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SFG 2023 Level 1 Test 14

The document is a test booklet for SFG 2023 Level 1, containing instructions for candidates regarding the examination process, including how to fill out the answer sheet and the penalty for wrong answers. It consists of 50 multiple-choice questions covering various topics related to general studies. Candidates are instructed to check the booklet for completeness and to follow specific guidelines during the test.

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0% found this document useful (0 votes)

56 views47 pages

SFG 2023 Level 1 Test 14

Uploaded by

Rohit Sheoran

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SFG 2023 |LEVEL 1 |Test 14 |

DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE TOLD TO DO SO

T.B.C.: FIAS-SFG23-L1T14 Test Booklet Series
Serial No.

A
TEST BOOKLET
GENERAL STUDIES

Time Allowed: ONE HOUR Maximum Marks: 100

INSTRUCTIONS
1. IMMEDIATELY AFTER THE COMMENCEMENT OF THE EXAMINATION, YOU SHOULD CHECK
THAT THIS TEST BOOKLET DOES NOT HAVE ANY UNPRINTED OR TORN OR MISSING PAGES
OR ITEMS ETC. IF SO, GET IT REPLACED BY A COMPLETE TEST BOOK.
2. Please note that it is the candidate’s responsibility to encode and fill in the Roll Number and Test
Booklet Series A, B, C or D carefully without any omission or discrepancy at the appropriate
places in the OMR Answer Sheet. Any omission/discrepancy will render the Answer Sheet liable
for rejection.
3. You have to enter your Name, Email Id and
Name:
Mobile No. on the test booklet in the Box Email Id:
provided alongside. DO NOT write anything
Mobile No:
else on the Test Booklet.
4. This Test Booklet contains 50 items (questions). Each item is printed in English and Hindi. Each
item comprises four responses (answers). You will select the response which you want to mark
on the Answer Sheet. In case you feel that there is more than one correct response, mark the
response which you consider the best. In any case, choose ONLY ONE response for each item.
5. You have to mark all your responses ONLY on the separate Answer Sheet provided.
See directions in the Answer Sheet.
6. All items carry equal marks.
7. Before you proceed to mark in the Answer Sheet the response to various items in the Test Booklet,
you have to fill in some particulars in the Answer Sheet as per instructions sent to you with your
Admission Certificate.
8. After you have completed filling in all your responses on the Answer Sheet and the examination
has concluded, you should hand over to the Invigilator only the Answer Sheet. You are permitted
to take away with you the Test Booklet.
9. Sheets for rough work are appended in the Test Booklet at the end.
10. Penalty for wrong answers:
THERE WILL BE PENALTY FOR WRONG ANSWERS MARKED BY A CANDIDATE IN THE
OBJECTIVE TYPE QUESTION PAPERS.
(i) There are four alternatives for the answer to every question. For each question for which a
wrong answer has been given by the candidate, one-third of the marks assigned to that
question will be deducted as penalty.
(ii) If a candidate gives more than one answer, it will be treated as wrong answer even if one
of the given answers happens to be correct and there will be same penalty as above to that
question.
(iii) If a question is left bank i.e., no answer is given by the candidate, there will be no penalty
for that question.

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Page 1

SFG 2023 |LEVEL 1 |Test 14 |

Q.1) With reference to casual workers employed (R). Read the statements and choose the correct
in India, consider the following statements: option.
1. All casual workers are entitled for Assertion (A): Petroleum products are one of
Employees Provident Fund Coverage. the important export commodities for India.
2. All casual workers are entitled for regular Reason (R): The refining industry has been
working hours and overtime payment. modernized and upgraded continuously for
3. The government can by a notification achieving cost reduction.
specify that an establishment or industry Which of the Options given below is correct?
shall pay wages only through its bank a) Both (A) and (R) are true and (R) is the
account. correct explanation of (A).
Which of the above statements are correct? b) Both (A) and (R) are true and (R) is not the
a) 1 and 2 only correct explanation of (A).
b) 2 and 3 only c) (A) is correct but (R) is wrong.
c) 1 and 3 only d) (A) is wrong but (R) is correct.
d) 1, 2 and 3
Q.5) “This phenomenon occurs when a huge
Q.2) Which of the following policy actions can amount of matter, like a cluster of galaxies,
be considered as a move towards ‘Capital creates a gravitational field that distorts and
Account Convertibility’ in India’s Balance of magnifies the light from distant galaxies that
Payment system? are behind it but in the same line of sight. This
effect allows researchers to study the details of
1. Increasing the foreign portfolio investment
early galaxies too far away to be seen with
limits in the Indian debt markets.
current technology and telescopes.”
2. Easing of the external commercial
Which one of the following interstellar
borrowing framework.
phenomena is described in the above given
3. Liberalized Foreign Direct Investment
paragraph?
4. Limiting NRI’s investment in G-sec
a) Gamma Ray Burst
Select the correct answer using the codes given
b) Stephan's Quintet
below:
c) Gravitational Lensing
a) 1 and 2 only
d) Fast Radio Burst
b) 2 and 3 only
c) 1, 2, and 3 only
Q.6) With reference to the ‘Developing District
d) 1, 2, 3 and 4
as Export Hub’ initiative, consider the following
statements:
Q.3) Which of the following statements 1. It is an initiative of the Directorate General
correctly defines the term ‘Official Reserve of Foreign Trade (DGFT).
Transactions’?
2. It includes the export of registered
a) All the transactions made out of Geographical Indication (GI) products from
Consolidated Fund of India. the districts.
b) Withdrawal of money from the Special 3. It will be overseen by the senior-most
Drawing Rights with the IMF. Member of Parliament from the District.
c) Transactions made to bridge the gap in the Which of the statements given above is/are
balance of payments. correct?
d) Reserves used by the Government before a) 1 and 2 only
the passage of the Money Bill.
b) 2 only
c) 1 and 3 only
Q.4) In the questions given below, there are two
d) 3 only
statements marked as Assertion (A) and Reason

SFG 2023 |LEVEL 1 |Test 14 |

Q.7) Which of the following best describes the Q.10) The ‘FASTER (Fast and Secured
term Net International Investment Position Transmission of Electronic Records)’ Platform
(NIIP)? was launched to-
a) It is the difference between a nation’s gross a) improve accessibility of police records to
national product (GNP) and its gross the central agencies through encrypted and
domestic product (GDP). secure platform.
b) It is the difference between a nation's stock b) communicate interim orders, stay orders,
of foreign assets and a foreigner's stock of and bail orders of the Supreme Court to the
that nation's assets. concerned authorities.
c) It is the difference between a nation’s c) faster redressal of corporate grievances
Foreign Direct Investments (FDIs) and through inter-departmental coordination
Foreign Portfolio Investments (FPIs) across different ministries.
d) It is difference between a nation’s imports d) provide information regarding financial
from foreign nations and domestic exports frauds for effective forensic audit and
to foreign nations. investigation.

Q.8) With reference to the Mahatma Gandhi Q.11) In the context of India, which of the
National Rural Employment Guarantee Scheme following factors is/are contributor/s to
(MGNREGS), consider the following reducing the risk of a currency crisis?
statements: 1. The foreign currency earnings of India’s IT
1. It guarantees 100 days of skilled manual sector
work. 2. Increasing the government expenditure
2. All districts except for those that have a 3. Remittances from Indians abroad
100% urban population are covered under it. Select the correct answer using the code given
3. It is monitored by the Ministry of Labour below.
and Employment. a) 1 only
4. It is mandatory to conduct Social Audit of all b) 1 and 3 only
Works executed under MGNREGA. c) 2 only
Which of the statements given above are d) 1, 2 and 3
correct?
a) 1 and 2 only Q.12) With reference to the Special Economic
b) 1 and 3 only
c) 2 and 4 only

x aammss . r gg
Zones (SEZ) in India, consider the following

. o o r
statements:
d) 3 and 4 only

Q.9) With reference to the international trade, PPddff44ee x 1. Since it is treated as a foreign territory, the
value added by firms in SEZ is not added to
the Gross Domestic Product of India.
consider the following statements: 2. The firms in the SEZ are not allowed to sell
1. Tariffs are a type of trade barrier that can its products in India’s domestic market.
have the effect of raising the relative prices 3. Units in SEZ are required to be net foreign
of imported products. exchange earners within a specified time
2. The World Trade Organisation agreements limit.
strictly prohibit the imposition of trade Which of the statements given above is/are
barriers. correct?
3. ‘Quotas’ are mainly aimed at generating a) 1 and 3 only
extra revenue for the government. b) 3 only
Which of the statements given above is/are c) 1 only
correct? d) 2 and 3 only
a) 1 only
b) 3 only
c) 1 and 2 only
d) 2 and 3 only

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Page 5

SFG 2023 |LEVEL 1 |Test 14 |

Q.13) Which of the following statements is the Which of the statements given above is/are
correct description of the term “Antitrust correct?
cases” that was recently in news? a) 1 only
a) It is a regulation that encourages b) 1 and 2 only
competition by limiting the market power of c) 2 and 3 only
any particular company.
d) 1 and 3 only
b) It refers to a situation where a group of
similar companies agrees on prices in order
to increase profits and limit competition. Q.16) The Ministry of Women and Child
Development does not consider the Global
c) It is a particular form of collusive behaviour
Hunger Index (GHI) as a realistic parameter
by which firms agree to submit common
because of which of the following reasons?
bids to eliminate price competition.
a) All the indicators used to assess hunger
d) It refers to the legal action brought against
levels are children-related that does not
companies that are charged with limiting
represent the entire population.
free competition in the market.
b) Complete absence of opinion polls from the
methodology of the index.
Q.14) With reference to the Indian economy,
c) The GHI estimations are based on a very
consider the following statements:
small sample size.
Assertion: The share of formal jobs has
d) The base year for the GHI is too old to
remained greater than informal jobs in India in
represent the current nutritional
post-liberalization period.
conditions.
Reason: The share of the services sector in
India’s Gross Domestic Product has remained
Q.17) Consider the following pairs with
higher than agriculture sector, in the post-
reference to various Prime Ministers of India
liberalization period.
and the Poverty alleviation schemes introduced
Which of the following options is correct?
under their tenure:
a) Both Assertion and Reason are correct and
Prime Minister Poverty alleviation
Reason is the correct explanation of the
Assertion. scheme introduced by
the government
b) Both Assertion and Reason are correct but
Reason is not the correct explanation of the

x aamms . o
. orrgg
1. Jawahar Lal Nehru

s
Integrated Rural

e x
Development

e
Assertion.
c) Assertion is correct but Reason is incorrect.
d) Assertion is incorrect but Reason is correct. PPddff44 2. Indira Gandhi
Programme.
Jawahar Rozgar Yojana
3. Lal Bahadur Food for Work
Q.15) Consider the following statements Shastri Programme
regarding ‘Rashtriya Gram Swaraj Abhiyan 4. P.V. Narsimha National Social
(RGSA)’: Rao Assistance Programme
1. The objective of the scheme is to improve How many pairs given above are correct?
the governance capabilities of Panchayati
a) Only one pair
Raj Institutions.
b) Only two pairs
2. The scheme only covers Panchayati Raj
c) Only three pairs
Institutions created under Part IX of Indian
Constitution. d) All four pairs.

3. It is a Central Sector Scheme having no

financial contribution from the state
Governments.

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Page 7

SFG 2023 |LEVEL 1 |Test 14 |

Q.18) With reference to the poverty levels, Q.21) Which of the following would include
consider the following statements: Foreign Direct Investment in India?
1. Absolute poverty is when people earn just 1. Subsidiaries of foreign companies in India
enough money to afford the bare necessities 2. Majority foreign equity holding in Indian
of life. companies
2. Relative poverty is when people earn just 3. Companies exclusively financed by foreign
enough money to maintain the average companies
standard of life in the society of their living. 4. Portfolio investment
Which of the statements given above is/are Select the correct answer using the codes given
incorrect? below:
a) 1 only a) 1, 2, 3 and 4
b) 2 only b) 2 and 4 only
c) Both 1 and 2 c) 1 and 3 only
d) Neither 1 nor 2 d) 1, 2 and 3 only

Q.19) Which of the following statements are Q.22) With reference to the World Bank &
correct regarding the challenges in the school International Monetary Fund (IMF), consider
education in India? the following statements:
1. Prevalence of rote learning as a practise of 1. IMF aims at economic development and
studying in most schools. poverty reduction, whereas aim of the
2. Lack of standard assessment method to World Bank is to ensure the stability of the
track the student performance in schools. international monetary system.
3. Burden on teachers to spend their time in 2. To become a member of the World Bank
non-teaching tasks. Group, a country must first join the IMF.
4. Lack of capacity building of teachers 3. Both World bank and IMF grants loans to
Select the correct answer using the code given Private sector.
below: Which of the statements given above is/are
a) 1 and 3 only correct?
b) 1, 2 and 3 only a) 2 and 3 only
c) 2, 3 and 4 only

x aamms . o
. orrg
b) 3 only

s g
d) 1, 2, 3 and 4

Q.20) Which one of the following statements PPddff44ee x c) 2 only

d) 1, 2 and 3

regarding Parliamentary Committee on Official Q.23) With the reference to organic farming in
Language is correct? India, consider the following statements:
a) It is a statutory committee setup in 1976 1. All states in India have their own state
under the Official Languages Act,1963. organic certification agencies.
b) It reviews the progress made in the use of 2. Organic farming accounts for about ten
Eighth schedule languages for the Official percent of the net sown area in the country.
purposes of the Union. 3. Sikkim is the only Indian state to have
c) The committee submit its report to the become fully organic in India.
Parliament, from where it is sent to all the Which of the statements given above is/are
State Legislatures. correct?
d) Speaker of the Lok Sabha has been the a) 1 and 2 only
Chairman of the Committee as per Rules of b) 3 only
Procedure of Lok Sabha.
c) 1 and 3 only
d) 2 and 3 only

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Page 9

SFG 2023 |LEVEL 1 |Test 14 |

Q.24) Consider the following statements with Q.27) Which among the following can be
reference to the Female Labour Force considered as the features of an open
Participation in India: economy?
1. It has consistently increased in India during 1. Allowing foreign Investment in a country
the last two decades, mainly due to 2. Trade in services across national borders
liberalization reforms. 3. Following Fixed Exchange Rate
2. Female Labour Force Participation is higher 4. Complete Convertibility of Capital Account
in rural areas than urban areas in recent Select the correct answer using the code given
past. below:
Which of the statements given above is/are a) 1 and 2 only
correct? b) 2, 3 and 4 only
a) 1 only c) 1, 2 and 4 only
b) 2 only d) 1, 2, 3 and 4
c) Both 1 and 2
d) Neither 1 nor 2 Q.28) With reference to the economy, the term
‘invisibles’ refers to?
Q.25) With reference to ‘Nidhi Companies’, a) It is an international transaction that
consider the following statements: includes an exchange of non-tangible
1. They are a type of financial institutions that goods.
raise funds exclusively from their members. b) They are one-sided economic transactions
2. A Nidhi company can provide loans to its between a resident entity and a non-
members only. resident entity.
3. They come under the dual regulation of c) It is the difference between a nation’s gross
Reserve Bank of India and Department of national product and gross domestic
Company Affairs. product.
Which of the statements given above are d) It is two-way transaction where money is
correct? usually recovered through disposal of the
a) 1 and 3 only assets.
b) 1 and 2 only
c) 1, 2 and 3 Q.29) Consider the following statements with
d) 2 and 3 only reference to the Autonomous and

