GS Paper 3 practice questions for UPSC Mains 2026.

Introduction: Combined Centre-State tax-GDP ratio ~17-18%; Centre alone ~11.7% (Economic Survey 2024-25); OECD average ~34%.

Body: 1) Narrow direct tax base — ~8 crore filers, less than 2 crore pay. 2) GST structure — rate rationalisation pending; cess sunset. 3) Compliance leakages, exemptions, exclusions (petroleum, real estate).

Way forward: GoM on GST rate rationalisation under GST Council Article 279A; Direct Tax Code roll-out; widen TDS net and use AIS-based nudges by CBDT.

Introduction: 16th Finance Commission under Arvind Panagariya was constituted in December 2023 for the award period 2026-31; 15th FC retained vertical devolution at 41%.

Body: 1) 15th FC — 41% vertical share, 2011 Census + demographic performance weight. 2) Issues — cesses and surcharges erode divisible pool (~18-20%), GST compensation sunset, off-budget borrowing by states. 3) Article 280 mandate and grants-in-aid under Article 275.

Way forward: Rationalise cesses; revise FRBM debt path for states; institutionalise GST Council and Finance Commission interface.

Introduction: Gross NPAs of scheduled commercial banks fell to a 12-year low of 2.6% in March 2025 (RBI Financial Stability Report, June 2025); credit growth at ~13.7% outpacing deposit growth ~10.8%.

Body: 1) IBC 2016 and 4R framework (Recognition, Resolution, Recapitalisation, Reforms). 2) Credit-deposit gap and reliance on certificates of deposit. 3) Governance — PSB Reform Agenda EASE, RBI PCA framework.

Way forward: Strengthen IBC resolution timelines (Section 12), expand digital deposits via UPI-linked products, complete privatisation roadmap per NITI Aayog.

Introduction: Digital Agriculture Mission 2024 has an outlay of ₹2,817 crore; AgriStack builds a federated farmer ID linked to land records and Krishi Decision Support System.

Body: 1) Stack components — Farmer Registry, Geo-referenced village maps, Crop Sown Registry. 2) Use cases — PM-KISAN targeting, KCC, PMFBY claim settlement, advisories via Kisan Sarathi. 3) Exclusion risks — tenancy invisibility, female cultivators, internet access in tribal blocks.

Way forward: Anchor AgriStack to DPDP Act 2023 consent norms; co-design with Krishi Vigyan Kendras; subsidise Kisan Drone use under SMAM.

Introduction: India's food processing GVA contributes ~1.7% of GVA and ~7.7% of manufacturing GVA (MoFPI Annual Report 2024-25); processing levels at ~10% vs 30%+ in Thailand.

Body: 1) Constraints — cold-chain gap, fragmented sourcing, APMC frictions, low R&D. 2) Schemes — PLI for Food Processing (₹10,900 crore), PMKSY mega food parks and cold-chain. 3) Aggregation — FPOs and One District One Product.

Way forward: Operationalise 10,000 FPOs scheme; revise APMC Acts under e-NAM; expand PMFME for micro units.

Introduction: Indian Space Policy 2023 demarcates roles of ISRO (R&D), IN-SPACe (regulator-promoter), NSIL (commercial arm) and NGEs (private entities); India's space economy is targeted at $44 bn by 2033 (IN-SPACe Decadal Vision).

Body: 1) Policy enablers — 100% FDI under automatic route (revised 2024), GST relief, technology transfer norms. 2) Achievements — SpaDeX docking, EOS-08, Agnikul Cosmos, Skyroot Vikram-S. 3) Gaps — Space Activities Bill pending, IP and liability law, venture capital depth.

Way forward: Enact Space Activities Bill in 2026; expand IN-SPACe Technology Transfer Centre; deepen ANIC and venture financing under DPIIT.

Introduction: India's non-fossil installed capacity crossed 200 GW in 2024 (MNRE); the National Green Hydrogen Mission targets 5 MMT of green hydrogen by 2030 with an outlay of ₹19,744 crore.

Body: 1) Capacity additions — solar 90+ GW, wind 47 GW. 2) Grid integration — round-the-clock RE, BESS auctions under VGF, Green Energy Open Access Rules 2022. 3) Storage and transmission — PSP pipeline 47 GW, Green Energy Corridor phase II.

