UPSC Prelims 2025 Question Paper

Detailed Explanation:

Correct Answer: ✅ Option 4 (I, II and III)

India is globally recognized as the leading producer, consumer, and exporter of turmeric. The country's diverse agro-climatic conditions support the cultivation of numerous turmeric varieties across several states.

✅ Statement I is Correct: India is the largest producer and exporter of turmeric in the world, contributing a major share of global production and exports.

✅ Statement II is Correct: More than 30 varieties of turmeric are cultivated in India, including popular varieties such as Alleppey Finger, Salem, Rajapore, and Nizamabad.

✅ Statement III is Correct: Telangana, Maharashtra, Karnataka, and Tamil Nadu are among the major turmeric-producing states of India.

Short Notes: Turmeric Production in India

• India is the world's largest producer, consumer, and exporter of turmeric.

• Turmeric is known as "Indian Saffron" due to its color and value.

• The scientific name of turmeric is Curcuma longa.

• Curcumin is the principal bioactive compound responsible for its medicinal properties.

• Major producing states include Telangana, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, and Odisha.

• India grows more than 30 varieties of turmeric.

• Turmeric has applications in food, medicine, cosmetics, and traditional healthcare systems.

Detailed Explanation:

Correct Answer: ✅ Option 1

When investing in a company, bondholders generally face lower risk than stockholders because bonds are debt instruments with fixed claims, while stocks represent ownership and carry higher uncertainty.

✅ Statement I is Correct: Bondholders are generally at lower risk because they receive fixed interest payments and have a higher claim on company assets than stockholders.

✅ Statement II is Correct: Bondholders are lenders (creditors) to the company, whereas stockholders (shareholders) are owners of the company.

✅ Statement III is Correct: In case of liquidation or bankruptcy, bondholders are repaid before stockholders, reducing their investment risk.

Why II and III explain I: Since bondholders are creditors and have priority in repayment, their chances of recovering money are higher than those of stockholders. Therefore, they are considered relatively less risky investors.

Short Notes: Bonds vs Stocks

• Bonds are debt instruments; investors act as lenders.

• Stocks (Shares) represent ownership in a company.

• Bondholders receive fixed interest payments.

• Stockholders receive returns through dividends and capital appreciation.

• In liquidation, creditors and bondholders are paid before shareholders.

• Bonds generally carry lower risk and lower returns.

• Stocks generally carry higher risk and higher return potential.

Detailed Explanation:

Correct Answer: ✅ Option 1 (I and II only)

India has witnessed a remarkable surge in stock market participation and derivatives trading in recent years. At the same time, investor protection and market regulation are actively handled by Securities and Exchange Board of India.

✅ Statement I is Correct: India accounts for a very large share of global equity options trading volume, making it one of the world's most active derivatives markets.

✅ Statement II is Correct: India's stock market capitalization grew rapidly and, during 2024, briefly surpassed that of Hong Kong, becoming one of the world's largest stock markets.

❌ Statement III is Incorrect: India has a dedicated regulator, Securities and Exchange Board of India>, which:

• Warns investors about the risks of derivatives and options trading.

• Regulates investment advisers and research analysts.

• Takes action against unregistered financial advisors and fraudulent entities.

Short Notes: India's Equity Options Market

• India is among the world's largest markets for equity derivatives trading.

• Equity options provide the right, but not the obligation, to buy or sell an asset.

• High trading volumes do not necessarily indicate high profitability for retail investors.

• SEBI regulates stock exchanges, brokers, and investment advisers.

• The National Stock Exchange and Bombay Stock Exchange are India's major stock exchanges.

• India became one of the world's top stock markets by market capitalization in recent years.

• SEBI frequently issues advisories regarding the risks of speculative options trading.

Detailed Explanation:

Correct Answer: ✅ Option 3 (I and III only)

Critical minerals are essential for sectors such as clean energy, electronics, electric vehicles, semiconductors, and defense. India has taken both international and domestic initiatives to secure access to these minerals.

✅ Statement I is Correct: India joined the Minerals Security Partnership in 2023 to strengthen critical mineral supply chains and reduce vulnerabilities.

❌ Statement II is Incorrect: India is not resource-rich in all 30 critical minerals identified by the government. It remains heavily dependent on imports for minerals such as lithium, cobalt, nickel, and graphite.

