INTEGRATED MAINS AND PRELIMS MENTORSHIP (IMPM) 2025 Daily KEY
| Exclusive for Subscribers Daily: Green bonds and Masala bonds and Tariffs and its significance for the UPSC Exam? Why are topics like Census Exercise , Gross Domestic Product (GDP)important for both preliminary and main exams? Discover more insights in the UPSC Exam Notes for March 15, 2025 |
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Critical Topics and Their Significance for the UPSC CSE Examination on March 15, 2025
Daily Insights and Initiatives for UPSC Exam Notes: Comprehensive explanations and high-quality material provided regularly for students
For Preliminary Examination: Current events of national and international importance
For Mains Examination: GS III - Economy
Context:
The demand for Sovereign Green Bonds (SGrBs) in India has received a luke response from the investors. The two new SGrBs worth Rs 10,000 crore auctioned by the Reserve Bank of India (RBI) in November and January faced muted response from the investors as bonds valued at Rs 7,443 crore remained unsold. This came despite a rule change allowing NRIs and foreign portfolio investors to participate without restrictions
Read about:
Sovereign Green Bonds (SGrBs)
Masala bonds
Key takeaways:
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A bond serves as a financial instrument for raising capital. It can be issued by a government or a corporation to secure funds. Government bonds, known as G-secs in India, Treasuries in the United States, and Gilts in the United Kingdom, are backed by sovereign guarantees, making them one of the safest investment options. However, their security also results in relatively lower returns, known as yields.
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The yield on a bond represents its effective rate of return, which fluctuates based on the bond’s price. For example, consider a 10-year government security with a face value of ₹100 and an annual coupon payment of ₹5. An investor purchasing this bond for ₹100 would receive ₹5 each year for ten years, along with the repayment of ₹100 at the end of the term. In this case, the yield or effective interest rate amounts to 5%.
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Sovereign Green Bonds (SGrBs) are issued by government entities, such as the Government of India, which introduced a framework for these bonds in 2022. This framework defines "green projects" as initiatives that enhance resource efficiency, lower carbon emissions, support climate resilience, and restore natural ecosystems.
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The Securities and Exchange Board of India (SEBI) introduced the idea of blue bonds in its ‘Consultation Paper on Green and Blue Bonds as a Mode of Sustainable Finance.’ SEBI emphasizes that India has significant potential for deploying blue bonds across various segments of the blue economy. The World Bank defines the blue economy as the sustainable utilization of oceanic resources to foster economic growth, enhance livelihoods, and generate employment while preserving marine ecosystems. Meanwhile, the European Commission categorizes it as all economic activities linked to oceans, seas, and coastal regions.
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Masala Bonds are rupee-denominated bonds, meaning they allow funds to be raised from foreign markets in Indian currency. As per the Reserve Bank of India (RBI), Indian corporations, statutory bodies, and banks are eligible to issue these bonds in international markets.
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The Organisation for Economic Co-operation and Development (OECD) defines Social Impact Bonds as a type of social investment that follows a "pay-for-success" model, where returns depend on the program’s effectiveness. This structure facilitates the tracking of progress, ensuring transparency for investors.
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According to the OECD, Sustainability-Linked Bonds are financial instruments whose structural or financial features are linked to the issuer’s achievement of predefined sustainability or Environmental, Social, and Governance (ESG) goals. These bonds adopt a forward-looking approach, requiring issuers to demonstrate sustainability improvements within a specified timeframe.
Sustainable Development Goals (SDGs)
The Union Cabinet has reaffirmed its commitment to achieving Sustainable Development Goals (SDGs) ahead of the 2030 deadline. Various bonds, including Sovereign Green Bonds, Blue Bonds, and Social Impact Bonds, aim to support SDG targets. Some of the key SDGs include:
- Goal 7: Ensuring universal access to affordable, reliable, and sustainable energy.
- Goal 11: Creating inclusive, safe, resilient, and sustainable urban spaces.
- Goal 13: Taking urgent measures to mitigate climate change and its effects.
- Goal 14: Promoting the conservation and sustainable utilization of oceanic and marine resources.
