1996 General Studies, all questions
UPSC Prelims 1996 · General Studies
Question 51: Economy and Social Development
Hawala transactions relate to payments
areceived in rupees against overseas currencies and vice versa without going through the official channels
breceived for sale/transfer of shares without going through the established stock exchanges
creceived as commission for services rendered to overseas investors/buyers/sellers in assisting them to get over the red tape and/or in getting preferential treatment
dmade to political parties or to individuals for meeting election expenses
AnswerThe answer is (a).
Hawala is an informal money-transfer system in which value moves between countries through a network of brokers without passing through banks or official exchange channels, so rupees are paid against foreign currency, and the reverse, outside legal channels. It came to wide notice in India through the hawala case of the mid-1990s. Remember: hawala - unofficial currency exchange and remittance.
Why each option is right or wrong
- (a) Right: unofficial exchange of rupees and foreign currency.
- (b) Selling shares outside the exchanges is a different irregularity, not hawala.
- (c) Commission for helping overseas investors is not hawala.
- (d) Money for political parties or elections is political funding, not hawala by definition.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 1996, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.