UPSC Essentials | Daily subject-wise quiz : Economy MCQs on Millets, Flex-fuel vehicles and more (Week 165)

UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today’s subject quiz on the Economy to check your progress.

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1. These are drought-resistant crops.

2. Among different states, Karnataka is the largest producer.

3. India is the world’s second-largest producer of millets after China.

Which one of the following conclusions based on the above statements is correct ?

(a) All three statements are correct.

(b) There are two correct statements, that include statement 2.

(c) There is only one correct statement.

(d) There is no correct statement.

Relevance: Millets are important from the perspectives of food security, climate-resilient agriculture, nutritional security, and sustainable farming practices. Government initiatives promoting millets and their role in addressing climate change and malnutrition make them a recurring current affairs topic for Prelims.

Explanation

— With the southwest monsoon expected to be weak because of El Niño conditions, several farmer-producer organisations (FPO) are promoting drought-resistant crops and climate-resilient farm practices, while officials say the Union Ministry of Agriculture is stepping up preparations to tackle the challenges.

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— Ministry officials said that promoting drought-resistant crops can help farmers reduce production risks under uncertain rainfall conditions. Millets, in particular, are naturally resilient, require less water, and can perform well in marginal environments where other crops may struggle. Hence, statement 1 is correct.

— India is the world’s largest producer of millets with a share of 42.75% of world’s production (FAO, 2023). Hence, statement 3 is not correct.

— Indian millets produced in FY25 include sorghum (jowar), pearl millet (bajra), finger millet (ragi), barnyard millet, prosomillet, Kodomillet, buckwheat, amaranthus, and foxtail millet. Rajasthan is the largest producer among all states, followed by Uttar Pradesh, Karnataka, and Maharashtra. Hence, statement 2 is not correct.

Therefore, option (c) is the correct answer.

(Other Source: apeda.gov.in)

QUESTION 2

With reference to the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) scheme, consider the following statements:

1. The scheme was launched in 2011 and renamed in 2016.

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2. It aims to reduce rural poverty by mobilising women into SHGs and linking them with banks, markets, and government support.

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: Government flagship schemes related to rural development, poverty alleviation, financial inclusion, and women’s empowerment are frequently tested in UPSC Prelims. Self-Help Groups (SHGs), livelihood missions, and community-based institutions are important themes linking Economy, Social Justice, and Rural Development.

Explanation

— A government-commissioned evaluation of central rural sector schemes, including the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM), has found that most self-help groups (SHGs) for women did not start income-generating businesses with the funds provided. Instead, the revolving fund of Rs 20,000- Rs 30,000 offered per group as part of the Centre’s flagship programme to organise poor rural women into SHGs and train them for small enterprises was often spent on household expenses, according to the report submitted to the Rural Development Ministry.

DAY-NRLM scheme

— Launched in 2011 by the UPA government as the National Rural Livelihood Mission and renamed in 2016, DAY-NRLM aims to reduce rural poverty by mobilising women into SHGs and linking them with banks, markets, and government support. Hence, statements 1 and 2 are correct.

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— Apart from the revolving fund at the rate of Rs 20,000-30,000 per SHG, groups can get up to Rs 2.5 lakh as a Community Investment Fund (CIF) to support their income-generating and livelihood activities, including entrepreneurial ventures.

Therefore, option (c) is the correct answer.

QUESTION 3

With reference to the Flex-fuel vehicles, consider the following statements:

1. These are equipped with modified internal combustion engines that can run on petrol, ethanol, or any combination of the two.

2. These vehicles can cut oil imports, carbon emissions, and local air pollution.

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3. Flex-fuel vehicles require a separate fuel tank and dedicated engine system for petrol and ethanol.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

Relevance: Flex-fuel vehicles are linked to India’s biofuel policy, ethanol blending programme, energy security, and efforts to reduce dependence on crude oil imports. UPSC can ask statement-based questions on alternative fuels, clean transportation technologies, and government initiatives related to sustainable mobility.

