UPSC Prelims 2012 Question Paper
Explore the complete solved question paper for UPSC Prelims 2012 featuring 100 solved questions with bilingual (English & Hindi) explanations, official answer key, and subject weightage breakdown.
Which of the following would include Foreign Direct Investment in India?
- Subsidiaries of companies in India
- Majority of foreign equity holding in Indian companies
- Companies exclusively financed by foreign companies
- Portfolio investment
Select the correct answer using the codes given below:
Detailed Explanation:
✅ Statement 1 – Correct: Subsidiaries established by foreign companies in India represent FDI as they involve lasting interest and management control.
✅ Statement 2 – Correct: Majority foreign equity holding (typically 10% or more) in Indian companies constitutes FDI as it enables effective voice in management.
✅ Statement 3 – Correct: Wholly Owned Subsidiaries (WOS) that are exclusively financed by foreign entities are a direct form of FDI with 100% foreign ownership.
❌ Statement 4 – Incorrect: Portfolio investment (FPI) involves purchase of securities without management control, distinguished from FDI which requires long-term interest and control.
Consider the following statements: The price of any currency in the international market is decided by the
- World Bank
- demand for goods/services provided by the country concerned
- stability of the government of the concerned country
- economic potential of the country in question
Which of the statements given above are correct?
Detailed Explanation:
❌ Statement 1 – Incorrect: The World Bank provides loans for development projects; it does not decide or set currency prices in international markets. Currency prices are determined by market forces (demand and supply).
✅ Statement 2 – Correct: High demand for exports (goods/services) requires foreign buyers to purchase the country's currency, increasing its value in foreign exchange markets. This is a Current Account factor.
✅ Statement 3 – Correct: Political stability attracts FDI and FPI (Capital Account flows). Government instability causes capital flight, increasing currency supply and reducing its price.
❌ Statement 4 – Incorrect: While economic potential influences long-term investment sentiment, it is not a direct determinant of daily currency prices compared to immediate trade demand and political stability.
Consider the following specific stages of demographic transition associated with economic development:
- Low birth rate with a low death rate
- High birth rate with a high death rate
- High birth rate with a low death rate
Select the correct order of the above stages using the codes given below:
Detailed Explanation:
Stage 1 (High birth rate with high death rate): Pre-industrial societies with poor healthcare, sanitation and nutrition; population remains stable due to high mortality offsetting high fertility.
Stage 2 (High birth rate with low death rate): Improved healthcare, sanitation and food supply reduce mortality while birth rates remain high; results in rapid population growth (demographic explosion).
Stage 3 (Low birth rate with low death rate): Industrialized economies with improved education, urbanization, contraception availability and changing social norms; birth rates decline leading to population stabilization.
Correct sequence of demographic transition: 2 → 3 → 1
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Despite having large reserves of coal, why does India import millions of tonnes of coal?
- It is the policy of India to save its own coal reserves for the future, and import it from other countries for the present use.
- Most of the power plants in India are coal-based and they are not able to get sufficient supplies of coal from within the country.
- Steel companies need a large quantity of coking coal which has to be imported.
Which of the statements given above is/are correct?
Detailed Explanation:
❌ Statement 1 – Incorrect: India has no policy of deliberate conservation of domestic coal for future use; imports are driven by supply-demand gaps and quality constraints, not strategic stockpiling.
✅ Statement 2 – Correct: Coal-based thermal power plants face shortages due to inadequate domestic production, logistical bottlenecks (rail transport constraints), and quality mismatch between available and required coal grades.
✅ Statement 3 – Correct: India's steel industry requires high-grade coking coal (metallurgical coal) for blast furnaces; domestic reserves of prime coking coal are negligible, necessitating imports primarily from Australia, USA, and Indonesia.
The balance of payments of a country is a systematic record of
Detailed Explanation:
✅ Statement 1 – Correct: Balance of Payments (BoP) is a systematic record of all economic transactions between residents of a country and the rest of the world during a given period, typically a year, including goods, services, capital flows, and transfers.
❌ Statement 2 – Incorrect: This describes only the Balance of Trade (visible trade), not the comprehensive BoP which includes services, income, and capital accounts.