Way forward: Scale SIGHT incentives under NGHM; auction 13 GWh BESS under VGF; complete Green Energy Corridor and ISTS waiver extension.

Introduction: Biological Diversity (Amendment) Act 2023 streamlines ABS, exempts AYUSH practitioners and codified traditional knowledge; India is one of 17 mega-diverse countries hosting 7-8% of global recorded species (NBA Annual Report 2023-24).

Body: 1) Three-tier structure — NBA, SBBs, BMCs and the People's Biodiversity Register. 2) 2023 Amendment — narrower ABS for domestic users, faster IP approvals, Section 36A reforms. 3) Critiques — dilution risk, AYUSH exemption breadth.

Way forward: Strengthen NBA capacity; integrate the Nagoya Protocol; align with WIPO Genetic Resources Treaty 2024.

Introduction: India recorded its longest heatwave ever in summer 2024 with 536 heatwave days (IMD); over 40 cities now have Heat Action Plans (HAPs), but only 11 are state-level.

Body: 1) Health burden — 11,000+ suspected heat deaths since 2013 (NCDC). 2) HAP gaps — single-season focus, weak cooling-centre network, no labour rules. 3) Disaster Management Act 2005 silence on heat as 'notified disaster'.

Way forward: Notify heatwave under DM Act 2005; mandate cool-roof and white-paint norms via MoHUA; integrate with NDMA Heat Wave Guidelines 2019 and Ayushman Bharat Health and Wellness Centres.

Introduction: CERT-In reported over 22 lakh cyber incidents in 2024 (Annual Report); India ranked 10th in ITU Global Cybersecurity Index 2024 (Tier 1).

Body: 1) Institutions — CERT-In (MeitY), NCIIPC under NTRO, I4C under MHA, NCSC, Defence Cyber Agency. 2) Laws — IT Act 2000, DPDP Act 2023, Section 70 CII regime, draft Digital India Act. 3) Gaps — sector-specific CSIRTs limited, attribution lag, OT and IoT exposure.

Way forward: Operationalise Digital India Act; expand NCIIPC sectoral coverage; mandate PQC migration timeline per CERT-In; ratify Budapest Convention dialogue.

Introduction: NITI Aayog completed ten years in January 2025; replaced the 1950-vintage Planning Commission as the Centre's apex policy think tank.

Body: 1) Mandate shift — cooperative federalism via Governing Council, SDG India Index, Aspirational Districts. 2) Wins — Multidimensional Poverty Index decline (135 million out of poverty 2013-23), composite indices, e-Amrit. 3) Gaps — no allocative powers, weak monitoring of state programmes, advisory fatigue.

Way forward: Empower NITI Aayog with statutory backing under Article 263; institutionalise outcome-budget linkages with Ministry of Finance; strengthen Development Monitoring and Evaluation Office (DMEO).

Introduction: Inclusive growth — economic expansion that spreads opportunity, reduces inequality and reaches marginal groups (NITI Aayog framing).

Body: 1) Income — MGNREGA (right to 100 days wage), PM-KISAN (₹6,000/year to 11+ crore farmers). 2) Financial inclusion — PMJDY (53+ crore accounts), Stand-Up India. 3) Health-nutrition — Ayushman Bharat PMJAY ₹5 lakh cover, POSHAN 2.0. 4) Skill-credit — PMKVY 4.0, PM SVANidhi for street vendors.

Way forward: Strengthen DBT plumbing via PFMS; scale Lakhpati Didi to 3 crore; gender-budget every scheme above ₹500 crore.

Introduction: Gender Budget Statement first published with Union Budget 2005-06; Budget 2025-26 allocates ₹4.49 lakh crore (~6.8% of total outlay) across Parts A (women-specific) and B (pro-women).

Body: 1) Architecture — Gender Budgeting Cells in 57 ministries, MWCD nodal. 2) Programmes — Mission Shakti, Beti Bachao Beti Padhao, Nirbhaya Fund, Lakhpati Didi. 3) Limits — outlay vs outcome, Part B accounting, exclusion of unpaid care.

Way forward: Adopt Part C for fully gender-mainstreamed schemes; link to SDG 5 indicators; outcome budget integration.

Introduction: CRR currently 4% of NDTL (Banking Regulation Act Sec 42), SLR 18% (Sec 24); RBI Bulletin January 2025 details liquidity management.

