GS Paper 3 practice questions for UPSC Mains 2026.

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: Services contribute 54.7% of GVA (Economic Survey 2024-25) but only ~30% of employment; manufacturing stuck near 14-16% of GVA against the 25% target of NMP 2011.

Body: 1) Drivers of jobless growth — capital-intensive services (IT-BPM, finance), informalisation, premature deindustrialisation. 2) Aatmanirbhar pivot — PLI in 14 sectors (₹1.97 lakh crore outlay), National Logistics Policy 2022, PM Gati Shakti. 3) Constraints — MSME credit gap (~₹25 lakh crore), skill mismatch (PLFS 2023-24), labour code delays.

Way forward: Operationalise four Labour Codes; expand Employment Linked Incentive scheme of Budget 2024-25 (₹2 lakh crore over 5 years); scale Skill India Digital Hub and PMKVY 4.0; export-led MSME clusters under SFURTI.

Introduction: National Infrastructure Pipeline (NIP) projects ₹111 lakh crore capex over FY20-25; NaBFID created by Act of Parliament 2021 with ₹20,000 crore paid-up capital.

Body: 1) NaBFID sanctions crossed ₹1 lakh crore by Q3 FY25 across roads, renewables and railways. 2) Funding stack — sovereign guarantee, ECB window, tax exemptions under Section 10(48D). 3) Constraints — bond market depth, take-out finance, ALM mismatch.

Way forward: Deepen corporate bond market via SEBI; build infra debt funds; co-financing with multilateral development banks under G20 Common Framework.

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: NSO Household Consumption Expenditure Survey 2022-23 shows rural MPCE ₹3,773 vs urban ₹6,459 — urban 1.7× rural; PLFS 2023-24 urban unemployment 6.7% vs rural 2.5%.

Body: 1) Causes — premature urbanisation, informalisation, migrant precarity exposed by COVID. 2) MGNREGA model — demand-driven, statutory, ₹86,000 crore budget FY25. 3) State pilots — Kerala AUEGS, Rajasthan Indira Gandhi Shahari Rozgar Guarantee Yojana, Odisha MUKTA. 4) Concerns — fiscal burden, urban informal labour profile, urban local body capacity.

Way forward: Use 16th Finance Commission window to design a national scheme; expand MoHUA's DAY-NULM; e-Shram portal integration; ULB capacity building under AMRUT 2.0.

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: India's median age is 28.4 years; UNFPA State of World Population 2024 confirms India crossed China as most populous; working-age share peaks ~68% by 2036.

Body: 1) Dividend window — 2018 to ~2055, with state-wise variance (Bihar peaks 2051, Kerala already past). 2) Skill gap — only 4.4% of workforce formally skilled (Economic Survey 2024-25). 3) Schemes — Skill India Digital Hub, PMKVY 4.0, NAPS, Employment Linked Incentive. 4) Risks — automation, weak female participation, mismatch between higher education and industry.

Way forward: Align NEP 2020 vocational integration; expand National Apprenticeship Promotion Scheme (NAPS); fast-track Labour Codes; gender-disaggregated Skill India targets.

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: CAG Compliance Audit 2022 flagged ₹4.5 lakh crore extra-budgetary resources between FY17-FY21 — FCI loans, NHAI bonds, fertiliser subsidies parked outside Budget.

Body: 1) Mechanisms — NSSF loans to FCI, EBRs by NHAI, IRFC borrowings for Railways. 2) Impact — fiscal deficit understated, distorted Article 293(3) consent for States, debt-to-GDP underreported. 3) Reforms — Finance Minister announced 2022 Budget to recognise EBRs; FCI loan converted to budgetary subsidy.

Way forward: Make EBR disclosure mandatory under FRBM Section 7; bring all GBE borrowings into general government debt under N.K. Singh framework; CAG real-time audit access via Section 18 of CAG (DPC) Act.

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: RBI Monetary Policy Transmission Report 2024 records 175 bps repo cycle (May 2022-Feb 2023) transmitting only ~120 bps to fresh rupee loans and ~75 bps to outstanding loans.

