UPSC IAS Archives

11. Consider the following statements: 1. Vietnam has been one of the fa

Consider the following statements:

1. Vietnam has been one of the fastest growing economies in the world in the recent years.
2. Vietnam is led by a multi-party political system.
3. Vietnam’s economic growth is linked to its integration with global supply chains and focus on exports.
4. For a long time Vietnam’s low labour costs and stable exchange rates have attracted global manufacturers.
5. Vietnam has the most productive e-service sector in the Indo-Pacific region.

Which of the statements given above are correct ?

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2 and 4

3 and 5

1, 3 and 4

1 and 2

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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Statements 1, 3, and 4 regarding Vietnam’s economy are correct, while statements 2 and 5 are incorrect.

– Statement 1: Vietnam has indeed been one of the fastest-growing economies globally in recent decades, driven by reforms and integration into the global economy.
– Statement 2: Vietnam is a socialist republic with a single-party system led by the Communist Party of Vietnam, not a multi-party system.
– Statement 3: Vietnam’s economic growth is strongly linked to its integration into global supply chains, particularly in manufacturing, and a focus on exports.
– Statement 4: Low labour costs and a stable exchange rate have been significant factors attracting foreign direct investment and global manufacturers to Vietnam for a long time.
– Statement 5: While Vietnam’s e-service sector is growing rapidly, claiming it is the “most productive” in the entire Indo-Pacific region is a very strong and likely inaccurate claim compared to more developed economies like South Korea, Singapore, or even parts of India.

Vietnam underwent significant economic reforms (Doi Moi) starting in the late 1980s, transitioning from a centrally planned economy to a socialist-oriented market economy. Its strategic location, young population, and trade agreements have further boosted its economic trajectory.

12. Consider the following: 1. Asian Infrastructure Investment Bank 2.

Consider the following:

1. Asian Infrastructure Investment Bank
2. Missile Technology Control Regime
3. Shanghai Cooperation Organisation

India is a member of which of the above ?

1 and 2 only

3 only

2 and 3 only

1, 2 and 3

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Answer is Wrong!

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UPSC IAS – 2022

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India is a member of all three organisations listed: Asian Infrastructure Investment Bank (AIIB), Missile Technology Control Regime (MTCR), and Shanghai Cooperation Organisation (SCO).

– India is a founding member of the Asian Infrastructure Investment Bank (AIIB), which was established in 2016.
– India became a full member of the Missile Technology Control Regime (MTCR) in June 2016.
– India became a full member state of the Shanghai Cooperation Organisation (SCO) in June 2017 at the Astana summit.

AIIB is a multilateral development bank focused on infrastructure investment in Asia. MTCR is a non-proliferation regime aimed at curbing the spread of missiles and missile technology. SCO is a Eurasian political, economic, and security alliance. India’s membership in these diverse bodies reflects its growing engagement in global and regional governance structures.

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13. With reference to Convertible Bonds, consider the following statements

With reference to Convertible Bonds, consider the following statements :

As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest.
The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices.

Which of the statements given above is/are correct ?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Answer is Wrong!

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UPSC IAS – 2022

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Statement 1 is correct: Convertible bonds give the holder the option to convert the bond into a specified number of shares of the issuing company’s common stock. Because this conversion option offers potential upside (participation in stock price appreciation), investors are typically willing to accept a lower interest rate (coupon) on a convertible bond compared to a traditional non-convertible bond issued by the same company with similar maturity and risk profile. Statement 2 is incorrect: The option to convert to equity provides potential linkage to the *stock price* performance, not directly to rising consumer prices (inflation). While equity values *can* over the long term reflect or hedge against inflation, the conversion option itself is not a form of indexation to consumer price levels. A CPI-linked bond would provide direct indexation to rising consumer prices.

Convertible bonds are hybrid securities that combine features of both debt (interest payments) and equity (conversion option), offering potential capital appreciation in exchange for a lower yield.

The conversion ratio (number of shares per bond) and conversion price are set at the time of issuance. Investors might convert the bond into stock if the stock price rises significantly above the conversion price, making the value of the stock received upon conversion greater than the bond’s value.

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14. With reference to the ‘Banks Board Bureau (BBB)’, which of the followi

With reference to the ‘Banks Board Bureau (BBB)’, which of the following statements are correct ?

