2021

Statement 1 is Incorrect: The International Seabed Authority (ISA) regulates seabed mining in international waters. The Global Ocean Commission was a 2013-2016 international initiative of leaders aiming to reverse ocean degradation, focusing on the high seas.

Statement 2 is Correct: Like other countries, India can apply for and receive exploration licenses from the ISA for areas beyond national jurisdictions. Since 2014, India has obtained licences from the International Sea Bed Authority for seabed mineral exploration in international waters.

Statement 3 is Correct: Rare earth minerals are among the potential resources found on the seabed in international waters, although their commercial viability is still being explored.

Therefore, the correct statements are 2 and 3 only.

Statement 1 is incorrect: The oil palm tree (Elaeis guineensis) is native to West Africa, not Southeast Asia. However, Indonesia and Malaysia are now the largest producers of palm oil because the tree was introduced and widely cultivated there due to favorable tropical conditions.

Statement 2 is correct: Palm oil and its derivatives (such as palm kernel oil) are widely used in cosmetic and personal care products, including lipsticks, soaps, and perfumes. It acts as a moisturizing agent, emulsifier, and texture enhancer in these products.

Statement 3 is correct: Palm oil is a major feedstock for biodiesel production. Palm-based biodiesel (Palm Methyl Ester - PME) is used as a renewable fuel alternative in several countries, including Malaysia, Indonesia, and parts of Europe.

Didwana, Kuchaman, Sargol, and Khatu are the names of saline lakes of Rajasthan.

The Sutlej is the river that joins the Indus directly after receiving the collective drainage of the other three rivers. According to NCERT Class 11 (India: Physical Environment), the Jhelum and Ravi rivers join the Chenab, and the Chenab subsequently joins the Sutlej in Pakistan. The Sutlej then flows into the Indus a few kilometres above Mithankot. Thus, the Sutlej acts as the final conduit for the combined waters of the Jhelum, Ravi, and Chenab before their confluence with the Indus. This geographical sequence is confirmed by the official UPSC Answer Key for the 2021 Prelims, which identifies Option D as the correct answer.

* Bacteria can be cultured and grown in various artificial culture media, such as nutrient broth, agar plates, or other specific media formulations. Bacteria can metabolize and utilize the nutrients provided in these synthetic culture media to grow and reproduce.

* Fungi can also be cultured in artificial media, such as potato dextrose agar, Sabouraud dextrose agar, or other specialized fungal growth media. Fungi can utilize the organic compounds and nutrients present in these synthetic media to support their growth and development.

* Viruses, on the other hand, are obligate intracellular parasites and cannot be directly cultured in artificial or synthetic media. Viruses require living host cells to replicate and propagate, as they lack the necessary machinery for autonomous growth and reproduction.

1. The Guptas of Magadha: The Later Gupta dynasty did indeed succeed the imperial Guptas and ruled parts of Magadha during the early 7th century.

2. The Paramaras of Malwa: The Paramara dynasty emerged much later, around the 9th century, and ruled in central India (Malwa region).

3. The Pushyabhutis of Thanesar: The Pushyabhuti dynasty, also known as Vardhana, flourished in the 6th and 7th centuries and held power in parts of North India, including Thanesar.

4. The Maukharis of Kanauj: The Maukhari dynasty rose to prominence after the Guptas and controlled Kanauj for some time.

5. The Yadavas of Devagiri: The Yadava dynasty, also known as the Seuna dynasty, established their kingdom much later, around the 12th century, in western India.

6. The Maitrakas of Valabhi: The Maitrakas were contemporaries of the Guptas and established an independent kingdom in western India (Gujarat) after being tributary chiefs for a while.

Therefore, the correct answer is 1, 3, 4 and 6.


Statement 1 is incorrect. The 'lender of last resort' (LoLR) function of the central bank primarily applies to commercial banks and financial institutions, not trade and industry bodies. Businesses and industries generally rely on commercial banks, financial institutions, and capital markets for funds. The Reserve Bank of India (RBI) does not directly lend to trade and industry bodies under its LoLR function.

Statement 2 is correct. The central bank (RBI) acts as the 'lender of last resort' for commercial banks facing liquidity shortages. This helps prevent bank failures and maintains financial stability. RBI provides liquidity through mechanisms like repo operations, open market operations (OMO), and special liquidity facilities.

