UPSC Prelims 2018 · GS Paper I
Question 56: Economy and Social Development
Consider the following statements :
- 1.The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.
- 2.Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
- 3.Treasury bills offer are issued at a discount from the par value.
Which of the statements given above is/are correct ?
AnswerUPSC’s answer is (c).
The RBI manages the public debt of both the Centre and the States: it services Government of India securities and also State Development Loans, so statement 1 is false. Treasury bills are short-term instruments issued by the Government of India alone; States issue dated securities, not T-bills. T-bills carry no coupon: they are issued at a discount to face value and redeemed at par, and the difference is the return.
- 1. The RBI manages and services State securities as well.
- 2. T-bills are issued only by the Centre.
- 3. T-bills are issued at a discount to par and redeemed at par.
How you could have got this
- If you were sure statement 1 is not correct, (a) and (d) go: each of them includes 1.
What you needed to know: The RBI manages and services State securities as well.
- Then, if you were sure statement 2 is correct, (b) goes: it leaves 2 out.
What you needed to know: T-bills are issued only by the Centre.
Only (c) is left. You didn’t need statement 3.
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) Wrong: statement 1 is false.
- (b) Incomplete: statement 2 is also correct.
- (c) Right: statements 2 and 3.
- (d) Wrong: statement 1 is false.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2018, General Studies Paper I, Series A. The paper on upsc.gov.in.