The expansion of the PLI scheme is expected to significantly contribute to which of the following aspects of India's economy?
A Decreased foreign direct investment (FDI) due to protectionist policies.
B Increased reliance on imported goods for critical sectors.
C Enhanced job creation, technological upgradation, and global competitiveness of Indian industries.
D Reduced government revenue due to widespread tax exemptions.
Answer: C
The PLI scheme's expansion is aimed at attracting significant investments, leading to increased production capacity, technological advancements, and the creation of numerous jobs across various manufacturing sectors. This, in turn, enhances India's global competitiveness and reduces import dependence.
32.
Which of the following statements accurately describes the operational mechanism of the PLI scheme?
A It provides upfront capital grants to companies for setting up new manufacturing units.
B It offers incentives as a percentage of incremental sales over a base year for products manufactured in India.
C It mandates government ownership in companies receiving incentives.
D It focuses exclusively on the service sector to boost employment.
Answer: B
The PLI scheme provides incentives to companies based on their incremental sales of manufactured products over a base year. This performance-linked approach encourages companies to increase production and sales, thereby boosting domestic manufacturing. The scheme covers various sectors, including electronics, automobiles, pharmaceuticals, and textiles.
33.
What is the primary objective of the Production Linked Incentive (PLI) scheme launched by the Government of India?
A To provide direct financial assistance to small and medium enterprises (SMEs) for working capital.
B To boost domestic manufacturing, enhance exports, and reduce import dependence in key sectors.
C To offer subsidies for agricultural produce to ensure food security.
D To fund research and development in space technology exclusively.
Answer: B
The Production Linked Incentive (PLI) scheme is designed to incentivize domestic manufacturing in strategic sectors, attract investments, create jobs, reduce reliance on imports, and make Indian manufacturers globally competitive.
34.
Which of the following statements is TRUE regarding the responsibilities of Regulated Entities (REs) and Lending Service Providers (LSPs) under RBI's digital lending framework?
A LSPs are solely responsible for grievance redressal related to digital loans.
B REs must ensure that LSPs comply with data privacy and security standards.
C LSPs are permitted to store all borrower data indefinitely without consent.
D REs can disburse loans through LSPs' bank accounts to speed up the process.
Answer: B
The RBI guidelines clearly state that Regulated Entities (REs) are ultimately responsible for the actions of their Lending Service Providers (LSPs). This includes ensuring that LSPs adhere to all data privacy and security standards, and that a robust grievance redressal mechanism is in place, with a nodal officer appointed by the RE.
35.
According to the RBI's tightened norms for digital lending, what is the primary purpose of the mandatory 'Key Fact Statement' (KFS) that must be provided to borrowers?
A To serve as a marketing brochure for other financial products.
B To provide a summary of the loan agreement, including all costs and terms, before execution.
C To act as a legal waiver for the lender in case of default.
D To track the borrower's digital footprint for credit scoring.
Answer: B
The Key Fact Statement (KFS) is a crucial requirement under RBI's digital lending guidelines. It aims to enhance transparency by providing borrowers with a clear and concise summary of the loan terms, including the Annual Percentage Rate (APR), all fees, charges, and other relevant information, before they commit to the loan.
36.
Which of the following is a key measure introduced by the Reserve Bank of India (RBI) to enhance consumer protection in digital lending?
A Mandatory direct disbursement of loans to the borrower's bank account.
B Allowing Lending Service Providers (LSPs) to directly charge processing fees from borrowers.
C Eliminating the need for a cooling-off period for small-value digital loans.
D Permitting automatic increase in credit limits without explicit borrower consent.
Answer: A
The RBI's digital lending guidelines mandate that the loan disbursement should be made directly into the bank account of the borrower without any pass-through to the Lending Service Provider (LSP). This ensures transparency and prevents unauthorized deductions.
37.
Beyond trade liberalization, what other areas are likely to be covered or strengthened by the landmark ASEAN-EU Free Trade Agreement finalized in 2026?
A Joint space exploration missions and defense cooperation.
B Investment, intellectual property rights, and sustainable development.
C Cultural exchange programs only, with no economic provisions.
D Cooperation in combating piracy in international waters.
Answer: B
Modern FTAs typically go beyond tariff reductions to include provisions on investment protection, services trade, intellectual property rights, competition policy, and increasingly, sustainable development and digital trade, reflecting the comprehensive nature of the ASEAN-EU agreement finalized in 2026.
38.
The finalization of the ASEAN-EU Free Trade Agreement in 2026 is significant because it connects two major global economic regions. Which of the following best describes the economic scale of these regions?
A EU is a large developed market, while ASEAN is a group of smaller developing economies with limited trade.
B Both ASEAN and EU represent substantial economic blocs with significant global trade influence.
C ASEAN is a single economic powerhouse, and the EU is a collection of minor trading nations.
D Both regions have negligible impact on global trade.
Answer: B
Both the European Union and the Association of Southeast Asian Nations are major economic players. The EU is one of the world's largest single markets, and ASEAN represents a dynamic and rapidly growing economic bloc with significant collective GDP and trade volume.
39.
In 2026, the Association of Southeast Asian Nations (ASEAN) and the European Union (EU) finalized a landmark Free Trade Agreement (FTA). What is a key objective of this agreement?
A To restrict trade between the two blocs.
B To promote economic integration and boost trade and investment.
C To create a common currency for both regions.
D To establish a joint military alliance.
Answer: B
The ASEAN-EU FTA aims to reduce trade barriers, harmonize regulations, and foster greater economic cooperation, thereby boosting trade volumes and investment flows between the two significant economic blocs.
40.
The G77 Summit, where India called for UNSC reforms in 2026, is a forum primarily representing which group of countries?
A Developed economies of North America and Europe.
B Emerging economies with strong industrial bases.
C Developing countries.
D Small island developing states (SIDS).
Answer: C
The G77 is a group of 77 developing countries that was founded to promote their collective economic interests and enhance their negotiating power in the United Nations. In 2026, the group has expanded significantly beyond its original 77 members.
