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NEXUS / 2026 / GS1
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Project Alexandria • Universal Library

UPSC 2026 GS Paper 1

The Final Ten: Artifacts [91] to [100]

91 92 93 94 95 96 97 98 99 100
CORE.91

Which of the following statements about Real-World Assets (RWA) Tokenization are correct?

  1. Tokenization is the process of turning real world assets into digital tokens using blockchain technology.
  2. Tokenization of real world assets offers 24x7 access, promoting financial inclusion.
  3. Tokenization of real world assets will allow the access to high growth investment opportunities for individuals in India.

Select the answer using the code given below:

  1. 1, 2 and 3
  2. 2 and 3 only
  3. 1 and 2 only
  4. 1 and 3 only

OUTPUT/VERDICT: (a) 1, 2 and 3

MAPPED DATABANK: CONTEMPORARY GOVERNANCE ISSUES ├─ REALM 15: Crypto Assets

Tokenization represents a paradigm shift in finance. It involves converting physical assets (like real estate, gold, or art) into digital tokens on a blockchain, securing ownership immutably (statement 1). Because blockchains operate without central holidays, these assets can be traded globally, 24/7, radically lowering barriers to entry and fostering financial inclusion (statement 2). By enabling fractional ownership (buying a fraction of a commercial building), it democratizes access to high-growth, high-value investment vehicles that were previously locked away from retail Indian investors (statement 3).
CORE.92

A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called:

  1. Green Bond
  2. Social Bond
  3. Sustainability Bond
  4. Sovereign Bond

OUTPUT/VERDICT: (c) Sustainability Bond

MAPPED DATABANK: CONTEMPORARY ECONOMY ISSUES ├─ REALM 123: Green Finance & Sustainable Investment

In the realm of ESG (Environmental, Social, and Governance) finance, bonds are strictly classified by their end-use. "Green Bonds" exclusively fund climate/environmental projects (like solar farms). "Social Bonds" exclusively fund social outcomes (like affordable housing or healthcare). When a financial instrument deliberately combines both mandates—funding projects that yield both environmental resilience and social equity—it is officially classified as a "Sustainability Bond."
CORE.93

Which of the following statements about M1xchange's role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct?

  1. M1xchange provides collateral based loans to MSMEs.
  2. M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs.
  3. M1xchange functions as a credit rating agency for MSMEs.

Select the answer using the code given below:

  1. 1, 2 and 3
  2. 2 only
  3. 2 and 3 only
  4. 1 only

OUTPUT/VERDICT: (b) 2 only

MAPPED DATABANK: INDUSTRY ├─ REALM 115: Delayed Payments

M1xchange is one of India's authorized Trade Receivables Discounting System (TReDS) platforms. TReDS solves the massive problem of delayed payments for MSMEs. It is not a bank issuing collateral-based loans (invalidating statement 1), nor is it a credit rating agency like CRISIL (invalidating statement 3). Instead, it acts as a digital marketplace where MSMEs can upload their approved trade invoices, and multiple financiers bid to discount them, providing the MSME with immediate working capital without requiring collateral (statement 2).
CORE.94

Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?

  1. A situation where private investment increases due to increased Government spending
  2. A situation where Government borrowing leads to higher interest rates, which reduces private investment
  3. A situation where an increase in taxes leads to increased private sector investment
  4. A situation where Government spending has no impact on aggregate demand

OUTPUT/VERDICT: (b) A situation where Government borrowing leads to higher interest rates, which reduces private investment

MAPPED DATABANK: BASIC ECONOMY ├─ REALM 99: Public Debt & Resource Mobilisation

The "Crowding Out Effect" is a fundamental macroeconomic phenomenon. When the government runs a massive fiscal deficit, it must borrow heavily from the domestic market to fund itself. By sucking up a large portion of the available capital pool, the government creates a scarcity of loanable funds. This scarcity drives up interest rates for everyone else, making it too expensive for private businesses to borrow and expand, effectively "crowding them out" of the investment market.
CORE.95

Which of the following statements about Rare Earth Elements (REEs) and Critical Minerals is/are correct?

  1. Modern technological innovations including Artificial Intelligence, robotics and space exploration extensively utilise Rare Earth Elements (REEs).
  2. China has the highest share in mining of REEs followed by India.
  3. The Government of India launched the National Critical Mineral Mission (NCMM) in 2025 to establish a robust framework for self-reliance in the critical mineral sector.
  4. Rare Earth Elements are a set of 13 metallic elements.

Select the answer using the code given below :

  1. 1 and 3 only
  2. 3 only
  3. 1, 3 and 4
  4. 1, 2 and 4

OUTPUT/VERDICT: (a) 1 and 3 only

MAPPED DATABANK: ECONOMIC GEOGRAPHY ├─ REALM 66: Critical & Strategic Minerals

REEs are the vital "vitamins" of modern technology, essential for manufacturing permanent magnets used in AI hardware, robotics, and aerospace tech (statement 1). While China dominates REE mining globally, India is not the second highest producer (the US and Australia rank higher in current extraction capacity), invalidating statement 2. India did officially launch the National Critical Mineral Mission (NCMM) recently to build domestic supply chain resilience (statement 3). Finally, chemically speaking, REEs are a defined set of exactly 17 metallic elements (the 15 lanthanides plus scandium and yttrium), not 13, invalidating statement 4.
CORE.96

Which of the following statements about insurance in aviation sector is/are correct?

