UPSC CDS-2

31. Which one among the following items comprises the major portion of rev

Which one among the following items comprises the major portion of revenue expenditure of the Union Government of India ?

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Salaries
Interest Payments
Road Transport and Highways
Defence Services
This question was previously asked in
UPSC CDS-2 – 2024
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Interest payments on the Union Government’s outstanding debt constitute one of the largest components of its revenue expenditure. These payments are mandatory outflows resulting from past borrowings and do not create any assets, hence classified under revenue expenditure.
Interest payments represent the largest single item of non-plan revenue expenditure for the Government of India year after year.
Other major components of revenue expenditure include subsidies (food, fertilizer, petroleum), defence revenue expenditure (salaries, maintenance), pensions, administrative expenses (salaries, allowances), and grants to states. While salaries and defence services are significant, interest payments typically exceed them.

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32. Pandit Deendayal Upadhyay National Welfare Fund was established with t

Pandit Deendayal Upadhyay National Welfare Fund was established with the view to help which one of the following groups ?

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Medical Practitioners
Farmers
Sportspersons
War Widows
This question was previously asked in
UPSC CDS-2 – 2024
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The Pandit Deen Dayal Upadhyay National Welfare Fund for Medical Practitioners is a welfare fund established to provide financial assistance to medical practitioners and their families who are in distress due to illness, accident, or death. It is supported by the Ministry of Health and Family Welfare and managed through bodies like the Indian Medical Association (IMA).
There are specific welfare funds named after Pandit Deendayal Upadhyay for different professional groups, including medical practitioners.
There is also a Pandit Deen Dayal Upadhyay National Welfare Fund for Cine Workers, managed by the Ministry of Labour and Employment. However, among the given options, Medical Practitioners is the target group of a known fund with this name.

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33. Which one of the following is not a fund managed by NIIFL (National In

Which one of the following is not a fund managed by NIIFL (National Investment and Infrastructure Fund Limited) ?

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Master Fund
Fund of Funds
Strategic Opportunities Fund
Global Investment Fund
This question was previously asked in
UPSC CDS-2 – 2024
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National Investment and Infrastructure Fund Limited (NIIFL) manages specific funds focused on infrastructure and strategic investments in India. The listed funds managed by NIIFL include the Master Fund, the Fund of Funds, and the Strategic Opportunities Fund. The option “Global Investment Fund” is not one of the officially listed or standard funds managed by NIIFL.
NIIFL manages various sector-specific and strategy-specific funds to channel investment into Indian infrastructure and related sectors.
The Master Fund primarily invests in core infrastructure sectors such as transportation, energy, and urban infrastructure. The Fund of Funds acts as an anchor investor in alternative investment funds managed by experienced fund managers. The Strategic Opportunities Fund focuses on growth equity and strategic investments in sectors beyond core infrastructure.

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34. The Rangarajan Committee methodology for determining the poverty line

The Rangarajan Committee methodology for determining the poverty line incorporated which of the following ?

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  • 1. A food component
  • 2. A normative level of expenditure for essential non-food items
  • 3. A behaviourally determined expenditure for other non-food items

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1 and 2 only
2 and 3 only
1, 2 and 3
1 and 3 only
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is C. The question asks what the Rangarajan Committee methodology for determining the poverty line incorporated.
The C. Rangarajan Committee, constituted in 2012 to re-examine poverty estimation methods in India, proposed a new methodology. A key feature of their approach was a more detailed consideration of consumption requirements, separating them into food and non-food components.
1. **A food component:** The committee derived a food expenditure norm based on calorie, protein, and fat requirements, and the actual observed expenditure on food items by households meeting these nutritional norms.
2. **A normative level of expenditure for essential non-food items:** This part of the non-food component included essential items like clothing, house rent, education, and health. The expenditure for this was estimated based on the average expenditure observed among households in certain expenditure fractiles (specifically, the 25-30% fractile) for these items. This was considered a “normative” requirement.
3. **A behaviourally determined expenditure for other non-food items:** This part covered other non-food expenses like conveyance, durable goods, etc. The expenditure for these items was also estimated based on the average expenditure observed among households in the 25-30% fractile whose food expenditure met the required nutritional level. This was seen as reflecting actual “behavioural” consumption patterns beyond the essential non-food needs.
The Rangarajan Committee’s method was distinct from the Tendulkar Committee’s which used a consumption basket derived from expenditure on food that met calorie norms and allowed for a moderate amount of spending on non-food items based on observed patterns. The Rangarajan approach explicitly segmented non-food expenditure into normative and behaviourally determined components, in addition to calculating a food component based on nutritional requirements and actual expenditure. All three statements accurately describe elements included in the Rangarajan Committee’s poverty line methodology.

