportunities to maximize environmental and economic returns. Circular Investment:Returned capital is reinvested into new green projects, creating a self-sustaining financing loop.

#### 2. Question

Consider the following statements about Green Banks:

• Green Banks primarily rely on individual savings accounts as their main source of funding.

• They finance only large-scale renewable energy projects, excluding smaller community initiatives.

• Recovered capital from loans is reinvested into new green projects to sustain funding cycles.

How many of the above statements are correct?

• (a) Only one

• (b) Only two

• (c) All three

Solution: A

Statement 1 is Incorrect. Green Banks are funded through government grants, environmental cesses, and green bonds, not individual savings accounts.

Statement 2 is Incorrect. Green Banks finance projects of various scales, including small-scale and community-level initiatives, to maximize environmental impact.

Statement 3 is Correct. A key feature of Green Banks is the reinvestment of returned capital into new green projects, ensuring a self-sustaining financing mechanism.

What Are Green Banks?

Green Banks are mission-driven financial institutions designed to accelerate clean energy adoption and fight climate change. Unlike traditional banks, they focus on financing proven, environmentally friendly projects while ensuring capital recovery for reinvestment.

How Green Banks Work:

• Capital Mobilization:Funds are sourced via government grants, environmental cesses, and issuing green bonds.

• Targeted Lending:Loans focus on viable clean energy projects with assured repayment potential.

• Market Development:Green Banks identify and finance opportunities to maximize environmental and economic returns.

• Circular Investment:Returned capital is reinvested into new green projects, creating a self-sustaining financing loop.

Solution: A

Statement 1 is Incorrect. Green Banks are funded through government grants, environmental cesses, and green bonds, not individual savings accounts.

Statement 2 is Incorrect. Green Banks finance projects of various scales, including small-scale and community-level initiatives, to maximize environmental impact.

Statement 3 is Correct. A key feature of Green Banks is the reinvestment of returned capital into new green projects, ensuring a self-sustaining financing mechanism.

What Are Green Banks?

How Green Banks Work:

• Capital Mobilization:Funds are sourced via government grants, environmental cesses, and issuing green bonds.

• Targeted Lending:Loans focus on viable clean energy projects with assured repayment potential.

• Market Development:Green Banks identify and finance opportunities to maximize environmental and economic returns.

• Circular Investment:Returned capital is reinvested into new green projects, creating a self-sustaining financing loop.

• Question 3 of 5 3. Question Which of the following sectors are permitted to raise funds through External Commercial Borrowings (ECBs) under the Automatic Route in India? a) Agriculture, trading, and real estate investment trusts (REITs) b) Microfinance, start-ups, and non-banking financial companies (NBFCs) c) Gambling, lottery, and real estate development d) Defense manufacturing, power distribution, and healthcare infrastructure Correct Solution: D ECBs under the Automatic Route are generally allowed for sectors that promote economic growth, such as defense manufacturing, power, and healthcare. Restricted sectors like gambling, lottery, and real estate (excluding affordable housing) are not eligible for ECBs. Incorrect Solution: D ECBs under the Automatic Route are generally allowed for sectors that promote economic growth, such as defense manufacturing, power, and healthcare. Restricted sectors like gambling, lottery, and real estate (excluding affordable housing) are not eligible for ECBs.

#### 3. Question

Which of the following sectors are permitted to raise funds through External Commercial Borrowings (ECBs) under the Automatic Route in India?

• a) Agriculture, trading, and real estate investment trusts (REITs)

• b) Microfinance, start-ups, and non-banking financial companies (NBFCs)

• c) Gambling, lottery, and real estate development

• d) Defense manufacturing, power distribution, and healthcare infrastructure

Solution: D

ECBs under the Automatic Route are generally allowed for sectors that promote economic growth, such as defense manufacturing, power, and healthcare. Restricted sectors like gambling, lottery, and real estate (excluding affordable housing) are not eligible for ECBs.

Solution: D

• Question 4 of 5 4. Question Which of the following best describes the concept of “Systematic Deregulation” introduced in the Economic Survey 2024-25? a) A framework for standardizing regulations across all sectors b) A phased approach for reviewing and reducing regulatory burdens on enterprises c) A system for states to impose new regulations in a structured manner d) A blanket removal of all regulations to promote economic growth Correct Solution: B The Economic Survey 2024-25 emphasizes *Systematic Deregulation* as a structured and phased approach to regulatory reforms. Unlike blanket deregulation, which removes all rules indiscriminately, this method ensures a balanced reduction of unnecessary regulatory burdens while retaining essential safeguards. The process consists of three key steps: first, identifying outdated or excessive regulations that hinder business operations; second, benchmarking these regulations against best practices from other states and countries to determine their necessity; and third, assessing the economic costs imposed by these regulations on enterprises. By streamlining regulatory frameworks, the policy enhances ease of doing business, encourages entrepreneurship, and boosts economic efficiency. Incorrect Solution: B The Economic Survey 2024-25 emphasizes *Systematic Deregulation* as a structured and phased approach to regulatory reforms. Unlike blanket deregulation, which removes all rules indiscriminately, this method ensures a balanced reduction of unnecessary regulatory burdens while retaining essential safeguards. The process consists of three key steps: first, identifying outdated or excessive regulations that hinder business operations; second, benchmarking these regulations against best practices from other states and countries to determine their necessity; and third, assessing the economic costs imposed by these regulations on enterprises. By streamlining regulatory frameworks, the policy enhances ease of doing business, encourages entrepreneurship, and boosts economic efficiency.

