1. It necessarily requires full capital account convertibility before any meaningful cross-border use of the rupee can begin.
2. Its progression may begin with current account transactions before extending to capital account use and reserve holding.
3. A Special Rupee Vostro Account is meant for direct settlement of international trade in INR.
4. The mere casual use of rupees for payments abroad is sufficient to qualify as true rupee internationalisation.
Which of the statements given above are correct?
Core Concept: Rupee internationalisation means the structured and sustained use of the rupee in cross-border trade, financial transactions and, eventually, reserve holding. It generally progresses from current account use to capital account use and then to reserve holding. It does not require full capital account convertibility at the outset, and mere occasional use of rupees abroad does not amount to genuine internationalisation.
Statement 1 – Incorrect: Full capital account convertibility is not an absolute precondition for meaningful rupee internationalisation. Internationalisation and convertibility are related, but they are not the same.
Statement 2 – Correct: The usual progression begins with current account transactions, then extends to capital account transactions, and finally to reserve holding by foreign central banks.
Statement 3 – Correct: A Special Rupee Vostro Account is designed for direct settlement of international trade in Indian Rupees through an arrangement between a foreign bank and an Indian bank.
Statement 4 – Incorrect: Casual or isolated overseas use of rupees does not qualify as true internationalisation. The idea is sustained and institutional use in trade and finance.
Final Answer: Statements 2 and 3 only are correct. Therefore, the correct answer is (a).
1. Vostro account — Domestic bank’s account held with a foreign bank in overseas currency
2. Nostro account — Domestic bank’s account held with a foreign bank in the currency of the overseas country
3. Special Non-Resident Rupee (SNRR) account — Can be opened by a non-resident with a business interest in India for bona fide rupee transactions
4. Masala bonds — Rupee-denominated bonds issued in foreign markets in which currency risk shifts from borrower to investor
How many of the pairs given above are correctly matched?
Core Concept: Rupee internationalisation is supported by specific banking arrangements and financial instruments. In such questions, the usual traps involve reversing the bank-account relationship, confusing local and foreign currency positions, or misplacing who bears currency risk.
Pair-wise Analysis
Pair 1 – Incorrect: This is not a Vostro account. A Vostro account is a foreign bank’s account held with a domestic bank in the local currency. The pair wrongly reverses the institutional position.
Pair 2 – Correct: A Nostro account is a domestic bank’s account held with a foreign bank in the currency of the overseas country. It facilitates foreign exchange transactions and settlement.
Pair 3 – Correct: An SNRR account can be opened by a non-resident having a business interest in India for bona fide rupee transactions.
Pair 4 – Correct: Masala bonds are rupee-denominated bonds issued in foreign markets. Their important feature is that the currency risk is borne by the investor, not the borrower.
Final Answer: Pairs 2, 3 and 4 are correctly matched. Therefore, the correct answer is (c).
Core Concept: One major practical constraint in rupee internationalisation is trapped liquidity. If partner countries accumulate rupee balances but cannot easily deploy, invest or recycle them, their incentive to accept rupee settlement weakens. Therefore, wider rupee use depends not only on settlement systems but also on deep financial markets and credible reinvestment avenues.
Option-wise Analysis
Option (a): Incorrect − The rupee is not fully convertible on the capital account. It remains only partially convertible, so the premise itself is wrong.
Option (b): Correct − Persistent trade surplus countries may accumulate rupee balances without finding enough productive deployment avenues. This creates an accumulation trap and weakens the incentive for wider rupee settlement.
Option (c): Incorrect − Relevant policy measures aim to make rupee balances investible in avenues such as Indian Government Securities and corporate bonds. So rupee settlement does not automatically block such investments.
Option (d): Incorrect − The policy direction has been toward easing the opening of Special Rupee Vostro Accounts, not slowing them through universal prior approval requirements.
Final Answer: Surplus rupee balances may accumulate without adequate deployment avenues, creating a settlement disincentive. Therefore, the correct answer is (b).
1. Urea is overused partly because it is more heavily subsidized than phosphatic and potassic fertilizers.
2. The ideal N:P:K ratio for Indian soils is 13:5:1.
3. Excess nitrogen application can degrade soil health and increase plant vulnerability to pests.
4. Nutrient imbalance improves crop quality by ensuring nitrogen-rich growth.
Which of the statements given above are correct?
Core Concept: Nutrient imbalance arises when fertilizer use becomes skewed toward one nutrient, especially nitrogen through excessive urea application. Plants mainly require Nitrogen, Phosphorus and Potassium, and the generally accepted ideal N:P:K ratio is 4:2:1. When urea is overused because of subsidy distortion, application ratios can become heavily nitrogen-biased, harming soil health, crop quality and pest resistance.
Statement-wise Analysis
Statement 1: Correct − Urea supplies nitrogen and is often overused because it is more heavily subsidized than phosphorus and potassium fertilizers. This price distortion encourages excessive and unbalanced application.
