UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today’s subject quiz on the Economy to check your progress. Click Here to read the UPSC Essentials magazine for September 2025. Share your views and suggestions in the comment box or at manas.srivastava@indianexpress.comQUESTION 1With reference to the External Commercial Borrowings (ECBs), consider the following statements:1. These are commercial loans raised by eligible Indian entities from recognised non-resident lenders.2. It is governed by the various respective banks.3. ECBs are covered under the Foreign Exchange Management Act (FEMA).How many of the statements given above are correct?(a) Only one(b) Only two(c) All three(d) NoneExplanation— The RBI unveiled plans to streamline and simplify regulations for External Commercial Borrowings (ECBs). The updated framework will expand the pool of eligible borrowers and recognised lenders, rationalise borrowing limits and maturity norms, eliminate restrictions on borrowing costs, relax end-use constraints, and simplify reporting requirements.— External Commercial Borrowings (ECBs) are commercial loans made by qualifying Indian firms to recognised non-resident lenders, which are controlled by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA). Hence, statements 1 and 3 are correct and statement 2 is not correct.Story continues below this ad— They provide a substantial funding source for capital development and modernisation, with recent data indicating that total outstanding ECBs will be around $190.4 billion as of September 2024, mostly for infrastructure and industrial projects.Therefore, option (b) is the correct answer.QUESTION 2With reference to the nominal GDP, consider the following statements:1. It measures an economy’s output after adjusting for inflation.2. Tax collections are benchmarked to nominal GDP.Which of the statements given above is/are correct?(a) 1 only(b) 2 only(c) Both 1 and 2(d) Neither 1 nor 2Explanation— Nominal GDP measures an economy’s output at current market prices, while Real GDP measures it after adjusting for inflation. Hence, statement 1 is not correct.Story continues below this ad— Nominal GDP is the main benchmark for almost all the key economic variables in the country. For instance, tax collections are benchmarked to nominal GDP, as is the country’s overall debt, the government’s gross fiscal deficit or even the total market capitalisation of listed companies. Hence, statement 2 is correct.Therefore, option (b) is the correct answer.QUESTION 3The Rangarajan committee was formed to:(a) recommend reforms in the financial sector and banking regulation.(b) review the methodology for measurement of poverty in the country.(c) draft the framework for the implementation of the Goods and Services Tax (GST).(d) suggest measures for restructuring public sector enterprises.ExplanationStory continues below this ad— Almost 15 years ago, the erstwhile Planning Commission set up a committee headed by C Rangarajan, a former governor of the Reserve Bank of India (RBI), to review the methodology for measurement of poverty in the country.— The committee, which submitted its report in June 2014, caused a stir when it estimated the national poverty line at Rs 1,407 in terms of monthly per capita expenditure for urban areas and Rs 972 for rural areas.Therefore, option (b) is the correct answer.QUESTION 4With reference to the Pradhan Mantri Awas Yojana (Grameen) (PMAY-G), consider the following statements:1. The funding for PMAY-G is fully funded by the Central Government.Story continues below this ad2. In PMAY-G, programme implementation and monitoring is to be carried out through an end to end e-Governance model- Using AwaasSoft and Awaas App.Which of the statements given above is/are correct?(a) 1 only(b) 2 only(c) Both 1 and 2(d) Neither 1 nor 2Explanation— After Durga Puja, the West Bengal government will implement the second phase of the flagship “Banglar Bari” project in which 16 lakh families will be given Rs 1.20 lakh each to build pucca houses.About PMAY-G— The funding for PMAY-G, at Rs 1.2 lakh per unit, is shared by the Centre and states at a 60:40 ratio (with the exception of Northeastern and Himalayan states, where the Centre bears 90% of the cost, and Union Territories, where the Centre bears all of the cost). Hence, statement 1 is not correct.— In PMAY-G, programme implementation and monitoring is to be carried out through an end to end e-Governance model- Using AwaasSoft and Awaas App. Hence, statement 2 is correct.Therefore, option (b) is the correct answer.(Other Source: pmayg.dord.gov.in)QUESTION 5The Repo Rate is theStory continues below this ad(a) interest rate at which the Reserve Bank of India (RBI) loans money to commercial banks.(b) interest rate at which commercial banks lend money to the RBI.(c) interest rate charged by commercial banks on loans to the public.(d) interest rate at which RBI accepts fixed deposits from the public.ExplanationStory continues below this ad— The Reserve Bank of India (RBI) Monetary Policy Committee met from September 29 to October 1, and is widely expected to keep the repo rate unchanged for the second consecutive time amid strong GDP growth and expectations of benign inflation.— A section of economists, however, see a possibility of a repo rate cut in the upcoming policy. The six-member rate-setting panel is unlikely to alter its present ‘neutral’ monetary policy stance.— The Repo Rate is the interest rate at which the Reserve Bank of India (RBI) loans money to commercial banks. More specifically, it is the interest rate at which the Reserve Bank provides liquidity under the liquidity adjustment facility (LAF) to all LAF participants against the collateral of government and other approved securities.Therefore, option (a) is the correct answer.Previous Daily Subject-Wise-QuizDaily Subject-wise quiz — History, Culture, and Social Issues (Week 125)Daily subject-wise quiz — Polity and Governance (Week 130)Daily subject-wise quiz — Science and Technology (Week 130)Daily subject-wise quiz — Economy (Week 129)Daily subject-wise quiz — Environment and Geography (Week 129)Daily subject-wise quiz – International Relations (Week 129)Story continues below this adSubscribe to our UPSC newsletter and stay updated with the news cues from the past week.Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us onInstagramand X.