2017 GS Paper I, all questions

UPSC Prelims 2017 · GS Paper I

Question 43: Economy and Social Development

Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’ ?

aMobile wallets will not be necessary for online payments.
bDigital currency will totally replace the physical currency in about two decades.
cFDI inflows will drastically increase.
dDirect transfer of subsidies to poor people will become very effective.

AnswerUPSC’s answer is (a).

The Unified Payments Interface lets a person pay or receive money directly from a bank account through a mobile app and a virtual payment address, at any hour and across banks. Money need not first be loaded into a wallet, so mobile wallets become unnecessary for online payments. Digital currency replacing physical cash entirely in two decades is speculation, FDI inflows depend on the investment climate rather than a payments system, and subsidy transfers rely on bank accounts and Aadhaar rather than UPI as such.

Why each option is right or wrong
  • (a) Right: UPI pays straight from bank accounts, so wallets are not needed.
  • (b) Wrong: a total replacement of cash in two decades is not a likely consequence.
  • (c) Wrong: UPI has no direct link to a drastic rise in FDI.
  • (d) Wrong: subsidy transfers depend on bank accounts and identity linkage, not UPI itself.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2017, General Studies Paper I, Series A. The paper on upsc.gov.in.