UPSC Essentials | Daily subject-wise quiz : Economy MCQs on Banking sector, AgriStack and more (Week 74)

1. Farmers’ Registry

2. Geo-referenced Village Maps

3. Crop Sown Registry

Select the correct answer using the codes given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Explanation

— The Centre approved the Rs 2,817-crore Digital Agriculture Mission for the creation of digital public infrastructure in the farm sector by building AgriStack to provide solutions like an Aadhaar-like unique ID for farmers, a crop sown registry and geo-referenced village maps, and implementing the Digital General Crop Estimation Survey (DGCES).

— The mission will be rolled out nationally over the next two years (till 2025-26).

— The Agriculture Ministry is in the process of signing Memorandums of Understanding (MoUs) with state governments for the creation and implementation of the DPI for agriculture. There will be three DPI projects as part of the mission:

(i) Agristack: The farmer-centric DPI AgriStack consists of three foundational agri-sector registries or databases: Farmers’ Registry, Geo-referenced Village Maps, and Crop Sown Registry, all of which will be created and maintained by state/ UT governments.

— Farmers will be given a digital identity (‘Farmer ID’) similar to Aadhaar, which will be linked dynamically to records of land, ownership of livestock, crops sown, demographic details, family details, schemes and benefits availed, etc.

— The Crop Sown Registry will provide details of crops planted by farmers. The information will be recorded through Digital Crop Surveys — mobile-based ground surveys — in each crop season.

— The maps will link geographic information on land records with their physical locations.

(ii) Krishi-DSS: The Krishi Decision Support System, which was unveiled recently, will create a comprehensive geospatial system to unify remote sensing-based information on crops, soil, weather, and water resources, etc.

— This information will support crop map generation for identifying crop sown patterns, droughts/ flood monitoring, and technology-/ model-based yield assessment for settling crop insurance claims by farmers.

(iii) Soil Profile Maps: Under the Mission, detailed Soil Profile Maps (on a 1:10,000 scale) of about 142 million hectares of agricultural land are envisaged to be prepared.

Therefore, option (d) is the correct answer.

QUESTION 2

Which of the following is/are the features of the Unified Pension Scheme (UPS)?

1. Assured pension of around 50 per cent of basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years.

2. Minimum pension of Rs 5,000 per month on superannuation after a minimum of 10 years of service.

Select the correct answer using the codes given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Explanation

— The Unified Pension Scheme (UPS) is the government’s biggest outreach to Central government servants yet, and also to a small section of the salaried middle class that has Central government jobs or aspires to hold one.

— The salient features of the UPS are:

(i) Assured pension: 50% of the average basic salary drawn in the past 12 months before to superannuation for a minimum qualifying service of 25 years. This compensation is commensurate to the length of service, up to a minimum of ten years. Hence, statement 1 is correct.

(ii) Assured family pension: 60% of the employee’s pension immediately preceding death.

(iii) Assured minimum pension: Rs 10,000 per month in superannuation after 10 years of service. Hence, statement 2 is not correct.

(iv) Inflation indexation for assured pension, assured family pension, and assured minimum pension. Dearness Relief is based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), as is the case with service personnel.

(v) For every completed six months of service, a lump sum payment of 1/10th of monthly earnings (pay + DA) as of the date of superannuation is made in addition to the gratuity.

Therefore, option (a) is the correct answer.

(Other Source: http://www.pmindia.gov.in)

QUESTION 3

Consider the following statements:

Statement 1: The banking sector has been struggling with slower growth in deposits compared to credit.

Statement 2: As the gap increases between deposits and credit, it creates an asset-liability mismatch for lenders.

Which one of the following is correct in respect of the above statements?

(a) Both Statement 1 and Statement 2 are correct and Statement 2 is the correct explanation for Statement 1.

(b) Both Statement 1 and Statement 2 are correct and Statement 2 is not the correct explanation for Statement 1.

(c) Statement 1 is correct but Statement 2 is incorrect.

(d) Statement 1 is incorrect but Statement 2 is correct.

Explanation

— The banking sector has been struggling with slower growth in deposits compared to credit over the past few months. Latest data from the Reserve Bank of India (RBI) showed that while deposits grew at 11.7 per cent in the quarter ending in June 2024, bank credit rose at 15 per cent. Hence, statement 1 is correct.

— As the gap increases between deposits (which customers keep with the bank and get interest for) and credit (which the bank lends to customers at an interest rate charged from them), it creates an asset-liability mismatch for lenders. Hence, statement 2 is correct.

— The widening gap has concerned the government and the RBI, who have asked lenders to focus more on deposit mobilisation through innovative products.

— The outflow of household savings from banks to capital markets is one of the major reasons for a slower growth in deposits in the banking system.

Both Statement 1 and Statement 2 are correct and Statement 2 is not the correct explanation for Statement 1.

Therefore, option (b) is the correct answer.

QUESTION 4

Consider the following pairs:

Type of Money Market	Description
Overnight market	The tenor of transactions is one working day
Term money market	The tenor of the transactions is from 2 days to 14 days.
Notice money market	The tenor of the transactions is from 15 days to one year.

How many of the pairs given above are correctly matched?

(a) Only one pair

(b) Only two pairs

(c) All three pairs

(d) None of the above pairs

Explanation

— Money market transactions are generally used for funding the transactions in other markets including G-Secs market and meeting short term liquidity mismatches.

— The money market is for a maximum tenor of one year. Within one year, depending upon the tenors, the money market is classified into:

(i) Overnight market – The tenor of transactions is one working day.

(ii) Notice money market – The tenor of the transactions is from 2 days to 14 days.

(iii) Term money market – The tenor of the transactions is from 15 days to one year.

Therefore, option (a) is the correct answer.

(Source: rbi.org.in)

QUESTION 5

With reference to the Liquidity Adjustment Facility (LAF), consider the following statements:

1. It is a facility extended by RBI to all the banks.

2. It enables liquidity management on a day to day basis.

3. The interest rate in LAF is fixed by Banks.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 2 and 3 only

(d) 1 and 3 only

Explanation

— In the banking sector, liquidity refers to the amount of cash accessible to banks to meet short-term commercial and financial needs.

— The Liquidity Adjustment Facility (LAF) is a facility provided by the RBI to scheduled commercial banks (except RRBs) and PDs to access liquidity when needed or to park excess funds with the RBI overnight on G-Sec collateral, including SDLs. Hence, statement 1 is not correct.

— It facilitates daily liquidity management. Hence, statement 2 is correct.

— The LAF operates through repurchase agreements (repos and reverse repos), with the RBI serving as the counter-party to all transactions.

— LAF is a valuable instrument for monetary policy and liquidity management. The RBI periodically fixes the interest rate in LAF. Hence, statement 3 is not correct.

— The accounting requirements that market participants must follow for repo/reverse repo transactions under RBI’s LAF and MSF (Marginal Standing Facility) are consistent with the accounting guidelines established for market repo transactions.

Therefore, option (b) is the correct answer.

(Other Source: rbi.org.in)

Previous Daily Subject-Wise-Quiz

Daily subject-wise quiz — Polity and Governance (Week 74)

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 74)

Daily subject-wise quiz — Environment, Geography, Science and Technology (Week 74)

Daily subject-wise quiz — Economy (Week 73)

Daily subject-wise quiz – International Relations (Week 73)

Subscribe to our UPSC newsletter and stay updated with the news cues from the past week.

Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.

https://www.youtube.com/watch?v=MNesF36gKu4?si=u-6MN4wfdduZs5oP