UPSC Essentials | Daily subject-wise quiz : Economy MCQs on Production Linked Incentive scheme, central counterparties and more (Week 147)

(b) 2 and 3 only

(c) 3 and 4 only

(d) 1, 2, 3 and 4

Relevance: UPSC often tests value-chain based schemes, especially those linked to Atmanirbhar Bharat, clean energy transition, and import substitution, making PLI for solar PV highly important for Prelims 2026.

Explanation

— The Ministry of Finance and Ministry of New and Renewable Energy (MNRE) are in discussions to bring out a new capital subsidy scheme for the upstream segment of solar photovoltaic (PV) manufacturing, MNRE Secretary Santosh Kumar Sarangi told The Indian Express. The proposed scheme would be separate from the existing Production Linked Incentive (PLI) scheme for high-efficiency solar PV modules.

— The existing PLI scheme for solar PV modules covers both upstream — ingot, wafer and polysilicon — and downstream — solar cell and module manufacturing — segments. However, progress under the PLI scheme has been slower in upstream segments such as polysilicon refining and ingot and wafer production.

— Polysilicon is a highly electricity-intensive industry. The refining from silica to polysilicon is extremely electricity intensive. So, efforts will have to focus on sourcing low-cost electricity.

Therefore, option (d) is the correct answer.

QUESTION 2

Which of the following are functions of the central counterparties (CCPs)?

1. Intermediary in a market transaction — clearing and settlement

2. Guarantee the terms of a trade

3. They are responsible for eliminating price volatility risk.

4. They directly supervise stock exchanges and clearing corporations.

(a) 1 and 4 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2, 3 and 4

Relevance:CCPs are crucial financial market infrastructures that interpose themselves between buyers and sellers to ensure smooth clearing and settlement of trades. They are in focus due to rising concerns over financial stability, systemic risk, and market resilience, especially after global banking and market stress episodes. Such topics frequently appear in concept-based and statement-type prelims questions linked with current affairs.

Explanation

— The Reserve Bank of India (RBI) and the European Securities and Markets Authority (ESMA), the European Union (EU’s) financial markets regulator and supervisor, signed a memorandum of understanding (MoU) for exchange of information for the recognition of central counterparties (CCPs).

— The agreement will help resolve the long-pending dispute between India and ESMA over the supervision of domestic CCPs including the Clearing Corporation of India Ltd (CCIL). The MoU comes on the day India and the EU announced the conclusion of negotiations on the landmark Free Trade Agreement (FTA).

— Central counterparties perform two main functions as the intermediary in a market transaction — clearing and settlement — and guarantee the terms of a trade. Hence, statements 1 and 2 are correct.

— CCPs do not eliminate market or price risk; they only manage counterparty default risk. Hence, statement 3 is not correct.

— Supervision and regulation are functions of market regulators, SEBI. Hence, statement 4 is not correct.

Therefore, option (b) is the correct answer.

QUESTION 3

Consider the following statements:

1. The UAE is India’s third-largest source of India’s oil imports, behind Russia, and Saudi Arabia.

2. India depends on imports to meet over 88% of its oil demand and around half of its natural gas demand.

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: India–UAE energy cooperation is in focus due to rising crude oil imports, gas security concerns, and strategic clean energy investments. Data on India’s energy import dependence and major oil suppliers are frequently tested in UPSC Prelims through factual and elimination-based questions.

Explanation

— The rise of emerging markets, growth of artificial intelligence (AI) and expansion of digital infrastructure, and transformation of energy systems to include various sources of energy—these are the three megatrends that are defining the story of energy in the present times, and India sits at the heart of these megatrends, according to the UAE’s Minister of Industry and Advanced Technology Sultan Ahmed Al Jaber.

— The UAE is also India’s fourth-largest source of India’s oil imports, behind Russia, Iraq, and Saudi Arabia. India depends on imports to meet over 88% of its oil demand and around half of its natural gas demand. The country depends on imports to meet around two-thirds of its LPG requirement. Hence, statement 1 is not correct and statement 2 is correct.

— The UAE is investing across 11 gigawatts of solar, wind, and storage projects in India through its global climate investment vehicle Altérra, which is the world’s largest private climate investment fund. The fund has a $30-billion commitment from the UAE, and aims to mobilse further investments of up to $250 billion by 2030.

Therefore, option (b) is the correct answer.

QUESTION 4

Consider the following statements:

Statement 1: Evacuation of RE power is a major challenge.

Statement 2: Renewable power plants can become operational much faster than conventional thermal power plants, and there is inadequate transmission infrastructure and grid integration issues, which create a major challenge in evacuation.

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.

Relevance: UPSC frequently frames assertion–reason type questions linking renewable energy expansion with grid infrastructure gaps, making this a high-probability conceptual area for Prelims 2026.

Explanation

— The curtailment of renewable energy (RE) power in Rajasthan is expected to ease significantly with the commissioning of the transmission line in Fatehgarh, Santosh Kumar Sarangi, Secretary at the Ministry of New and Renewable Energy (MNRE), told The Indian Express.

— Renewable energy developers in Rajasthan have increasingly flagged curtailment during peak solar hours. According to Sarangi, this is a structural challenge linked to the faster execution timelines of renewable projects.

— Evacuation of RE power is a major challenge because renewable power plants can become operational much faster than conventional thermal power plants. Hence, statements 1 and 2 are correct.

— A coal-based power plant typically takes five to six years to become operational. So, the transmission system used to get ready by that time. But now, a solar power plant is coming up within one to two years. A wind turbine is getting ready within a one-year period, whereas the transmission system is still taking three to four to five years.

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

Therefore, option (a) is the correct answer.

QUESTION 5

With reference to the Jal Jeevan Mission (JJM), consider the following statements:

1. It aims to provide safe and adequate drinking water through individual household tap connections.

2. It is based on a community approach to water.

3. Now states would receive funds under the Jal Jeevan Mission (JJM) only after signing of separate MoUs, with each scheme mapped through a unique Scheme ID.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Relevance: JJM is a flagship scheme, frequently in news for coverage milestones, reforms in funding, and digital monitoring, making it a high-probability area for UPSC Prelims 2026.

Explanation

— States would receive funds under the Jal Jeevan Mission (JJM) only after signing of separate MoUs, with each scheme mapped through a unique Scheme ID and future releases linked to the demonstration of 15 days of continuous water supply, Union Jal Shakti Minister said. Hence, statement 3 is correct.

About Jal Jeevan Mission

— Jal Jeevan Mission is envisioned to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in rural India. Hence, statement 1 is correct.

— The programme will also implement source sustainability measures as mandatory elements, such as recharge and reuse through grey water management, water conservation, rain water harvesting.

— The Jal Jeevan Mission will be based on a community approach to water and will include extensive Information, Education and communication as a key component of the mission. Hence, statement 2 is correct.

Therefore, option (c) is the correct answer.

(Other Source: jaljeevanmission.gov.in)

Previous Daily Subject-Wise-Quiz

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 142)

Daily subject-wise quiz — Polity and Governance (Week 147)

Daily subject-wise quiz —  Science and Technology (Week 147)

Daily subject-wise quiz — Economy (Week 146)

Daily subject-wise quiz — Environment and Geography (Week 146)

Daily subject-wise quiz – International Relations (Week 146)

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