✅ Statement III is Correct: The Mines and Minerals (Development and Regulation) Amendment Act, 2023 empowered the Central Government to exclusively auction mining leases and composite licenses for certain critical and strategic minerals.

Short Notes: Critical Minerals in India

• Critical minerals are essential for renewable energy, EVs, electronics, and defense industries.

• India identified 30 critical minerals for economic and strategic security.

• India joined the Minerals Security Partnership (MSP) in 2023.

• MSP aims to build secure and sustainable global critical mineral supply chains.

• Key critical minerals include lithium, cobalt, nickel, graphite, and rare earth elements.

• The MMDR Amendment Act, 2023 introduced reforms to accelerate exploration and mining of critical minerals.

• India remains import-dependent for several strategic minerals despite having domestic reserves of some minerals.

Detailed Explanation:

Correct Answer: ✅ Option 1 (I only)

RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) are electronic fund transfer systems operated by the Reserve Bank of India. The key difference lies in the method and speed of settlement.

✅ Statement I is Correct: RTGS transactions are settled individually and in real time, making them almost instantaneous. NEFT transactions are settled in batches, so there may be a slight delay.

❌ Statement II is Incorrect: As per RBI guidelines, banks cannot levy charges on inward transactions (receiving funds) under either RTGS or NEFT.

❌ Statement III is Incorrect: Both RTGS and NEFT are available 24×7×365, including weekends and holidays. Therefore, RTGS operating hours are no longer restricted.

Short Notes: RTGS vs NEFT

• RTGS stands for Real Time Gross Settlement.

• NEFT stands for National Electronic Funds Transfer.

• RTGS settles transactions individually and instantly.

• NEFT settles transactions in half-hourly batches on a continuous basis.

• Both systems are operated by the Reserve Bank of India (RBI).

• Both RTGS and NEFT are available 24×7×365.

• No charges are permitted on inward transactions under either system.

Detailed Explanation:

Correct Answer: ✅ Option 4 (None)

This question tests knowledge of the ministries under which various statutory and autonomous bodies function. All three pairs are incorrectly matched.

❌ Pair I is Incorrect: National Automotive Board functions under the Ministry of Heavy Industries, not the Ministry of Commerce and Industry.

❌ Pair II is Incorrect: Coir Board functions under the Ministry of Micro, Small and Medium Enterprises (MSME), not the Ministry of Heavy Industries.

❌ Pair III is Incorrect: National Centre for Trade Information is associated with the Ministry of Commerce and Industry, not the Ministry of MSME.

Short Notes: Important Boards and Organizations

• National Automotive Board (NAB) functions under the Ministry of Heavy Industries.

• NAB supports implementation of India's automotive policies and initiatives.

• Coir Board was established under the Coir Industry Act, 1953.

• Coir Board operates under the Ministry of MSME.

• The National Centre for Trade Information (NCTI) is linked to the Ministry of Commerce and Industry.

• NCTI facilitates access to trade-related information and export promotion.

• UPSC frequently asks questions on organizations and their parent ministries.

Detailed Explanation:

Correct Answer: ✅ Option 4 (I, II and III)

This question is based on the formulas of Revenue Deficit, Fiscal Deficit, and Primary Deficit used in government budgeting.

✅ Statement I is Correct: Revenue Deficit = Revenue Expenditure − Revenue Receipts
= ₹80,000 crore − ₹60,000 crore
= ₹20,000 crore

✅ Statement II is Correct: Fiscal Deficit represents the government's total borrowing requirement.
Given Borrowings = ₹10,000 crore
Therefore, Fiscal Deficit = ₹10,000 crore

✅ Statement III is Correct: Primary Deficit = Fiscal Deficit − Interest Payments
= ₹10,000 crore − ₹6,000 crore
= ₹4,000 crore

Short Notes: Budget Deficits

• Revenue Deficit = Revenue Expenditure − Revenue Receipts

• Revenue deficit indicates that the government is unable to meet its day-to-day expenses from its regular income.

• Fiscal Deficit = Total Borrowings of the Government

• Fiscal deficit reflects the total gap between expenditure and receipts (excluding borrowings).

• Primary Deficit = Fiscal Deficit − Interest Payments

• Primary deficit shows the current year's fiscal imbalance excluding past debt obligations.

• A zero primary deficit means borrowings are only being used to pay interest on past loans.

Detailed Explanation:

Correct Answer: ✅ Option 3 (I and III only)

The International Bank for Reconstruction and Development is the largest institution of the World Bank Group. It was originally established to support post-war reconstruction and now focuses on development financing.