Statement 3 is incorrect. The RBI does not directly lend to the government to cover budgetary deficits under the 'lender of last resort' function. The government primarily finances deficits through market borrowings, treasury bills, and bonds. However, RBI can indirectly support the government by purchasing government securities in the open market (OMO) or monetizing debt in special situations (historically, through ways and means advances - WMA).


Statement 1 is Correct: Under the RBI Retail Direct scheme, retail investors can participate in the primary market for Government Securities (G-Secs) and Treasury Bills (T-Bills) by opening a Retail Direct Gilt (RDG) account or using existing demat accounts to place bids in auctions.

Statement 2 is Correct: The Negotiated Dealing System-Order Matching (NDS-OM) is an anonymous, electronic, screen-based trading platform for government securities in India. It is owned by the Reserve Bank of India (RBI) and operated by the Clearing Corporation of India Limited (CCIL) on its behalf.

Statement 3 is Incorrect: Central Depository Services Ltd (CDSL) was promoted by the Bombay Stock Exchange (BSE) in association with leading commercial banks such as the State Bank of India, Bank of India, and HDFC Bank. The RBI is the regulator of the banking sector and does not promote CDSL.

Statement 1 is Correct. WaterCredit uses microfinance tools to help people access clean water and sanitation solutions. It provides small loans to individuals and households to invest in these facilities.

Statement 2 is Incorrect. WaterCredit is not a global initiative under WHO and World Bank. It's an initiative of Water.org, an international non-profit organization focused on water and sanitation access.

Statement 3 is Correct. WaterCredit aims to empower people by enabling them to pay for their own water and sanitation needs, reducing reliance on potentially unreliable subsidies.

Therefore, the correct answer is 1 and 3 only.

Statement A is incorrect: Increase in the Cash Reserve Ratio (CRR) in banks. CRR is the percentage of deposits banks must keep with the RBI. If CRR increases, banks have less money to lend, reducing the money multiplier.

Statement B is incorrect: Increase in the Statutory Liquidity Ratio (SLR) in banks. SLR is the percentage of deposits banks must keep in liquid assets like gold or government securities. A higher SLR means less lending capacity, reducing the money multiplier.

Statement C is correct: Increase in the banking habits of the people. If more people deposit money in banks instead of holding cash, banks get more reserves to lend, increasing the money multiplier. This expands the credit creation process, leading to a higher money supply.

Statement D is incorrect: Increase in the population of the country. A higher population does not directly impact the money multiplier unless it leads to a rise in banking habits or economic activity.

The most inflationary method of financing a budget deficit is the creation of new money.

Option A is incorrect: Repayment of public debt involves the government transferring money back to the creditors (the public). This increases the liquidity and money supply in the hands of the public. However, it is generally less inflationary than printing new money because the funds used for repayment often come from tax revenues, which reduces the disposable income of the public elsewhere.

Option B is incorrect: Borrowing from the public involves a transfer of existing money from individuals and private institutions to the government. Since the total money supply in the economy remains the same (it just changes hands), this is considered the least inflationary way to finance a deficit.

Option C is incorrect: Borrowing from commercial banks can lead to an increase in the money supply if banks use their excess reserves to lend to the government, potentially leading to credit creation. While more inflationary than borrowing from the public, its impact is still significantly lower than the direct creation of new money.

Option D is correct: Creation of new money (often called deficit financing or monetization of debt) occurs when the central bank prints new currency to fund government expenditure. This directly increases the 'high-powered money' or monetary base in the economy. This expansion of the money supply, without a corresponding increase in the production of goods and services, leads to a sharp rise in price levels, making it the most inflationary option.

Expansionary policies: Expansionary policies like increased government spending or lower interest rates can stimulate economic activity and consumer spending. This can lead to excess demand that outstrips supply, causing prices to rise.

Fiscal stimulus: Similar to expansionary policies, fiscal stimulus through government spending injections can create an inflationary gap if it's excessive.

Higher purchasing power: Higher purchasing power can contribute to demand-pull inflation. If people have more money to spend due to factors like wage increases or wealth accumulation, it can lead to increased demand for goods and services.

