UPSC Essentials | Daily subject-wise quiz : Economy MCQs on vanilla solar projects, Public Private Partnership Appraisal Committee and more (Week 177)

(b) solar power projects that use only concentrated solar thermal technology to generate electricity without photovoltaic panels.

(c) solar power projects that are developed exclusively on government-owned land without any private-sector participation.

(d) solar power projects that combine photovoltaic generation with battery storage and wind power to ensure round-the-clock electricity supply.

Relevance: This topic is relevant for UPSC Prelims as it tests understanding of emerging terminology in India’s renewable energy sector. It is useful for understanding how evolving project models address issues of grid integration and round-the-clock power supply.

Explanation

— Hybrid renewable energy projects with high tariffs and vanilla solar projects are finding it difficult to secure buyers (power distribution companies) for their electricity, Santosh Kumar Sarangi, Secretary at the Ministry of New and Renewable Energy (MNRE), said at the BloombergNEF Summit in New Delhi.

— Vanilla solar (or ‘plain vanilla solar’) refers to standard, standalone photovoltaic solar power projects that generate electricity directly from sunlight without integrated battery storage, wind pairing, or hybrid components.

Therefore, option (a) is the correct answer.

QUESTION 2

With reference to the Foreign Currency Non-Resident (Bank), or FCNR(B) deposits, consider the following statements:

1. FCNR(B) deposits are fixed-term deposits.

2. These deposits allow overseas Indians to retain their savings in US dollars only.

3. Income tax is levied on the interest earned on FCNR(B) deposits under Indian tax laws.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Relevance: This topic is relevant for UPSC Prelims as it tests conceptual understanding of NRI banking instruments and foreign-currency deposits. It links with RBI regulations, external sector, taxation, foreign exchange management and remittances.

Explanation

— With nine days left for the closure of special forex swap facility, the Reserve Bank of India (RBI) on Saturday said the scheme has attracted $72.85 billion in foreign exchange inflows till August 21, underscoring the strong response to the central bank’s measure to augment forex liquidity and support the rupee.

— Data reported by authorised dealer banks to the RBI show that Foreign Currency Non-Resident (Bank), or FCNR(B) deposits accounted for the overwhelming share of the inflows at $65.397 billion. This was followed by Overseas Foreign Currency Borrowings (OFCBs) at $4.86 billion and External Commercial Borrowings (ECBs) at $2.591 billion.

— FCNR(B) deposits are fixed-term deposits that can be maintained by non-resident Indians, Overseas Citizens of India and Persons of Indian Origin in designated foreign currencies. Unlike ordinary rupee deposits, these deposits allow overseas Indians to retain their savings in currencies such as the US dollar, pound sterling, euro, Japanese yen, Australian dollar and Canadian dollar. Hence, statement 1 is correct and statement 2 is not correct.

— Interest earned on FCNR(B) deposits is exempt from income tax in India as long as the depositor qualifies as a non-resident under Indian tax laws. Hence, statement 3 is not correct.

Therefore, option (a) is the correct answer.

QUESTION 3

Who approves the appointment of the part-time, non-official directors on the Central Board of the Reserve Bank of India (RBI)?

(a) Union Finance Minister

(b) Prime Minister of India

(c) Appointments Committee of the Cabinet

(d) Governor of the Reserve Bank of India

Relevance: This topic is relevant for UPSC Prelims as it tests knowledge of the composition and appointment mechanism of the RBI’s Central Board. It is useful for understanding the institutional framework governing India’s central banking system.

Explanation

— The government has appointed former senior finance ministry official Annie George Mathew, economist and management consultant Janmejaya Kumar Sinha and former diplomat Syed Akbaruddin as part-time, non-official directors on the Central Board of the Reserve Bank of India (RBI) for a four-year term.

— As of today, the current strength of the board is 11, including the governor and deputy governors. After today’s appointments, it will become 14.

— The appointments were approved by the Appointments Committee of the Cabinet under Section 8(1)(c) of the Reserve Bank of India Act, 1934.

Therefore, option (c) is the correct answer.

QUESTION 4

With reference to the Public Private Partnership Appraisal Committee (PPPAC), consider the following statements:

1. It works under the Department of Economic Affairs.

2. It is responsible for appraisal and approval of central sector public private partnership (PPP) projects exceeding Rs 100 crore.

3. It appraises only PPP projects involving foreign private investment.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Relevance: This topic is relevant for UPSC Prelims as it covers an important institutional mechanism for appraisal of PPP projects in India. It links with infrastructure development, public-private partnerships, government expenditure and institutional mechanisms for project appraisal.

Explanation

— In a bid to minimise risks related to market concentration and over-leveraging, the Ministry of Civil Aviation (MoCA) plans to cap the number of airport bundles that can be awarded to the same bidder in the upcoming round of airport privatisation, as per the ministry’s submission to Public Private Partnership Appraisal Committee (PPPAC) earlier this month. The submission by MoCA was in response to a query from PPPAC chair and Secretary, Department of Economic Affairs, Anuradha Thakur in an August 4 meeting on the planned privatisation of 11 airports — clubbed into five bundles — for a 50-year period. The panel gave its in-principle approval to the proposal, as per the minutes of the meeting.

— The PPPAC, under the Department of Economic Affairs, is responsible for appraisal and approval of central sector public private partnership (PPP) projects exceeding Rs 100 crore. Hence, statements 1 and 2 are correct.

— PPPAC is not restricted to projects involving foreign private investment; its mandate covers eligible central-sector PPP projects irrespective of whether the private partner is domestic or foreign. Hence, statement 3 is not correct.

— India’s private sector-operated airport ecosystem is dominated by two groups — Adani and GMR — and concerns over the oligopolistic nature of the sector have been flagged over the past few years. Notably, in the previous round of airport privatisation in 2019, the Adani group walked away with all the six airports that were on offer. At present, the Adani group operates eight airports — Mumbai, Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, Mangaluru, and Navi Mumbai. GMR operates six airports, including Delhi, Hyderabad, North Goa (Mopa), Visakhapatnam, Nagpur, and Bidar.

Therefore, option (a) is the correct answer.

QUESTION 5

With reference to the IT Resilience Index (ITRI), consider the following statements:

1. It has been introduced by the Securities and Exchange Board of India.

2. The index tracks the resilience of technology systems used by market infrastructure institutions.

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: This topic is relevant for UPSC Prelims as it covers regulatory measures aimed at strengthening technological resilience in India’s financial markets. It can test awareness of emerging regulatory frameworks and the role of technology in maintaining financial stability.

Explanation

— Indian regulators are stepping up the vigil on cybersecurity, with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) both reiterating their focus on protecting critical parts of the financial ecosystem from rising cyber threats amid the advent of AI.

— SEBI, for example, introduced an IT Resilience Index (ITRI) for market infrastructure institutions — entities such as clearing corporations and exchanges that enable trading in financial markets. “Any disruption, degrading in performance or compromise of these (IT) systems may adversely impact critical market operations and pose risks to the trust in the securities market,” the market regulator noted in its circular. Hence, statement 1 is correct.

— The index tracks the resilience of technology systems used by market infrastructure institutions. Hence, statement 2 is correct.

Therefore, option (c) is the correct answer.

Previous Daily Subject-Wise-Quiz

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 159)

Daily subject-wise quiz — Polity and Governance (Week 177)

Daily subject-wise quiz —  Science and Technology (Week 177)

Daily subject-wise quiz — Economy (Week 176)

Daily subject-wise quiz — Environment and Geography (Week 176)

Daily subject-wise quiz – International Relations (Week 176)

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