✅ Statement I is Correct: IBRD provides loans, guarantees, risk-management products, and advisory services primarily to middle-income and creditworthy lower-income countries.

❌ Statement II is Incorrect: IBRD does not work alone to reduce poverty. It works along with other World Bank Group institutions such as:

• International Development Association> (IDA)

• International Finance Corporation> (IFC)

• Multilateral Investment Guarantee Agency> (MIGA)

✅ Statement III is Correct: IBRD was established in 1944 at the Bretton Woods Conference to help rebuild Europe after World War II.

Short Notes: International Bank for Reconstruction and Development (IBRD)

• IBRD was established in 1944 under the Bretton Woods system.

• It is a key institution of the World Bank Group.

• Headquarters: Washington, D.C..

• Provides loans and guarantees to middle-income and creditworthy countries.

• Funds development projects in infrastructure, education, health, and governance.

• Raises funds mainly through international capital markets.

• Its original objective was the reconstruction of Europe after World War II.

Detailed Explanation:

Correct Answer: ✅ Option 2 (Only three)

India's Unified Payments Interface (UPI) has expanded internationally through partnerships with foreign payment networks and merchants. However, UPI-based international merchant payments are currently available only in selected countries.

✅ I. United Arab Emirates – Correct: UPI is accepted at select merchants in the UAE through partnerships facilitated by National Payments Corporation of India.

✅ II. France – Correct: France became one of the first European countries to accept UPI payments, including at locations such as the Eiffel Tower.

❌ III. Germany – Incorrect: UPI merchant payment acceptance has not been officially rolled out in Germany.

✅ IV. Singapore – Correct: UPI is operational in Singapore for cross-border payments and merchant transactions through linkage arrangements.

❌ V. Bangladesh – Incorrect: UPI merchant payment acceptance is not operational in Bangladesh.

Therefore, among the given countries, UAE, France, and Singapore are the three countries where international merchant payments are accepted under UPI.

Short Notes: UPI Internationalization

• UPI (Unified Payments Interface) was developed by National Payments Corporation of India.

• UPI enables instant real-time digital payments.

• International merchant payments are operational in countries such as UAE, Singapore, France, Bhutan, Nepal, Mauritius, and Sri Lanka.

• UPI helps reduce dependence on international card networks.

• Cross-border UPI services support tourism, remittances, and business transactions.

• UPI is one of the world's largest digital payment platforms.

• The system is regulated by the Reserve Bank of India and operated by NPCI.

Detailed Explanation:

Correct Answer: ✅ Option 1 (₹48,500 crores)

This question is based on the concept of Primary Deficit, which measures the fiscal deficit excluding interest payments on past borrowings.

✅ Statement I is Correct: Fiscal Deficit = ₹50,000 crore (given)

✅ Interest Liabilities = ₹1,500 crore (given)

✅ Formula:
Primary Deficit = Fiscal Deficit − Interest Payments

Calculation:
= ₹50,000 crore − ₹1,500 crore
= ₹48,500 crore

Note: The ₹10,000 crore non-debt creating capital receipts are already accounted for while calculating the fiscal deficit. Therefore, they are not used again in the calculation of primary deficit.

Short Notes: Fiscal Deficit and Primary Deficit

• Fiscal Deficit represents the government's total borrowing requirement.

• Fiscal Deficit = Total Expenditure − Total Receipts (excluding borrowings).

• Primary Deficit = Fiscal Deficit − Interest Payments.

• Primary Deficit indicates the current year's fiscal imbalance excluding past debt burden.

• A lower primary deficit suggests better fiscal discipline.

• If Primary Deficit is zero, borrowings are only sufficient to pay interest on previous loans.

• Non-debt capital receipts include disinvestment proceeds and loan recoveries.

Detailed Explanation:

Correct Answer: ✅ Option 4

The United States and Brazil are the world's two largest ethanol producers. However, the United States produces more ethanol than Brazil, while the two countries use different primary feedstocks for ethanol production.

❌ Statement I is Incorrect: The United States of America is the world's largest ethanol producer, producing more ethanol than Brazil.

✅ Statement II is Correct: The USA mainly uses corn (maize) as feedstock for ethanol production, whereas Brazil primarily uses sugarcane.

Short Notes: Ethanol Production

• Ethanol is a renewable biofuel produced through the fermentation of sugars and starches.

