1. RBI’s “State of the Economy” article (Dec 2025) primarily highlights which of the following?
A. Export-led growth despite weak domestic demand
B. Strong domestic demand amid global uncertainties
C. Declining rural consumption
D. Stagflationary trends in the Indian economy
Answer: B
Explanation:
The RBI’s State of the Economy (December 2025) notes that India’s growth momentum is being driven mainly by resilient domestic demand. High-frequency indicators such as automobile sales, e-way bill generation, and logistics activity show strength. This performance persists despite geopolitical tensions and global economic uncertainty, reflecting internal economic resilience.
2. Which indicator best reflects the expansion of the formal economy according to RBI?
A. Increase in agricultural MSP
B. Growth in e-way bill generation
C. Rise in gold imports
D. Increase in fiscal deficit
Answer: B
Explanation:
E-way bill generation is a key indicator of formal economic activity under GST. The RBI highlights its rise due to GST rationalisation, stock clearance, and year-end sales. It reflects increased compliance, goods movement, and formalisation of trade within the economy.
3. As per NSO’s first advance estimate, India’s GDP growth for 2025–26 is projected at:
A. 6.5%
B. 6.8%
C. 7.0%
D. 7.4%
Answer: D
Explanation:
The National Statistical Office (NSO) projects GDP growth at 7.4% for 2025–26, an improvement over the previous year’s 6.5%. This projection reinforces the RBI’s assessment of strong domestic demand and reform-driven growth prospects.
4. CPI inflation in December 2025 rose mainly due to:
A. Food inflation spike
B. Fuel price shock
C. Reduced food deflation and higher core inflation
D. Increased indirect taxes
Answer: C
Explanation:
CPI inflation rose to 1.3% in December 2025, largely because food prices stopped declining sharply and core inflation firmed up. This indicates a gradual normalisation of inflation rather than an overheating economy.
5. Which of the following is NOT identified as a global geopolitical risk by RBI?
A. Middle East conflicts
B. Russia–Ukraine peace uncertainty
C. Greenland territorial dispute
D. South China Sea arbitration
Answer: D
Explanation:
The RBI lists risks such as U.S. intervention in Venezuela, Middle East conflicts, Russia–Ukraine uncertainty, and Greenland disputes. The South China Sea arbitration is not mentioned in the report.
6. Structural reforms highlighted by RBI in 2025 include:
Tax structure rationalisation
Implementation of labour codes
Financial sector deregulation
Which of the above are correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: D
Explanation:
The RBI identifies all three reforms as crucial to strengthening productivity and long-term growth. These reforms aim to improve ease of doing business, labour flexibility, and financial efficiency.
7. India’s export diversification strategy focuses on expanding trade with:
A. Europe and East Asia
B. Africa and Latin America
C. Central Asia only
D. Pacific Island nations
Answer: B
Explanation:
To reduce dependence on traditional markets, India is diversifying exports towards Africa and Latin America. This aligns with India’s broader Global South engagement and trade resilience strategy.
8. Talks ongoing with 14 countries/groups may cover nearly how many nations?
A. 25
B. 35
C. 50
D. 75
Answer: C
Explanation:
India’s trade negotiations involve around 14 countries or blocs, potentially covering nearly 50 nations, including the EU, GCC, and the USA, reflecting an aggressive trade diplomacy push.
9. Section 17A of the Prevention of Corruption Act requires:
A. Judicial approval before prosecution
B. Parliamentary approval before investigation
C. Government approval before inquiry/investigation
D. Lokpal approval before FIR registration
Answer: C
Explanation:
Section 17A mandates prior government approval before inquiry or investigation into decisions taken by public servants in official capacity. It was introduced in 2018 to protect honest officers from malicious probes.
10. Section 17A is often compared with which earlier provision struck down by courts?
A. Section 124A IPC
B. Section 6A of DSPE Act
C. Section 66A IT Act
D. Article 356
Answer: B
Explanation:
Section 6A of the DSPE Act required prior approval to investigate senior officials and was struck down in Subramanian Swamy vs CBI (2014) for violating Article 14. Critics argue Section 17A revives similar protection.
11. The Supreme Court’s verdict on Section 17A is best described as:
A. Unanimous validation
B. Unanimous rejection
C. Split verdict referred to a larger bench
D. Advisory opinion only
Answer: C
Explanation:
The Supreme Court delivered a split verdict, with one judge upholding Section 17A and another striking it down. The matter has been referred to a larger bench for final adjudication.
12. Which committee recommended compensation for Punjab farmers affected by border fencing?
A. Dhar Committee
B. Kapoor Committee
C. Swaminathan Committee
D. Sarkaria Commission
Answer: B
Explanation:
The Kapoor Committee (1986) recommended compensation for farmers whose land fell beyond the India–Pakistan border fence. This led to the introduction of an inconvenience allowance in 1988.
13. Approximately how much private land lies beyond the Punjab border fence?
A. 10,000 acres
B. 15,000 acres
C. 21,500 acres
D. 35,000 acres
Answer: C
Explanation:
Around 21,500 acres of private land and nearly 10,000 acres of government land lie beyond the fence, severely affecting farmers’ access and productivity.
14. Under PITA, long-term custody (1–3 years) is allowed only if:
A. Police recommend it
B. Victim lacks family support
C. Magistrate finds need of care and protection
D. Victim is unemployed
Answer: C
Explanation:
The Immoral Traffic (Prevention) Act allows long-term placement only when a magistrate explicitly finds that the person needs care and protection, ensuring liberty is not curtailed arbitrarily.
15. The Bombay High Court emphasised which constitutional principle in the PITA case?
A. Collective security
B. Procedural efficiency
C. Consent and personal liberty
D. Preventive detention
Answer: C
Explanation:
The court ruled that adult trafficking survivors retain full constitutional autonomy. Rehabilitation must be voluntary; forced confinement without consent violates Articles 19 and 21.
16. Which of the following is correct regarding prostitution under Indian law?
A. Prostitution is illegal
B. Prostitution is punishable under PITA
C. Prostitution itself is not a crime
D. Sex work requires mandatory licensing
Answer: C
Explanation:
PITA criminalises exploitation-related activities such as trafficking, brothel management, and forced detention. Prostitution per se is not illegal, reinforcing a rights-based approach.
17. India reduced import duty on New Zealand apples to 25% under:
A. RCEP
B. SAFTA
C. India–NZ FTA
D. WTO AoA
Answer: C
Explanation:
Under the India–New Zealand Free Trade Agreement, apple import duty was reduced from 50% to 25% (within quota), triggering concerns among domestic apple growers.
18. Which factor worsens Himachal’s apple crisis beyond imports?
A. Excess mechanisation
B. Climate stress and diseases
C. Overproduction
D. Decline in global demand
Answer: B
Explanation:
Erratic weather, reduced snowfall, floods, and diseases like apple scab and fire blight have reduced both yield and quality, compounding farmers’ vulnerability.
19. Parbati Giri is associated with which movement?
A. Civil Disobedience Movement
B. Non-Cooperation Movement
C. Quit India Movement
D. Home Rule Movement
Answer: C
Explanation:
Parbati Giri actively participated in the Quit India Movement (1942) at the age of 16 and became a symbol of youthful courage in Odisha’s freedom struggle.
20. The Responsible Nations Index (RNI) differs from traditional indices because it focuses on:
A. GDP and per capita income
B. Military expenditure
C. Responsibility, ethics, and sustainability
D. Trade competitiveness
Answer: C
Explanation:
RNI evaluates nations based on internal, environmental, and external responsibility, moving beyond GDP and military power to promote ethical and sustainable global leadership.