Q.26) Consider the following pairs regarding

x aammss. o
. orrgg
Accommodating Transactions:
1. Autonomous transactions are international
the types of unemployment and their examples:
Type of
Unemployment
Example/
Explanation PPddff44ee x economic transactions made independently
of the state of the Balance of Payments.
2. Accommodating transactions are the
1. Frictional Unemployment transactions made to cover the deficit
occurring due to occurred due to the autonomous
automation transactions.
2. Structural Unemployment in Which of the statements given above is/are
skiing resort in correct?
summer months a) 1 only
3. Cyclical Unemployment b) 2 only
during 2008 Financial c) Both 1 and 2
Crisis d) Neither 1 nor 2
Which of the above given pairs is/are matched
correctly?
a) 2 only
b) 3 only
c) 1 and 2 only
d) 2 and 3 only

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Page 11

SFG 2023 |LEVEL 1 |Test 14 |

Q.30) Consider the following statements Q.33) Which of the following are the possible
regarding ‘UN Human Rights Council (UNHRC)’: reasons for the rise in economic inequality after
1. The member states of the council are the 1991 economic reforms in India?
elected by the United Nations General 1. Reduction in public investment in
Assembly through direct and secret ballot. agriculture
2. The council has the authority to carry out 2. Decline in the availability of casual labour
the Universal Periodic Review of human 3. Poor growth of public expenditure in social
rights records of all UN member state. sectors
3. The rights and privileges of any council 4. Rapid decline in foreign direct investments
member can be suspended only by the UN in India
Security Council. Select the correct answer using the code given
Which of the statements given above is/are below:
correct? a) 1 and 2 only
a) 1 and 2 only b) 2, 3 and 4 only
b) 2 only c) 1 and 3 only
c) 2 and 3 only d) 1, 3 and 4 only
d) 1 and 3 only
Q.34) Which of the following statements
Q.31) Consider the following statements: correctly describes the term ‘Factoring’?
Human capital formation as a concept is better a) It is a type of supply chain finance where the
explained in terms of a process which enables bank/financial institution provides the
1. Individuals of a country to accumulate more seller an immediate amount of its invoice at
capital. a discounted rate.
2. Increasing the knowledge, skill levels and b) It is a method of calculating the total cost of
capacities of the people of the country. all the factors of production to produce a
3. Accumulation of tangible wealth. good or service.
4. Accumulation of intangible wealth c) It is a type of finance where the seller
Which of the statements given above is/are combines its different financial debts to
correct? form a consolidated financial instrument
a) 1 and 2 which is issued to investors.
b) 2 only d) It is a type of finance where the seller would

gg
sell its invoices to a third party to meet its

r
c) 2 and 4
d) 1, 3 and 4

eexxaammss. o
. o r
short-term cash requirements.

Q.32) With reference to economy, consider the

following statements: PPddff44 Q.35) With reference to ‘Mission Vatsalya’,
consider the following statements:
1. The mission consists of schemes and
Assertion (A) – Depreciation of rupee can result
in an increase in domestic inflation. policies for the empowerment and
The Reason (R) - Depreciation leads to an protection of women.
increase in the prices of imported goods. 2. It will be implemented in partnership with
Which of the following options is correct? the private sector as well as volunteer
a) Both Assertion (A) and Reason (R) are the groups through a national level portal.
true and Reason (R) is a correct explanation 3. The scheme assists States/Union
of Assertion (A). Territories in delivering the mandate of the
b) Both Assertion (A) and Reason (R) are the Juvenile Justice Act 2015.
true but Reason (R) is not a correct Which of the statements given above is/are
explanation of Assertion (A). correct?
c) Assertion (A) is true and Reason (R) is false. a) 1 and 2 only
d) Assertion (A) is false and Reason (R) is true. b) 2 only
c) 2 and 3 only
d) 1 and 3 only

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Page 13

SFG 2023 |LEVEL 1 |Test 14 |

Q.36) With reference to SENSEX in India, a) When a country is having a bell-shaped

consider the following statements: population pyramid.
1. It is one of the benchmark indexes of the b) When mortality and fertility rate is on a
BSE Limited. declining trend
2. It is comprised of 50 of the largest and most c) When the share of non-working age
actively-traded stocks. population is larger than working age
3. Its value is calculated in terms of both Indian population
rupees and U.S. dollars. d) When conducive economic policies are put
4. Its composition is re-evaluated once in in place.
every five years as per the performance of
stocks of the companies. Q.40) Consider the following statements:
Which of the statements given above are 1. The Aadhaar Act stipulates that an individual
correct? should reside in India for a period of 12
a) 1 and 2 only weeks for being eligible to obtain an
b) 3 and 4 only Aadhaar.
c) 1 and 3 only 2. The Aadhaar can be issued to minor children
d) 2 and 4 only under the age of five years based on the
demographic information of their parents.
Q.37) Which one of the following statements is Which of the statements given above is/are
correct regarding ‘Inequality’? correct?
a) According to Kuznets Curve, economic a) 1 only
growth initially leads to increased economic b) 2 only
inequality in an economy. c) Both 1 and 2
b) Phillips Curve measures the degree of d) Neither 1 nor 2
income inequality in an economy.
c) A Gini Coefficient of 1 means that everyone Q.41) In a given year in India, official poverty
in the population has the same income. lines are higher in some states than in other
d) The Gini coefficient for India has rapidly because
reduced during the last decade. a) Poverty rates vary from state to state
b) Price levels vary from state to state
Q.38) Which of the following are the
components of India’s Foreign Exchange

x aammss. o
. rr
stategg
c) Gross state product varies from state to

o
Reserves?
1. Special Drawing Rights
2. Investment in US treasury bonds by Reserve PPddff44ee x d) Quality of public distribution varies from
state to state

Bank of India Q.42) In relation to foreign currency market,

3. Silver holdings of the Reserve Bank of India which of the following correctly describes a
4. Reserve tranche position with International ‘hard currency’?
Monetary Fund a) Currency which is very volatile and has low
Select the correct answer from the options demand in the forex market.
given below: b) Currency which has high liquidity and
a) 1, 2, and 4 only demand in the forex market
b) 2 and 3 only c) Currency which is under pressure of
c) 1 and 4 only depreciation due to exit of other currencies
d) 1, 2, 3, and 4 d) Currency which enters the market due to
re-purchasing of bonds by the Government
Q.39) Which of the following conditions is not before their maturities.
conducive for the occurrence of the
demographic dividend in a country?

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Page 15

SFG 2023 |LEVEL 1 |Test 14 |

Q.43) With reference to the General Agreement Q.46) With reference to the Real Effective
on Trade in Services (GATS) of World Trade Exchange Rate (REER), which of the following
Organization (WTO), consider the following statement is incorrect?
statements: a) It is used as a measure for observing
1. It is an international treaty which was external competitiveness of Indian economy
created as a result of Uruguay Round b) It captures inflation differential between
Negotiations. India and its trading partners.
2. All the services are covered within the ambit c) It signifies the quantity of domestic goods
of GATS. required to purchase one unit of a given
3. The services covered by the treaty are basket of foreign goods
automatically opened to competition. d) An increase in a country’s REER indicates
Which of the statements given above are that its exports are becoming cheaper.
incorrect?
a) 1 and 2 only Q.47) In the context of international trade,
b) 2 and 3 only which one of the following conditions make a
c) 1 and 3 only product eligible for 'Countervailing duty'?
d) 1, 2 and 3 a) When the product has potential of harming
the environment of destination country.

Q.44) Higher economic growth would b) When the product has potential of
necessarily lead to which of the following? destabilising the currency of importing
country.
1. Reduction in inequality
c) When the product has not followed the
2. Reduction in poverty
international sanitary rules while
3. Reduction in unemployment
production process.
Select the correct answer using the code given
d) When the product has received unfair
below:
advantage through export subsidy in the
a) 1 and 2 only source country.
b) 2 and 3 only
c) 1 only
Q.48) Why women compared to men have a
d) None of the Above

x aammss. o
. orrgg
higher incidence of poverty in India?
1. The income disparity between men and
Q.45) The Council on Energy, Environment and
Water (CEEW) has recently released a study
titled ‘Managing Forest Fires in a Changing
Climate’, In this context, consider the following
PPddff44ee x women
2. Women are increasingly employed in the
unorganized sector
statements: 3. Discrimination against women in the
inheritance of land and property.
1. Most of the Northeastern Region has not
witnessed forest fire incidences in recent Select the correct answer using the codes given
decades due to cooler climate. below:
2. In India, there has been a ten-fold increase a) 1 and 2 only
in forest fires in the past two decades. b) 2 and 3 only
3. Among the Indian states, Tamil Nadu has c) 1 and 3 only
had the highest number of forest fire d) 1, 2 and 3
incidences in the last two decades.
Which of the statements given above is/are
correct?
a) 1 and 2 only
b) 2 only
c) 2 and 3 only
d) 1, 2 and 3

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SFG 2023 |LEVEL 1 |Test 14 |

Q.49) In the context of Agricultural land

holdings in India, consider the following
statements:
1. The highest number of operational
agricultural landholdings is in Maharashtra.
2. The number of small and marginal farmers
declined drastically in the last decade.
3. Higher proportion of women hold land in
northern states as compared to southern
states.
Which of the above statements is/are correct?
a) 1 only
b) 1 and 2 only
c) 3 only
d) None

Q.50) Consider the following statements with

reference to Kodavas:
1. They are an ethnolinguistic group from the
region of Coorg in Karnataka.
2. They belong to a traditional landless group
with hunting as their survival occupation.
3. In India, they have been permitted to carry
firearms without a license.
4. Kodava Takke Language has been classified
as an Endangered Language by UNESCO.
Which of the statements given above are
correct?
a) 1 and 2 only
b) 1, 2 and 4 only

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c) 1, 3 and 4 only
d) 2, 3 and 4 only
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Page 1 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Q.1) With reference to casual workers employed in India, consider the following statements:
1. All casual workers are entitled for Employees Provident Fund Coverage.
2. All casual workers are entitled for regular working hours and overtime payment.
3. The government can by a notification specify that an establishment or industry shall pay wages only
through its bank account.
Which of the above statements are correct?
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3

Ans) b
Exp) Option b is the correct answer.
Statement 1 is incorrect. A casual worker is a worker on a temporary employment with generally limited
entitlements and little or no security of employment. The main attribute is the absence of a continuing
relationship of any stability with an employer, which could lead to their not being considered ‘employees’ at
all.
Now, EPFO registration generally applies only to establishments that have 20 or more workers. So, if we go
by this “20 worker” technical rule, then if a casual worker is employed in an organisation with less than 20
workers, then he will not be entitled to get EPF coverage.
Statement 2 is correct. Casual workers (should) have all those rights that are enjoyed by regular workers,
since the definition of employee includes casual labour as per Supreme Court guidelines. Employees in
India are entitled for regular working hours and overtime payment according to Minimum Wages Rules,
1950.
Statement 3 is correct. The Payment of Wages (Amendment) Act 2017 provides that the Government
may specify that the employer of any industrial or other establishment shall pay wages to
every employee only by cheque or by crediting the wages in his bank account.
Source) UPSC CSE Pre 2021

x aa mss. o
. orrgg
Q.2) Which of the following policy actions can be considered as a move towards ‘Capital Account

m
Convertibility’ in India’s Balance of Payment system?

d
PPdff44ee x
1. Increasing the foreign portfolio investment limits in the Indian debt markets.
2. Easing of the external commercial borrowing framework.
3. Liberalized Foreign Direct Investment
4. Limiting NRI’s investment in G-sec
Select the correct answer using the codes given below:
a) 1 and 2 only
b) 2 and 3 only
c) 1, 2, and 3 only
d) 1, 2, 3 and 4

Ans) c
Exp) Option c is the correct answer.
Capital account convertibility means the freedom to conduct investment transactions without any
constraints. Typically, it would mean no restrictions on the amount of rupees you can convert into foreign
currency to enable you, an Indian resident, to acquire any foreign asset. Similarly, there should be no
restraints on a NRI bringing in any amount of dollars or dirhams to acquire an asset in India.

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Page 2 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Statements 1, 2 and 3 are correct. The recent moves towards Capital account convertibility
include increasing the foreign portfolio investment limits in the Indian debt markets, introducing the
Fully Accessible Route (FAR) — through which non-residents can invest in specified government securities
without any restrictions and the easing of the external commercial borrowing framework by relaxing end-
user restrictions. Inward FDI is allowed in most sectors, and outbound FDI by Indian incorporated entities
is allowed as a multiple of their net worth.
Statement 4 is incorrect. Limitation on Non-Resident Indians to invest in Government
securities restrict the flow of currency and hence it does not aid the process of full capital account
convertibility in India.
Knowledge Base: BoP - Capital and current account.
Source: All you want to know about capital account convertibility - The Hindu BusinessLine

Q.3) Which of the following statements correctly defines the term ‘Official Reserve Transactions’?
a) All the transactions made out of Consolidated Fund of India.
b) Withdrawal of money from the Special Drawing Rights with the IMF.
c) Transactions made to bridge the gap in the balance of payments.
d) Reserves used by the Government before the passage of the Money Bill.

Ans) c
Exp) Option c is the correct answer.
The balance of payments (BoP) records the transactions in goods, services and assets between residents of
a country with the rest of the world for a specified time period typically a year.
Option c is correct: A country could use its reserves of foreign exchange in order to balance any deficit
in its balance of payments. Such transactions are called official reserve transactions. Since the official
reserve transactions are made to bridge the gap in the BoP, they are seen as the accommodating item in
the BoP (all others being autonomous).
Official reserve transactions are more relevant under a regime of fixed exchange rates than when exchange
rates are floating. Flexible or Floating Exchange Rate is determined by the market forces of demand and
supply. In Fixed Exchange Rate system, the Government fixes the exchange rate at a particular level.
Source: Pages 5-8, Chapter 6, NCERT Macroeconomics

x aammss. o
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d
PPdff44ee x
Q.4) In the questions given below, there are two statements marked as Assertion (A) and Reason (R). Read
the statements and choose the correct option.
Assertion (A): Petroleum products are one of the important export commodities for India.
Reason (R): The refining industry has been modernized and upgraded continuously for achieving cost
reduction.
Which of the Options given below is correct?
a) Both (A) and (R) are true and (R) is the correct explanation of (A).
b) Both (A) and (R) are true and (R) is not the correct explanation of (A).
c) (A) is correct but (R) is wrong.
d) (A) is wrong but (R) is correct.