• The USA is the world's largest ethanol producer.

• Brazil is the world's second-largest ethanol producer.

• Corn (maize) is the principal feedstock in the USA.

• Sugarcane is the principal feedstock in Brazil.

• In India, ethanol is mainly produced from sugarcane molasses, sugarcane juice, and food grains.

• Ethanol blending helps reduce crude oil imports and greenhouse gas emissions.

Detailed Explanation:

Correct Answer: ✅ Option 3 (I, III and IV)

The Fifteenth Finance Commission recommended several performance-based grants and incentives to improve governance, education, agriculture, and fiscal discipline among States.

✅ Statement I is Correct: The Commission recommended ₹4,800 crore during 2022–23 to 2025–26 to incentivize States for improving educational outcomes.

❌ Statement II is Incorrect: The Commission recommended that 41% of the net proceeds of Union taxes be devolved to States, not 45%.

✅ Statement III is Correct: A ₹45,000 crore performance-based incentive fund was proposed to encourage States to undertake agricultural reforms.

✅ Statement IV is Correct: The Commission reintroduced the Tax Effort Criterion to reward States that mobilize their own tax revenues more effectively relative to their economic capacity.

Short Notes: Fifteenth Finance Commission

• The 15th Finance Commission was chaired by N. K. Singh.

• Its recommendations covered the period 2021–26.

• It recommended 41% tax devolution to States.

• Introduced performance-based incentives in sectors like education, agriculture, and power reforms.

• Recommended ₹45,000 crore for agricultural reform-linked incentives.

• Reintroduced the Tax Effort criterion in the devolution formula.

• Finance Commissions are constituted under Article 280 of the Indian Constitution.

Detailed Explanation:

Correct Answer: ✅ Option 2 (Only two)

The Petroleum and Natural Gas Regulatory Board (PNGRB) regulates mainly the downstream petroleum and natural gas sector. It does not regulate upstream activities such as exploration and production of crude oil and natural gas.

❌ Activity I: Production of crude oil – Not Regulated by PNGRB

Production of crude oil is an upstream activity regulated by the Ministry of Petroleum & Natural Gas and the Directorate General of Hydrocarbons.

✅ Activity II: Refining, storage and distribution of petroleum products – Regulated

PNGRB regulates aspects of storage, transportation, distribution, and common carrier access in the downstream sector.

✅ Activity III: Marketing and sale of petroleum products – Regulated

PNGRB authorizes entities for marketing notified petroleum products and natural gas and promotes fair competition.

❌ Activity IV: Production of natural gas – Not Regulated by PNGRB

Like crude oil production, natural gas production is an upstream activity and falls outside PNGRB's regulatory jurisdiction.

Therefore, only II and III fall under PNGRB regulation.

Short Notes: Petroleum and Natural Gas Regulatory Board (PNGRB)

• PNGRB was established under the PNGRB Act, 2006.

• It regulates the downstream petroleum and natural gas sector.

• It ensures fair competition in petroleum and natural gas markets.

• It regulates pipelines, city gas distribution networks, storage, and transportation.

• It does not regulate exploration or production of crude oil and natural gas.

• Upstream activities are overseen by the Directorate General of Hydrocarbons (DGH) and the Ministry of Petroleum & Natural Gas.

• PNGRB helps protect consumer interests and promotes investment in energy infrastructure.

Detailed Explanation:

Correct Answer: ✅ Option 4 (Lahore)

Vishnu Digambar Paluskar founded the first Gandharva Mahavidyalaya in Lahore in 1901. His objective was to make Hindustani classical music accessible to common people through formal institutional education.

✅ Statement I is Correct: The first Gandharva Mahavidyalaya was established in Lahore in 1901.

✅ Statement II is Correct: Paluskar broke the traditional gharana-based exclusivity and promoted systematic music education for all sections of society.

❌ Delhi, Gwalior and Ujjain are Incorrect: Although Gandharva Mahavidyalaya later expanded to other cities, the first institution was established in Lahore.

Short Notes: Vishnu Digambar Paluskar and Gandharva Mahavidyalaya

• Vishnu Digambar Paluskar (1872–1931) was a pioneer of Hindustani classical music.

• He founded the first Gandharva Mahavidyalaya in 1901 at Lahore.

• The institution promoted formal music education outside the hereditary gharana system.

• Paluskar played a major role in popularizing classical music among the masses.

• He standardized music teaching through structured curricula and notation.