Statement 2: Incorrect − 13:5:1 is not the ideal ratio. It is a skewed nutrient-application ratio observed in some regions, reflecting nitrogen-heavy fertilizer use. The generally accepted ideal ratio is 4:2:1.
Statement 3: Correct − Excess nitrogen use creates nutrient imbalance, which degrades soil health, lowers crop quality and makes plants more vulnerable to pests. This is one of the major agronomic consequences of subsidy-driven overuse.
Statement 4: Incorrect − Nutrient imbalance does not improve crop quality. On the contrary, the imbalance lowers crop quality and weakens plant health.
Final Answer: Statements 1 and 3 only are correct. Therefore, the correct answer is (a).
Core Concept: Nutrient Use Efficiency measures the share of applied nutrient actually absorbed by the plant rather than lost to the environment. Fertigation improves this efficiency by combining irrigation and fertilization, so that nutrients are delivered in a controlled manner directly to the plant root zone. This reduces wastage, allows precise dosing and prevents nutrient loss through excessive watering.
Option-wise Analysis
Option (a): Incorrect − Fertigation does not rely on heavy surface application of granular urea. In fact, it seeks to avoid inefficient fertilizer use and reduce nutrient losses associated with conventional methods.
Option (b): Correct − Fertigation combines fertilization and irrigation by supplying liquid fertilizers through a drip irrigation system. Water and nutrients are delivered directly to the root zone, which improves precision, reduces wastage and sharply enhances nutrient-use efficiency.
Option (c): Incorrect − This describes foliar absorption, which is associated with liquid or Nano Urea sprayed on leaves through stomata. Fertigation, by contrast, works through drip-based delivery to the root zone, not by replacing root absorption.
Option (d): Incorrect − Fertigation improves efficiency through precise application and reduced nutrient loss, not because of any subsidy increase. The concept is technological and agronomic, not subsidy-based.
Final Answer: It delivers liquid fertilizers through drip irrigation directly to the root zone, enabling precise dosing and reducing nutrient loss. Therefore, the correct answer is (b).
Core Concept: An SSBN is a nuclear-powered ballistic missile submarine designed to carry submarine-launched nuclear missiles. In a nuclear triad, the sea leg is regarded as the most survivable because stealth at sea helps preserve retaliation capability even after a first strike on land-based assets. This makes SSBNs central to credible deterrence, especially in a no first use framework.
Option-wise Analysis
Option (a): Incorrect − Conventional power projection is more closely associated with broader naval deployment and carrier-led operations. The distinctive strategic role of an SSBN is not conventional projection but survivable nuclear deterrence.
Option (b): Correct − This captures the core strategic logic of an SSBN. It forms the sea-based leg of the nuclear triad and preserves second-strike capability through stealth and continuous at-sea deterrence.
Option (c): Incorrect − An SSBN strengthens the sea leg of the triad; it does not replace the air leg. The logic of a triad is diversification of delivery platforms, not substitution of one by another.
Option (d): Incorrect − The intelligence-gathering concern in the Indian Ocean is linked in the text to adversarial research and survey vessels. That is different from the designed role of an SSBN, which is strategic deterrence through ballistic missile capability.
Final Answer: It provides a survivable sea-based second-strike capability within the nuclear triad. Therefore, the correct answer is (b).
1. INS Aridhaman is described as a larger platform than INS Arihant and INS Arighat.
2. Earlier submarines in the series could reportedly carry 24 K-15 missiles and eight K-4 missiles.
3. India aims to commission its first fully indigenously designed nuclear attack submarine by 2036.
4. The Defence Cyber Agency was created as a specialised tri-service agency for threats in the space domain.
Which of the statements given above are correct?
Core Concept: The current phase of India’s submarine programme combines expansion of the SSBN fleet with a longer-term move toward indigenous SSN capability. UPSC-style traps here lie in reversing missile capacity figures and interchanging cyber and space institutional roles.
Statement-wise Analysis
Statement 1: Correct − INS Aridhaman is presented as a gradual capability upgrade over INS Arihant and INS Arighat, including in size and missile-carrying capacity. It is described as a larger 7000-tonne platform.
Statement 2: Incorrect − This reverses the comparative missile loads. The text says INS Aridhaman can reportedly carry up to 24 K-15 missiles and up to eight K-4 or K-5 missiles, whereas earlier submarines could carry 12 K-15 missiles and four K-4 missiles.
Statement 3: Correct − The future direction outlined includes a plan to commission the first fully indigenously designed nuclear attack submarine by 2036, followed by a second by 2038.
Statement 4: Incorrect − The Defence Cyber Agency deals with threats in the cyber domain. The specialised tri-service agency linked to the space domain is the Defence Space Agency.
Final Answer: Statements 1 and 3 only are correct. Therefore, the correct answer is (a).