Ans) a
Exp) Option a is the correct answer.
Owing to rise in global crude oil prices and cheaper crude oil sourced from Russia have lifted the share of
India’s petroleum products in exports to their highest ever at 21.2 per cent during April-August 2022.

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Page 3 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Assertion is correct: India is one of largest importers of crude oil but it is also one of the largest
exporters of refined oil given the presence of refineries. Petroleum products is one of the important export
commodities for India.
Reason is correct: The refining industry has been modernized and upgraded continuously with the
indigenous and imported technologies for refining cost reduction. From a deficit scenario in 2001 the
country has achieved self-sufficiency in refining and is the major exporter of quality petroleum products.
India, has achieved the refining capacity of about 249 million tonnes a year, equivalent to about 5 million
barrels per day (bpd). Refining capacity is expected to climb to 298 million tonnes a year by 2025.
Source: Page 89, Ecoomic Survey PDF
https://www.indiatoday.in/india/story/why-indian-government-exports-petrol-at-half-the-price-we-
pay-1321786-2018-08-23
https://www.business-standard.com/article/economy-policy/india-s-petroleum-exports-reach-
record-high-at-21-2-during-apr-aug-period-122091401152_1.html

Q.5) “This phenomenon occurs when a huge amount of matter, like a cluster of galaxies, creates a
gravitational field that distorts and magnifies the light from distant galaxies that are behind it but in the
same line of sight. This effect allows researchers to study the details of early galaxies too far away to be
seen with current technology and telescopes.”
Which one of the following interstellar phenomena is described in the above given paragraph?
a) Gamma Ray Burst
b) Stephan's Quintet
c) Gravitational Lensing
d) Fast Radio Burst

Ans) c
Exp) Option c is the correct answer.
NASA’s Hubble Space Telescope has discovered the farthest star ever seen to date. They have nicknamed
that star as “Earendel”. This discovery of the most distant star was made possible by a phenomenon known
as ‘gravitational lensing’.

x aamms . o
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Gravitational Lensing: A gravitational lens can occur when a huge amount of matter, like a cluster of

s
d
PPdff44ee x
galaxies, creates a gravitational field that distorts and magnifies the light from distant galaxies that are
behind it but in the same line of sight. The effect is like looking through a giant magnifying glass. This
effect allows researchers to study the details of early galaxies too far away to be seen with current
technology and telescopes.

This effect was predicted to exist by Albert Einstein’s General Theory of Relativity in the early 20th
century.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Knowledge Base: Earendel: It is the most distant star discovered by the Hubble Space Telescope. The star
has been officially called WHL0137-LS, but it has been nicknamed “Earendel”, which means “morning star”
in Old English. The star is more than 12.9 billion light-years away and likely existed within the first billion
years after the beginning of the universe.
Source: 9 PM Daily Current Affairs Brief – April 26th, 2022 -ForumIAS Blog
Gravitational Lensing (hubblesite.org)

Q.6) With reference to the ‘Developing District as Export Hub’ initiative, consider the following statements:
1. It is an initiative of the Directorate General of Foreign Trade (DGFT).
2. It includes the export of registered Geographical Indication (GI) products from the districts.
3. It will be overseen by the senior-most Member of Parliament from the District.
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 only
c) 1 and 3 only
d) 3 only

Ans) a
Exp) Option a is the correct answer.
Every District has products and services which are being exported, and can be further promoted, along
with new products / services, to increase production, grow exports, generate economic activity and
achieve the goal of AtmaNirbhar Bharat, Vocal for local and Make in India.
Statement 1 is correct: Department of Commerce, through Directorate General of Foreign Trade (DGFT)
is working with the State / UT Governments in a phased manner to achieve this objective through
Developing District as Export Hub Scheme.
Statement 2 is correct: In the initial phase, product/services (GI products, agricultural clusters, toy
clusters etc.) with export potential in each District have been identified. Institutional mechanism in the
form of State Export Promotion Committees (SEPC) at the state level and District Export Promotion
Committees (DEPCs) at the district level are being created to provide support for export promotion and to
address the bottlenecks for export growth in the districts.

x aammss. o
. orrgg
d
PPd
the District and co-chaired by designated DGFT Regional Authority.
ff44ee x
Statement 3 is incorrect: DEPCs may be headed by DM/Collector/DC/District Development Officer of

Source: https://commerce.gov.in/wp-content/uploads/2021/03/Devolping-Districts-as-Export-
Hubs.pdf

Q.7) Which of the following best describes the term Net International Investment Position (NIIP)?
a) It is the difference between a nation’s gross national product (GNP) and its gross domestic product (GDP).
b) It is the difference between a nation's stock of foreign assets and a foreigner's stock of that nation's
assets.
c) It is the difference between a nation’s Foreign Direct Investments (FDIs) and Foreign Portfolio
Investments (FPIs)
d) It is difference between a nation’s imports from foreign nations and domestic exports to foreign nations.

Ans) b
Exp) Option b is the correct answer.
Net International Investment Position (IIP) can be viewed as a nation’s balance sheet with the rest of the
world at a specific point in time. NIIP is an important barometer of a nation’s financial condition and

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Page 5 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

creditworthiness. A nation with a positive NIIP is a creditor nation, while a nation with a negative NIIP is a
debtor nation.
Option a is incorrect: Net foreign factor income (NFFI) is the difference between a nation’s gross national
product (GNP) and its gross domestic product (GDP).
Option b is correct: A net international investment position (NIIP) measures the gap between a nation's
stock of foreign assets and a foreigner's stock of that nation's assets.
Option c is incorrect: Foreign investments can be classified as Foreign direct investments (FDIs) and
Foreign Portfolio Investments (FPIs). NIIP does not reflect the difference between a nation’s Foreign
Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs)
Option d is incorrect: Net Trade Balance defines the difference between a nation’s imports from foreign
nations and domestic exports to foreign nations.
Source: https://www.investopedia.com/terms/n/net-international-investment-position-niip.asp

Q.8) With reference to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS),
consider the following statements:
1. It guarantees 100 days of skilled manual work.
2. All districts except for those that have a 100% urban population are covered under it.
3. It is monitored by the Ministry of Labour and Employment.
4. It is mandatory to conduct Social Audit of all Works executed under MGNREGA.
Which of the statements given above are correct?
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 4 only
d) 3 and 4 only

Ans) c
Exp) Option c is the correct answer.
The National Rural Employment Guarantee Act, 2005 introduced the scheme. In 2010, NREGA renamed as
MGNREGA. It is one of the world’s largest employment guarantee programs.

x aa mss. o
. orrgg
Statement 1 is incorrect: Under the scheme, every rural household whose adult member volunteers to do

m
to enhance the livelihood security of people.
d
PPd f 4ee x
unskilled manual work is entitled to get at least 100 days of wage employment in a financial year. It aims

f 4
Statement 2 is correct: The Act currently covers all districts except for those that have a 100% urban
population.
Statement 3 is incorrect: Ministry of Rural Development (MRD), Government of India in association with
state governments monitors the implementation of the scheme.
Statement 4 is correct: Section 17 of the MGNREGA has mandated Social audit of all Works executed under
the MGNREGA. Social Audit is the examination and assessment of a programme/scheme conducted with
the active involvement of people and comparing official records with actual ground realities. Social Audit
is a powerful tool for social transformation, community participation and government accountability.
Knowledge Base:
Features of MGNREGS:
1) It is a Demand-driven scheme. Worker to be hired when he demands and not when the Government
wants it.
2) Gram Panchayat is mandated to provide employment within 15 days of work application failing which
worker is entitled to unemployment allowance.
3) Payment of wages within 15 days of competition of work failing which worker is entitled to delay
compensation of 0.05% per day of wages earned.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

4) Women empowerment: Minimum one-third of the workers should be women
5) Minimum wages: Wage payment should be according to the Minimum Wages Act 1948 for agricultural
laborers in the State.
6) Gram Sabhas conduct Social audits to enable the community to monitor the implementation of the
scheme.
7) Both the Center and the States share the funding of the scheme.
8) Significance of MGNREGA
9) The programme mandates that at least 60 percent of the works undertaken must be related to land and
water conservation.
10) The water conservation structures built under MGNREGA have potentially conserved at least 28,741
million cubic metres of water in the past 15 years.
11) The scheme provides support in times of distress and individuals are not forced to migrate into cities.
12) The program provided a sigh of relief to millions of migrants and other people who lost their livelihood
in the pandemic times.
13) The scheme has led to the creation of common community assets. These assets are built by communities
on common lands thereby creating a sense of responsibility towards the structure which results in
better care.
Source: https://blog.forumias.com/mgnrega/
https://blog.forumias.com/mgnrega-issues-and-significance-explained-pointwise/

Q.9) With reference to the international trade, consider the following statements:
1. Tariffs are a type of trade barrier that can have the effect of raising the relative prices of imported
products.
2. The World Trade Organisation agreements strictly prohibit the imposition of trade barriers.
3. ‘Quotas’ are mainly aimed at generating extra revenue for the government.
Which of the statements given above is/are correct?
a) 1 only
b) 3 only
c) 1 and 2 only
d) 2 and 3 only

x aammss. o
. orrgg
Ans) a
Exp) Option a is the correct answer.
d
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A trade barrier refers to any regulation or policy that restricts international trade, especially tariffs, quotas,
licenses etc.
Statement 1 is correct: Tariffs are a type of protectionist trade barrier that can come in several forms.
Tariffs may benefit a few domestic sectors. Tariffs are paid by domestic consumers and not the exporting
country, but they have the effect of raising the relative prices of imported products.
Statement 2 is incorrect: The World Trade Organisation agreements in general follows the following
principles:
(a) Most Favored Nation- All nations should be treated equally. No one country can grant any other member
country any special favour.
(b) Non-Discrimination
(c) National Treatment- Same treatment to all products, either local or foreigners.
(d) Reciprocity- Lowering of import duties and other trade barriers in return for similar concessions from
another country.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

The Technical Barriers to Trade Agreement (TBT) tries to ensure that regulations, standards, testing and
certification procedures do not create superfluous obstacles to trade. The WTO agreements also allow
exceptions in some circumstances. Three of these issues are:
(a) actions taken against dumping (selling at an unfairly low price)
(b) subsidies and special “countervailing” duties to offset the subsidies
(c) emergency measures to limit imports temporarily, designed to “safeguard” domestic industries.
Statement 3 is incorrect: Quotas are a type of nontariff barrier governments enacts to restrict trade.
Quotas focus on limiting the quantities of a particular good that a country imports or exports for a specific
period, whereas tariffs impose specific fees on those goods.
Governments design tariffs to raise the overall cost to the producer or supplier seeking to sell products
within a country. Tariffs provide a country with extra revenue and they offer protection to domestic
producers by causing imported items to become more expensive.
Quotas are more effective in restricting trade than tariffs, especially if domestic demand for something is
not price-sensitive. Applied selectively to various countries, they can be utilized as a coercive economic
weapon.
Knowledge Base:
Types of Trade barriers:
(a) Tariff Barriers. These are taxes on certain imports. They raise the price of imported goods making
imports less competitive.
(b) Non-Tariff Barriers. These involve rules and regulations which make trade more difficult. For example,
if foreign companies have to adhere to complex manufacturing laws it can be difficult to trade.
(c) Quotas. A limit placed on the number of imports.
(d) Voluntary Export Restraint - Similar to quotas, this is where countries agree to limit the number of
imports.
(e) Subsidies. A domestic subsidy from government can give the local firm a competitive advantage.
(f) Embargo. A complete ban on imports from a certain country.
Source: https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm
https://www.investopedia.com/terms/q/quota.asp#:~:text=A%20quota%20is%20a%20government,bet
ween%20them%20and%20other%20countries.
https://www.economicshelp.org/blog/glossary/trade-barriers/

x aammss. o
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Q.10) The ‘FASTER (Fast and Secured Transmission of Electronic Records)’ Platform was launched to-
a) improve accessibility of police records to the central agencies through encrypted and secure platform.
b) communicate interim orders, stay orders, and bail orders of the Supreme Court to the concerned
authorities.
c) faster redressal of corporate grievances through inter-departmental coordination across different
ministries.
d) provide information regarding financial frauds for effective forensic audit and investigation.

Ans) b
Exp) Option b is the correct answer.
FASTER (Fast and Secured Transmission of Electronic Records) Platform is a digital platform to
communicate interim orders, stay orders, and bail orders of the Supreme Court to authorities concerned
through a secured electronic communication channel. It is developed by Registry of the Supreme Court
in collaboration with the National Informatics Centre (NIC).
FASTER Cell has been established in the Registry of the Supreme Court. The cell will transmit digitally
signed records of proceedings or orders related to bail and release passed by the court to the nodal officers
and duty holders concerned through email.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

To reach all districts of India, 73 nodal officers have been nominated at various levels. All nodal officers have
been connected through a specific Judicial Communication Network (JCN) by creating a secured pathway.
Source: FASTER Platform: CJI launches software to transmit court orders swiftly -ForumIAS Blog

Q.11) In the context of India, which of the following factors is/are contributor/s to reducing the risk of a
currency crisis?
1. The foreign currency earnings of India’s IT sector
2. Increasing the government expenditure
3. Remittances from Indians abroad
Select the correct answer using the code given below.
a) 1 only
b) 1 and 3 only
c) 2 only
d) 1, 2 and 3

Ans) b
Exp) Option b is the correct answer.
A decline in the value of a country's currency brings currency crisis. In this situation, there is speculation
in the market that the central bank of the country does not have sufficient foreign exchange reserves.
Statements 1 and 3 are correct. The foreign currency earnings of India’s IT sector and remittances increase
country’s foreign reserves, thus increasing demand for Indian currency and reducing risk of currency crisis.
Statement 2 is incorrect. Increasing the government expenditure does not bring foreign currency in the
country.
Source) UPSC CSE Pre 2019

Q.12) With reference to the Special Economic Zones (SEZ) in India, consider the following statements:
1. Since it is treated as a foreign territory, the value added by firms in SEZ is not added to the Gross Domestic
Product of India.
2. The firms in the SEZ are not allowed to sell its products in India’s domestic market.