- Goal 17: Strengthening global partnerships to drive sustainable development
Follow Up Question
1.With reference to ‘IFC Masala Bonds’, sometimes seen in the news, which of the statements given below is/ are correct? (2016)
1. The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor
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Answer (c)
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For Preliminary Examination: Current events of national and international importance
For Mains Examination: GS II, III effects of policies on tariffs
Context:
US President Donald Trump’s latest salvo that India has “agreed” to “cut their tariffs way down” did not elicit any immediate response from Delhi Saturday. Officials indicated it’s one bait that the Indian establishment is not going to bite, especially when the ground is being prepared for negotiations on a bilateral trade pact.
Read about:
What are tariffs and why are they imposed?
How are tariffs retaliated?
Key takeaways:
Tariffs refer to taxes or levies that a government applies to imported goods and services. Their primary purpose is to raise the cost of foreign products, making them less competitive against locally produced goods, thereby promoting domestic consumption. They also function as a safeguard for homegrown industries against international competition while serving as a revenue stream for the government.
From India’s perspective, a bilateral trade agreement is expected to enhance two-way trade in both goods and services, improve market accessibility, lower tariff and non-tariff restrictions, and strengthen supply chain networks. Negotiators are working towards finalizing the agreement by autumn this year.
The United States is among India’s largest trading partners, with bilateral trade in goods and services amounting to $190 billion in 2023. India’s trade surplus in goods with the US has increased significantly post-COVID-19, rising from $17.30 billion in 2019-20 to $35.33 billion in 2023-24. This period has also witnessed a shift in India’s export composition. Meanwhile, imports from the US have grown at a slower rate compared to India's exports over the past five years.
India has five key takeaways regarding the latest trade-related moves by former US President Donald Trump:
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During Prime Minister Narendra Modi’s meeting with President Trump at the White House on February 13, both nations agreed to initiate negotiations for the first phase of a multi-sector Bilateral Trade Agreement (BTA), with the goal of concluding it within seven to eight months.
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India emphasized the importance and urgency of the negotiations to the Trump administration on February 13, indicating that it would send lead negotiators once the US had its Trade Representative in place.
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The Indian government considers this development a positive step, as both sides share a common understanding of the proposed trade agreement.
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Given the comprehensive nature of the deal, the negotiation process is expected to be complex and prolonged, involving multiple rounds of discussions at both technical and political levels.
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Until negotiations are completed, India aims to collaborate with US trade officials to prevent the imposition of reciprocal tariffs. Delhi expects a temporary delay in tariff imposition, similar to how Trump recently postponed tariffs on Canada and Mexico for a month
Follow Up Question
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Answer (C)
ASEAN has FTAs with:
Now, checking the given options:
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What are the issues around delimitation?
For Preliminary Examination: Current events of national and international importance
For Mains Examination: GS II - Polity & Governance
Context:
There has been a renewed debate about delimitation after the issue was raised by the Chief Minister of Tamil Nadu. The delimitation of constituencies for the Lok Sabha and State Legislative Assemblies is to be carried out on the basis of the first Census after 2026.
Read about:
What is a Delimitation Commission?
Census Exercise
Key takeaways:
- Delimitation refers to the process of determining the number of seats and defining the boundaries of territorial constituencies in each state for both the Lok Sabha and Legislative Assemblies.
- This task is undertaken by the Delimitation Commission, which is established through an act of Parliament. Past delimitation exercises were conducted based on the Census figures of 1951, 1961, and 1971.
- The total number of Lok Sabha seats was fixed at 543 following the 1971 Census, when the population stood at 54.8 crores. Since then, this figure has remained unchanged to promote population control initiatives.
- However, a revision is scheduled to take place after the first Census conducted post-2026. With the 2021 Census delayed due to the COVID-19 pandemic, discussions have emerged linking it to the upcoming delimitation process.
Key Issues in Delimitation
Over the past five decades, India's population growth has been uneven across states. Northern states such as Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan have experienced significantly higher growth rates compared to southern states like Kerala, Tamil Nadu, Karnataka, and Andhra Pradesh. Two possible approaches to delimitation are being considered:
- Retaining the current number of 543 seats while redistributing them among states.
- Expanding the Lok Sabha to 848 seats, proportionally increasing representation across states.
Union Home Minister Amit Shah recently assured that no state would lose its existing seat share and that any increase would be implemented on a pro-rata basis. However, the criteria for this proportional allocation—whether based on the current seat distribution or projected population—is unclear.