Inflation-indexing wages: While inflation-indexing wages can contribute to a wage-price spiral in some cases, it's not necessarily a direct cause of demand-pull inflation. It can be a consequence of inflation rather than a primary driver.

Rising interest rates: Rising interest rates generally act as a tool to cool down an economy and reduce inflation. They make borrowing more expensive and encourage saving, thereby reducing the money supply and aggregate demand.

Therefore, the correct code is 1, 2, and 4.


A. Diversion to Real Estate: While this can happen, it still involves some economic activity and might generate taxes (though potentially not on the full value of the transaction if black money is used).

B. Investment in Unproductive Activities: This can hurt the economy, but the government loses tax revenue regardless of the type of investment if it's funded by black money.

C. Donations to Political Parties: This is a concern, but the lost tax revenue likely outweighs the impact of such donations.

D. Loss of Revenue: Black money, by definition, avoids taxes. This directly reduces the government's income, limiting its ability to fund public services, infrastructure, and social welfare programs.

Tax evasion through black money creation significantly hinders the government's ability to function effectively and meet the needs of its citizens. This is why it's a major concern.

Statement 1 is correct. When a country devalues its currency, it becomes cheaper for foreign buyers to purchase the country's exports. This can lead to increased demand for exports, making domestic producers more competitive in the international market.

Statement 2 is incorrect. Devaluation actually decreases the foreign value of the domestic currency. The whole point is to make the domestic currency less expensive relative to foreign currencies.

Statement 3 is also incorrect. While improved export competitiveness can lead to a better trade balance (more exports, fewer imports), it's not a guaranteed outcome. Other factors like import prices, global demand, and domestic production costs can also influence the trade balance. Devaluation can also lead to increased import costs if the country relies on imported raw materials.

Therefore, the correct code is 1 only.

Foreign Direct Investment (FDI) refers to the investment through capital instruments by a person resident outside India in an unlisted Indian company, or in 10% or more of the post-issue paid-up equity capital of a listed Indian company.

* Statements 1 and 3 are correct: Foreign Currency Convertible Bonds (FCCBs) and Global Depository Receipts (GDRs) are instruments used by Indian companies to raise capital from foreign markets. Under the FDI policy of the Government of India, investments made through these instruments are treated as part of the FDI framework because they represent or convert into equity shares of the company. * Statement 2 is correct: While Foreign Institutional Investment (FII) is generally categorized as Portfolio Investment, the Arvind Mayaram Committee recommended that any investment by a foreign investor/FII/FPI that exceeds 10% of the equity of an Indian company should be treated as FDI. Thus, with the condition of reaching the 10% threshold, FII is included in FDI. * Statement 4 is incorrect: Non-Resident External (NRE) deposits are bank accounts maintained by NRIs in Indian banks. These are classified as 'Banking Capital' or 'External Debt' (if repatriable) and are not considered as Foreign Direct Investment in a productive enterprise.

Statement 1 is correct: The Federal Reserve's monetary policy decisions, particularly regarding interest rates, can impact global capital flows. If the Fed raises interest rates, it can make US investments more attractive, potentially leading to some outflow of capital from India. This could affect demand for Indian government bonds and influence their yield.

Statement 2 is correct: The RBI's monetary policy plays a crucial role in influencing Indian government bond yields. The RBI's actions like setting repo rates, open market operations, and cash reserve ratio (CRR) can affect the overall liquidity in the banking system. Higher liquidity can lead to lower yields, and vice versa.

Statement 3 is correct: Inflation expectations and short-term interest rates are important factors for investors when considering the return on government bonds. Higher inflation expectations can lead investors to demand higher yields to compensate for the potential erosion of purchasing power. Similarly, short-term interest rates can act as a benchmark for bond yields.

Therefore, all three factors significantly influence the yields of Indian government bonds.

Statement 1 is incorrect. Urban Cooperative Banks (UCBs) are not solely regulated by State Governments. They are jointly regulated by the Reserve Bank of India (RBI) and the respective State Governments. In 2020, the Banking Regulation (Amendment) Act, 2020 gave RBI more control over UCBs, bringing them largely under its regulatory framework for financial stability.

