Q119. Which set correctly lists the three sub-indices of RBI’s Financial Inclusion Index?
[UPSC CSE Prelims 2026]
(A) Credit access, insurance depth and pension coverage
(B) Bank access, GDP share and financial literacy
(C) Access, usage and quality
(D) Access, affordability and transparency
Answer: (C) Access, usage and quality
Explanation: The RBI index groups financial inclusion into access, usage and quality. These dimensions distinguish having the possibility of using formal finance from actual participation and service standards. Aggregate scores therefore represent more than account ownership alone.
Q118. What is the key objective of the Open Network for Digital Commerce (ONDC)?
[UPSC CSE Prelims 2026]
(A) To place every digital-commerce transaction under direct state control
(B) To replace all private online retailers
(C) To enable interoperability and reduce dependence on dominant closed platforms
(D) To make UPI compulsory for all internet purchases
Answer: (C) To enable interoperability and reduce dependence on dominant closed platforms
Explanation: ONDC makes it possible for participants using different compatible applications to discover and trade with one another. This open-network approach can reduce dependence on a few dominant platforms and improve access for smaller merchants.
Q117. A merchant controls prices but holds no inventory and forwards orders for shipment by a supplier. Which revenue model is this?
[UPSC CSE Prelims 2026]
(A) Dropshipping
(B) Affiliate revenue
(C) Transaction-fee revenue
(D) Agency revenue
Answer: (A) Dropshipping
Explanation: Under dropshipping the merchant accepts orders and sets the retail price without stocking products. A separate supplier fulfils orders directly. It differs from affiliate marketing, where the promoter typically earns a referral commission rather than making the sale.
Q116. What best describes crowding out in fiscal policy?
[UPSC CSE Prelims 2026]
(A) Private investment rises when government spending grows
(B) Government borrowing raises interest rates and discourages private investment
(C) Higher taxes stimulate private investment
(D) Government spending has no effect on aggregate demand
Answer: (B) Government borrowing raises interest rates and discourages private investment
Explanation: Government borrowing can compete with private borrowers for funds, raising financing costs and discouraging some planned private investment. Crowding out varies with the state of the economy, monetary accommodation and availability of savings.
Q115. A bond funding eligible projects that combine environmental and social purposes is called what?
[UPSC CSE Prelims 2026]
(A) Green bond
(B) Social bond
(C) Sustainability bond
(D) Sovereign bond
Answer: (C) Sustainability bond
Explanation: A sustainability bond directs proceeds to both environmental and social projects. A green bond instead targets eligible environmental activity, and a social bond targets social objectives. The purpose of financing determines its classification.
Q114. For M1xchange, examine:
1. It makes collateral-based MSME loans;
2. It facilitates discounting of MSME invoices and bills of exchange;
3. It serves as an MSME rating agency.
Which are correct?
[UPSC CSE Prelims 2026]
(A) 1, 2 and 3
(B) 2 only
(C) 2 and 3 only
(D) 1 only
Answer: (B) 2 only
Explanation: M1xchange is a receivables-discounting platform, not a collateral-loan provider or ratings company. It connects approved invoices with financiers so MSMEs can receive payment earlier, helping to improve working-capital management.
Q113. For real-world asset tokenisation, consider:
1. It creates blockchain-based digital tokens;
2. It can enable round-the-clock access;
3. It can widen access to investments.
Which are correct?
[UPSC CSE Prelims 2026]
(A) 1, 2 and 3
(B) 2 and 3 only
(C) 1 and 2 only
(D) 1 and 3 only
Answer: (A) 1, 2 and 3
Explanation: Tokenisation digitally represents interests in tangible or financial assets and may offer fractional participation and continuous platform access. Benefits depend on custody, enforceable rights, regulation and market liquidity; tokenisation alone does not guarantee returns.
Q112. Regarding Vizhinjam port, consider:
1 it is exclusively a domestic cargo hub;
2 it mainly promotes heritage passenger cruises;
3 its deep draft and location can reduce dependence on overseas trans-shipment hubs.
Which are correct?
[UPSC CSE Prelims 2026]
(A) 1 only
(B) 1 and 2 only
(C) 2 and 3 only
(D) 3 only
Answer: (D) 3 only
Explanation: Vizhinjam’s deep-water location close to international shipping routes can handle major container traffic and attract trans-shipment activity. Its strategic significance is not primarily exclusive domestic cargo handling or tourism, but more efficient maritime logistics.
Q111. For Sagarmala, evaluate the relations:
1 rising coastal cargo and port rankings support its port-led strategy;
2 Sagarmala 2.0 extends that strategy toward maritime innovation;
3 port-led development contradicts maritime innovation.
Which are correct?
[UPSC CSE Prelims 2026]
(A) 1 only
(B) 1 and 2 only
(C) 2 and 3 only
(D) 3 only
Answer: (B) 1 and 2 only
Explanation: Sagarmala aims to strengthen port infrastructure and coastal logistics. Higher maritime activity supports that direction, and the later programme expands it toward modernisation and innovation. Infrastructure development and innovation are complementary, not inherently contradictory.