❌ Statement 3 – Incorrect: BoP covers transactions by all residents (individuals, firms, banks, government), not just government-to-government transactions.
❌ Statement 4 – Incorrect: Capital movements form only the capital account component of BoP; it also includes the current account (trade, services, income, transfers) and errors & omissions.
Which of the following measures would result in an increase in the money supply in the economy?
- Purchase of government securities from the public by the Central Bank
- Deposit of currency in commercial banks by the public
- Borrowing by the government from the Central Bank
- Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below:
Detailed Explanation:
✅ Statement 1 – Correct: When the Central Bank purchases government securities from the public, it pays with newly created money, directly injecting liquidity and increasing money supply.
❌ Statement 2 – Incorrect: When the public deposits currency in commercial banks, no new money is created; it merely shifts from cash in hand to bank deposits, keeping total money supply unchanged.
✅ Statement 3 – Correct: When the government borrows from the Central Bank, the Central Bank creates new money (monetization of deficit), directly expanding money supply in the economy.
❌ Statement 4 – Incorrect: When the Central Bank sells government securities to the public, it absorbs money from circulation in exchange for securities, thereby reducing money supply.
Under which of the following circumstances may ‘capital gains’ arise?
- When there is an increase in the sales of a product
- When there is a natural increase in the value of the property owned
- When you purchase a painting and there is a growth in its value due to increase in its popularity
Select the correct answer using the codes given below:
Detailed Explanation:
❌ Statement 1 – Incorrect: Increase in sales of a product generates revenue or business income, not capital gains. Capital gains arise only from the sale of a capital asset (property, shares, etc.), not from regular business operations.
✅ Statement 2 – Correct: Natural appreciation in the value of property or land creates capital gains when the asset is sold at a price higher than its original purchase cost.
✅ Statement 3 – Correct: Paintings, jewelry, and other movable assets are treated as capital assets under the Income Tax Act; increase in value due to popularity or demand results in capital gains upon sale.
Which of the following can be said to be essentially the parts of Inclusive Governance?
- Permitting the Non-Banking Financial Companies to do banking
- Establishing effective District Planning Committees in all the districts
- Increasing government spending on public health
- Strengthening the Mid-day Meal Scheme
Choose the correct answer:
Detailed Explanation:
❌ Statement 1 – Incorrect: Permitting NBFCs to do banking is a financial sector reform aimed at credit expansion, not an essential part of inclusive governance.
✅ Statement 2 – Correct: Establishing effective District Planning Committees (DPCs) under Article 243ZD promotes decentralized participatory planning, a core pillar of inclusive governance.
✅ Statement 3 – Correct: Increasing government spending on public health ensures universal access to healthcare, reduces inequalities, and promotes social inclusion.
✅ Statement 4 – Correct: Strengthening the Mid-day Meal Scheme addresses nutritional and educational needs of marginalized children, directly contributing to inclusive development.
The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following?
- Other banks retain their deposits with the RBI.
- The RBI lends funds to the commercial banks in times of need.
- The RBI advises the commercial banks on monetary matters.
Select the correct answer using the codes given below :
Detailed Explanation:
✅ Statement 1 – Correct: Commercial banks maintain their deposits with the RBI in the form of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements, making RBI the custodian of banking system reserves.
✅ Statement 2 – Correct: RBI acts as the Lender of Last Resort, providing emergency liquidity to commercial banks through mechanisms like repo operations and marginal standing facility during financial crunch.
✅ Statement 3 – Correct: RBI exercises supervisory and regulatory functions over commercial banks, advising them on monetary policy implementation, credit management, and prudential norms to maintain banking system stability.
What is/are the recent policy initiative(s) of Government of India to promote the growth of the manufacturing sector?
- Setting up of National Investment and Manufacturing Zones
- Providing the benefit of ‘single window clearance’
- Establishing the Technology Acquisition and Development Fund
Select the correct answer using the codes given below:
Detailed Explanation:
✅ Statement 1 – Correct: National Investment and Manufacturing Zones (NIMZs) were announced in the National Manufacturing Policy 2011 to create integrated industrial townships with world-class infrastructure for promoting investment and manufacturing.
✅ Statement 2 – Correct: Single Window Clearance mechanism has been implemented through platforms like eBiz portal and Industrial Development Portal to provide time-bound approvals and reduce compliance burden on businesses.