Statement 2 is correct. As per the Banking Regulation (Amendment) Act, 2020, Urban Cooperative Banks can raise funds by issuing equity shares, preference shares, and unsecured debentures with RBI approval. This allows UCBs to strengthen their capital base and improve financial health.

Statement 3 is correct. Initially, cooperative banks were regulated under state laws. In 1966, an amendment to the Banking Regulation Act, 1949, brought Urban Cooperative Banks (UCBs) under RBI's purview for banking-related functions. However, their management and administrative aspects remained under state cooperative laws.


Statement 1 is Correct: Substitutes are goods that can be used in place of each other. When the price of a substitute (e.g., tea) increases, the good in question (e.g., coffee) becomes relatively cheaper, leading consumers to switch to it and increasing its market demand.

Statement 2 is Incorrect: Complementary goods are consumed together (e.g., cars and petrol). According to standard economic principles (NCERT Class 12 Microeconomics), an increase in the price of a complement leads to a decrease in the demand for the good, as the total cost of using the two together rises.

Statement 3 is Incorrect: For an inferior good, there is an inverse relationship between income and demand. As the income of consumers increases, they tend to switch to superior or normal goods, causing the demand for the inferior good to decrease.

Statement 4 is Correct: According to the Law of Demand, other things remaining equal (ceteris paribus), a fall in the price of a good leads to an increase in the quantity demanded by consumers.

During an economic recession, the goal is to stimulate economic activity and consumer spending.

A. Cut in Tax Rates & Increase in Interest Rates. Cutting taxes puts more money in people's pockets, potentially increasing spending. However, raising interest rates discourages borrowing and investment, potentially hindering economic growth. This combination could have offsetting effects.

B. Increase in Expenditure on Public Projects. This injects money into the economy through government spending, creating jobs and boosting demand for goods and services. This is a typical measure during recessions.

C. Increase in Tax Rates & Reduction of Interest Rates. Increasing taxes reduces disposable income, dampening consumer spending. Lowering interest rates encourages borrowing and investment, but it might not be effective if there's low confidence in the economy.

D. Reduction of Expenditure on Public Projects. This reduces government spending, taking money out of circulation and potentially worsening the recession.

Therefore, the most likely step during an economic recession is (B) Increase in expenditure on public projects

Statement 1 is correct. The Governor of RBI is appointed by the Central Government under the RBI Act, 1934. The Appointments Committee of the Cabinet (ACC), led by the Prime Minister, finalizes the selection. The tenure is typically four years, but the government has the authority to extend or terminate the term.

Statement 2 is incorrect. The Constitution of India does not have any direct provision allowing the Central Government to issue directions to the RBI. However, Section 7 of the RBI Act, 1934, gives the Central Government the power to issue directions to the RBI in the public interest, but this is a statutory provision, not a constitutional one.

Statement 3 is correct. The powers, functions, and responsibilities of the RBI Governor come from the Reserve Bank of India Act, 1934. The Act defines the Governor's role, monetary policy responsibilities, and overall authority over banking regulations.

* Cnidarians: Many cnidarian species, such as corals, develop symbiotic relationships with single-celled algae called zooxanthellae. This symbiosis is crucial for the survival and growth of coral reefs.

* Fungi: Fungi are known to form various symbiotic relationships with other organisms, including * Mycorrhizal associations with plant roots, where the fungus helps the plant absorb nutrients in exchange for carbohydrates. * Lichens are a symbiotic relationship between a fungus and an algae or cyanobacteria.

* Protozoa: Some protozoa living in the digestive tracts of termites and ruminant animals, helping them break down cellulose.

Therefore, all three groups - cnidarians, fungi, and protozoa - have species that can form symbiotic relationships with other organisms.

The concentration of wealth violates the Directive principles of state policy.

Under Article 39 of the Constitution of India, the State shall direct its policy towards ensuring that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. It is a key part of ensuring economic justice for all.

* The Separation of Powers between the legislature, the executive, and the judiciary constitute an important safeguard of liberty in a liberal democracy.

* The doctrine of Separation of powers entails the division of the legislative, executive, and judicial functions of government among different organs. This separation minimizes the possibility of arbitrary excesses by the government since all three organs act as checks and balances on the powers of each other. Therefore, none of the three organs can usurp the essential functions of other organs.