. o
. orrgg
3. Units in SEZ are required to be net foreign exchange earners within a specified time limit.

x aammss
x
Which of the statements given above is/are correct?
a) 1 and 3 only
b) 3 only
c) 1 only
d
PPdff44ee
d) 2 and 3 only

Ans) b
Exp) Option b is the correct answer.
The Special Economic Zones (SEZs) Act was enacted in 2006 with an aim to create special economic zones.
Units in SEZs used to enjoy 100% income tax exemption on export income for the first five years, 50% for
the next five years and 50% of the ploughed back export profit for another five years.
Government plans to table the Development of Enterprise and Service Hubs (DESH) Bill in the Parliament.
This bill will replace the current Special economic zones (SEZ) Act, 2005.
Statement 1 is incorrect: Special Economic Zone (SEZ) is a specifically delineated duty-free enclave and
shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs only. The
value added by firms is added to the Gross Domestic Production. The SEZ is a geographical region that
has economic laws different from a country’s typical economic laws. The goal is to increase foreign
investments.

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Page 9 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Statement 2 is incorrect: In the current SEZ regime, a firm is allowed to sell in the domestic market after
the duty is paid on the final product.
Statement 3 is correct: Units in SEZ are required to achieve net foreign exchange positive cumulatively
in five years (i.e, export more than they import).
Source: https://blog.forumias.com/govt-proposes-new-sez-law/
https://blog.forumias.com/draft-development-of-enterprise-and-service-hubs-desh-bill-sezs-to-be-
turned-into-mfg-hubs-for-domestic-markets/

Q.13) Which of the following statements is the correct description of the term “Antitrust cases” that was
recently in news?
a) It is a regulation that encourages competition by limiting the market power of any particular company.
b) It refers to a situation where a group of similar companies agrees on prices in order to increase profits
and limit competition.
c) It is a particular form of collusive behaviour by which firms agree to submit common bids to eliminate
price competition.
d) It refers to the legal action brought against companies that are charged with limiting free competition
in the market.

Ans) d
Exp) Option d is the correct answer.
Competition Commission of India (CCI) has fined Google twice — for abusing its dominant position in the
market with its Android mobile operating system (OS) and for anti-competitive policies in its in-app billing
and payment processing.
Option a is incorrect: Antitrust refers to a field of economic policy and laws dealing with monopoly and
monopolistic practices. Antitrust laws prevent multiple firms from colluding or forming a cartel to limit
competition through practices such as price fixing. Antitrust laws are regulations that encourage
competition by limiting the market power of any particular firm. This often involves ensuring that
mergers and acquisitions don't overly concentrate market power or form monopolies, as well as breaking
up firms that have become monopolies.

x aamms . o
. orrgg
Option b is incorrect: A cartel is an association of similar companies or businesses that have grouped

s
together in order to prevent competition and to control prices.

d
PPdff44ee x
Option c is incorrect: Bid rigging is a particular form of collusive price-fixing behaviour by which firms
coordinate their bids on procurement or project contracts. There are two common forms of bid rigging. In
the first, firms agree to submit common bids, thus eliminating price competition. In the second, firms
agree on which firm will be the lowest bidder and rotate in such a way that each firm wins an agreed upon
number or value of contracts.
Option d is correct: Antitrust case is a legal action brought against parties who are charged with limiting
free competition in the market place. The Competition Commission of India (CCI) is empowered under the
Competition Act, 2002 to check whether companies, especially large tech companies are not eliminating
healthy competition in the market and creating a monopoly.
Knowledge Base:
Under Section 27 of the Competition Act, CCI has the power to impose such a penalty as it may deem fit
which shall be not more than 10% of the average turnover for the last three preceding financial years upon
each of such persons or enterprises which are parties to such agreements or abuse.
In 2014, the Supreme Court ruled that the penalty should be imposed not on the “total/ entire turnover of
the offending company” but on “relevant turnover”.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Source: https://blog.forumias.com/antitrust-cases-against-google-how-regulator-decided-fine/
https://www.vocabulary.com/dictionary/antitrust%20case#:~:text=Definitions%20of%20antitrust%20
case,action%20at%20law%2C%20legal%20action
https://www.moneycontrol.com/news/business/googles-antitrust-cases-in-india-other-markets-a-
quick-look-7914881.html
https://www.oecd.org/regreform/sectors/2376087.pdf

Q.14) With reference to the Indian economy, consider the following statements:
Assertion: The share of formal jobs has remained greater than informal jobs in India in post-liberalization
period.

g
Reason: The share of the services sector in India’s Gross Domestic Product has remained higher than
agriculture sector, in the post-liberalization period.

xxaammss. o
. orr g
Which of the following options is correct?

d
PPdff44ee
a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion.
b) Both Assertion and Reason are correct but Reason is not the correct explanation of the Assertion.
c) Assertion is correct but Reason is incorrect.
d) Assertion is incorrect but Reason is correct.

Ans) d
Exp) Option d is the correct answer.
Liberalisation was expected to formalise India’s largely informal agrarian economy, with labour moving
from agriculture to the organised industrial sector. But we have witnessed contractualisation of the
employment.
Assertion is incorrect: The quality of employment in India has declined in the post-liberalisation period.
Of around 61 million jobs created in India over 22 years post-liberalisation of the economy, 92% were
informal jobs, according to an analysis of National Sample Survey Office (NSSO) data for 2011-12. While
formal workers comprised 6% of the total workforce in 1999-2000, this increased to around 9% in 2011-12,
showing that the jobs that were created in the formal sector were mainly informal, employing workers with
low earnings and with limited or no social protection.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Reason is correct: Agriculture accounted for nearly 30 per cent of the total GDP in 1991, and now accounts
for 17.4 per cent of the economy. The services sector presently contributes nearly 54 per cent to domestic
GDP and this was 39 per cent in 1991.
The industry sector's contribution to GDP stands at 29 per cent now against 30 in 1991.
Services sector contributes over 50 per cent to India's GDP. While Covid-19 pandemic has had an adverse
impact on most sectors of the economy, the services sector has been the worst affected as its' share in
India's GVA declined from 55 per cent in 2019-20 to 53 per cent in 2021-22.
Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1793804
https://economictimes.indiatimes.com/markets/stocks/news/since-1991-budget-size-grew-19-times-
economy-9-times-your-income-5-times/articleshow/62735382.cms?from=mdr
https://www.business-standard.com/article/jobs/90-of-jobs-created-over-two-decades-post-
liberalisation-were-informal-119050900154_1.html

Q.15) Consider the following statements regarding ‘Rashtriya Gram Swaraj Abhiyan (RGSA)’:
1. The objective of the scheme is to improve the governance capabilities of Panchayati Raj Institutions.
2. The scheme only covers Panchayati Raj Institutions created under Part IX of Indian Constitution.
3. It is a Central Sector Scheme having no financial contribution from the state Governments.
Which of the statements given above is/are correct?
a) 1 only
b) 1 and 2 only
c) 2 and 3 only
d) 1 and 3 only

Ans) a
Exp) Option a is the correct answer.
Statement 1 is correct: Rashtriya Gram Swaraj Abhiyan (RGSA) aims to improve the governance
capabilities of Panchayati Raj Institutions. The scheme was first approved in 2018 for implementation
from 2018-19 to 2021-22. It will comprise Central and State components. The Central Components will be
fully funded by the Government of India. The funding pattern for State Components will be in the ratio of

100% for UTs.

x aammss. o
. orrgg
60:40 for Centre and States respectively, 90:10 for NE, Hilly States and Union Territory (UT) of J&K and

d
PPdff44ee x
Statement 2 is incorrect: The scheme of Rashtriya Gram Swaraj Abhiyan will extend to all States and UTs
of the country and will also include institutions of rural local government in non-Part IX areas, where
Panchayats do not exist.
Statement 3 is incorrect: Cabinet Committee on Economic Affairs has approved the continuation of
revamped Centrally Sponsored Scheme of Rashtriya Gram Swaraj Abhiyan (RGSA). It is continued for
implementation during the period from 2022 to 2026 at a total cost of ₹5911 crore including Central Share
of ₹3700 crore and State share of ₹2211 crore.
Source: Cabinet approves continuation of revamped Centrally Sponsored Scheme of Rashtriya Gram
Swaraj Abhiyan(RGSA) -ForumIAS Blog

Q.16) The Ministry of Women and Child Development does not consider the Global Hunger Index (GHI) as
a realistic parameter because of which of the following reasons?
a) All the indicators used to assess hunger levels are children-related that does not represent the entire
population.
b) Complete absence of opinion polls from the methodology of the index.
c) The GHI estimations are based on a very small sample size.
d) The base year for the GHI is too old to represent the current nutritional conditions.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Ans) c
Exp) Option c is the correct answer.
The Global Hunger Report 2022 released by Concern Worldwide and Welt Hunger Hilfe, Non-Government
Organisations from Ireland and Germany respectively, has ranked India at 107 among 121 countries. The
index is an erroneous measure of hunger and suffers from serious methodological issues.
Option a is incorrect: The Indian government has primarily maintained two major objections over the past
two installments of the GHI. In a press release, the ministry of women and child development (MWCD) says,
"Three out of the four indicators used for calculation of the index are related to the health of children
and cannot be representative of the entire population." So, all indicators are not children-related.
Option b and d are incorrect: India has not pointed out these as a reason to criticize the GHI.
Option c is correct: The ministry of women and child development claims that the fourth and most
important indicator estimate of Proportion of Undernourished (PoU) population is based on an opinion
poll conducted on a very small sample size of 3000.
The FAO estimate is based on “Food Insecurity Experience Scale (FIES)” Survey Module conducted through
Gallop World Poll, which is an “opinion poll” based on “8 questions”. The data collected from a miniscule
sample for a country of India’s size through FIES has been used to compute PoU value for India which is
not only wrong and unethical; it also reeks of obvious bias.
Knowledge Base:
India is ranked second lowest amongst the SAARC nations, with Pakistan at 99, Bangladesh at 84, Nepal at
81, and even the crisis-stricken Sri Lanka at 64. Only Afghanistan is ranked lower at 109.
The GHI official website mentions that they don't use the FIES and instead rely on the prevalence of
undernourishment indicators assessed by the FAO using the Food Balance Sheet, which is based primarily
on data officially reported by member countries, including India.
Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1868103

Q.17) Consider the following pairs with reference to various Prime Ministers of India and the Poverty
alleviation schemes introduced under their tenure:
Prime Minister Poverty alleviation
scheme introduced
by the government

x aammss. o
. orrgg
1. Jawahar Lal
Nehru
Integrated
Development
Programme.
Rural

d
PPdff44ee x
2. Indira Gandhi Jawahar Rozgar
Yojana
3. Lal Bahadur Food for Work
Shastri Programme
4. P.V. National Social
Narsimha Rao Assistance
Programme
How many pairs given above are correct?
a) Only one pair
b) Only two pairs
c) Only three pairs
d) All four pairs.

Ans) a
Exp) Option a is the correct answer.

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Page 13 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Poverty alleviation programmes are launched by government to remove poverty and provide better access
to work, food and basic facilities to the poor people.
Pair 1 is incorrect: The Integrated Rural Development Program (IRDP) was launched by the Government of
India (Morarji Desai) during 1978 and implemented during 1980. The program aimed at providing
employment opportunities to the poor and a chance to enhance their skill sets. The focus of IRDP was also
mainly on the target group i.e. small and marginal farmers, agricultural labourers and rural artisans. Its goal
is to provide long term employment to disadvantage group and increasing rural small scale industry
production.
Pair 2 is incorrect: Jawahar Rozgar Yojana was launched in 1989(V.P. Singh) launched with the merger of
two schemes National Rural Employment Programme and Rural Landless Guarantee Programme (RLGP)
aimed at providing sustainable employment to rural population.
Objectives of Jawahar Rozgar Yojana:
(a) Providing employment opportunities to unemployed and under-employed population in the rural areas.
(b) Developing rural Infrastructure and establishments for the benefits of the rural areas.
(c) Preference was given to the OBCs, SC/STs etc.
(d) Special reservation for women 30% of the employment opportunities.
Pair 3 is incorrect: Food for work programme was started in 1970s. Under this scheme by food grains
were provided instead of wages aiming to address poverty and food security in backward regions. Under
this scheme some unskilled manual labour like constructing kutcha road, cleaning historical monuments
etc. was given to disadvantage group and were provided with food grains. This scheme later in 2001
revamped into National food for work programme.
Pair 4 is correct: In 1995, during P.V. Narsimha Rao government, National Social Assistance programme
(NSAP) was launched. It represents a significant step towards the fulfilment of the Directive Principles of
State Policy under article 41 and 42 enshrined in the Constitution of India which encourage the State to
undertake number of welfare measures. The National Social Assistance Programme (NSAP) then comprised
of
1) National Old Age Pension Scheme (NOAPS),
2) National Family Benefit Scheme (NFBS) and
3) National Maternity Benefit Scheme (NMBS).

x aamms . o
. orrgg
These programmes target at providing social assistance benefit to the widows, destitute, aged, the BPL

s
d
PPdff44ee x
households in the case of death of the primary breadwinner and for maternity. It ensures minimum national
standards in addition to the benefits that the States were then providing or would provide in future.
Source: https://www.bankbazaar.com/saving-schemes/integrated-rural-development-program.html
https://www.indiamapped.com/yojanas-in-india/jawahar-rozgar-yojana/
https://www.indiamapped.com/yojanas-in-india/food-for-work-programme/
https://nsap.nic.in/circular.do?method=aboutus

Q.18) With reference to the poverty levels, consider the following statements:
1. Absolute poverty is when people earn just enough money to afford the bare necessities of life.
2. Relative poverty is when people earn just enough money to maintain the average standard of life in the
society of their living.
Which of the statements given above is/are incorrect?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

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Page 14 of 37

SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Ans) c
Exp) Option c is the correct answer.
Poverty line refers to the limit according to the government standards below which one is classified as
poor. In India, Tendulkar Committee has formulated a new poverty line in (2004-2005). According to this,
uniform poverty line basket for rural and urban areas of each state has been defined.
On the basis of income and consumption, poverty is classified into Absolute poverty and Relative poverty.
Statement 1 is incorrect: Absolute poverty is when household income is below a certain level. This makes
it impossible for the person or family to meet basic needs of life including food, shelter, safe drinking water,
education, healthcare, etc.
Statement 2 is incorrect: Relative poverty is the condition in which people lack the minimum amount of
income needed in order to maintain the average standard of living in the society in which they live.
Relative poverty is defined relative to the members of a society and, therefore, differs across countries.
People are said to be impoverished if they cannot keep up with the standard of living as determined by
society.
Relative poverty also changes over time. As the wealth of a society increases, so does the amount of income
and resources that the society deems necessary for proper conditions of living.
Source: https://www.endpoverty.org/blog/relative-poverty-vs-absolute-poverty
https://www.habitatforhumanity.org.uk/blog/2018/09/relative-absolute-poverty/
https://www.thehindu.com/news/national/415-crore-indians-exited-multi-dimensional-poverty-
since-2005-
06/article66023269.ece#:~:text=The%20incidence%20of%20poverty%20there,10%20poorest%20in%20
2019%2F2021.

