UPSC Indian Economy – Chapter 25: The Services Sector and the Digital Economy (23 MCQs)
UPSC Indian Economy – Chapter 25: The Services Sector and the Digital Economy (23 MCQs) – 23 questions, subject: Indian Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.
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The share of services in India's gross value added is about:
Correct Answer: A [55 per cent]
Explanation:
NITI Aayog (2025) puts services at about 55 per cent of India's GVA; the Economic Survey gives 56.4 per cent for 2025-26.
The share of services in India's total employment is about:
Correct Answer: B [30 per cent]
Explanation:
Services employ only about 30 per cent of India's workers, far below their share in output (Economic Survey 2025-26).
India's services exports in 2025-26 were about:
Correct Answer: B [US$ 421 billion]
Explanation:
Revised commerce ministry data put 2025-26 services exports at US$ 421.32 billion, up from US$ 387.5 billion in 2024-25.
India's share of world services exports in 2024 was about:
Correct Answer: D [4.3 per cent]
Explanation:
The Economic Survey 2025-26 records India's share of world services exports at 4.3 per cent in 2024, up from 2 per cent in 2005.
A captive offshore unit of a multinational company doing IT, engineering or R&D work for its parent is called a:
Correct Answer: A [global capability centre]
Explanation:
A GCC is a captive offshore unit owned by a multinational that does IT, engineering, analytics or R&D work for its parent.
The NPCI was set up by:
Correct Answer: B [the RBI and the Indian Banks' Association]
Explanation:
NPCI was set up in 2008 as an initiative of the RBI and the Indian Banks' Association under the PSS Act, 2007.
Which of the following are products of NPCI?
1. RuPay
2. UPI
3. DigiLocker
Select the correct answer:
Correct Answer: C [1 and 2 only]
Explanation:
RuPay (2012) and UPI (2016) were built and run by NPCI; DigiLocker is a MeitY platform.
In September 2026, UPI processed about:
Correct Answer: D [24 billion transactions]
Explanation:
24.07 billion.
UPI was launched in:
Correct Answer: A [2016]
Explanation:
NPCI launched UPI in 2016 for instant bank-to-bank payments using a virtual payment address.
The Open Network for Digital Commerce (ONDC) belongs to which layer of India's digital public infrastructure?
Correct Answer: C [Commerce]
Explanation:
ONDC is an open protocol connecting e-commerce buyers and sellers, so it forms the commerce layer of the India Stack.
Assertion (A): India's services sector contributes far more to output than to employment.
Reason (R): Labour productivity in modern services such as IT and finance is much higher than in agriculture.
Correct Answer: A [Both A and R are true, and R is the correct explanation of A]
Explanation:
Services give about 55 per cent of GVA with about 30 per cent of jobs because output per worker there is far higher.
The DPDP Rules were notified in:
Correct Answer: B [November 2025]
Explanation:
MeitY notified the Digital Personal Data Protection Rules, 2025 in November 2025, with obligations phased in over 12–18 months.
The maximum penalty per breach under the DPDP Act, 2023 is:
Correct Answer: D [₹250 crore]
Explanation:
The Schedule to the DPDP Act, 2023 sets the highest penalty, for failing to take reasonable security safeguards, at ₹250 crore.
Consider the following statements:
1. The digital economy was estimated at 11.74 per cent of GDP in 2022-23.
2. Gig and platform workers are covered under the Code on Social Security, 2020.
3. UPI is a wallet that stores money outside bank accounts.
Which of the statements given above are correct?
Correct Answer: D [1 and 2 only]
Explanation:
UPI links bank accounts.
Arrange the following in chronological order:
1. DPDP Act
2. UPI launched
3. NPCI set up
4. IndiaAI Mission
Select the correct answer:
Correct Answer: C [3-2-1-4]
Explanation:
2008, 2016, 2023, 2024.
The RBI committee on deepening digital payments (2019) was headed by:
Correct Answer: A [Nandan Nilekani]
Explanation:
The RBI's High-Level Committee on Deepening of Digital Payments, chaired by Nandan Nilekani, submitted its report in May 2019.
The committee whose report (2018) led to the draft personal data protection law was headed by:
Correct Answer: C [Justice B. N. Srikrishna]
Explanation:
The Justice B. N. Srikrishna Committee submitted its report and a draft Personal Data Protection Bill in July 2018.
Foreign-currency earnings of India's IT sector:
Correct Answer: C [reduce the risk of a currency crisis]
Explanation:
Steady IT export earnings bring in foreign currency, narrowing the current account deficit and lowering the risk of a currency crisis.
The BHIM app allows a user to:
Correct Answer: B [transfer money to anyone with a UPI-enabled bank account]
Explanation:
BHIM is a UPI app, so it can send money to anyone whose bank account is UPI-enabled (Prelims 2018).
The Software Technology Parks of India scheme was launched in:
Correct Answer: B [1991]
Explanation:
STPI was set up in 1991 by the Department of Electronics to give software exporters single-window clearance and data links.
Consider the following countries:
1. United Arab Emirates
2. France
3. Germany
4. Singapore
5. Bangladesh
How many countries amongst the above are there other than India where international merchant payments are accepted under UPI?
Correct Answer: B [Only three]
Explanation:
UAE, France, Singapore.
With reference to digital payments, consider the following statements:
1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.
Which of the statements given above is/are correct?
Correct Answer: A [1 only]
Explanation:
Statement 1 is true – BHIM pays any UPI-enabled account; statement 2 is false since a chip-and-PIN card has two factors.
Consider the following statements:
1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country.
2. NPCI has launched RuPay, a card payment scheme.
Which of the statements given above is/are correct?
Correct Answer: C [Both 1 and 2]
Explanation:
NPCI promotes financial inclusion through RuPay, AePS and UPI, and it launched the RuPay card scheme in 2012.
➤ Full notes, maps, tables, a reason for every option and Mains PYQs – U15 · Indian Economy (UPSC book, ₹249): www.shanmugamiasacademy.in/study-materials/upsc-indian-economy
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