✅ Statement 3 – Correct: Technology Acquisition and Development Fund (TADF) was established under the Ministry of Science and Technology to facilitate acquisition and development of clean, green and energy-efficient technologies by Indian industry.
In India, in the overall Index of Industrial Production, the Indices of Eight Core Industries have a combined weight of 37.90%. Which of the following is among those Eight Core Industries?
- Cement
- Fertilizers
- Natural gas
- Refinery products
- Textiles
Select the correct answer using the codes given below:
Detailed Explanation:
The Eight Core Industries (ICI) with 37.90% weight in IIP are: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity.
Options 1, 2, 3, and 4 (Cement, Fertilizers, Natural Gas, Refinery Products) are all part of the Eight Core Industries, while Textiles is not included in this list.
The Nagara, Dravida and the Vesara are the:
Detailed Explanation:
Nagara (Northern style), Dravida (Southern style), and Vesara (Mixed style) are the three main styles of Indian temple architecture.
Nagara features beehive-shaped shikharas, Dravida has pyramidal vimanas, and Vesara combines elements of both styles, prevalent in the Deccan region.
Lord Buddha’s image is sometimes shown with the hand gesture called ‘Bhumisparsha Mudra’. It symbolizes
Detailed Explanation:
Bhumisparsha Mudra (Earth-touching gesture) depicts the moment when Siddhartha Gautama, under attack by Mara's temptations at Bodh Gaya, touched the ground with his right hand to call upon Earth goddess (Vasudhara/Sthavira) as witness.
The Earth testified to Buddha's accumulated merits, purity, and spiritual worthiness across countless past lives, defeating Mara's claim and confirming his right to enlightenment. The gesture symbolizes witnessing purity and chastity, not physical protection from disturbance.
With reference to the religious history of medieval India, the Sufi mystics were known to pursue which of the following practices?
- Meditation and control of breath
- Severe ascetic exercises in a lonely place
- Recitation of holy songs to arouse a state of ecstasy in their audience
Select the correct answer using the codes given below:
Detailed Explanation:
✅ Statement 1 – Correct: Sufi mystics practised meditation (muraqaba) and breath control (habs-i-dam) techniques to attain spiritual concentration and self-purification.
✅ Statement 2 – Correct: Many Sufis engaged in ascetic practices (khalwa) involving seclusion in lonely places (khanqahs), fasting, and self-denial to detach from worldly desires.
✅ Statement 3 – Correct: Sama (musical assemblies) involving recitation of devotional songs (qawwali) and poetry (ghazals) were central to Sufi practice to induce spiritual ecstasy (wajd) and divine connection.
With reference to Dhrupad, one of the major traditions of India that has been kept alive for centuries, which of the following statements are correct?
- Dhrupad originated and developed in the Rajput kingdoms during the Mughal period.
- Dhrupad is primarily devotional and spiritual music.
- Dhrupad Alap uses Sanskrit syllables from Mantras.
Select the correct answer using the codes given below:
Detailed Explanation:
❌ Statement 1 – Incorrect: Dhrupad originated in ancient times from Samaveda chanting and developed in temples during the 12th–15th centuries, well before the Mughal period. It was later patronized by Rajput and Mughal courts but did not originate there.
✅ Statement 2 – Correct: Dhrupad is primarily devotional and spiritual music, traditionally sung in temples before deities, emphasizing meditation and introspection.
✅ Statement 3 – Correct: The Dhrupad Alap uses Sanskrit syllables from Vedic mantras such as "Om, Ananta, Hari, Narayana", reflecting its roots in Vedic chanting traditions.
How do you distinguish between Kuchipudi and Bharatanatyam dances?
- Dancers occasionally speaking dialogues is found in Kuchipudi dance but not in Bharatanatyam.
- Dancing on the brass plate by keeping the feet on its edges is a feature of Bharatanatyam but Kuchipudi dance does not have such a form of movements.
Which of the statements given above is/are correct?
Detailed Explanation:
✅ Statement 1 – Correct: Kuchipudi dancers use Vachika Abhinaya (spoken dialogues) during performances, which is a unique feature not found in Bharatanatyam.
