2010 General Studies, all questions

UPSC Prelims 2010 · General Studies

Question 134: Economy and Social Development

With reference to the National Investment Fund to which the disinvestment proceeds are routed, consider the following statements :

  1. 1.The assets in the National Investment Fund are managed by the Union Ministry of Finance.
  2. 2.The National Investment Fund is to be maintained within the Consolidated Fund of India.
  3. 3.Certain Asset Management Companies are appointed as the fund managers.
  4. 4.A certain proportion of annual income is used for financing select social sectors.

Which of the statements given above is/are correct ?

a1 and 2
b2 only
c3 and 4
d3 only

AnswerThe answer is (c).

The National Investment Fund (set up in 2005) receives the proceeds of disinvestment of public sector enterprises. It is held in the Public Account of India, not the Consolidated Fund, and its corpus is managed by selected public sector asset management companies, not by the Finance Ministry, so statements 1 and 2 are wrong. Statement 3 is right. Statement 4 is right: a stated share of the annual income is used to finance selected social sector schemes such as education, health and employment.

  • 1. The fund's assets are managed by professional fund managers, not the Finance Ministry.
  • 2. The fund is kept in the Public Account of India, not the Consolidated Fund.
  • 3. Asset management companies are appointed as fund managers.
  • 4. A share of the annual income finances select social sector schemes.

How you could have got this

  1. If you were sure statement 4 is correct, (a), (b) and (d) go: each of them leaves 4 out.

    What you needed to know: A share of the annual income finances select social sector schemes.

Only (c) is left. You didn’t need statements 1, 2 or 3.

This follows an unofficial answer: UPSC has not published its key for this year, and if that answer is wrong, so is this path.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Statements 1 and 2 are wrong.
  • (b) Statement 2 is wrong: the fund is in the Public Account.
  • (c) Right: statements 3 and 4 are correct.
  • (d) Leaves out statement 4, which is correct.

Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2010, General Studies, Series A. The paper on upsc.gov.in.