If future seat allocation follows projected population figures, southern states, along with smaller northern states like Punjab, Himachal Pradesh, and Uttarakhand, as well as northeastern states, may receive fewer seats compared to larger northern states. This could potentially disrupt the federal balance, diminishing political influence for regions that have successfully controlled their population. Currently, southern states hold a 24% share of Lok Sabha seats, which could drop by 5% under such a system.
Possible Solutions
- Democracy is based on the principle of one citizen, one vote, one value. However, this principle has already been adjusted since 1976, when delimitation was first postponed to encourage population control.
- In contrast, the United States has maintained a fixed number of 435 seats in its House of Representatives since 1913, despite its population nearly quadrupling from 9.4 crores in 1911 to an estimated 34 crores in 2024.
- The primary role of a Member of Parliament (MP) is to legislate on matters in the Union List and oversee the functioning of the Union Government, while most central schemes are executed by state administrations.
- Despite India's population rising from 55 crores to 145 crores over the past five decades, the Lok Sabha has functioned effectively with 543 MPs. With the country’s population expected to peak at 165-170 crores in the next three decades before gradually declining, maintaining the current number of Lok Sabha seats could be a viable option. This would preserve existing state-wise representation and uphold the federal structure.
- To safeguard regional political interests, MPs and political leaders from southern states, smaller northern states, and the northeastern region should advocate for capping Lok Sabha seats at 543. Meanwhile, to ensure adequate local representation, state assemblies could increase the number of MLAs in proportion to projected population growth
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Answer (C)
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Are freebies and welfare schemes different?
For Preliminary Examination: Current events of national and international importance
For Mains Examination: GS II - GS II - Governance
Context:
All three major political parties in the Delhi Assembly elections, won by the Bharatiya Janata Party, unveiled a barrage of freebies or subsidies to woo voters. The Aam Aadmi Party (AAP) pledged a ₹2,100 monthly allowance for all women, an additional ₹21,000 for pregnant women, and subsidised LPG cylinders at ₹500 for those from impoverished backgrounds.
Read about:
Can schemes such as the midday meal, the public distribution system, and child development services be considered as welfare?
How do targeted cash transfer programmes impact lives?
Key takeaways:
Electoral Sops or Welfare Politics?
- The debate over electoral freebies versus welfare measures remains unresolved due to the lack of a clear definition of what qualifies as a freebie. Some view freebies as a form of bribery, which they argue influences voter decisions and discourages informed choices.
- Others, however, believe this perspective undermines voter agency and delegitimizes welfare politics. The perception of a policy as a freebie or a genuine welfare measure often depends on context.
- For instance, while some may consider free public transport an unnecessary handout, others see it as an essential social support system. Ironically, critics of transport subsidies may indirectly benefit from the availability of cheap labor, which is facilitated by affordable transportation.
- Dr. K.K. Kailash, a Political Science professor at the University of Hyderabad, highlights how such measures enable people to travel for work, thereby sustaining economic activity.
Welfare as a Legal Right
- The National Food Security Act (2013), introduced by the Congress-led UPA government, transformed various welfare programs—such as the mid-day meal scheme, the Public Distribution System (PDS), and child development initiatives—into legal entitlements. According to government data, the law benefits 75% of the rural population and 50% of the urban population, covering nearly 800 million people.
- A 2023 study by the Centre for Financial Inclusion (CFI) found that well-structured cash transfer programs, particularly those directing funds to women on behalf of their households, not only empower women but also help reduce the risks of domestic violence.
Where to Draw the Line?
- According to Dr. Kailash, welfare programs enhance human capabilities and promote freedom, aligning with Amartya Sen’s “capability approach” to development. For example, mid-day meal programs provide access to nutritious food, which boosts immunity and allows individuals to live healthier, more dignified lives.
- Poor health, on the other hand, increases healthcare costs and puts additional pressure on public resources. Investing in nutrition and education from an early age yields long-term societal benefits.
- Cash transfer schemes have gained political traction in Maharashtra, Jharkhand, and Haryana, reinforcing their role in electoral strategies. However, Dr. Kailash warns that while these schemes increase consumer spending and stimulate market activity, they do not create sustainable economic opportunities.
- Over-reliance on freebie-driven politics poses significant fiscal risks, particularly for states burdened with high debt.
- The Reserve Bank of India (RBI) has highlighted a sharp rise in subsidy expenditure, urging states to rationalize subsidies to protect essential investments in infrastructure and public services.
