UPSC Essentials | Daily subject-wise quiz : Economy MCQs on Household Consumption Expenditure Survey, Special Rupee Vostro Account and more (Week 176)

3. Data collected in HCES is used to measure poverty, inequality, and social exclusion.

4. The HCES was conducted every year.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) Only three

(d) All four

Relevance: This question is important for UPSC Prelims as it covers a key official statistical survey used for understanding household consumption patterns and socio-economic conditions in India. It is relevant to the Indian Economy and Social Development sections.

Explanation

— With the next edition of the Household Consumption Expenditure Survey (HCES) expected to begin in mid-2027 and continue for about a year, the ministry is looking at the adoption of “diary-based data collection” for high-income households living in gated societies, instead of a door-to-door survey by field officials.

— In this method, households note down the information themselves, as and when the relevant activity occurs. In the case of the HCES, this would mean jotting down how much is spent in a month on different goods and services, ranging from food items to haircuts.

— HCES is intended to collect data on households’ consumption and expenditure on goods and services. The survey collects data needed to monitor economic trends and identify and update the basket of consumer goods and services and weights used to calculate the Consumer Price Index. Hence, statement 1 is correct.

— The survey is conducted by the Ministry of Statistics and Programme Implementation (MoSPI). Hence, statement 2 is not correct.

— Data from HCES is also used to assess poverty, inequality, and social exclusion. The Monthly Per Capita Consumption Expenditure (MPCE), derived from HCES, is the principal indicator used for most analytical purposes. Hence, statement 3 is correct.

— In the past, the HCES was conducted every five years. However, after an overhaul of the methods, two back-to-back surveys were conducted in 2022-23 and 2023-24. Going forward, the ministry intends to conduct the HCES every three years or so. Hence, statement 4 is not correct.

Therefore, option (b) is the correct answer.

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

QUESTION 2

Consider the following statements:

1. Despite depending on imported oil and gas, India is a net exporter of petroleum products.

2. India has a large refining capacity that enables it to import crude oil, refine it into petroleum products, and export surplus refined products.

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: This question is important for UPSC Prelims because it tests the distinction between India’s dependence on imported crude oil and its position as a major exporter of refined petroleum products.

Explanation

— Amid supply tightness and elevated prices due to the West Asia crisis and stifled energy flows through the Strait of Hormuz, India’s net oil and gas imports surged by 43.4% in value from year-ago levels in the first four months of the current financial year, according to provisional data from the petroleum ministry. Net oil and gas imports — arrived at deducting petroleum product exports from oil, natural gas, and petroleum product imports — in April-July stood at $57.8 billion against $40.3 billion a year ago.

— In volume terms, oil and liquefied natural gas (LNG) imports were only marginally higher. As for petroleum product exports, the volumes declined, while export value rose. Petroleum product imports declined in volume as well as value, although the volume decline outpaced the fall in value, which is also reflective of high prices in the international market.

— India depends on imports to meet over 88% of its crude oil requirement and about half of its consumption of natural gas, which is imported as LNG. Despite depending on imported oil and gas, India is a net exporter of petroleum products due to its massive refining capacity. The country also imports some petroleum products like liquefied petroleum gas (LPG). Hence, statements 1 and 2 are correct.

Therefore, option (a) is the correct answer.

QUESTION 3

Which of the following categories are included in the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS)?

1. Undisclosed foreign income or assets located outside India up to Rs 1 crore.

2. Asset up to Rs 5 crore located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant schedule of the ITR.

3. Foreign assets of any value that were acquired through undisclosed income, provided that the assessee voluntarily declares them under the scheme.

Select the correct answer using the codes given below:

(a) 1 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

Relevance: This question is important for UPSC Prelims as it covers a recent tax-compliance initiative and tests awareness of government measures aimed at improving tax transparency and voluntary disclosure.

Explanation

— Taxpayers can now disclose foreign income and assets up to Rs 5 crore in a one-time voluntary disclosure window provided by the Income Tax Department from August 16 to December 31 under the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS).

— An assessee can declare foreign income and assets that have never been taxed before up to a maximum limit of Rs 1 crore. An assessee can also disclose assets located abroad up to Rs 5 crore that were taxed or were acquired when the taxpayer was a non-resident but did not declare them in the income tax returns (ITR).

— The scheme applies to two broad categories: i) undisclosed foreign income or asset located outside India up to Rs 1 crore; ii) asset up to Rs 5 crore located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant schedule of the ITR. Hence, statements 1 and 2 are correct.

— FAST-DS does not cover foreign assets of any value merely because they were acquired through undisclosed income and voluntarily declared. The scheme applies only to the specified categories and thresholds. Hence, statement 3 is not correct.

Therefore, option (b) is the correct answer.

QUESTION 4

With reference to the Special Rupee Vostro Account (SRVA), consider the following statements:

1. Settlement of international trade in Indian Rupees through SRVA is an additional arrangement to the existing system of trade settlement.

2. The balance held in an SRVA can be freely converted into any foreign currency without any restrictions under the existing regulatory framework.

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 question is important for UPSC Prelims as it covers a significant banking and international trade mechanism associated with India’s efforts to facilitate cross-border transactions.

Explanation

— In cross-border trade in local currencies, local currencies will play an ever-increasing role in cross-border trade and payments. The Special Rupee Vostro Account (SRVA) framework for invoicing, payment and settlement of international trade in rupees has been implemented keeping in view the evolving dynamics of our international trade.

— The settlement of International trade in Indian Rupees (INR) through SRVA is an additional arrangement to the existing system of settlement. Facilities to use SRVA balances for permissible investments make it distinct from normal Rupee Vostro Account. Hence, statement 1 is correct.

— The balance maintained in an SRVA is not freely convertible into any foreign currency without restrictions. Its utilisation is subject to the applicable regulatory framework and permitted transactions under FEMA. Hence, statement 2 is not correct.

Therefore, option (a) is the correct answer.

(Other Source: http://www.rbi.org.in)

QUESTION 5

The volume-weighted average price (VWAP) refers to:

(a) A mechanism where the average price of a stock is calculated by giving equal weight to every trade executed during the trading session.

(b) A mechanism where the average price of a stock or index is calculated solely on the basis of the highest and lowest prices recorded during the trading session.

(c) A mechanism where the closing price of a stock or index is calculated based on both the volume and the price of the entity in the final 30 minutes of the trading session.

(d) A mechanism where the closing price of a stock or index is calculated based on both the volume and the price of the entity in the final 30 minutes of the trading session.

Relevance: This question is important for UPSC Prelims as it covers a key concept related to financial markets and stock-market functioning. It is relevant to the Indian Economy syllabus, particularly capital markets, stock exchanges, market indicators and financial-market terminology.

Explanation

— Normal trading for stocks covered under the CAS system halts at 3:15 PM, and a reference price for these stocks is calculated in the next five minutes. The CAS begins after that, and continues till 3:30 PM, subject to random closure by the exchanges between 3:28 PM and 3:30 PM to avoid any last-moment manipulation.

— Currently, only stocks with futures and options (F&O) contracts available go through the CAS, while the rest continue to trade until 3:30 PM, with closing prices calculated using the traditional volume-weighted average price (VWAP) mechanism.

— VWAP is a mechanism where the closing price of a stock or index is calculated based on both the volume and the price of the entity in the final 30 minutes of the trading session.

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 176)

Daily subject-wise quiz —  Science and Technology (Week 176)

Daily subject-wise quiz — Economy (Week 175)

Daily subject-wise quiz — Environment and Geography (Week 175)

Daily subject-wise quiz – International Relations (Week 175)

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