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The Governor of RBI is the Chairman of BBB.
BBB recommends for the selection of heads for Public Sector Banks.
BBB helps the Public Sector Banks in developing strategies and capital raising plans.

Select the correct answer using the code given below :

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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Statement 1 is incorrect: The Governor of RBI is not the Chairman of the Banks Board Bureau (BBB). The BBB was chaired by a distinguished former banker or bureaucrat. (Note: BBB has since been replaced by the Financial Services Institutions Bureau – FSIB, also chaired by someone other than the RBI Governor). Statement 2 is correct: One of the key functions of the BBB was to recommend personnel for appointment as whole-time directors and non-executive chairpersons in Public Sector Banks (PSBs). Statement 3 is correct: BBB was also tasked with advising PSBs on strategies for growth and development, including capital raising plans and ways to address stress in the banking system.

The Banks Board Bureau (now FSIB) was established to improve the governance of Public Sector Banks and recommend appointments for their top management.

The BBB was an autonomous body set up by the Government of India in 2016 as part of the Indradhanush plan for reforming PSBs. It replaced the Appointments Board for PSBs. In July 2022, the FSIB was constituted in place of BBB to recommend full-time directors and non-executive chairpersons for public sector financial institutions including PSBs and public sector insurers.

15. Consider the following statements : In India, credit rating agencies

Consider the following statements :

In India, credit rating agencies are regulated by Reserve Bank of India.
The rating agency popularly known as ICRA is a public limited company.
Brickwork Ratings is an Indian credit rating agency.

Which of the statements given above are correct ?

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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Statement 1 is incorrect: In India, credit rating agencies are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Credit Rating Agencies) Regulations, 1999. The Reserve Bank of India’s role is primarily in prescribing how banks should use these ratings for capital adequacy purposes. Statement 2 is correct: ICRA Limited is indeed a public limited company, listed on Indian stock exchanges. Statement 3 is correct: Brickwork Ratings India Pvt. Ltd. is an Indian credit rating agency, registered with SEBI.

Credit Rating Agencies in India operate under the regulatory purview of SEBI.

Besides ICRA and Brickwork Ratings, other prominent SEBI-registered credit rating agencies in India include CRISIL, CARE Ratings, India Ratings and Research (Ind-Ra), and SMERA Ratings (now Acuité Ratings & Research).

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16. Consider the following States : Andhra Pradesh Kerala Himachal Pra

Consider the following States :

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Andhra Pradesh
Kerala
Himachal Pradesh
Tripura

How many of the above are generally known as tea-producing States ?

Only one State

Only two States

Only three States

All four States

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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All four states listed are generally known as tea-producing States in India. Andhra Pradesh has tea plantations, particularly in the Araku Valley region. Kerala is a major tea producer, with famous tea-growing areas like Munnar and Wayanad. Himachal Pradesh is known for its distinctive Kangra tea. Tripura is also a significant tea-growing state in North East India, after Assam and West Bengal.

Tea cultivation in India is concentrated in several states across different geographical regions, including the North East, South India, and some hilly regions in the North.

While Assam and West Bengal (Darjeeling, Dooars) are the largest tea-producing states in India, states like Kerala, Tamil Nadu (Nilgiris), Karnataka, Himachal Pradesh, Tripura, Uttarakhand, Sikkim, Bihar, Odisha, and Andhra Pradesh also contribute to India’s tea production.

17. Consider the following statements : Tight monetary policy of US Fede

Consider the following statements :

Tight monetary policy of US Federal Reserve could lead to capital flight.
Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs).
Devaluation of domestic currency decreases the currency risk associated with ECBs.

Which of the statements given above are correct ?

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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Statement 1 is correct: A tight monetary policy by the US Federal Reserve (raising interest rates) makes dollar-denominated assets more attractive, potentially leading to capital flowing out of other countries (capital flight) as investors seek higher returns or safer assets in the US. Statement 2 is correct: Capital flight often leads to depreciation of the domestic currency. Firms with existing External Commercial Borrowings (ECBs) denominated in foreign currency (like USD) will have to pay more local currency to service the same amount of foreign currency interest payments and principal repayments. While the *interest rate* on the ECB might not change, the *cost* of that interest payment in local currency terms increases, effectively increasing the interest cost burden for the firm. Statement 3 is incorrect: Devaluation (or depreciation) of the domestic currency *increases* the currency risk associated with ECBs denominated in a foreign currency. The weaker the domestic currency, the more expensive it becomes to repay the foreign currency debt.