The Judiciary’s Role
- In August 2022, the Supreme Court referred multiple petitions challenging the constitutional validity of electoral freebies to a three-judge bench. The lead petition, filed by BJP leader Ashwini Upadhyay, argued that populist giveaways undermine free and fair elections, violating constitutional principles.
- During the hearings, a bench led by former Chief Justice of India N.V. Ramana proposed forming an expert panel to gather recommendations from stakeholders—marking a shift from the Court’s previous stance.
- In S. Subramaniam Balaji vs Government of Tamil Nadu (2013), the Supreme Court had ruled that such matters fall under legislative policy and are beyond judicial intervention.
- The judgment also emphasized that state-funded welfare programs cannot be deemed illegal or considered “corrupt practices”, especially when they align with the Directive Principles of State Policy. However, no further hearings have taken place since November 23, 2023
Follow Up Question
1.Consider the following statements: (2017)
- The Election Commission of India is a five-member body.
- The Union Ministry of Home Affairs decides the election schedule for the conduct of both general elections and bye-elections.
- Election Commission resolves the disputes relating to splits/mergers of recognised political parties.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 only
(c) 2 and 3 only
(d) 3 only
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Answer (d)
Therefore, only statement 3 is correct |
GDP grows 6.2% on rising government, consumer spending
For Preliminary Examination: GDP, GVA
For Mains Examination: GS III - Economy
Context:
India’s real Gross Domestic Product (GDP) grew 6.2% in the October to December 2024 period, the third quarter of the fiscal year, picking up pace from the 5.6% growth recorded in the previous quarter, according to data released by the National Statistics Office (NSO)
Source: The Hindu
Read about:
Gross Domestic Product (GDP)
National Statistics Office (NSO)
Key takeaways:
- Gross Domestic Product (GDP) and Gross Value Added (GVA) are two key economic indicators used to measure the economic performance of a country or region, but they approach this measurement in slightly different ways.
- GDP is the most widely recognized measure of a country's economic activity. It represents the total monetary value of all goods and services produced within a country's borders over a specific period, typically a quarter or a year.
- GDP can be calculated using three approaches: the production approach, the income approach, and the expenditure approach.
- The production approach sums the outputs of all sectors of the economy; the income approach adds up all incomes earned by individuals and businesses, including wages, profits, and taxes minus subsidies; and the expenditure approach totals all spending on final goods and services, including consumption, investment, government spending, and net exports (exports minus imports). GDP provides a broad overview of the economic health and size of an economy.
- GVA, on the other hand, focuses on the value added at each stage of production. It measures the contribution to the economy of each individual producer, industry, or sector.
- GVA is calculated by subtracting the cost of inputs and raw materials from the total output. Essentially, it captures the value created by an entity after accounting for the costs of goods and services used in the production process.
- GVA is particularly useful for understanding the productivity and efficiency of specific industries or sectors within an economy. When GVA is summed up across all sectors and adjusted for taxes and subsidies, it equals GDP.
- In summary, while GDP provides a comprehensive measure of the overall economic activity within a country, GVA offers a more granular view by focusing on the value added by individual sectors or industries.
- Both metrics are crucial for policymakers, economists, and analysts to assess economic performance, identify growth drivers, and make informed decisions.
- GDP gives a macro-level picture, whereas GVA helps in understanding the micro-level contributions of different parts of the economy. Together, they provide a more complete understanding of economic dynamics
Follow-Up Question
1.With reference to Indian economy, consider the following statements: (UPSC CSE, 2015)
1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.
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
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Answer (b)
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Internet shutdowns highest in 2024 globally, India tops in government-ordered curbs
For Preliminary Examination: Current events of naional and international importance
For Mains Examination: GS II - Governance
Context:
India did not impose the highest number of Internet shutdowns last year, with Myanmar seeing one additional disruption in 2024, according to a report by the advocacy body Access Now. However, the number of shutdowns imposed by the government in charge — the Union and State governments here — is still higher in India
Source: The Hindu
Read about:
Impact of British-Era Law on Internet Shutdowns in India
Is the Right to the Internet is a Fundamental right?
Key takeaways:
- India did not record the highest number of Internet shutdowns last year, as Myanmar experienced one more disruption in 2024, according to a report by the advocacy group Access Now. However, the combined number of shutdowns enforced by the Union and State governments in India remained higher.
