UPSC Current Affairs Quiz, 15th Feb 2023

Correct Answer: D
Explanation
All the statements are not correct.
National Small Savings Fund
• National Small Savings Fund (NSSF) in the Public Account of India was established in 1999.
Hence statement 1 is not correct.
• The Fund is administered by the Government of India, Ministry of Finance (Department of Economic
Affairs) under National Small Savings Fund (Custody and Investment) Rules, 2001, framed by the
President under Article 283(1) of the Constitution.
• The objective of NSSF is to de-link small savings transactions from the Consolidated Fund of India and
ensure their operation in a transparent and self-sustaining manner.
• Since NSSF operates in the public account, its transactions do not impact the fiscal deficit of the Centre
directly. Hence statement 3 is not correct.
• The Ministry of Finance decides the interest rates on small savings schemes in India. Hence statement
3 is not correct.
• Small savings instruments can be classified under three heads:
1. Postal deposits (comprising savings account, recurring deposits, time deposits of varying maturities
and monthly income scheme),
2. Savings certificates like: National Small Savings Certificate(NSC) and Kisan Vikas Patra (KVP)
3. Social security schemes like: Public Provident Fund (PPF) and Senior Citizens‘ Savings Scheme(SCSS)

Correct Answer: A
Explanation
Statement 3 is not correct, 1 and 2 are correct.
Payment Banks
• In 2013, the Reserve Bank of India constituted a committee headed by Dr Nachiket Mor. One of the
key suggestions of the committee was to introduce specialised banks or ‘payments bank’ to cater to the
lower income groups and small businesses.
• A payments bank is like any other bank, but operating on a smaller scale without involving any credit
risk.
• In simple words, it can carry out most banking operations but can’t advance loans or issue credit cards.
Hence statement 3 is NOT correct.
• The payments bank will be registered as a public limited company under the Companies Act, 2013, and
licensed under Section 22 of the Banking Regulation Act, 1949, with specific licensing conditions
restricting its activities mainly to acceptance of demand deposits and provision of payments and
remittance services. Hence statement 2 is correct.
• The payments bank cannot undertake lending activities.
• Apart from amounts maintained as Cash Reserve Ratio (CRR) with RBI on its outside demand and time
liabilities, it will be required to invest minimum 75 per cent of its “demand deposit balances” in
Government securities/Treasury Bills with maturity up to one year that are recognized by RBI as eligible
securities for maintenance of Statutory Liquidity Ratio (SLR) and hold maximum 25 per cent in current
and time/ fixed deposits with other scheduled commercial banks for operational purposes and liquidity
management.

Correct Answer: C
Explanation
Open Network for Digital Commerce (ONDC)
• ONDC is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT) under the
Ministry of Commerce and Industry. Hence statement 1 is not correct.
• The ONDC aims at promoting open networks developed on open-sourced methodology, using open
specifications and open network protocols, independent on any specific platform.
• The project to integrate e-commerce platforms through a network based on open-source technology
has been tasked to the Quality Council of India. Hence statement 2 is correct.
• Implementation of ONDC, which is expected to be on the lines of Unified Payments Interface (UPI)
could bring various operational aspects put in place by e-commerce platforms to the same level.
• Various operational aspects include onboarding of sellers, vendor discovery, price discovery and
product cataloguing etc.
Significance:
• If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have
to operate using the same processes (like Android Based Mobile Devices).
• This could give a huge booster shot to smaller online retailers and new entrants.
• If mandated, this could be problematic for larger e-commerce companies, which have their own
processes and technology deployed for these segments of operations.
• ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of
suppliers, derive efficiency in logistics and enhance value for consumers.

Correct Answer: A
Explanation
Statements 1 and 2 are correct, 3 is not correct.
The “health star rating” system that the Food Safety Standards Authority of India (FSSAI) plans to adopt
in order to help consumers reduce their intake of unhealthy foods has been opposed by a dozen
consumer and health advocacy groups.
Health Star Rating System
• This system will be similar to the one that is being used by the Bureau of Energy Efficiency for
assessing the energy efficiency in electrical devices. Hence statement 1 is correct.
• The packaged foods will have number of stars displayed on them which will indicate whether the item
is healthy or unhealthy. Hence statement 2 is correct.
• The amount of fats, sugar, and salt in the food item will be used to determine the rating. Hence
statement 3 is not correct.
• A study was conducted by IIM Ahmedabad regarding the methodology to be used to display the health
ratings of the food items
• The display of star ratings was recommended in this study as it would be easier for the customer to
understand.
• It has been decided that the ratings will be placed in front of the packets as studies show that this
method is much more effective towards affecting the choice of the consumer. Applicability
• All packaged food items or processed food will have the HSR label. These will include chips, biscuits,
namkeen, sweets and chocolates, meat nuggets, and cookies.
• Exemptions: However, milk and its products such as chenna and ghee are EXEMPTED as per the FSSAI
draft notified in 2019.