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35. If the price index increased from 100 in 2021 to 110 in 2022 to 132 in

If the price index increased from 100 in 2021 to 110 in 2022 to 132 in 2023, then the rate of inflation is :

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10%
32%
20%
Cannot be determined
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is C. The question provides price index values for three years and asks for “the rate of inflation”.
The rate of inflation between two periods is calculated as the percentage change in the price index from the earlier period to the later period.
– Inflation rate from 2021 to 2022:
`((Index in 2022 – Index in 2021) / Index in 2021) * 100`
`((110 – 100) / 100) * 100 = (10 / 100) * 100 = 10%`
– Inflation rate from 2022 to 2023:
`((Index in 2023 – Index in 2022) / Index in 2022) * 100`
`((132 – 110) / 110) * 100 = (22 / 110) * 100 = (1/5) * 100 = 20%`
The inflation rates for the two periods are 10% and 20%. The question asks for “the rate of inflation” (singular). In such sequences, it often refers to the rate in the most recent period calculated or the cumulative change. The cumulative percentage increase from 2021 to 2023 is `((132 – 100) / 100) * 100 = 32%`. Both 20% (rate in 2023) and 32% (total change) are among the options (A and B are not possible as singular rates for the whole period). However, the standard interpretation of “the rate of inflation” when a time series is given is often the latest period’s annual rate. Thus, 20% is the most likely intended answer as it represents the inflation rate for the year 2023.
Option A (10%) is the inflation rate for the year 2022. Option C (20%) is the inflation rate for the year 2023. Option B (32%) is the total percentage increase in the price index from 2021 to 2023. Given that both 10% and 20% are valid annual rates within the period, and 20% is the rate for the latest year, it is the most probable answer.

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36. Suppose there are only two normal goods in the economy, X and Y. If pr

Suppose there are only two normal goods in the economy, X and Y. If price of good X increases, which would be the correct statement from below ?

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Demand for good X decreases and demand for Y is indeterminate.
Demand for good X decreases and demand for Y decreases.
Demand for good X increases and demand for Y is indeterminate.
Demand for good X increases and demand for Y decreases.
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is A. The question describes a scenario with two normal goods (X and Y) and asks about the effect of an increase in the price of good X.
If the price of good X increases, according to the Law of Demand, the quantity demanded of good X will decrease, assuming all other factors remain constant (ceteris paribus). This is a movement along the demand curve for X.
To determine the effect on the demand for good Y, we need to consider the cross-price elasticity of demand, which depends on whether X and Y are substitutes, complements, or unrelated goods.
– If X and Y are substitutes (e.g., tea and coffee), an increase in the price of X makes Y relatively cheaper or more attractive. This leads to an increase in the demand for Y (a rightward shift of the demand curve for Y).
– If X and Y are complements (e.g., cars and petrol), an increase in the price of X reduces the quantity demanded of X. Since X and Y are consumed together, the reduced consumption of X also leads to a decrease in the demand for Y (a leftward shift of the demand curve for Y).
– If X and Y are unrelated goods, a change in the price of X has no significant impact on the demand for Y.
The information that X and Y are “normal goods” relates to how their demand changes with income, not how their demand changes with respect to the price of *another* good. Therefore, based only on the information that X and Y are normal goods and the price of X increased, we know the demand for X decreases, but the effect on the demand for Y is indeterminate without knowing the relationship between X and Y (substitutes, complements, or unrelated).
Option A correctly states that demand for X decreases and demand for Y is indeterminate. Options B, C, and D make specific claims about the demand for Y (decreases, increases) or demand for X (increases), which are either incorrect or not universally true given only the information provided.

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37. Which one of the following dimensions is not included in Human Develop

Which one of the following dimensions is not included in Human Development Index ?

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Life Expectancy at birth
Mean years of schooling
Expected years of schooling
Mortality rate
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is D. The question asks which dimension is *not* included in the Human Development Index (HDI).
The Human Development Index (HDI), developed by the United Nations Development Programme (UNDP), is a summary measure of average achievement in key dimensions of human development. It comprises three basic dimensions:
1. **A long and healthy life:** Measured by Life Expectancy at Birth.
2. **Knowledge:** Measured by Mean Years of Schooling for adults aged 25 years and more and Expected Years of Schooling for children of school entering age.
3. **A decent standard of living:** Measured by Gross National Income (GNI) per capita adjusted for Purchasing Power Parity (PPP$).
Options A (Life Expectancy at birth), B (Mean years of schooling), and C (Expected years of schooling) are all direct components used in calculating the HDI. Option D (Mortality rate), while related to health outcomes and life expectancy, is not one of the specific dimensions or indicators directly used in the standard HDI calculation. Life expectancy at birth is used as the indicator for the health dimension.