Body: 1) CRR — sterilises liquidity, no interest paid; cut released ₹1.16 lakh crore in Dec 2024 50-bps move. 2) SLR — in G-Secs, gold, cash; supports government borrowing programme. 3) Distinction from repo/SDF (price tools).

Way forward: Modulate CRR for durable liquidity; OMO operations to support YTM stability; align with Basel III LCR requirements.

Introduction: Article 112 mandates the Annual Financial Statement; Budget presented 1 February since 2017.

Body: 1) Revenue Budget — receipts and expenditure not creating assets. 2) Capital Budget — borrowings, asset creation. 3) Demand for Grants — voted by Lok Sabha (Article 113). 4) Finance Bill — taxation proposals (Article 110). Charged vs Voted expenditure distinction.

Way forward: Strengthen outcome budgeting; align Public Financial Management System (PFMS) with Demands; widen pre-Budget consultations under FRBM Strategy Statement.

Introduction: Union Budget 2025-26 pegs capex at ₹11.21 lakh crore (3.1% of GDP), up from 1.7% in FY20; effective capex (incl. grants in aid) at ₹15.48 lakh crore.

Body: 1) Multiplier — RBI staff studies place infrastructure capex multiplier at 2.45x within four years. 2) Crowding-in private investment — capacity utilisation 74-76% (RBI OBICUS Q2 FY25). 3) Crowding-out concerns — high G-Sec yields, state capex slippage. 4) Quality — front-loading, absorptive capacity, PFMS lags.

Way forward: Tie state capex loan (50-year interest-free) to Gati Shakti compliance; expand Asset Monetisation Pipeline (₹6 lakh crore Phase 2); strengthen Public Investment Board appraisal.

Introduction: Core CPI excludes food and fuel; RBI Monetary Policy Report April 2025 placed core inflation at ~3.5% even as headline ranged 4-5%.

Body: 1) Definition — non-food non-fuel CPI; better gauge of underlying demand. 2) Use — MPC anchors expectations on core trajectory; food shocks treated as supply-side. 3) Limits — large food weight (45.9%) in CPI Combined dilutes core signal.

Way forward: Periodic CPI base revision (NSO has begun 2024 base review); supply-side coordination with Ministry of Consumer Affairs on tomato-onion-pulse chains.

Introduction: SEBI Annual Report 2023-24 records demat accounts crossing 18 crore; mutual fund AUM ₹68 lakh crore (Mar 2025 AMFI); India moved to T+1 (Jan 2023) and optional T+0 (Mar 2024).

Body: 1) Market infrastructure — T+0 pilot, ASBA for secondary, SCORES 2.0. 2) Retail participation — SIP inflows >₹26,000 crore/month; F&O risk (SEBI study Sep 2024: 93% retail F&O traders lose money). 3) Reforms — Investor Charter, OFS to retail, REIT/InvIT framework.

Way forward: Suitability framework for derivatives; expand financial literacy via SEBI's investor education fund; risk-based supervision of UCBs in equity participation.

Introduction: IBC 2016 — unified, time-bound insolvency framework; IBBI Quarterly Newsletter Q2 FY25 records ~32% recovery for financial creditors, 745+ resolutions to date.

Body: 1) Pillars — IBBI regulator, NCLT/NCLAT adjudicator, IPs, IUs. 2) CIRP timeline — 330 days (incl. litigation). 3) Outcomes — 28,800+ CIRPs admitted, ₹3.55 lakh crore realised. 4) Pre-pack for MSMEs (Aug 2021).

Way forward: Operationalise Cross-Border Insolvency (UNCITRAL Model Law); group insolvency rules; NCLT capacity augmentation.

Introduction: Sagarmala Programme (2015) under MoPSW lists 839 projects worth ₹5.8 lakh crore; major ports handled 819 MT in FY24 (IPA data); Vadhavan greenfield port approved Jun 2024.

Body: 1) Port modernisation — Indira Container Terminal, Vizhinjam transshipment commissioned 2024. 2) Connectivity — coastal economic zones, Inland Waterways NW-1. 3) Constraints — turnaround time (gap with Singapore), dredging, multi-modal interface.

Way forward: Operationalise Maritime India Vision 2030 (₹3 lakh crore investments); PPP under Major Port Authorities Act 2021; integrate with PM Gati Shakti for hinterland connectivity.