Tightening monetary policy in a major economy like the US can trigger capital movements globally, impacting exchange rates and the cost of foreign debt for entities in other countries.

External Commercial Borrowings (ECBs) are loans raised by eligible resident entities from recognized non-resident entities and should conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc. Currency risk on unhedged ECBs is a significant concern, especially during periods of exchange rate volatility.

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18. Which one of the following best describes the term “greenwashing”?

Which one of the following best describes the term “greenwashing”?

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Conveying a false impression that a company's products are eco-friendly and environmentally sound

Non-inclusion of ecological/environmental costs in the Annual Financial Statements of a country

Ignoring the disastrous ecological consequences while undertaking infrastructure development

Making mandatory provisions for environmental costs in a government project/programme

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Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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“Greenwashing” is a term used to describe the practice of making unsubstantiated or misleading claims about the environmental benefits of a product, service, technology, or company practices. It involves conveying a false impression to consumers that something is more environmentally sound than it actually is. Option A perfectly captures this definition. Options B, C, and D describe other aspects related to environmental accounting, development impacts, or environmental cost integration, but not greenwashing.

Greenwashing is essentially environmental marketing spin that deceives the public into believing a company or product is environmentally friendly when it is not.

Common tactics include using vague language, irrelevant certifications, hidden trade-offs (making one environmental claim while ignoring a significant negative impact), or outright lies. Regulatory bodies in various countries are increasingly cracking down on greenwashing claims.

19. With reference to the “Tea Board” in India, consider the following sta

With reference to the “Tea Board” in India, consider the following statements :

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1. The Tea Board is a statutory body.
2. It is a regulatory body attached to the Ministry of Agriculture and Farmers Welfare.
3. The Tea Board’s Head Office is situated in Bengaluru.
4. The Board has overseas offices at Dubai and Moscow.

Which of the statements given above are correct ?

1 and 3

2 and 4

3 and 4

1 and 4

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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Statement 1 is correct: The Tea Board is a statutory body established under Section 4 of the Tea Act, 1953. Statement 2 is incorrect: The Tea Board is an attached office of the Ministry of Commerce and Industry, not the Ministry of Agriculture and Farmers Welfare. Statement 3 is incorrect: The Head Office of the Tea Board is situated in Kolkata, West Bengal. Statement 4 is correct: The Tea Board maintains overseas offices in several locations to promote Indian tea exports, including Dubai and historically having presence in areas covered by Moscow.

The Tea Board of India is the apex body responsible for the development, promotion, and regulation of the tea industry in India, functioning under the Ministry of Commerce and Industry.

The Board is headed by a Chairman and consists of 31 members. Its functions include registration and licensing of tea planters, manufacturers, brokers and exporters, undertaking development and research activities, and promoting tea consumption and export.

20. With reference to the United Nations General Assembly, consider the fo

With reference to the United Nations General Assembly, consider the following statements :

1. The UN General Assembly can grant observer status to the non-member States.
2. Inter-governmental organisations can seek observer status in the UN General Assembly.
3. Permanent Observers in the UN General Assembly can maintain missions at the UN headquarters.

Which of the statements given above are correct ?

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1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2022

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All three statements are correct. The UN General Assembly (UNGA) has the ability to grant observer status to non-member States, such as Palestine and the Holy See (Vatican City). It also grants observer status to various inter-governmental organizations (IGOs) like the African Union, the European Union, and ASEAN. Permanent Observers, whether non-member states or certain IGOs, are allowed to maintain permanent observer missions at the UN headquarters in New York, facilitating their engagement with the UN system.

Observer status at the UNGA allows entities that are not full Member States to participate in the sessions and work of the General Assembly, although they do not have voting rights.

The UNGA resolution 57/301 of 2003 formalized the participation of observers. Observers can speak in debates, attend meetings, and access documentation. Permanent Observers typically maintain significant diplomatic presence at the UN headquarters.