Body: 1) Tools — External Benchmark Linked Lending Rate (EBLR) since 1 Oct 2019; MCLR for legacy book. 2) Frictions — small savings rate stickiness, deposit competition, NBFC parallel rates. 3) Liquidity — Standing Deposit Facility (SDF), VRRR/VRR auctions. 4) Coordination — Ministry of Finance on small savings, FSDC oversight.

Way forward: Align administered small savings rates with G-Sec yield via Shyamala Gopinath formula; deepen overnight call money; broaden EBLR to MSME and personal beyond 2019 sectors.

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: 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: Public Sector Bank count dropped from 27 (2017) to 12 (post-2020 merger of 10 PSBs into 4); Budget 2021-22 announced privatisation of two PSBs and one general insurer.

Body: 1) Performance — PSB net profit ₹1.41 lakh crore FY24 (RBI Trend & Progress Report), GNPA 3.1% (Sep 2024). 2) Case for privatisation — efficiency, capital, governance autonomy. 3) Concerns — financial inclusion mandate, RRB-PSB linkage, employee unions, BBB recommendations. 4) Banking Companies (Acquisition) Amendment pending.

Way forward: Empower Bank Boards Bureau (now Financial Services Institutions Bureau); strategic disinvestment with golden share; ringfence priority sector mandate via SBI-led consortium.

Introduction: NBFC sector AUM crossed ₹50 lakh crore (RBI Financial Stability Report Dec 2024); credit to GDP from NBFCs ~13%; IL&FS (2018) and DHFL (2019) defaults reshaped supervision.

Body: 1) Scale-Based Regulation effective 1 Oct 2022 — Base, Middle, Upper, Top Layer with PCA-like norms. 2) Risk concerns — unsecured retail (RBI Nov 2023 risk weight increase to 125%), interconnectedness, ALM mismatch. 3) Governance — CFO and compliance officer norms; bank-NBFC co-lending caps.

Way forward: Operationalise NBFC-Upper Layer PCA; deepen corporate bond market; expand NaBFID's take-out finance window; supervisory colleges for large NBFCs.

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: MoRTH built 12,349 km of NH in FY24 (33.8 km/day); Bharatmala Pariyojana Phase-I (2017) covers 34,800 km at ₹5.35 lakh crore — extended completion to FY28.

Body: 1) Asset creation — economic corridors, expressways (Delhi-Mumbai, Dwarka, Bengaluru-Chennai). 2) Financing — toll-operate-transfer (TOT) bundles, NHAI InvIT, NHIT raised ₹16,000+ crore. 3) Constraints — land acquisition, environmental clearances, ribbon development.

Way forward: Sequence Bharatmala Phase-II under National Master Plan; expand TOT and InvIT pipeline; integrate Gati Shakti for forest and wildlife clearances; emphasis on EV charging on NH grid.

Introduction: India imports 87.7% of crude oil and ~50% of natural gas (PPAC Apr 2025); Cabinet approved National Green Hydrogen Mission (Jan 2023) with ₹19,744 crore outlay; PM Surya Ghar Muft Bijli Yojana (Feb 2024) targets 1 crore rooftops.

Body: 1) Demand-side — Mission LiFE (Lifestyle for Environment, UNFCCC COP26), Star Rating, Perform-Achieve-Trade. 2) Supply-side — Green Hydrogen, SIGHT incentives, 500 GW non-fossil by 2030. 3) Risks — Strait of Hormuz exposure, Russia discounts ending, REC market depth.

Way forward: Mandatory Energy Audit under BEE Section 14(i); expand Strategic Petroleum Reserve Phase-II (6.5 MMT); fast-track CBG and bioethanol blending (20% E20 target advanced to 2025-26).

Introduction: Kharif sown with south-west monsoon (June-Oct), harvested Sep-Oct; Rabi sown Oct-Dec, harvested Mar-May; Ministry of Agriculture's 4th Advance Estimates 2023-24 records 332.3 MT foodgrain.

Body: 1) Kharif — rice, jowar, bajra, cotton, soybean; depends on monsoon; supported by Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). 2) Rabi — wheat, mustard, gram, peas; depends on residual moisture and irrigation; supported by Pradhan Mantri Fasal Bima Yojana (PMFBY).

Way forward: Crop diversification under Rashtriya Krishi Vikas Yojana; align MSP with sustainability incentives; expand PMKSY 'per drop more crop'.