Explanation

— India’s largest carmaker, Maruti Suzuki India on Thursday launched the WagonR Flex Fuel, billed as the country’s first mass-market flex-fuel passenger car, marking a significant step in India’s push towards alternative fuels. The vehicle can even run on pure ethanol, and will allow consumers to use a wider range of ethanol and petrol mixes without engine modifications.

— Flex-fuel vehicles are equipped with modified internal combustion engines that can run on petrol, ethanol, or any combination of the two without requiring manual adjustments by the driver. Sensors in the vehicle detect the fuel blend and automatically alter engine settings such as fuel injection and ignition timing to ensure optimal performance. Hence, statement 1 is correct.

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— Flex-fuel vehicles (FFVs) are specifically designed to operate on varying blends of petrol and ethanol using a single fuel system and engine. Hence, statement 3 is not correct.

— Flex-fuel vehicles have the potential to cut oil imports, carbon emissions, and local air pollution while enhancing domestic value addition and farmer incomes. Hence, statement 2 is correct.

— “India imports a large quantity of crude oil every year, and biofuels like ethanol are an important pathway towards reducing this dependence while strengthening our rural economy. Flex-fuel vehicles can create a strong and sustainable demand for ethanol, benefiting our farmers, industry, and the environment together,” Gadkari said.

Therefore, option (b) is the correct answer.

QUESTION 4

With reference to the Real Effective Exchange Rate (REER), consider the following statements:

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1. The REER measures the rupee’s value against a basket of 40 currencies.

2. The REER shows if a currency is under or overvalued.

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: Exchange rate indices such as REER and NEER are frequently in the news due to their role in assessing currency competitiveness and external sector stability. Understanding key economic indices and their applications is important for solving statement-based questions in the Economy section of the Preliminary Examination.

Explanation

— The REER measures the rupee’s value against a basket of 40 currencies, affording weights to each depending on India’s non-service trade in that currency. Depending on whether it’s below or above 100, the REER shows if a currency is under or overvalued. This means a REER of 90.96 indicates the rupee is roughly 9% undervalued against these 40 currencies. Hence, statements 1 and 2 are correct.

Therefore, option (c) is the correct answer.

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QUESTION 5

With reference to the new Wholesale Price Index (WPI) series, consider the following statements:

1. It will be released with 2024-25 as the base year.

2. This new year series will, in all likelihood, be discontinued after five years in 2031 and the Producer Price Index (PPI) based on output prices will become the main measure of non-retail inflation.

3. The inflation based on WPI is the most widely considered measure of price increases in the country for households and is used by the Reserve Bank of India (RBI) to decide interest rates.

Which one of the following conclusions based on the above statements is correct ?

(a) All three statements are correct.

(b) There are two correct statements, that include statement 1.

(c) There is only one correct statement.

(d) There is no correct statement.

Relevance: Inflation indices such as WPI, CPI, and the proposed Producer Price Index (PPI) are important economic indicators frequently asked in statement-based questions. The topic is significant due to ongoing reforms in India’s statistical framework and its implications for inflation measurement, monetary policy, and economic analysis.

Explanation

— The commerce ministry, on June 15, will release the new Wholesale Price Index (WPI) series with 2022-23 as the base year, starting with data for May as well as a back-series from April 2023 onwards. However, this new year series will in all likelihood be discontinued after five years in 2031 and the Producer Price Index (PPI) based on output prices will become the main measure of non-retail inflation. Hence, statement 1 is not correct and statement 2 is correct.

New WPI series table

— While inflation based on the Consumer Price Index (CPI) is the most widely considered measure of price increases in the country for households and used by the Reserve Bank of India (RBI) to decide interest rates, the WPI is crucial too and used in price escalation clauses in the supply of raw materials, machinery, and construction work. Hence, statement 3 is not correct.

Therefore, option (c) is the correct answer.

Previous Daily Subject-Wise-Quiz

Daily Subject-wise quiz — History, Culture, and Social Issues (Week 156)

Daily subject-wise quiz — Polity and Governance (Week 165)

Daily subject-wise quiz —  Science and Technology (Week 165)

Daily subject-wise quiz — Economy (Week 164)

Daily subject-wise quiz — Environment and Geography (Week 164)

Daily subject-wise quiz – International Relations (Week 164)

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