UPSC Essentials | Daily subject-wise quiz : Economy MCQs on credit societies, headline inflation and more (Week 145)

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Relevance:Credit societies are often confused with cooperative banks, making them a high-yield area for factual prelim questions. UPSC tests awareness of who regulates them and what banking functions they cannot perform.

Explanation

— Two decades after the Reserve Bank of India (RBI) stopped granting licenses for new urban co-operative banks (UCBs), the central bank has proposed reopening the licensing window. The move would favour granting UCB licenses to co-operative credit societies.

— Credit societies are regulated by the Registrar of Co-operative Societies, and not by the RBI. They can accept deposits only from its members and lend only to its members. They can’t issue cheques payable to the public or offer full banking services like online fund transfer. Hence, statement 2 is correct and statement 1 and 3 are not correct.

Therefore, option (a) is the correct answer.

QUESTION 2

With reference to the headline inflation, consider the following statements:

1. It measures the rise in prices across goods only and does not include services.

2. It is based on the Consumer Price Index.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Relevance:Headline inflation is a core concept in monetary policy and RBI-related questions, frequently tested through CPI vs WPI distinctions. UPSC uses such basics to assess understanding of economic indicators reported in current affairs.

Explanation

— India’s headline retail inflation rate based on the Consumer Price Index (CPI) rose to 1.33 per cent in the final month of 2025 from 0.71 per cent in November, pulled up by an unfavourable base effect even as food prices were down on a year-on-year basis for the seventh month in a row. Hence, statement 2 is correct.

— According to data released on Monday by the Ministry of Statistics and Programme Implementation (MoSP), retail food prices fell 2.71 per cent year-on-year in December after falling by 3.91 per cent the previous month.

— Headline inflation measures the overall rise in prices across all goods and services in an economy and is closely tied to the Consumer Price Index (CPI), which tracks the cost of a fixed basket of items. Hence, statement 1 is not correct.

Therefore, option (b) is the correct answer.

(Other Source: http://www.investopedia.com)

QUESTION 3

Which of the following is the single-point regulator for cryptocurrency exchanges operating in India?

(a) Reserve Bank of India

(b) Financial Intelligence Unit

(c) Securities and Exchange Board of India

(d) Ministry of Electronics and Information Technology

Relevance:Cryptocurrency regulation is an evolving current-affairs–driven topic, often tested through identification of the correct regulatory authority.

Explanation

— In an effort to eliminate illegal activity in the digital asset market, India’s Financial Intelligence Unit (FIU) has unveiled stringent new Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols for cryptocurrency exchanges, including mandatory liveness detection and geographical tracking during the onboarding process.

— The FIU, which operates under the Union Finance Ministry, is taking a tough stance against tools meant to conceal the paper trail of crypto wealth. The new guidelines aim to “strongly discourage” Initial Coin Offerings (ICOs) and Initial Token Offerings (ITOs) due to their lack of economic justification and high risk.

— The FIU is the single-point regulator for cryptocurrency exchanges (reporting entities or VDA service providers) operating in India under the provisions of the Prevention of Money Laundering Act (PMLA).

Therefore, option (b) is the correct answer.

QUESTION 4

With reference to the Pax Silica, consider the following statements:

1. It is an initiative of Russia.

2. It aims to build a secure supply chain ranging from critical minerals and energy inputs to advanced manufacturing and semiconductors.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Relevance:Pax Silica is a new geopolitics–technology concept emerging from current affairs, often tested through origin and objectives. UPSC uses such terms to assess understanding of tech-driven global supply chain realignments.

Explanation

— Pax Silica is a US-led strategic initiative to counter China’s dominance in new age sectors. It aims to reduce what the US calls “coercive dependencies” and protect materials and capabilities “foundational to artificial intelligence”, and “ensure aligned nations can develop and deploy transformative technologies at scale”. Hence, statement 1 is not correct.

— Pax Silica aims to build a secure supply chain ranging from critical minerals and energy inputs to advanced manufacturing and semiconductors. Hence, statement 2 is correct.

— Eight countries that Pax Silica brought together, each of which had something to offer. Japan and South Korea have technology and manufacturing expertise, the Netherlands has a stranglehold over specialised chipmaking lithography machines that are extremely hard to substitute, Australia is a repository of critical minerals while Singapore is a global transhipment hub. Israel, the UK, and the UAE are innovation centres that have all made visible progress in fostering AI expertise and ramping up supporting infrastructure.

Therefore, option (b) is the correct answer.

QUESTION 5

With reference to rice production, consider the following statements:

1. India has surpassed China to become the world’s largest rice producer in 2024-25.

2. India currently accounts for around half of global rice production.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Relevance:Rice production is a core agriculture statistic frequently linked with food security, exports, and MSP-related current affairs. UPSC tests such data to check awareness of India’s global ranking versus exaggerated numerical claims.

Explanation

— Last week, the Union Agriculture Minister said that India had surpassed China to become the world’s largest rice producer in 2024-25. India produced around 150 million metric tonnes while China produced 145.28 million tonnes in that year. Hence, statement 1 is correct.

— India currently accounts for around 28% of global rice production. A decade ago, however, India’s rice production was 104.4 million metric tonnes while China’s was 148.5 million metric tonnes — pointing to a steady growth in India output and a stagnation in China’s. Hence, statement 2 is not correct.

— India’s rice production has increased steadily over the years. Between 1969-70 and 2024-25, the area (for all seasons) under paddy cultivation increased by more than 36%, yield tripled and production almost quadrupled.

— A significant jump in area and production came in just the last five years. In 2019-20, the area under paddy was 43.66 million hectares and rice production was 118.87 million metric tonnes. In 2024-25, these figures increased to 51.42 million hectares and 150 million metric tonnes.

— Consequently, India’s share in the global output also increased from 21.95% in 2011 to 28% in 2024.

Therefore, option (a) is the correct answer.

Previous Daily Subject-Wise-Quiz

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 140)

Daily subject-wise quiz — Polity and Governance (Week 145)

Daily subject-wise quiz —  Science and Technology (Week 145)

Daily subject-wise quiz — Economy (Week 144)

Daily subject-wise quiz — Environment and Geography (Week 144)

Daily subject-wise quiz – International Relations (Week 144)

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