Correct Answer: C
Explanation
Statements 1, 2 and 4 are correct, 3 is not correct.
Goods and services tax (GST)
• The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for
domestic consumption.
• The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods
and services.
The GST replaced the following union taxes:
• Central Excise duty
• Duties of Excise (Medicinal and Toilet Preparations)
• Additional Duties of Excise (Goods of Special Importance)
• Additional Duties of Excise (Textiles and Textile Products)
• Additional Duties of Customs (commonly known as CVD) and Service Tax.
The GST replaced the following state taxes:
• State VAT
• Central Sales Tax
• Luxury Tax
• Entry Tax (all forms)
• Entertainment and Amusement Tax (except when levied by the local bodies)
• Taxes on advertisements g. Purchase Tax
• Taxes on lotteries, betting and gambling

Correct Answer: A
Explanation
Statements 1 and 3 are correct, 2 and 4 are not correct.
Bond Yield
• Bond yield is the return an investor realizes on a bond. The mathematical formula for calculating yield
is the annual coupon rate divided by the current market price of the bond
• Bond is an instrument to borrow money. A bond could be issued by a country’s government or by a
company to raise funds.
Coupon Rate:
• It is the rate of interest paid by bond issuers on the bond’s face value.
• Movements in yields depend on trends in interest rates, it can result in capital gains or losses for
investors. Hence statement 1 is correct.
• A rise in bond yields in the market will bring the price of the bond down. Hence statement 1 is not
correct.
• A drop in bond yield would benefit the investor as the price of the bond will rise, generating capital
gains. Hence statement 3 is correct.
• A decline in yield is also better for the equity markets because money starts flowing out of debt
investments to equity investments. Hence statement 4 is not correct.
• It is a market in which shares of companies are issued and traded, either through exchanges or overthe-counter markets. Also known as the stock market.
• That means as bond yields go down, the equity markets tend to outperform by a bigger margin and as
bond yields go up equity markets tend to falter.

Correct Answer: A
Explanation
Statements 1 and 2 are correct, 3 and 4 are not correct.
Competition Commission of India (CCI)
• The Competition Commission of India (CCI) was established in March 2009 by Government of India
under the Competition Act, 2002 for the administration, implementation, and enforcement of the Act.
• The Commission consists of one Chairperson and six Members as per the Competition Act who shall be
appointed by the Central Government.
• The commission is a quasi-judicial body which gives opinions to statutory authorities and also deals
with other cases. The Chairperson and other Members shall be whole-time Members. Hence statement
1 is correct.
The Competition Commission of India takes the following measures to achieve its objectives:
1. Consumer welfare: To make the markets work for the benefit and welfare of consumers.
2. Ensure fair and healthy competition in economic activities in the country for faster and inclusive
growth and development of the economy. Hence statement 2 is correct.
3. Implement competition policies with an aim to effectuate the most efficient utilization of
economic resources.
4. Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth
alignment of sectoral regulatory laws in tandem with the competition law.
• The Competition Commission of India can impose the monetary penalty on companies. CCI imposed a
penalty of ₹522 million (US$7.6 million) on the Board of Control for Cricket in India (BCCI) in 2013, for
misusing its dominant position. Hence statement 4 is not correct.
• Foreign Investment Promotion Board (FIPB) reviews the FDI policies and helps in setting up
transparent guidelines that encourage FDI into different sectors. Hence statement 3 is not correct.

Correct Answer: A
Explanation
Statements1 and 3 are correct, 2 is not correct.
The government measures to ease power supply constraints through higher coal imports are likely to
increase cost of supply for discoms by 4.5-5.0 per cent in 2022-23.
Revamped Distribution Sector Scheme
• This Scheme seeks to improve the operational efficiencies and financial sustainability of all DISCOMs/
Power Departments excluding Private Sector DISCOMs by providing conditional financial assistance to
DISCOMs for strengthening of supply infrastructure. Hence statement 1 is correct.
• The assistance will be based on meeting pre-qualifying criteria as well as upon achievement of basic
minimum benchmarks by the DISCOM evaluated on the basis of agreed evaluation framework tied to
financial improvements.
• It is also proposed that the currently ongoing approved projects under the Schemes of Integrated
Power Development Scheme (IPDS), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) would be
subsumed in this Scheme.
• Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) are the nodal agencies for
the implementation of the Scheme. Hence statement 3 is not correct.
• The scheme also focuses on funding for feeder segregation for unsegregated feeders, which would
enable solarization under KUSUM. Hence statement 3 is correct.
• Solarization of feeders will lead to cheap/ free daytime power for irrigation and additional income for
the farmers.
• It is proposed to take up System metering at Feeder and Distribution Transformer (DT) level with
communicating features simultaneously in PPP mode

Correct Answer: C
Explanation
With States’ borrowing limits for this fiscal set to be pared in tune with their off-budget borrowings
since 2020-21, some States that had borrowed more in the pandemic-hit years could face challenges in
raising resources, rating agency ICRA said.
Ricardian Equivalence Proposition (REP)
• Ricardian equivalence is an economic theory that says that financing government spending out of
current taxes or future taxes (and current deficits) will have equivalent effects on the overall economy.
• This means that attempts to stimulate an economy by increasing debt-financed government spending
will not be effective because investors and consumers understand that the debt will eventually have to
be paid for in the form of future taxes.
• The theory argues that people will save based on their expectation of increased future taxes to be
levied in order to pay off the debt, and that this will offset the increase in aggregate demand from the
increased government spending.

Correct Answer: D
Explanation
Stablecoins
• Cryptocurrency prices tend to vary a huge amount in a short span of time and people find this volatility
exciting.
• Stablecoins are cryptocurrencies without the volatility. They share a lot of the same powers as other
cryptos, but their value is steady, more like a traditional currency, i.e. the US Dollar, Indian Rupee, etc.
• Stablecoins are a type of cryptocurrency linked to an asset like the U.S. dollar that doesn’t change
much in value.
• Many are also pegged to other fiat currencies issued by governments like the euro and yen.
• There are two types of stablecoins depending on the collateral: national currency backed, and
cryptocurrency backed.
• Collateralised stablecoins are attached to another asset, like the US dollar. Their issuers back up the
value of their coin by holding on to that asset.
• Other stablecoins are linked to the price of crypto assets like Ether or, in certain DeFi apps, collections
of coins put up as collateral.