  1. 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment.
  2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.

Select the answer using the code given below :

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

OUTPUT/VERDICT: (c) Both 1 and 2

MAPPED DATABANK: INFRASTRUCTURE ├─ REALM 112: Air Transport Regulation

In aviation finance, "Hull Insurance" is the standard policy that protects the physical asset of the aircraft itself against damage or destruction (statement 1). Regarding human life, the monumental Montreal Convention of 1999 modernized international carriage laws. It established a strict, two-tier liability regime where airlines are absolutely liable to pay an initial tier of compensation for passenger death or injury automatically, removing the agonizing burden on grieving families to legally prove the airline was at fault (statement 2).
CORE.97

Which of the following statements about Crowdfunding is/are correct?

  1. Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.
  2. Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.

Select the answer using the code given below:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2

OUTPUT/VERDICT: (c) Both 1 and 2

MAPPED DATABANK: INDUSTRY ├─ REALM 130: Startup Finance & Innovation

Crowdfunding disrupts traditional venture capital. It democratizes investment by utilizing internet platforms to aggregate many small financial contributions from a large crowd of individual backers to fund a specific venture (statement 1). By completely bypassing the severe regulatory friction, massive collateral requirements, and high interest rates of traditional bank loans, startups and SMEs can secure seed capital significantly faster and at a much lower practical cost (statement 2).
CORE.98

With reference to different Committees in India, consider the following details

Sl. No. Committee Objective Organization under which it was formed
1. R.N. Malhotra Committee Comprehensive reforms of Insurance sector in India Insurance Regulatory and Development Authority of India
2. L.C. Gupta Committee Preparing a roadmap for the introduction of derivatives trading in India Securities and Exchange Board of India
3. Urjit R. Patel Committee Preparing a roadmap for reforming bank lending to the Housing sector Reserve Bank of India
4. Y.H. Malegam Committee Preparing a roadmap for reforms in Microfinance sector in India Reserve Bank of India

In which of the above rows are all the details correctly matched ?

  1. 2 only
  2. 2 and 3
  3. 1, 3 and 4
  4. 2 and 4

OUTPUT/VERDICT: (d) 2 and 4

MAPPED DATABANK: BASIC ECONOMY ├─ REALM 143: Nachiket Mor Committee (Committees)

This question relies on precise institutional history. The R.N. Malhotra Committee (1993) certainly recommended comprehensive insurance reforms, but it was set up by the Government of India, before IRDAI existed—in fact, IRDAI was created *because* of its recommendations (Row 1 is wrong). The L.C. Gupta Committee was indeed set up by SEBI to develop the regulatory framework for derivatives trading (Row 2 is correct). The famous Urjit Patel Committee was tasked with revising and strengthening the Monetary Policy Framework (inflation targeting), not housing sector lending (Row 3 is wrong). The Y.H. Malegam Committee was constituted by the RBI to study issues and concerns in the Microfinance sector (Row 4 is correct). Thus, only rows 2 and 4 are perfectly matched.
CORE.99

Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India:

  1. NBFCs cannot accept demand deposits.
  2. All the NBFCs operating in India have to be registered with the RBI.
  3. NBFCs form part of the payment and settlement system and can issue cheque drawn on itself.
  4. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.

Which of the statements given above is/are correct?

  1. 1 and 4
  2. 1, 2 and 3
  3. 4 only
  4. 2, 3 and 4

OUTPUT/VERDICT: (a) 1 and 4

MAPPED DATABANK: BASIC ECONOMY ├─ REALM 147: NBFCs

NBFCs perform bank-like functions but face critical legal restrictions. Unlike commercial banks, they absolutely cannot accept demand deposits (CASA accounts), making statement 1 correct. Consequently, because they cannot hold demand deposits, they are not part of the payment and settlement system and cannot issue cheques drawn on themselves (invalidating statement 3). Furthermore, even for NBFCs that are permitted to accept long-term time deposits, those deposits are not insured by the DICGC (statement 4 is correct). Finally, not *all* NBFCs register with RBI; some are regulated by SEBI (merchant banks), IRDAI (insurance companies), or NHB (housing finance), invalidating statement 2.
CORE.100

Consider the following statements about Multidimensional Poverty Index (MPI):

  1. MPI is calculated using Alkire-Foster methodology.
  2. MPI calculated by NITI Aayog has a total of twelve indicators.
  3. Maternal Health and Bank Account are common indicators in the MPI of NITI Aayog and MPI of United Nations Development Programme (UNDP).

Which of the statements given above is/are correct?

  1. 1 and 2 only
  2. 1, 2 and 3
  3. 1 and 3 only
  4. 2 only

OUTPUT/VERDICT: (a) 1 and 2 only

MAPPED DATABANK: GOVERNANCE ├─ REALM 230: National MPI

The Global MPI (by UNDP and OPHI) is famously built on the Alkire-Foster mathematical methodology (statement 1). When NITI Aayog customized the National MPI for India, they retained the three core dimensions (Health, Education, Standard of Living) but expanded the total indicators from the global 10 to a customized 12 (statement 2). The two extra indicators added exclusively by NITI Aayog to fit the Indian context were precisely "Maternal Health" and "Bank Account." Because these two were added only in the Indian version, they are not common to the UNDP's Global MPI, rendering statement 3 false.