Q.19) Which of the following statements are correct regarding the challenges in the school education in
India?
1. Prevalence of rote learning as a practise of studying in most schools.
2. Lack of standard assessment method to track the student performance in schools.
3.Burden on teachers to spend their time in non-teaching tasks.
4. Lack of capacity building of teachers
Select the correct answer using the code given below:

x aammss. o
. orrgg
x
a) 1 and 3 only
b) 1, 2 and 3 only
c) 2, 3 and 4 only
d) 1, 2, 3 and 4
d
PPdff44ee
Ans) d
Exp) Option d is the correct answer.
Sustainable Development Goal 4 is about quality education. It aims at securing inclusive and equitable
quality education and promoting lifelong learning opportunities for all.
Statement 1 is correct: Rote learning or memorisation of information based on repetition and recalling.
our education suffers from the drawback of testing knowledge than developing knowledge. It promotes
learning deficit among students specially of primary classes. ASER 2018 showed that in grade 5, only half of
all children could read a grade 2 level text fluently.
Statement 2 is correct: assessments in most of the schools were done in an ad hoc and dispersed manner.
There is a lack of consistent and high-quality data with the purpose of various assessments. Standardized
assessment is missing, which makes it difficult to effectively measure and track student performance.
Statement 3 is correct: School teachers occupied with non-teaching activities leading to degradation of
quality of education in India. Instead of providing education which is their primary role, they have to deal

Forum Learning Centre: Delhi - 2nd Floor, IAPL House, 19 Pusa Road, Karol Bagh, New Delhi - 110005 | Patna - 2nd floor, AG Palace, E Boring Canal Road,
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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

with tasks like election duty, data collection. It increases the stress level among the teachers. According to
the report by the National Institute of Educational Planning and Administration (NIEPA) only 19% of a
teacher’s annual school hours are spent on teaching activities.
Statement 4 is correct: Data from SATH States has shown that teachers’ capacity is very weak on
pedagogy as well as on content of the topics. Particularly in middle and secondary grades. Many teachers
are scoring themselves <60-70% in papers of the grades that they teach. The situation is similar for upper
primary teachers in English, Hindi and Math.
Knowledge Base: National Education Policy (NEP) aims at achieving foundational skills which includes
reading, writing and arithmetic for all children in primary school, and beyond by 2025
Source: https://www.indiatoday.in/education-today/featurephilia/story/how-rote-learning-restricts-
a-child-s-creativity-1739093-2020-11-08
https://www.deccanchronicle.com/nation/current-affairs/220918/teachers-spend-only-191-per-cent-
time-teaching.html
https://www.niti.gov.in/sites/default/files/2021-11/BCG_SATHE_DIGITAL_13112021_0.pdf

Q.20) Which one of the following statements regarding Parliamentary Committee on Official Language is
correct?
a) It is a statutory committee setup in 1976 under the Official Languages Act,1963.
b) It reviews the progress made in the use of Eighth schedule languages for the Official purposes of the
Union.
c) The committee submit its report to the Parliament, from where it is sent to all the State Legislatures.
d) Speaker of the Lok Sabha has been the Chairman of the Committee as per Rules of Procedure of Lok
Sabha.

Ans) a
Exp) Option a is the correct answer.
Statement a is correct: The Committee of Parliament on Official Language came into existence as a result
of the arrangements made in the Official Language Act, 1963. The Act was created to determine the official
language policy of the Union after 26 January, 1965. It envisaged to adopt Hindi for official purposes. Section

x aa mss. o
. orrgg
4 (1) of the Act provides that the Official Language Committee will be constituted after the expiry of ten

m
d
PPd f44e
Committee of Parliament on Official Language was formed in January, 1976.
e x
years from the date of commencement of Section 3 of the said Act (i.e. 26 January, 1965). Accordingly, the

f
Statement b is incorrect: According to the provisions of the Official Language Act, 1963, the duties
entrusted to the Committee are to review the progress made in the use of Hindi (not Eighth Schedule
languages) for the official purposes of the Union.
Statement c is incorrect: The Committee of Parliament on Official Language submit report to the
President (not Parliament) while making recommendations on use of Hindi for the official purposes of the
Union. The President will get that report laid before every House of Parliament thereafter and send it to
all the State Governments.
Statement d is incorrect: As a convention, the union Home minister has been the Chairman of the
Committee from time to time, not the Speaker. The Committee comprises 30 members of Parliament, 20
from Lok Sabha and 10 from Rajya Sabha. These members are to be elected respectively by the members of
Lok Sabha and Rajya Sabha in accordance with the system of proportional representation by means of the
single transferable vote.
Knowledge Base:
Official Language of the Union: Article 343 of the Constitution of India stated that the official language of
the Union is Hindi in Devanagari script, with the official use of English to continue for 15 years from 1947.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Later, the Official Languages Act of 1963 allowed for the continuation of English alongside Hindi in the
Indian government indefinitely until legislation decides to change it.
Source: Union Home Minister presided over the 37th meeting of the Parliamentary Official Language
Committee -ForumIAS Blog
संसदीय राजभाषा समिमि, Parliamentary Official Language Committee, Department of Official Language,
Government of India (rajbhashasamiti.gov.in)

Q.21) Which of the following would include Foreign Direct Investment in India?
1. Subsidiaries of foreign companies in India
2. Majority foreign equity holding in Indian companies
3. Companies exclusively financed by foreign companies
4. Portfolio investment
Select the correct answer using the codes given below:
a) 1, 2, 3 and 4
b) 2 and 4 only
c) 1 and 3 only
d) 1, 2 and 3 only

Ans) d
Exp) Option d is the correct answer.
Option 1, 2 and 3 are correct. The Subsidiaries of foreign companies in India, majority foreign equity holding
in Indian companies and Companies exclusively financed by foreign companies come under the FDI.
Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside
India (a) in an unlisted Indian company; or (b) in 10 percent or more of the post issue paid-up equity capital
on a fully diluted basis of a listed Indian company.
Option 4 is incorrect. Foreign Portfolio Investment is any investment made by a person resident outside
India in capital instruments where such investment is (a) less than 10 percent of the post issue paid-up
equity capital on a fully diluted basis of a listed Indian company or (b) less than 10 percent of the paid up
value of each series of capital instruments of a listed Indian company.

. o
. orr
Off all the listed options, except Portfolio investment all will come under FDI in India.

x aammss gg
x
Knowledge Base:

d
PPdff44ee
Foreign portfolio investment is the purchase of securities of foreign countries, such as stocks and bonds,
on an exchange. Direct investment is seen as a long-term investment in the country's economy, while
portfolio investment can be viewed as a short-term move to make money.
Source) UPSC CSE Pre 2012

Q.22) With reference to the World Bank & International Monetary Fund (IMF), consider the following
statements:
1. IMF aims at economic development and poverty reduction, whereas aim of the World Bank is to ensure
the stability of the international monetary system.
2. To become a member of the World Bank Group, a country must first join the IMF.
3. Both World bank and IMF grants loans to Private sector.
Which of the statements given above is/are correct?
a) 2 and 3 only
b) 3 only
c) 2 only
d) 1, 2 and 3

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Ans) c
Exp) Option c is the correct answer.
Statement 1 is incorrect.
The International Monetary Fund (IMF) primarily aims to ensure the stability of the international
monetary system—the system of exchange rates and international payments that enables countries and
their citizens to transact with each other. It aims to facilitate the expansion and balanced growth of
international trade. On the contrary, the World Bank Group primarily aims at reducing poverty,
increasing shared prosperity, and promoting sustainable development. It provides financing, policy advice,
and technical assistance to governments, and also focuses on strengthening the private sector in
developing countries.
Statement 2 is correct. To become a member of the World Bank, under the International Bank for
Reconstruction and Development (IBRD) Articles of Agreement, a country must first join the International
Monetary Fund (IMF) and not vice-versa.
Statement 3 is incorrect. IMF loans are meant to help only member countries tackle balance of- payments
problems, stabilize their economies, and restore sustainable economic growth. Thus, IMF only lends to the
governments, not the private sector or civil society.
On the contrary, the International Finance Corporation (IFC) of the World Banks lends to the private
sector while Multilateral Investment Guarantee Agency (MIGA) encourages private companies to invest in
foreign countries.
Knowledge Base: Resources for IMF loans to its members on non-concessional terms are provided by
member countries, primarily through their payment of quotas. Multilateral (New Arrangements to Borrow)
and bilateral borrowing agreements serve as a second and third line of defence, respectively, by providing
a temporary supplement to quota resources.
On the other hand, the World Bank's financial reserves come from several sources - from funds raised in
the financial markets, from earnings on its investments, from fees paid in by member countries, from
contributions made by members (particularly the wealthier ones) and from borrowing countries themselves
when they pay back their loans.
Source: https://www.worldbank.org/en/about/history/the-world-bank-group-and-the-imf
https://www.worldbank.org/en/about/leadership/members
https://www.imf.org/en/About/Factsheets/IMF-at-a-Glance

x aammss. o
. orrgg
d
PPdff44ee x
https://www.worldbank.org/en/news/feature/2012/07/26/getting_to_know_theworldbank

Q.23) With the reference to organic farming in India, consider the following statements:
1. All states in India have their own state organic certification agencies.
2. Organic farming accounts for about ten percent of the net sown area in the country.
3. Sikkim is the only Indian state to have become fully organic in India.
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 3 only
c) 1 and 3 only
d) 2 and 3 only

Ans) b
Exp) Option b is the correct answer.
Organic farming can be defined as an agricultural process that uses biological fertilisers and pest control
acquired from animal or plant waste.
Statement 1 is incorrect.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Currently, only 12 states — Madhya Pradesh, Gujarat, Telangana, Sikkim, Bihar, Karnataka, Odisha,
Rajasthan, Uttarakhand, Chhattisgarh, Tamil Nadu and Uttar Pradesh have their own state organic
certification agencies accredited by Agricultural and Processed Food Products Export Development
Authority (APEDA).
Statement 2 is incorrect. Organic farming is in a nascent stage in India. About 2.78 million hectares of
farmland was under organic cultivation as of March 2020, according to the Union Ministry of Agriculture
and Farmers’ Welfare. This is two per cent of the 140.1 million ha net sown area in the country.
The top three states, Madhya Pradesh, Rajasthan and Maharashtra account for about half the area under
organic cultivation. The top 10 states account for about 80 per cent of the total area under organic
cultivation.
Statement 3 is correct. Sikkim is the only Indian state to have become fully organic so far. A majority of
the states have only a small part of their net sown area under organic farming. Even the top three states
that account for the largest area under organic cultivation — Madhya Pradesh, Rajasthan and Maharashtra
— have only around 4.9, 2.0 and 1.6 per cent of their net sown area under organic farming respectively.
Source: https://news.agropages.com/News/NewsDetail---42830.htm

Q.24) Consider the following statements with reference to the Female Labour Force Participation in India:
1. It has consistently increased in India during the last two decades, mainly due to liberalization reforms.
2. Female Labour Force Participation is higher in rural areas than urban areas in recent past.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Ans) b
Exp) option b is the correct answer.
The labor force participation rate measures the percentage of adults who are either employed or actively
looking for a job. The participation of women in the labour force varies considerably across developing
countries and emerging economies, far more than

x aammss. o
. orrgg
e x
in the case of men.

d
PPdff44 e
Statement 1 is incorrect: The female labour force participation has not increased consistently in last two
decades. Female participation rates declined from 34.1 per cent in 1999-00 to 27.2 per cent in 2011-12,
and wide gender differences in participation rate also persists. As per PLFS 2020-21, all India Female Labour
Participation Rate is at 25.1.
Statement 2 is correct: The Periodic Labour Force Survey (PLFS) data in 2020-2021 highlights that female
labour force participation in rural area is higher than urban areas.
Source: https://economictimes.indiatimes.com/jobs/despite-policy-support-labour-participation-by-
women-still-low/articleshow/90061223.cms
https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-
new_delhi/documents/genericdocument/wcms_342357.pdf
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1833855
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1833855

Q.25) With reference to ‘Nidhi Companies’, consider the following statements:

1. They are a type of financial institutions that raise funds exclusively from their members.
2. A Nidhi company can provide loans to its members only.
3. They come under the dual regulation of Reserve Bank of India and Department of Company Affairs.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Which of the statements given above are correct?
a) 1 and 3 only
b) 1 and 2 only
c) 1, 2 and 3
d) 2 and 3 only

Ans) c
Exp) Option c is the correct answer.
The government of India has released the Nidhi (amendment) Rules, 2022. This amendment brings changes
to the Nidhi Rules,2014 to safeguard the interest of the general public.
Statement 1 is correct: Nidhi companies are a type of non-bank lenders that raise funds exclusively from
their members and give loans to them.
Statement 2 is correct: To become a Nidhi company, the entity has to first register as a public limited
company which has more disclosure requirements than a private limited company.
Nidhi Company can provide loans only to its members. And they cannot give loans to companies.
Statement 3 is correct: Nidhi Companies are regulated by the Reserve Bank of India (RBI) for deposit-
taking and by the Department of Company Affairs (DCA) for operational matters and deployment of
funds.
Source: Central Government amends Nidhi Rules, 2014 to safeguard the interest of general public -
ForumIAS Blog

Q.26) Consider the following pairs regarding the types of unemployment and their examples:
Type of Example/
Unemployment Explanation
1. Frictional Unemployment
occurring due to
automation
2. Structural Unemployment in

g
skiing resort in
summer months

xxaammss. o
. orr g
3. Cyclical Unemployment
during 2008
Financial Crisis
Which of the above given pairs is/are matched correctly?
d
PPdff44ee
a) 2 only
b) 3 only
c) 1 and 2 only
d) 2 and 3 only

Ans) b
Exp) Option b is the correct answer.
Unemployment is when a person who’s actively seeking employment can’t find work — but its effects go
beyond any one individual looking for a job. Unemployment also has implications for families, employers,
and the economy. There are several kinds of employment.
Pair 1 is incorrect: Frictional unemployment is the result of people voluntarily leaving their jobs. People
who’ve resigned from their jobs and graduates seeking their first jobs need time to find employment,
leaving them unemployed in the interim. Looking for a job, seeking a replacement employee, and finding
the right employee for a job take time, but frictional unemployment isn’t necessarily bad. This type of

