2021 GS Paper I, all questions

UPSC Prelims 2021 · GS Paper I

Question 13: Economy and Social Development

With reference to India, consider the following statements :

  1. 1.Retail investors through demat account can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in primary market.
  2. 2.The ‘Negotiated Dealing System-Order Matching’ is a government securities trading platform of the Reserve Bank of India.
  3. 3.The ‘Central Depository Services Ltd.’ is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange.

Which of the statements given above is/are correct?

a1 only
b1 and 2
c3 only
d2 and 3

AnswerUPSC’s answer is (b).

Retail investors can buy Treasury Bills and government securities in the primary market through their demat accounts, using non-competitive bidding facilities. NDS-OM (Negotiated Dealing System-Order Matching) is the RBI's screen-based, anonymous platform for trading government securities. CDSL is not promoted by the RBI. It was promoted by the Bombay Stock Exchange together with some banks. Remember: NDS-OM is the RBI's G-sec platform; the depositories are promoted by exchanges and financial institutions, not the central bank.

  • 1. Retail investors can bid for T-Bills and G-secs in the primary market through demat accounts.
  • 2. NDS-OM is the RBI's electronic trading platform for government securities.
  • 3. CDSL was promoted by the Bombay Stock Exchange with banks, not jointly with the RBI.

How you could have got this

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

    What you needed to know: Retail investors can bid for T-Bills and G-secs in the primary market through demat accounts.

  2. Then, if you were sure statement 2 is correct, (a) goes: it leaves 2 out.

    What you needed to know: NDS-OM is the RBI's electronic trading platform for government securities.

Only (b) 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 2 is also correct.
  • (b) Right: statements 1 and 2 are correct; CDSL was not promoted by the RBI.
  • (c) Wrong: statement 3 is false.
  • (d) Wrong: statement 3 is false, and it drops statement 1.

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

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Source: UPSC, Civil Services (Preliminary) Examination 2021, General Studies Paper I, Series A. The paper on upsc.gov.in.