- The frequency of Internet shutdowns in India decreased in 2024 compared to the previous year. The report highlighted that people across 16 States and Union Territories faced shutdowns, with officials in Manipur (21), Haryana (12), and Jammu & Kashmir (12) implementing the highest number of restrictions.
- Among the 84 shutdowns in India, 41 were linked to protests, while 23 were attributed to communal violence.
- On a global scale, Internet shutdowns reached an all-time high in 2024. A total of 296 shutdowns were recorded worldwide, with India accounting for 28% of them through its 84 restrictions.
- Myanmar imposed 85 shutdowns, while various entities enforced 11 others: China implemented two in Myanmar, Thailand enforced four, and the exiled National Unity Government (NUG), Myanmar National Democratic Alliance Army (MNDAA), and Ta’ang National Liberation Army (TNLA) each imposed one in their respective territories. The origin of two additional shutdowns remained unknown, according to the report.
- Examination-related Internet restrictions have been a key concern for critics of such measures. In 2024, India implemented five shutdowns ahead of major exams.
- One of these occurred during the General Graduate Level Combined Competitive Examinations in Jharkhand, lasting five and a half hours on the morning of September 22.
- Similarly, Assam enforced Internet shutdowns across multiple districts in the same month for government job examinations
The Right to the Internet is not explicitly recognized as a Fundamental Right under the Indian Constitution. However, the Supreme Court of India has affirmed that access to the internet is an important aspect of fundamental rights, particularly under Article 19(1)(a) (Right to Freedom of Speech and Expression) and Article 21 (Right to Life and Personal Liberty).
Key Judicial Rulings
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Anuradha Bhasin v. Union of India (2020)
- The Supreme Court ruled that the internet is essential for exercising freedom of speech and expression under Article 19(1)(a) and for carrying out trade and business under Article 19(1)(g).
- The court held that any restrictions on internet access must be reasonable, proportionate, and subject to judicial review.
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Faheema Shirin v. State of Kerala (2019)
- The Kerala High Court declared that the right to access the internet forms part of the right to education and the right to privacy under Article 21.
- The ruling was significant in recognizing the internet as a necessity for education and personal development.
1.When the alarm of your smartphone rings in the morning, you wake up and tap it to stop the alarm, which causes your geyser to be switched on automatically. The smart mirror in your bathroom shows the day’s weather and also indicates the level of water in your overhead tank. After you take some groceries from your refrigerator for making breakfast, it recognises the shortage of stock in it and places an order for the supply of fresh grocery items. When you step out of your house and lock the door, all lights, fans, geysers and AC machines get switched off automatically. On your way to the office, your car warns you about traffic congestion ahead and suggests an alternative route, and if you are late for a meeting, it sends a- message to your office accordingly.
In the context of emerging communication technologies, which one of the following terms best applies to the above scenario? (UPSC Prelims 2018)
(a) Border Gateway Protocol
(b) Internet of Things
(c) Internet Protocol
(d) Virtual Private Network
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Answer (b)
The scenario describes a network of interconnected devices that communicate and operate automatically based on real-time data, which is the core concept of the Internet of Things (IoT). IoT enables devices such as smartphones, home appliances, cars, and sensors to connect to the internet and interact with each other to enhance automation and convenience. Why not the other options?
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Revenue Budget
The Revenue Budget deals with the revenue receipts and revenue expenditure of the government.
A. Revenue Receipts
These are the government’s earnings that do not create any liability or reduce assets. They are of two types:
- Tax Revenue: Includes revenues from direct and indirect taxes such as Income Tax, Corporate Tax, GST, Customs Duty, Excise Duty, etc.
- Non-Tax Revenue: Includes revenue from sources such as dividends from public sector enterprises, interest on loans, fees, fines, and grants received by the government.
B. Revenue Expenditure
This refers to the government’s spending that does not create assets or reduce liabilities. It includes:
- Interest Payments on government borrowings.
- Subsidies (such as food, fertilizer, and fuel subsidies).
- Expenditure on salaries, pensions, and administrative costs.
- Grants given to state governments and other entities.
A Revenue Deficit occurs when revenue expenditure exceeds revenue receipts
Capital Budget
The Capital Budget includes capital receipts and capital expenditure related to long-term investments.