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

unemployment usually is short term, and it’s present even in a healthy economy as people leave their jobs
to seek new opportunities. Job loss due to automation would not fall under frictional unemployment.
Pair 2 is incorrect: Fundamental changes in the economy and labor markets, such as evolving technology,
government policies, and competition, can create structural unemployment. This means that while jobs
are available, the people who could fill those roles either don’t have the right skills for them or aren’t in the
right location. Examples would include job loss due to automation. Unemployment in skiing resort in
summer months would an example of seasonal unemployment.
Pair 3 is correct: The term “cyclical unemployment” refers to the variation in the number of unemployed
workers during cycles of economic strength and weakness. When demand for a product or service
declines, production also goes down. This creates less need for employers to hire people who are looking
for jobs, causing the unemployment rate to increase. During the early stages of the COVID-19 pandemic,
for example, people were confined to their homes, leading many businesses to shut down. During this
economic downturn, many employees of those businesses weren’t needed and were left unemployed. The
financial crisis of 2008 provides is an example of cyclical unemployment.
Source: https://online.maryville.edu/blog/8-types-of-unemployment-understanding-each-type/
NCERT Class XI: Indian Economic Development; Chapter-7

Q.27) Which among the following can be considered as the features of an open economy?
1. Allowing foreign Investment in a country
2. Trade in services across national borders
3. Following Fixed Exchange Rate
4. Complete Convertibility of Capital Account
Select the correct answer using the code given below:
a) 1 and 2 only
b) 2, 3 and 4 only
c) 1, 2 and 4 only
d) 1, 2, 3 and 4

Ans) c
Exp) Option c is the correct answer.

x aammss. o
. orrgg
d
PPd f44ee x
An open economy is one that trades commodities, services as well as financial assets with other countries.

f
An open economy is one that conducts business with other countries in a variety of ways.
Option 1 is correct: Open economy allows inflow and outflow of money and is not highly restrictive about
it. Thus, it allows various kinds of foreign investment in the economy in form of foreign direct investment
(FDI) as well as Foreign Institutional Investors etc.
Option 2 is correct: Open economy allows easy trade in both goods and services. Essentially it is the
amount of trade one country does with other countries that define its openness.
Option 3 is incorrect: Fixed exchange rate is not a feature of an open economy. It is rather more likely to
occur in a closed economy as they tend to regulate the movement of foreign currency in a highly restrictive
manner. On the other hand, a floating exchange rate is an exchange rate system where a country's currency
price is determined by the foreign exchange market, depending on the relative supply and demand of other
currencies, this is more likely to happen in open economies.
Option 4 is correct: Full capital account convertibility opens up the country's markets to global players
including investors, businesses, and trade partners. A fully convertible capital account provides three key
benefits. These are stock market returns, reduction in transaction cost due to free rupee convertibility, and
improvement in savings and investments which effectively accelerates growth.
Source: https://ncert.nic.in/textbook/pdf/leec106.pdf
https://www.thehindubusinessline.com/opinion/columns/slate/all-you-want-to-know-
about/article33215196.ece

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Q.28) With reference to the economy, the term ‘invisibles’ refers to?
a) It is an international transaction that includes an exchange of non-tangible goods.
b) They are one-sided economic transactions between a resident entity and a non-resident entity.
c) It is the difference between a nation’s gross national product and gross domestic product.
d) It is two-way transaction where money is usually recovered through disposal of the assets.

Ans) a
Exp) Option a is the correct answer.
Option a is correct: An invisible trade is an international transaction that includes an exchange of non-
tangible goods. Customer service outsourcing, overseas banking transactions, and the medical tourism
industry all are examples of invisible trade. Invisible trade or the exchange of non-tangible goods
represents an increasing percentage of the world's business. Global financial services and insurance
companies, shipping services, and tourism all engage in invisible trade.
Option b is incorrect: Current transfers are one-sided transaction transfers characterized by a resident
entity in one nation providing a non-resident entity with an economic value.
The two main types of current transfers are general government transfers, which are conducted between
governments of two countries, and other sector transfers, such as those involving worker remittances or
premiums associated with non-life insurances.
Option c is incorrect: Net foreign factor income (NFFI) is the difference between a nation’s gross national
product (GNP) and gross domestic product (GDP).
NFFI is the difference between the aggregate amount that a country’s citizens and companies earn abroad
and the aggregate amount that foreign citizens and overseas companies earn in that country.
Option d is incorrect: Capital account transactions are two way and multiple transactions. In capital
account transactions, paid money can be recovered through periodical income or by disposal of the asset
created. Likewise, the received money needs to be repaid periodically and settled finally by repaying the
full amount.
Source: https://economictimes.indiatimes.com/definition/trade
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEw
ifxMmjgaH7AhURRnwKHcX5DVEQFnoECCsQAQ&url=https%3A%2F%2Fsiteproxy.ruqli.workers.dev%3A443%2Fhttps%2Fwww.investopedia.com%2Fterms
%2Fi%2Finvisible-trade.asp&usg=AOvVaw2z3XtzFX0getzQNpLuIqLS

x aammss. o
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Indian economy by Shankar Ganesh. Page no-282.

d
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Q.29) Consider the following statements with reference to the Autonomous and Accommodating
Transactions:
1. Autonomous transactions are international economic transactions made independently of the state of
the Balance of Payments.
2. Accommodating transactions are the transactions made to cover the deficit occurred due to the
autonomous transactions.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Ans) c
Exp) Option c is the correct answer.
Statement 1 is correct: Autonomous transactions are the International economic transactions that are
made independently of the state of the Balance of Payments (BOP). These transactions take place due to

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

some economic motives like earning income and profit maximization. They have nothing to do with foreign
exchange payments. Autonomous transactions are generally called ‘above the line items’ in Balance of
payments. It is autonomous transactions which make deficit or surplus in BOP. BOP is in deficit if the
autonomous receipts are less than autonomous payments. BOP is in surplus if the autonomous receipts are
greater than autonomous payments.
Statement 2 is correct: Accommodating transactions are determined by the net consequences of the
autonomous items. Accommodating transactions refer to transactions that are made to cover deficit or
surplus arising from autonomous transactions. Accommodating transactions are called ‘below the line
items. Because of government financing, official settlements are seen as accommodating items to keep the
BOP identity.
Source: https://www.economicsdiscussion.net/difference-between/economical-distinction-between-
autonomous-and-accommodating-items-in-bop-account/624
Class 11th NCERT. Indian Economic Development. Chapter 6. Open economy macroeconomics.

Q.30) Consider the following statements regarding ‘UN Human Rights Council (UNHRC)’:
1. The member states of the council are elected by the United Nations General Assembly through direct
and secret ballot.
2. The council has the authority to carry out the Universal Periodic Review of human rights records of all
UN member state.
3. The rights and privileges of any council member can be suspended only by the UN Security Council.
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 only
c) 2 and 3 only
d) 1 and 3 only

Ans) a
Exp) Option a is the correct answer.
Statement 1 is correct: The Human Rights Council is an inter-governmental body within the ‘United

a mmss. o
. rrgg
Nations’ system. The UNHRC replaced the former United Nations Commission on Human Rights. The

o
Council was created by the United Nations General Assembly in 2006 by a resolution. The Council is made

x a
PPdff44ee x
of 47 Member States, elected by the General Assembly of the UN through direct and secret ballot. The

d
General Assembly takes into account the candidate States’ contribution to the promotion and protection
of human rights, as well as their voluntary pledges and commitments in this regard.
Statement 2 is correct: The UN Human Right council carries out the Universal Periodic Review of all UN
member states. This allows civil society groups to bring accusations of human rights violations in member
states to the attention of the UN. The Council holds no fewer than three regular sessions a year, for a total
of at least ten weeks. If one third of the Member States requests so, the Council can hold a special session
to address human rights violations and emergencies.
Statement 3 is incorrect: As per the rules, the United Nations General Assembly (UNGA) can suspend the
rights and privileges of any Council member that it decides has persistently committed gross and
systematic violations of human rights during its term of membership. To suspend a member, one needs a
two-thirds majority vote by the General Assembly. The United Nations General Assembly (UNGA) has
voted to suspend Russia from the UN Human Rights Council (UNHRC).
Note: This is only the second time the UNGA has suspended a country from the 47-member UN Human
Rights Council after its formation in 2006. In 2011, Libya was thrown out through a resolution adopted by
UNGA through consensus.
Source: https://blog.forumias.com/u-n-suspends-russia-from-human-rights-council-india-abstains-
from-vote/ UN Human Rights Council -ForumIAS Blog

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Q.31) Consider the following statements:
Human capital formation as a concept is better explained in terms of a process which enables
1. Individuals of a country to accumulate more capital.
2. Increasing the knowledge, skill levels and capacities of the people of the country.
3. Accumulation of tangible wealth.
4. Accumulation of intangible wealth
Which of the statements given above is/are correct?
a) 1 and 2
b) 2 only
c) 2 and 4
d) 1, 3 and 4

Ans) c
Exp) Option c is the correct answer.
Statements 2 and 4 are correct whereas Statements 1 and 3 are incorrect.
Investment in education, in health, on- the job training, migration and information are the sources of
human capital formation. This will lead to enhancement in the knowledge, skill levels and capacities of the
people of the country. These are the essential needed for human capital formation.
Intangible wealth includes patents, intellectual property rights etc. Thus, if more patents and IPs are
generated it indicates that population is more educated- pointing to human capital formation.
Knowledge Base: A substantial part of the human capital formation takes place in one’s life when she/he is
unable to decide whether it would maximise her/his earnings. Children are given different types of school
education and health care facilities by their parents and the society. The peers, educators and society
influence the decisions regarding human capital investments even at the tertiary level, that is, at the college
level. Moreover, the human capital formation at this stage is dependent upon the already formed human
capital at the school level. Human capital formation is partly a social process and partly a conscious decision
of the possessor of the human capital.
Source) UPSC CSE Pre 2018

Q.32) With reference to economy, consider the following statements:

x aammss. o
. orrgg
e x
Assertion (A) – Depreciation of rupee can result in an increase in domestic inflation.

d
PPdff44 e
The Reason (R) - Depreciation leads to an increase in the prices of imported goods.
Which of the following options is correct?
a) Both Assertion (A) and Reason (R) are the true and Reason (R) is a correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are the true but Reason (R) is not a correct explanation of Assertion
(A).
c) Assertion (A) is true and Reason (R) is false.
d) Assertion (A) is false and Reason (R) is true.

Ans) a
Exp) Option a is the correct answer.
Assertion (A) is correct: As Rupee depreciates, the cost of imports goes up, which in turn increases the
external deficit as well as the fiscal deficit. A weaker Rupee raises the cost of all imports, thereby increasing
the price of goods and putting upward pressure of domestic inflation.
Reason (R) is correct: The biggest impact of a weakening rupee is inflation, given India imports more
than 80% of its crude oil.
Depreciation reduces the value of a country’s currency when compared with the currency of other
countries. Depreciation discourages imports because the imported goods become more expensive due

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

to a reduction in the value of rupee. As the goods become more and more expensive it leads to rising
inflation.
Thus Reason (R) is a correct explanation of Assertion (A).
Source: https://www.outlookindia.com/business/rupee-at-record-low-rupee-vs-dollar-why-is-rupee-
falling-and-how-will-it-impact-the-indian-economy-and-people-why-is-indian-rupee-falling-news-
205888

Q.33) Which of the following are the possible reasons for the rise in economic inequality after the 1991
economic reforms in India?
1. Reduction in public investment in agriculture
2. Decline in the availability of casual labour
3. Poor growth of public expenditure in social sectors
4. Rapid decline in foreign direct investments in India
Select the correct answer using the code given below:
a) 1 and 2 only
b) 2, 3 and 4 only
c) 1 and 3 only
d) 1, 3 and 4 only

Ans) c
Exp) Option c is the correct answer.
Statement 1 is correct. The share of agriculture investment in the total investment declined from 11.4% in
1980s to 7.4% in 2000s. Evidence show that inequality increased in post-reform period India. Even with a
doubling of per capita consumption growth in the post-reform decade, the decline in poverty was less by
a quarter compared to the pre-reform decade.
There has been a relative neglect of the agriculture sector by policymakers. While economic development
entails a move from the off-farm to industry and services, deficiencies of public investments in agriculture,
and in the rural economy more generally, has been problematic precisely because the productivity of
agriculture determines the standards of living of the majority of the people in India.

x aamms . o
. orrgg
Statement 2 is incorrect. Post-reform period saw an increase in casual labour and not a decline. The

s
e x
growth of the labour-intensive manufacturing sector has been slow and has been lagging behind the service

d
PPdff44 e
sector, which is less labour intensive. Also, a high growth in the post-liberalisation period has been
accompanied by increased informalisation and de-unionisation of workforce. Economically and socially
deprived sections of society were mostly employed as casual labour. These are some of the worrisome
features of the labour market, as these workers have low bargaining power and earn meagre wages.
Statement 3 is correct. Public expenditure on social sectors has suffered after 1991. As a percentage of
GDP, social sector expenditure after 1991 was generally less than what it was in the late 1980s. This has
impacted the improvement in health and quality of education in India, which affects economic growth and
its distribution.
Statement 4 is incorrect. India’s foreign direct investments has increased significantly since 1991. FDI into
India increased from $97 million in 1990-91 to about $84,835 million in FY 21-22.
Source: https://www.egyankosh.ac.in/bitstream/123456789/37979/1/Unit-11.pdf
https://www.thehindu.com/news/national/telangana/Economic-growth-post-reform-period-not-
inclusive/article17006542.ece
https://theprint.in/economy/97-mn-in-1991-to-82-bn-in-2021-how-reforms-made-india-a-go-to-
destination-for-fdi/699786/

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9821711605 | https://academy.forumias.com | [email protected] | [email protected]

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Q.34) Which of the following statements correctly describes the term ‘Factoring’?
a) It is a type of supply chain finance where the bank/financial institution provides the seller an immediate
amount of its invoice at a discounted rate.
b) It is a method of calculating the total cost of all the factors of production to produce a good or service.
c) It is a type of finance where the seller combines its different financial debts to form a consolidated
financial instrument which is issued to investors.
d) It is a type of finance where the seller would sell its invoices to a third party to meet its short-term cash
requirements.