• The Gandharva Mahavidyalaya movement later spread to many Indian cities.

• He is regarded as one of the architects of modern Hindustani music education.

Detailed Explanation:

Correct Answer: ✅ Option 3 (Bronze)

The famous 'Dancing Girl' is one of the most iconic artifacts of the Indus Valley Civilization. It was discovered at Mohenjo-daro and showcases the advanced metallurgical skills of the Harappans.

✅ Statement I is Correct: The Dancing Girl is made of bronze.

✅ Statement II is Correct: It was created using the Lost-Wax Casting Method (Cire Perdue), a sophisticated metal-casting technique.

❌ Carnelian, Clay, and Gold are Incorrect: The figurine is neither made of stone, clay, nor gold; it is a bronze sculpture.

Short Notes: Dancing Girl of Mohenjo-daro

• Discovered at Mohenjo-daro in present-day Pakistan.

• Belongs to the Indus Valley Civilization (c. 2500 BCE).

• Made of bronze using the Lost-Wax Casting Method.

• Height is approximately 10.5 cm.

• Depicts a young girl in a confident dancing posture.

• Considered a masterpiece of Harappan art and metallurgy.

• Indicates advanced knowledge of metalworking during the Harappan period.

Detailed Explanation:

Pair I — Correct. Asmaka (also called Assaka) — southernmost Mahajanapada, in the Deccan region, on the banks of the Godavari river.

Pair II — Incorrect. Kamboja was in the extreme north-west (modern Afghanistan/Kashmir area). The Vipas (Beas) river flows through Punjab — a different region, further east.

Pair III — Incorrect. Avanti was in western Madhya Pradesh (Malwa region). Its main rivers were Kshipra and Vetravati, NOT Mahanadi (which flows through Odisha/Chhattisgarh).

Pair IV — Correct. Kosala — Mahajanapada in eastern Uttar Pradesh. Its capital Ayodhya sits on the banks of the Sarayu river.

So only 2 pairs (I and IV) are correct.

Mahajanapadas and Their Rivers

Detailed Explanation:

The correct answer is C. Rajendra I (Chola).

Rajendra Chola I, son of Rajaraja Chola I, led a famous naval expedition against the Srivijaya kingdom around 1025 CE. Srivijaya was a powerful maritime empire controlling the Malay Peninsula, Sumatra, Java, and nearby islands. Rajendra I’s campaign asserted Chola naval dominance in the region and secured control over important sea trade routes.

The other rulers listed did not conduct campaigns against Srivijaya:

• Amoghavarsha (Rashtrakuta) focused mainly on the Deccan region.
• Prataparudra (Kakatiya) ruled much later and was centered in the Deccan.
• Vishnuvardhana (Hoysala) focused on South Indian affairs.

Detailed Explanation:

Fa-hien (Faxian), the Chinese Buddhist pilgrim, visited India during the reign of Chandragupta II (also called Chandragupta Vikramaditya), in the early 5th century CE. He came to collect Buddhist texts and study Buddhist practices in India.

His travel account gives valuable insight into:

• Gupta society
• Administration
• State of Buddhism in India at that time

Chinese Pilgrims to India (for Revision)

About Chandragupta II:

• Son of Samudragupta
• Also known as Vikramaditya
• His reign = often called the "Golden Age" of Gupta dynasty
• Court had Navaratnas (nine gems) including Kalidasa

Detailed Explanation:

These three officers worked together at the district (Pradesa) level during Ashoka's reign:

Mauryan Administration Officers

Mauryan Administrative Hierarchy (Top to Bottom):

1. King (Centre)
2. Provinces — headed by princes/governors (e.g., Taxila, Ujjain, Tosali, Suvarnagiri)
3. District (Pradesa/Ahara) — Pradesika, Rajuka, Yukta
4. Village — Gramani (village headman)

Detailed Explanation:

Araghatta = an ancient water-lifting wheel device. It has a large wheel with earthen pots tied to its spokes. As the wheel turns (powered by animals or people), the pots dip into water, fill up, rise, and pour out the water for irrigation.

Why other options are wrong:

Ancient Irrigation Devices

Context:

• Mentioned in ancient and medieval Indian texts
• Sometimes called the "Persian wheel" in later medieval usage (though technically distinct evolution)
• Represents an early form of mechanical irrigation technology in India
• Found referenced in inscriptions related to agriculture and irrigation systems