* This demarcation prevents the concentration of excessive power by any branch of the Government. It thus helps to safeguard the liberty and rights of the people in a democracy.

Statement 1 is correct. Sodium lamps emit light in a 360-degree pattern, while LED lamps are directional.

Statement 2 is incorrect. LED lamps generally have a longer lifespan compared to sodium lamps.

Statement 3 is correct. Sodium lamps emit monochromatic light, whereas LED lamps offer a wider spectrum of visible light, providing significant colour advantages in street lighting.

Statement 1 is Correct: Under Article 128, the Chief Justice of India may, at any time, with the previous consent of the President, request a retired Judge of the Supreme Court or a duly qualified retired Judge of a High Court to sit and act as a Judge of the Supreme Court.

Statement 2 is Incorrect: The Supreme Court derives its explicit power of review from Article 137 of the Constitution. High Courts have no equivalent explicit constitutional provision granting them review powers. While High Courts, being Courts of Record under Article 215, possess certain inherent powers, their power of review is neither equivalent in source nor in scope to the Supreme Court's review power under Article 137. This distinction was the basis of the official UPSC Answer Key for Prelims 2021, which confirmed Option (A) as correct.

* A comprehensive definition of state should include following elements:

* A community of people permanently occupying a definite territory: This establishes the physical foundation of the state - a population and a defined geographical area.

* Possessing an organized government: This highlights the presence of a central authority that governs the population within the territory.

* Independent of external control (sovereignty): This emphasizes the state's autonomy in exercising its power within its territory.

* The legislation described would violate Article 14 of the Indian Constitution.

* Article 14 guarantees Equality Before Law and Equal Protection of Laws. This means that laws must be applied fairly and consistently, and everyone should be treated equally under the law.

* Legislation that gives unchecked power to the executive or administration to apply the law violates this principle.

Option B is incorrect. Article 28 is related to the right to freedom of religion.

Option C is incorrect. Article 32 confers the right to remedies for the enforcement of the fundamental rights of an aggrieved citizen. Article 32 affirms the right to move the Supreme Court if a fundamental right is violated. Under this article, the Supreme Court can issue writs for the enforcement of any of the fundamental rights of the citizens.

Option D is incorrect. Article 44 provides for one of the Directive Principles of State Policy. Article 44 says that the State shall endeavor to secure for the citizens a uniform civil code throughout the territory of India.

Statement 1 is incorrect: Police Custody means that the police have the physical custody of the accused while Judicial Custody means an accused is in the custody of the concerned Magistrate. In Police custody, the accused is lodged in a police station lockup while in Judicial Custody, he is locked up in the jail.

Statement 2 is correct: During Judicial Custody, the police officer in charge of the case is not allowed to interrogate the suspect. However, the court may allow the interrogations to be conducted if it opines the interrogation is necessary under the facts produced before the court. However, during police custody, the police officer in charge of the case may interrogate the suspect.

The Ministry of Tribal Affairs (MoTA) is the designated nodal agency at the national level for the implementation of the Forest Rights Act (FRA), 2006. While the Act pertains to forest land, it is primarily a social welfare and rights-based legislation aimed at correcting historical injustices faced by forest-dwelling communities. Consequently, the responsibility for its implementation and the issuance of operational guidelines lies with MoTA to ensure the protection of tribal interests and the recognition of individual and community forest rights, rather than the Ministry of Environment, Forest and Climate Change which focuses on conservation.

Option A is correct. In a federal system, power is distributed between the central government and the states. There can be disputes about the division of power or interpretation of the Constitution. An independent judiciary acts as an impartial umpire to settle these disputes and uphold the Constitution. It ensures that both the central government and the states function within their constitutional boundaries.The other options, while relevant to Indian polity, are not exclusive to federal systems


Option B is incorrect. The Union Legislature having elected representatives from constituent units is a common feature in both federal and some unitary states with devolved power.

Option C is incorrect. The Union Cabinet having elected representatives from regional parties is not a defining characteristic of federalism. Political party affiliation doesn't necessarily determine the federal structure.

Option D is incorrect. The Fundamental Rights being enforceable by Courts of Law, while essential for a democracy, this feature exists even in some non-federal states.