Ans) d
Exp) Option d is the correct answer.
Option a is incorrect. Reverse factoring is a type of supply chain finance where the bank/financial
institution provide seller an immediate amount on approved invoices at a discounted rate. It increases the
payment terms without the need to negotiate the amount. It provides a secured supply chain and
Diversified sources of capital.
Option b is incorrect. Factor cost (not the factoring) is the total cost of all the factors of production
consumed or used in producing a good or service.
Option c is incorrect. A securitization is a financing tool for financial companies that helps them raise
funds. It is the process by which a company clubs its different financial assets/debts to form a consolidated
financial instrument that is issued to investors. In return, the investors in such securities get interest. It
raises the liquidity in the market and is useful If a company has already issued many loans to its customers
and wants to further add to the number.
Option d is correct. Factoring is a type of finance in which a seller would sell its invoices or the accounts
receivable to a third party to meet its short-term liquidity needs. The major advantage of this process is
that a company doesn't have to wait for two or three months and can address its liquidity needs by
approaching a financial institution. Under the transaction between both parties, the factor or the third
party would pay the amount due on the invoices minus its commission or fees.
Source: https://economictimes.indiatimes.com/definition/factoring
https://economictimes.indiatimes.com/definition/securitization
https://www.paisabazaar.com/business-loan/bill-discounting/

x aammss. o
. orrgg
e x
https://gocardless.com/guides/posts/what-is-reverse-factoring/

d
PPdff44 e
Q.35) With reference to ‘Mission Vatsalya’, consider the following statements:
1. The mission consists of schemes and policies for the empowerment and protection of women.
2. It will be implemented in partnership with the private sector as well as volunteer groups through a
national level portal.
3. The scheme assists States/Union Territories in delivering the mandate of the Juvenile Justice Act 2015.
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 only
c) 2 and 3 only
d) 1 and 3 only

Ans) c
Exp) Option c is the correct answer.
The Ministry of Women and Child Development has sent its draft guidelines for Mission Vatsalya Scheme
to States and Union Territories to seek their suggestions.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Statement 1 is incorrect: Mission Vatsalya focuses on Child Protection Services and child welfare
services. It is essentially a renamed version of the pre-existing scheme called Child Protection Services.
The objectives of the mission are to secure a healthy and happy childhood for every child in India.
Mission Shakti will consist of the schemes and policies for the empowerment and protection of women.
Mission Shakti will cover schemes under two categories:
SAMBAL: This category will include schemes such as One Stop Centre, Mahila Police Volunteer, Women’s
Helpline, Swadhar, Ujjawala among others.
SAMARTHYA: This category will include schemes such as Beti Bachao Beti Padhao, Pradhan Mantri Matru
Vandana Yojana among others.
Statement 2 is correct: Under the Vatsalya mission, the Government plans to partner with the private
sector as well as volunteer groups for its scheme for the protection of vulnerable children such as those
abandoned or missing. For this, a Vatsalya portal will be developed that will allow volunteers to register so
that State and District Authorities can engage them in executing various schemes.
Statement 3 is correct: The Vatsalya mission will foster a sensitive, supportive and synchronized ecosystem
for the development of children, assist States/UTs in delivering the mandate of the Juvenile Justice Act
2015 and to achieve the SDG goals.
Components under the mission: It will include statutory bodies; service delivery structures; institutional
care/services; non-institutional community-based care; emergency outreach services (through Childline
or the national helpline 1098 for children); training and capacity building.
Source: 9 PM Daily Current Affairs Brief – April 8th 2022 -ForumIAS Blog
“Mission Shakti, Mission Poshan 2.0, and Mission Vatsalya” – 3 Umbrella schemes of Ministry of WCD -
ForumIAS Blog

Q.36) With reference to SENSEX in India, consider the following statements:

1. It is one of the benchmark indexes of the BSE Limited.
2. It is comprised of 50 of the largest and most actively-traded stocks.
3. Its value is calculated in terms of both Indian rupees and U.S. dollars.
4. Its composition is re-evaluated once in every five years as per the performance of stocks of the
companies.
Which of the statements given above are correct?

x aammss. o
. orrgg
a) 1 and 2 only
b) 3 and 4 only
c) 1 and 3 only d
PPdff44ee x
d) 2 and 4 only

Ans) c
Exp) Option c is the correct answer.
Statement 1 is correct. Sensex is the benchmark index of the BSE in India. It was launched in 1986, as a
basket of 30 stocks representing the country's largest, financially-sound companies listed on the BSE.
Sensex is a Free-float Market Capitalisation weighted stock market index. That is in this index, the total
shares issued by the company is made available for trading to the general public. It does not consider
promoters holding, government holding, and other shares that will not be available in the market for
trading in the ordinary course of events. The market capitalization of any company in Sensex is
determined by the stock price multiplied by the number of shares outstanding.
Statement 2 is incorrect. SENSEX is the benchmark index of the Bombay Stock Exchange (BSE) in India.
The SENSEX index is made up of 30 (not 50) of the BSE's largest and most actively traded stocks, and it
serves as a gauge for the Indian economy.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

On the other hand, National Stock Exchange-Fifty (NIFTY 50) is a benchmark-based index of National
Stock Exchange’s showcasing the top 50 equity stocks listed on the stock exchange.
Statement 3 is correct. Sensex is calculated in Indian rupees and U.S. dollars. As they reflect both domestic
and international benchmarks for the Indian market and reflect changes in both stock prices and exchange
rates properly.
Statement 4 is incorrect. The Sensex is reviewed and re-evaluated semi-annually each year in June and
December. It involves re-evaluation of the constituents of a particular index as it deals with addition and
removal of stocks from the index and their re-ranking based on the current market situation.
Source: https://www.business-standard.com/podcast/markets/all-you-need-to-know-about-sensex-
reshuffle-and-how-it-affects-investors-119112700641_1.html
https://www.indiatimes.com/worth/investment/sensex-and-nifty-explained-562810.html
https://www.business-standard.com/about/what-is-sensex#collapse

Q.37) Which one of the following statements is correct regarding ‘Inequality’?

a) According to Kuznets Curve, economic growth initially leads to increased economic inequality in an
economy.
b) Phillips Curve measures the degree of income inequality in an economy.
c) A Gini Coefficient of 1 means that everyone in the population has the same income.
d) The Gini coefficient for India has rapidly reduced during the last decade.

Ans) a
Exp) Option a is the correct answer.
Option a is correct. Kuznets Curve shows the relationship between economic growth and inequality. It is
inverted U shaped meaning that as initially economic growth leads to greater inequality, followed later by
the reduction of inequality. Simon Kuznets indicates that inequalities rise with economic growth up to a
point and then decline. This is the so-called Kuznets inverted ‘U’ shape curve. Initially economic growth
increase overall inequality as the rural-urban transformation takes place and labour moves from low
productivity agriculture to high productivity urban industrial and service sector activities.

x aammss. o
. orrgg
d
PPdff44ee x

Option b is incorrect. Lorenz curve shows the degree of inequality in income and wealth in a given
economy.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

The Philips Curve provides a relationship between inflation and unemployment. The theory claims that
with economic growth comes inflation, which in turn should lead to more jobs and less unemployment. The
Phillips curve states that inflation and unemployment have a stable and inverse relationship.
Option c is incorrect. Gini coefficient, is a degree of the distribution of income across a population. A Gini
Coefficient of zero means that everyone has the same income, while a Coefficient of 1 represents a single
individual receiving all the income. Gini index or coefficient measures distribution of income across
population. Gini coefficient of 1 indicates full inequality and 0 indicates full equality. Thus, higher Gini
coefficient indicates greater inequality.
Option d is incorrect. The Gini coefficient was 35.7 per cent in 2011 in India. The coefficient increased to
47.9 per cent in 2018. Due to the COVID-19 pandemic, the Gini coefficient increased further. India is only
second to Russia in the world in terms of inequality.
Source: https://www.downtoearth.org.in/blog/economy/why-inequality-is-india-s-worst-enemy-
75778
https://www.thehindu.com/opinion/op-ed/what-is-kuznets-curve-

economist%20Simon%20Kuznets.

x aammss . rrg
economics/article19127870.ece#:~:text=A%20curve%20used%20to%20demonstrate,by%20American%20

. o o g
https://www.investopedia.com/terms/g/gini-index.asp

d
PPdff44ee x
Q.38) Which of the following are the components of India’s Foreign Exchange Reserves?
1. Special Drawing Rights
2. Investment in US treasury bonds by Reserve Bank of India
3. Silver holdings of the Reserve Bank of India
4. Reserve tranche position with International Monetary Fund
Select the correct answer from the options given below:
a) 1, 2, and 4 only
b) 2 and 3 only
c) 1 and 4 only
d) 1, 2, 3, and 4

Ans) a
Exp) Option a is the correct answer.
India's Foreign Exchange Reserves comprise Foreign Currency Assets, Gold, SDR's and Reserve tranche
position with International Monetary Fund (IMF).

Forum Learning Centre: Delhi - 2nd Floor, IAPL House, 19 Pusa Road, Karol Bagh, New Delhi - 110005 | Patna - 2nd floor, AG Palace, E Boring Canal Road,
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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Option 1 is correct. The Special Drawing Rights (SDR) is an forex reserve asset created by the IMF to
supplement the official reserves of its member countries.
The SDR is not a currency. It is a potential claim on the freely usable currencies of IMF members. As such,
SDRs can provide a country with liquidity.
Option 2 is correct. India's Foreign Exchange Reserves comprise Foreign Currency Assets, Gold, SDR's and
Reserve tranche position with International Monetary Fund (IMF). Foreign currency assets include
investments in US Treasury bonds, Bonds/Treasury Bills of other selected Governments, deposits with
foreign central banks, foreign commercial banks etc.
Option 3 is incorrect. Silver holding of the RBI is not included in the foreign exchange reserves of India.
Option 4 is correct. A reserve tranche is a part of country’s forex reserve. A reserve tranche is a portion of
the required quota of currency each member country must provide to the International Monetary Fund
(IMF) that can be utilized for its own purposes—without a service fee or economic reform conditions.
Source: https://indianexpress.com/article/business/economy/india-rbi-gold-reserves-
7607754/#:~:text=Data%20from%20the%20Reserve%20Bank,metal%20held%20in%20September%2020
20.&text=46%3A09%20am-
,Data%20from%20the%20Reserve%20Bank%20shows%20that%20the%20central%20bank,gold%20as%2
0of%20September%202021.
https://www.business-standard.com/about/what-is-forex-reserve
https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?ID=383#:~:text=2.10%20From%20the%2
0country's%20balance,recorded%20in%20the%20capital%20account.
https://www.investopedia.com/terms/r/reserve_tranche.asp

Q.39) Which of the following conditions is not conducive for the occurrence of the demographic dividend
in a country?
a) When a country is having a bell-shaped population pyramid.
b) When mortality and fertility rate is on a declining trend
c) When the share of non-working age population is larger than working age population
d) When conducive economic policies are put in place.

Ans) c

x aammss. o
. orrgg
Exp) Option c is the correct answer.

d
PPdff44ee x
Statement a is correct: Dome-shape or bell-shaped pyramid is seen in countries like India, Bangladesh,
Mexico and Brazil that are witnessing demographic dividend phase. The population growth rates decline
and life expectancy increases and becomes about 70 years. Lower- middle portion slightly bulges out and
the shape of the pyramid resembles dome or bell.
Statement b is correct: Demographic Dividend is the result of decline in a country’s mortality and fertility
and the subsequent change in the age structure of the population.
Statement c is incorrect: Demographic dividend is not conducive when dependency ratio is high.
Demographic dividend is a window of opportunity when share of the working age population between 15
and 64 years of age increases and share of children and elderly people age group decreased. Thus, changes
in the age structure due to the demographic transition lower the ‘dependency ratio’.
Statement d is correct: Demographic Dividend is a demographic and economic concept. It refers to an
accelerated economic growth that a nation experiences once in a lifetime. It occurs when working age
population grows at a faster pace than dependent population, provided that government policies and
institutions are conducive to create employment opportunities for an expanding labour force.
Source: https://egyankosh.ac.in/bitstream/123456789/76242/1/Unit-3.pdf

Forum Learning Centre: Delhi - 2nd Floor, IAPL House, 19 Pusa Road, Karol Bagh, New Delhi - 110005 | Patna - 2nd floor, AG Palace, E Boring Canal Road,
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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Q.40) Consider the following statements:
1. The Aadhaar Act stipulates that an individual should reside in India for a period of 12 weeks for being
eligible to obtain an Aadhaar.
2. The Aadhaar can be issued to minor children under the age of five years based on the demographic
information of their parents.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Ans) b
Exp) Option b is the correct answer.
Comptroller and Auditor General (CAG) of India has pulled up the Unique Identification Authority of India
(UIDAI) over a range of issues related to the issuance of Aadhar Cards.
Statement 1 is incorrect: The Aadhaar Act stipulates that an individual should reside in India for a period
of 182 days or more in the twelve months immediately preceding the date of application for being eligible
to obtain an Aadhaar. In 2019, this condition was relaxed for non-resident Indians holding valid Indian
Passport.
However, UIDAI has not prescribed any specific proof/document or process for confirming whether an
applicant has resided in India for the specified period and takes confirmation of the residential status
through a casual self-declaration from the applicant.
Statement 2 is correct: For children below 5 years no biometrics will be captured. Their UID be processed
on the basis of demographic information and facial photograph linked with the UID of their parents.
These children will need to update their biometrics of ten fingers, iris and facial photograph, when they
turn 5 and 15.
Knowledge Base:
Other issues raised by CAG report:
1) All Aadhaar numbers are not supported with actual documents containing personal information.

x aa mss. o
. orrgg
According to the CAG, all the Aadhaar numbers stored in the UIDAI database were not supported with

m
UIDAI could not identify the exact extent of the mismatch.
d
PPd f 4ee x
documents relating to the personal information of their holders and even after nearly ten years the

f 4
2) Charging Fees for Voluntary Update: UIDAI appeared to have charged people for biometric updates
when poor quality data was fed in during enrolment. UIDAI did not take responsibility for poor quality
biometrics and put the onus on the resident and charged fees for it.
3) No Data Archiving Policy: UIDAI maintains one of the largest biometric databases in the world; but does
not have a data archiving policy, which is considered to be a vital storage management best practice.
4) No Proper Grievance Redressal Procedure: The process of capturing grievances/complaints have not
been streamlined by UIDAI and does not display a clear picture for analysis.
Source: https://blog.forumias.com/explained-the-common-complaints-about-aadhaar-which-cag-has-
now-flagged-in-uidai-audit/
https://uidai.gov.in/en/contact-support/have-any-question/299-english-uk/faqs/enrolment-
update/enrolling-
children.html#:~:text=For%20children%20below%205%20years,they%20turn%205%20and%2015.

Q.41) In a given year in India, official poverty lines are higher in some states than in other because
a) Poverty rates vary from state to state
b) Price levels vary from state to state

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

c) Gross state product varies from state to state
d) Quality of public distribution varies from state to state

Ans) b
Exp) Option b is the correct answer.
The current methodology for poverty estimation is based on the recommendations of an Expert Group to
Review the Methodology for Estimation of Poverty (Tendulkar Committee) established in 2005. For 2011-
12, the poverty lines were fixed at daily expenditure of ₹27.2 in rural areas and ₹33.3 in urban areas.
According to a planning commission report, these poverty lines would vary from State to State because
of inter-state price differentials.
Source) UPSC CSE Pre 2019

Q.42) In relation to foreign currency market, which of the following correctly describes a ‘hard currency’?
a) Currency which is very volatile and has low demand in the forex market.
b) Currency which has high liquidity and demand in the forex market
c) Currency which is under pressure of depreciation due to exit of other currencies
d) Currency which enters the market due to re-purchasing of bonds by the Government before their
maturities.