A. Capital Receipts
These are receipts that create liabilities or reduce assets. They include:
- Borrowings (from the public, foreign institutions, and the RBI).
- Disinvestment proceeds from the sale of government stakes in public sector enterprises.
- Recovery of loans given by the government.
B. Capital Expenditure
This refers to expenditure on the creation of long-term assets such as:
- Infrastructure projects (highways, railways, ports).
- Defense equipment purchases.
- Loans given to states and public sector enterprises.
A Fiscal Deficit occurs when total expenditure exceeds total revenue (excluding borrowings)
Fiscal Deficit, Revenue Deficit, and Primary Deficit
- Fiscal Deficit = Total Expenditure – Total Revenue (excluding borrowings).
- Revenue Deficit = Revenue Expenditure – Revenue Receipts.
- Primary Deficit = Fiscal Deficit – Interest Payments.
Finance Bill and Appropriation Bill
- Finance Bill: Contains tax proposals for the year and must be passed by Parliament.
- Appropriation Bill: Authorizes government expenditure from the Consolidated Fund of India.
Budget Classification: Plan vs. Non-Plan (Earlier) vs. Capital & Revenue (Current)
- Earlier, budgets were classified as Plan Expenditure (for development projects) and Non-Plan Expenditure (for routine administrative costs).
- Now, the classification follows Revenue Expenditure and Capital Expenditure
Additional Information
- If India sustains an annual real GDP growth rate of 6% for the next two decades, its per capita income could rise from $2,650 to $10,000 by 2045. Given that 63% of the population is under 50, most Indians are likely to witness this transformation.
- Even if growth moderates to 5.5%, the same milestone could be reached in 22 years. Whether this happens by 2045 or 2047 is relatively insignificant in the grand scheme of the nation’s economic journey; what truly matters is achieving the target.
- Some nations have experienced rapid economic expansion driven by excessive borrowing, only to face sharp downturns or restructuring later. Recently, concerns have emerged about India’s growth slowing down, partly due to increasing household debt.
- Traditionally, Indian families borrowed money only for emergencies or acquiring appreciating assets. However, borrowing habits have evolved, with people now taking loans for depreciating assets and lifestyle experiences.
- The ease of click-based EMI purchases, the influence of social media, the convenience of e-commerce, and the absence of significant incentives for paying upfront have all contributed to this rising debt culture.
- With household indebtedness on the rise, as reflected in higher retail non-performing assets (NPAs), efforts to curb personal loan growth are a welcome move. While this may temporarily slow consumer spending, it also lays the groundwork for more sustainable economic growth.
- The long-term consequences of debt-driven consumption require careful evaluation. While EMI schemes allow lower-income individuals to afford premium products and experiences, they may also create lifelong spending habits. Whether this enhances overall well-being remains a debated issue.
- Another factor influencing economic growth is China’s continued dominance in exports. Although the China+1 strategy presents an opportunity for India, meaningful progress will take time as significant groundwork is needed before India can emerge as a strong alternative.
- Despite India’s moderate but promising manufacturing base, along with government support and favorable geopolitical conditions, achieving higher manufacturing output will be a slow and challenging process.
- Additionally, India faces short-term economic challenges such as rising US interest rates, a narrowing yield gap between India and the US (around 2.2%), the strong US dollar, and a decline in net foreign direct investment (FDI).
- Stock markets, particularly small- and mid-cap segments, appear to have overestimated India’s sustained growth trajectory. Investors should remain cautious and keep in mind the wisdom of John C. Bogle, the legendary American investor, who emphasized that financial markets inevitably revert to the mean over time
Follow Up Question
1.Economic growth in country X will necessarily have to occur if (UPSC CSE 2013)
(a) there is technical progress in the world economy
(b) there is population growth in X
(c) there is capital formation in X
(d) the volume of trade grows in the world economy
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Answer (c)
Economic growth in country X is not guaranteed by factors such as technical progress in the world economy, population growth, or global trade expansion alone. However, capital formation—which includes investments in physical assets like infrastructure, machinery, and technology—is a direct driver of economic growth.
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| Subject | Topic | Description |
| Polity | Panchayats | Panchayats |
| Environment & Ecology | Wildlife Protection Act 1972 | Wildlife Protection Act 1972 |
| Economy | International Organisations | International Organisations |
| Ancient History | Buddhism | Buddhism |
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