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38. Which one of the following taxes is not included in the Central Pool t

Which one of the following taxes is not included in the Central Pool to be shared with the States according to the recommendations of Finance Commission of India ?

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Personal Income Tax
Corporate Profit Tax
Surcharge and Cess
Excise Duties
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is C. The question asks which one of the listed taxes is *not* included in the Central Pool to be shared with the States according to the recommendations of the Finance Commission of India.
Finance Commissions recommend the vertical devolution (sharing) of Union taxes between the Union government and the states. The divisible pool of taxes typically includes major central taxes like Personal Income Tax, Corporate Tax, and Union Excise Duties (now largely subsumed under GST, whose division is also recommended). However, Surcharges and Cesses levied by the Central Government are generally not part of this divisible pool. They are usually levied for specific purposes and accrue solely to the Central Government, unless explicitly included in the divisible pool by specific legislation or Finance Commission recommendation for a particular cess/surcharge (which is rare).
The Constitution of India (Article 270) provides for the sharing of certain Union taxes with the States. Surcharges (Article 271) and Cesses are constitutionally distinct and are not ordinarily shared. Finance Commissions, in their recommendations, specify the percentage of the net proceeds of the divisible pool of Union taxes that should go to the states. The composition of this divisible pool has evolved over time but generally excludes surcharges and cesses.

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39. Which one of the following statements for a firm’s equilibrium in Perf

Which one of the following statements for a firm’s equilibrium in Perfect Competition is not correct ?

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The market price must be greater or equal to average variable cost in the short run.
The market price must be equal to marginal cost.
The market price must be equal to average cost in the long run.
The marginal cost decreases at the equilibrium output.
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is D. The question asks which statement about a firm’s equilibrium in Perfect Competition is *not* correct.
In perfect competition, a firm is a price taker, meaning the market price (P) is constant for the firm and equals its Marginal Revenue (MR) and Average Revenue (AR). A firm maximizes profit by producing at the output level where Marginal Cost (MC) equals Marginal Revenue (MR). Thus, the equilibrium condition is P = MR = MC.
Let’s evaluate the statements:
A) The market price must be greater or equal to average variable cost in the short run: Correct. A firm continues to produce in the short run only if the price is at least equal to the average variable cost (P ≥ AVC). If P < AVC, the firm minimizes losses by shutting down. B) The market price must be equal to marginal cost: Correct. P = MC is the profit-maximizing (or loss-minimizing) condition for a firm in perfect competition. C) The market price must be equal to average cost in the long run: Correct. In the long run equilibrium of a perfectly competitive market, entry and exit of firms ensure that price equals the minimum average total cost (P = MC = ATC), resulting in zero economic profit for all firms. D) The marginal cost decreases at the equilibrium output: Incorrect. For the equilibrium at P=MC to be stable and represent profit maximization, the MC curve must be rising at the point of intersection with the MR (Price) line. If MC were decreasing at equilibrium, producing more would increase profit (or decrease loss) because the cost of the next unit would be less than the revenue it generates (P). Firms produce on the upward-sloping portion of their MC curve above the AVC curve.
The stable equilibrium condition for a firm is MC = MR and MC must be rising (or the MC curve must intersect the MR curve from below). In perfect competition, MR is horizontal (equal to P), so the firm operates on the upward-sloping part of its MC curve where it intersects the horizontal demand curve (P).

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40. The Atmanirbhar Bharat Scheme announced by the Government helps in :

The Atmanirbhar Bharat Scheme announced by the Government helps in :

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  • Enhancing India’s manufacturing capabilities and exports across the industries
  • Incentivizing foreign investments for domestic production

Select the answer using the code given below :

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1 only
2 only
Both 1 and 2
Neither 1 nor 2
This question was previously asked in
UPSC CDS-2 – 2024
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The correct option is C. The question asks how the Atmanirbhar Bharat Scheme announced by the Government helps.
The Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) is a comprehensive economic package and strategy aimed at making India self-reliant. Key objectives and components of the scheme include:
1. **Enhancing India’s manufacturing capabilities and exports:** A central goal is to boost domestic production across various sectors, improve quality and efficiency, and make Indian industries competitive globally, thereby increasing exports. Initiatives like Production Linked Incentives (PLI) are designed for this.
2. **Incentivizing foreign investments for domestic production:** The scheme aims to attract foreign capital and technology to boost manufacturing and other sectors within India. The PLI schemes, for example, are open to both domestic and foreign companies establishing or expanding manufacturing base in India.
Both statements accurately reflect the aims of the Atmanirbhar Bharat scheme. It seeks to strengthen the domestic economy by improving manufacturing capabilities, reducing import dependence where feasible, and promoting exports, while also leveraging foreign investment and technology to achieve these goals. The emphasis is on becoming self-reliant, not self-contained, implying continued engagement with the global economy through trade and investment.

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