❌ Statement 2 – Incorrect: Dancing on brass plates (Tarangam) is a distinctive feature of Kuchipudi, not Bharatanatyam.
With reference to the history of ancient India, which of the following was/were common to both Buddhism and Jainism?
- Avoidance of extremities of penance and enjoyment
- Indifference to the authority of the Vedas
- Denial of the efficacy of rituals
Select the correct answer using the codes given below:
Detailed Explanation:
❌ Statement 1 – Incorrect: Buddhism advocated the Middle Path (Madhyama Marga) avoiding extremes of luxury and penance, but Jainism emphasized extreme asceticism and severe penance for spiritual liberation.
✅ Statement 2 – Correct: Both Buddhism and Jainism rejected the authority of the Vedas and did not consider them as ultimate religious texts, marking them as heterodox (Nastika) traditions.
✅ Statement 3 – Correct: Both traditions denied the efficacy of Vedic rituals and sacrifices (yajnas), emphasizing instead personal ethical conduct, right knowledge, and mental discipline for attaining liberation.
The religion of early Vedic Aryans was primarily of -
Detailed Explanation:
Early Vedic religion centered on worship of natural forces such as Indra (rain), Agni (fire), Varuna (water), Surya (sun), and Vayu (wind), personified as deities in the Rig Veda.
Yajnas (sacrificial rituals) were the primary mode of worship, involving offerings of soma, ghee, and grains to invoke divine blessings; Bhakti (devotional worship) and image worship emerged only in the later Vedic and post-Vedic periods.
With reference to the guilds (Shreni) of ancient India that played a very important role in the country’s economy, which of the following statements is /are correct?
- Every guild was registered with the central authority of the State and the king was the chief administrative authority on them.
- The wages, rules of work, standards and prices were fixed by the guild.
- The guild had judicial powers over its own members.
Select the correct answer using the codes given below:
Detailed Explanation:
❌ Statement 1 – Incorrect: Guilds (Shrenis) were autonomous bodies headed by a chief (Jetthaka/Pramukha), not registered with central authority or directly administered by the king.
✅ Statement 2 – Correct: Guilds fixed wages, work rules, quality standards, and prices to regulate their respective trades and maintain market stability.
✅ Statement 3 – Correct: Guilds possessed judicial powers over members, settling disputes according to Shreni-dharma (customary guild laws) recognized by the state.
With reference to the scientific progress of ancient India, which of the statements given below are correct?
- Different kinds of specialized surgical instruments were in common use by the 1st century AD.
- Transplant of internal organs in the human body had begun by the beginning of 3rd century AD.
- The concept of the sine of an angle was known in 5th century AD.
- The concept of cyclic quadrilaterals was known in 7th century AD.
Select the correct answer using the codes given below:
Detailed Explanation:
✅ Statement 1 – Correct: Sushruta Samhita (6th century BCE) describes over 120 surgical instruments including scalpels, forceps, and needles; these were in common use by 1st century AD.
❌ Statement 2 – Incorrect: No evidence exists of internal organ transplantation in ancient India; while skin grafts and reconstructive surgery were performed, organ transplant requires modern immunosuppressive technology unavailable in 3rd century AD.
✅ Statement 3 – Correct: Aryabhata in his Aryabhatiya (499 AD) introduced the concept of jya (sine function) and provided detailed trigonometric tables.
✅ Statement 4 – Correct: Brahmagupta in Brahmasphutasiddhanta (628 AD) formulated theorems on cyclic quadrilaterals, including the famous formula for their area.
UPSC Prelims 2012 Questions Paper - Subject-wise Question Distribution
UPSC Prelims 2012 Question Paper - FAQs & Analysis
Q1 How many total questions were asked in UPSC Prelims 2012?
Q2 What is the subject-wise question breakdown for UPSC Prelims 2012?
- Environment & Ecology: 19 questions (19%)
- Indian Polity: 19 questions (19%)
- Indian Economy: 12 questions (12%)
- Modern History: 11 questions (11%)
- Science & Technology: 10 questions (10%)
- Indian Geography: 8 questions (8%)
- Current Affairs: 6 questions (6%)
- Indian Art & Culture: 6 questions (6%)
- World Geography: 6 questions (6%)
- Ancient History: 3 questions (3%)