Ans) b
Exp) Option b is the correct answer.
Statement a is incorrect: A soft currency is one with a value that fluctuates, predominantly lower relative
to other currencies, because there is less demand for that currency in the forex markets. This lack of
demand may be driven by a variety of factors, but is most often a result of the country's political or
economic uncertainty.
Statement b is correct: Hard Currency refers to the currency in which everyone shows highest faith and
it is demanded by every economy for transactions. Such a currency has high level of liquidity, which also
makes them always scarce and less available.

g
Statement c is incorrect: Heated Currency refers to a currency which is under high pressure of

xxaammss. o
. orr g
depreciation due to high probability of hard currency’s exit from the economy. It is also known as currency
under heat or under hammering.

d
PPdff44ee
Statement d is incorrect: The term Cheap Currency was being first used by J.M. Keynes. When a
government starts re-purchasing its bonds before their maturities, the money which flows into the
economy is known as the Cheap currency.
Source: Ramesh Singh economy

Q.43) With reference to the General Agreement on Trade in Services (GATS) of World Trade Organization
(WTO), consider the following statements:
1. It is an international treaty which was created as a result of Uruguay Round Negotiations.
2. All the services are covered within the ambit of GATS.
3. The services covered by the treaty are automatically opened to competition.
Which of the statements given above are incorrect?
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Ans) b
Exp) Option b is the correct answer.
The General Agreement on Trade in Services (GATS) is one of the landmark achievements of the World
Trade Organization (WT)). It is related to liberalization of trade in services. Some of the features are:
Statement 1 is correct. It is an international treaty of the WTO which emerged a result of the Uruguay
Round Negotiations. It entered into force in 1995. It aimed at creating a credible and reliable system of
international trade rules; ensuring fair and equitable treatment of all participants (principle of non-
discrimination); stimulating economic activity through guaranteed policy bindings; and promoting trade
and development through progressive liberalization for trade in the services sector.
Statement 2 is incorrect. The GATS applies in principle to all service sectors, with two exceptions. First
exclusion is related to “services supplied in the exercise of governmental authority”, and Second
exclusion is related to a bulk of Air Transport Services. It exempts from coverage measures affecting air
traffic rights and services directly related to the exercise of such rights.
Statement 3 is incorrect. Services covered by the GATS are not automatically opened to competition.
WTO members guarantee access to their markets only in those sectors and modes of supply specified in
their “schedules of commitments”, subject to any “limitations” they wish to maintain. These schedules
provide legally binding commitments. The only obligation that applies across all services covered by the
GATS is the most-favoured-nation (MFN) principle, meaning suppliers of services from all countries are
treated in the same way.
Source: https://www.wto.org/english/thewto_e/20y_e/services_brochure2015_e.pdf
https://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm

Q.44) Higher economic growth would necessarily lead to which of the following?
1. Reduction in inequality
2. Reduction in poverty
3. Reduction in unemployment
Select the correct answer using the code given below:
a) 1 and 2 only
b) 2 and 3 only
c) 1 only

x aammss. o
. orrgg
d) None of the Above

Ans) d d
PPdff44ee x
Exp) Option d is the correct answer.
Economic Growth means the increase in the level of GDP of the country. It can be possible only when all
the factors of production are applied in the right manner i.e., land, labor, capital, and entrepreneurship.
Economic growth widens opportunities and provides the resources needed to invest in human
development. This also encourages people to send their children, including girls to schools in the hope of
getting better economic returns from investing in education.
Option 1 is incorrect. Economic growth means an increase in national income but economic growth may
not reduce income inequality because
1) Economic growth often creates the best opportunities for those who are highly skilled and educated.
2) Modern economies are creating an increased number of part-time/flexible service sector jobs. In
these sectors, wages have been lagging average earnings.
Option 2 is incorrect. Economic growth does not necessarily reduce poverty. Economic growth leads to
poverty reduction only when it is accompanied by equitable income distribution as well. Suppose there is
a disparity in income distribution and a wide gap between the income earned by the top and bottom income

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

strata. In case of income inequality, economic growth will lead to concentration of income in the hands of
the few rich, the level of poverty might increase.
Option 3 is incorrect. Economic growth does not necessarily lead to reduction in unemployment. The
phenomenon of jobless growth is often seen in economies around the world. For example, growth cannot
solve structural and frictional unemployment; this is unemployment caused by lack of skills and
geographical immobility.
Source: https://www.oecd.org/derec/unitedkingdom/40700982.pdf
https://www.economicshelp.org/macroeconomics/inequality/poverty-inequality-economic-growth/
https://nios.ac.in/media/documents/SrSec318NEW/318_Economics_Eng/318_Economics_Eng_Less
on3.pdf

Q.45) The Council on Energy, Environment and Water (CEEW) has recently released a study titled
‘Managing Forest Fires in a Changing Climate’, In this context, consider the following statements:
1. Most of the Northeastern Region has not witnessed forest fire incidences in recent decades due to cooler
climate.
2. In India, there has been a ten-fold increase in forest fires in the past two decades.
3. Among the Indian states, Tamil Nadu has had the highest number of forest fire incidences in the last two
decades.
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 only
c) 2 and 3 only
d) 1, 2 and 3

Ans) b
Exp) Option b is the correct answer.
Council on Energy, Environment and Water (CEEW) has released a study titled ‘Managing Forest Fires in a
Changing Climate’.
Statement 1 is incorrect: Most of the North-eastern Region are witnessing an increased frequency of

x aamms . o
. orrgg
forest fire incidents in recent decades. More than 75 % of Indian districts are extreme climate event

s
e x
hotspots, and more than 30 % of districts are extreme forest fire hotspots.

d
PPdff44 e
Statement 2 is correct: The study points toward the increase in Forest Fires in India. There has been a
ten-fold increase in forest fires in the past two decades, and more than 62% of Indian states are prone to
high-intensity forest fires.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Fire Prone Region in India

Statement 3 is incorrect: Mizoram has had the highest number of forest fire incidences in the last two
decades, with more than 95% of its districts being forest fire hotspots. Andhra Pradesh, Assam,
Chhattisgarh, Odisha and Maharashtra are the most prone to high-intensity forest fire events caused by
rapid changes in the climate.
Source: https://blog.forumias.com/forest-fires-frequency-intensity-went-up-in-past-2-decades-
study/

Q.46) With reference to the Real Effective Exchange Rate (REER), which of the following statement is
incorrect?
a) It is used as a measure for observing external competitiveness of Indian economy
b) It captures inflation differential between India and its trading partners.

x aamms . o
. orrgg
c) It signifies the quantity of domestic goods required to purchase one unit of a given basket of foreign

s
e x
goods

d
PPdff44 e
d) An increase in a country’s REER indicates that its exports are becoming cheaper.

Ans) d
Exp) Option d is the correct answer.
Statement a is correct: The Real effective exchange rate (REER) is the weighted average of a country's
currency in relation to an index or basket of other major currencies. It is calculated as the weighted
average of the real exchange rates of all of a country’s trade partners. The weights being the shares of the
respective countries in its foreign trade.
Real Effective Exchange Rate (REER) serve as a gauge for assessing the fair value of a currency, the
external competitiveness of an economy and even serve as guideposts for setting monetary and financial
conditions. A REER is a summary indicator of movements of the home currency against a basket of
currencies of trading partners.
Statement b is correct: REER takes price differential and inflation into account and, therefore, is said to
be a better indicator of the competitiveness of the country in terms of exchange rates.
Real effective exchange rate is a weighted average of nominal exchange rates adjusted for relative price
differential between the domestic and foreign countries.

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Statement c is correct: REER is interpreted as the quantity of domestic goods required to purchase one
unit of a given basket of foreign goods.
Statement d is incorrect: An increase in a nation's REER is an indication that its exports are becoming more
expensive and its imports are becoming cheaper. It means it is losing its trade competitiveness.
Source: https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=20020

Q.47) In the context of international trade, which one of the following conditions make a product eligible
for 'Countervailing duty'?
a) When the product has potential of harming the environment of destination country.
b) When the product has potential of destabilising the currency of importing country.
c) When the product has not followed the international sanitary rules while production process.
d) When the product has received unfair advantage through export subsidy in the source country.

Ans) d
Exp) Option d is the correct answer.
Countervailing duties or CVDs are tariffs on imported goods that are imposed to offset subsidies given by
the exporting country's government. CVDs help offset any negative domestic impacts that producers of
the same good might experience due to foreign competition, who in this case, would receive a subsidy to
export the same good. If left unchecked, such subsidized imports can have a severe effect on the domestic
industry, forcing factory closures and causing huge job losses. As export subsidies are considered to be an
unfair trade practice, the World Trade Organization (WTO)–which deals with the global rules of trade
between nations–has detailed procedures in place to establish the circumstances under which
countervailing duties can be imposed by an importing nation.
Source: https://www.investopedia.com/terms/c/countervailingduties.asp

Q.48) Why women compared to men have a higher incidence of poverty in India?
1. The income disparity between men and women
2. Women are increasingly employed in the unorganized sector
3. Discrimination against women in the inheritance of land and property.
Select the correct answer using the codes given below:

x aammss. o
. orrgg
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3
d
PPdff44ee x
Ans) d
Exp) Option d is the correct answer.
Option 1 is correct. Women make a substantial proportion of poor people. Studies have shown that women
headed household in rural areas are the poorest. The income disparity between men and women is evident
due to vast differentials in wages paid to men and women.
Option 2 is correct. Women are increasingly employed in the unorganized sector as unskilled labour.
They are also engaged in home-based work where they get low wages. Female-headed households are
often poor, as women do not get jobs or credit to set up their own businesses. In recent years, the term
'feminization of poverty' is used to denote the specific characteristics of poverty where women are directly
affected adversely as a result of development process.
Option 3 is correct. Although laws in India provides for right of inheritance of property to
daughters/women. But, such laws are seldom used in practice. Women are not generally given ownership

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

rights over ancestral property and very rarely they get a share in their father’s property in India. This is one
of the reason why women have a higher incidence of poverty compared to men.
Source: https://egyankosh.ac.in/bitstream/123456789/60539/2/Unit-2.pdf
http://egyankosh.ac.in/bitstream/123456789/58865/1/Unit3.pdf

Q.49) In the context of Agricultural land holdings in India, consider the following statements:
1. The highest number of operational agricultural landholdings is in Maharashtra.
2. The number of small and marginal farmers declined drastically in the last decade.
3. Higher proportion of women hold land in northern states as compared to southern states.
Which of the above statements is/are correct?
a) 1 only
b) 1 and 2 only
c) 3 only
d) None

Ans) d
Exp) Option d is the correct answer.
Operational land holdings are all land which is used wholly or partly for agricultural production and is
operated as one technical unit by one person alone or with others without regard to the title, legal form,
size or location. According to 10th Agriculture Census 2015-16, the total number of operational holdings in
the country has increased from 138.35 million in 2010-11 to 146.45 million in 2015-16 showing an increase of
5.86%.
Statement 1 is incorrect. In a total of 146.45 million operational agricultural land holdings in the country,
the highest number of operational land holdings in India belonged to Uttar Pradesh (23.82 million). UP is
followed by Bihar (16.41 million), Maharashtra (15.29 million), Madhya Pradesh (10.00 million).
Statement 2 is incorrect. According to the 10th agricultural census, the number of small and marginal
agricultural land holdings in the country has registered a marginal increase in 2015-16 compared to 2010-
11. The small and marginal holdings taken together (0.00-2.00 ha.) constituted 86.08% of the total holdings
in 2015-16 against 85.01% in 2010-11 while their share in the operated area stood at 46.94% in the current
census as against 44.58% in 2010-11.

x aammss. o
. orrgg
d
PPdff44ee x
Statement 3 is incorrect. As per the data on women’s operational holdings from the agriculture census of
2011, in southern states an average of 15.4% of women hold land, and in the north-eastern states, 14.1%.
With these low figures, these states outperform the northern states where 9.8% of women hold land, and
the eastern states where 9.2% of women do i.e., more women in the southern states hold land as compared
to the rest of the country. All the southern states fall within the first 10 ranks, with Andhra Pradesh
reporting the best figure–17.2% of the state’s women hold land, giving it the fourth place in the all-India
ranking.
Source: https://www.fao.org/india/fao-in-india/india-at-a-glance/en/
https://www.thehindu.com/sci-tech/agriculture/indian-farms-getting-smaller/article25113177.ece
https://agcensus.nic.in/document/agcen1516/T1_ac_2015_16.pdf
https://www.business-standard.com/article/current-affairs/the-landless-women-only-12-9-indian-
women-hold-agricultural-land-120121300771_1.html

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SFG 2023 | LEVEL 1 | Test #14 – Solutions |

Q.50) Consider the following statements with reference to Kodavas:
1. They are an ethnolinguistic group from the region of Coorg in Karnataka.
2. They belong to a traditional landless group with hunting as their survival occupation.
3. In India, they have been permitted to carry firearms without a license.
4. Kodava Takke Language has been classified as an Endangered Language by UNESCO.
Which of the statements given above are correct?
a) 1 and 2 only
b) 1, 2 and 4 only
c) 1, 3 and 4 only
d) 2, 3 and 4 only

Ans) c
Exp) Option c is the correct answer.
Recently the researchers have published a book titled “A Place Apart: Poems from Kodagu”. It is a bilingual
edition of 21 poems by Appana. This book will help spread awareness about the endangered Kodava takke
language.
Statement 1 is correct: Kodavas are an ethnolinguistic group from the region of Kodagu (Coorg) in
Karnataka. They speak the Kodava language.
Statement 2 is incorrect: Kodavas are traditionally land-owning agriculturists, with martial customs.
Statement 3 is correct: Kodavas worship ancestors and weapons. They are the ones in India permitted to
carry firearms without a license. As per the exemption, continuing from the British-era rule, the people
from the hill district of Kodagu can possess pistols, revolvers and double-barrelled shotguns without a
licence.
Statement 4 is correct: Kodava takke belongs to the Dravidian group of languages. This language doesn’t
have a script. But over the years, it has found its way into a written form through Kannada.
The language has been classified as an Endangered Language by UNESCO as it is spoken by just 166,187
people according to the 2001 census.
Several factors have contributed to the Kodava language becoming endangered. For instance, with the
coming of the Haleri dynasty, Kannada became the language of communication, the language of the court

x aa mss. o
. orrgg
and state. The language took a further back seat when the British introduced Kannada as the medium of

m
education.

d
PPdff44ee x
Source: https://blog.forumias.com/endangered-kodava-takke-gets-a-new-lease-of-life/
Karnataka HC upholds Arms Act exemption for Kodavas: History behind community's right to own guns
without a licence (firstpost.com)

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