#### 4. Question

Which of the following best describes the concept of “Systematic Deregulation” introduced in the Economic Survey 2024-25?

• a) A framework for standardizing regulations across all sectors

• b) A phased approach for reviewing and reducing regulatory burdens on enterprises

• c) A system for states to impose new regulations in a structured manner

• d) A blanket removal of all regulations to promote economic growth

Solution: B

• The Economic Survey 2024-25 emphasizes *Systematic Deregulation* as a structured and phased approach to regulatory reforms. Unlike blanket deregulation, which removes all rules indiscriminately, this method ensures a balanced reduction of unnecessary regulatory burdens while retaining essential safeguards.

• The process consists of three key steps: first, identifying outdated or excessive regulations that hinder business operations; second, benchmarking these regulations against best practices from other states and countries to determine their necessity; and third, assessing the economic costs imposed by these regulations on enterprises.

• first, identifying outdated or excessive regulations that hinder business operations;

• second, benchmarking these regulations against best practices from other states and countries to determine their necessity; and

• third, assessing the economic costs imposed by these regulations on enterprises.

• By streamlining regulatory frameworks, the policy enhances ease of doing business, encourages entrepreneurship, and boosts economic efficiency.

Solution: B

• first, identifying outdated or excessive regulations that hinder business operations;

• second, benchmarking these regulations against best practices from other states and countries to determine their necessity; and

• third, assessing the economic costs imposed by these regulations on enterprises.

• By streamlining regulatory frameworks, the policy enhances ease of doing business, encourages entrepreneurship, and boosts economic efficiency.

• Question 5 of 5 5. Question Consider the following statements about the Debt-to-GDP ratio: It measures the government’s total fiscal deficit in a given year. It includes only external debt and excludes domestic borrowing. It is always considered a negative indicator for a country’s economy. How many of the above statements are incorrect? a) Only one b) Only two c) All three d) None Correct Solution: C The Debt-to-GDP ratio is an important indicator of a country’s financial health, representing the proportion of a nation’s total debt compared to its gross domestic product (GDP). It helps assess a country’s ability to repay its debt based on its economic output. Statement 1 is incorrect because the ratio measures total accumulated government debt, including past deficits, rather than just the fiscal deficit of a single year. Statement 2 is incorrect because the Debt-to-GDP ratio includes both external (foreign) and domestic (internal) debt, giving a comprehensive picture of national liabilities. Statement 3 is incorrect as a high Debt-to-GDP ratio is not always negative. Some countries, like Japan, maintain high debt levels due to strong investor confidence, low interest rates, and stable economic policies. Incorrect Solution: C The Debt-to-GDP ratio is an important indicator of a country’s financial health, representing the proportion of a nation’s total debt compared to its gross domestic product (GDP). It helps assess a country’s ability to repay its debt based on its economic output. Statement 1 is incorrect because the ratio measures total accumulated government debt, including past deficits, rather than just the fiscal deficit of a single year. Statement 2 is incorrect because the Debt-to-GDP ratio includes both external (foreign) and domestic (internal) debt, giving a comprehensive picture of national liabilities. Statement 3 is incorrect as a high Debt-to-GDP ratio is not always negative. Some countries, like Japan, maintain high debt levels due to strong investor confidence, low interest rates, and stable economic policies.

#### 5. Question

Consider the following statements about the Debt-to-GDP ratio:

• It measures the government’s total fiscal deficit in a given year.

• It includes only external debt and excludes domestic borrowing.

• It is always considered a negative indicator for a country’s economy.

How many of the above statements are incorrect?

• a) Only one

• b) Only two

• c) All three

Solution: C

The Debt-to-GDP ratio is an important indicator of a country’s financial health, representing the proportion of a nation’s total debt compared to its gross domestic product (GDP). It helps assess a country’s ability to repay its debt based on its economic output.

• Statement 1 is incorrect because the ratio measures total accumulated government debt, including past deficits, rather than just the fiscal deficit of a single year.

• Statement 2 is incorrect because the Debt-to-GDP ratio includes both external (foreign) and domestic (internal) debt, giving a comprehensive picture of national liabilities.

• Statement 3 is incorrect as a high Debt-to-GDP ratio is not always negative. Some countries, like Japan, maintain high debt levels due to strong investor confidence, low interest rates, and stable economic policies.

Solution: C

• Statement 1 is incorrect because the ratio measures total accumulated government debt, including past deficits, rather than just the fiscal deficit of a single year.

• Statement 2 is incorrect because the Debt-to-GDP ratio includes both external (foreign) and domestic (internal) debt, giving a comprehensive picture of national liabilities.

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