UPSC Indian Economy – Chapter 26: Mobilisation of Resources – Savings, Investment and Disinvestment (24 MCQs)
UPSC Indian Economy – Chapter 26: Mobilisation of Resources – Savings, Investment and Disinvestment (24 MCQs) – 24 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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According to the RBI Handbook (July 2026), India's gross savings in 2024-25 were about:
Correct Answer: A [35 per cent of GDP]
Explanation:
34.94 per cent.
Net household financial savings in 2024-25 were about:
Correct Answer: B [7.0 per cent of GNDI]
Explanation:
RBI data put net household financial savings at 7.0 per cent of GNDI in 2024-25: gross 11.8 per cent minus liabilities 4.8 per cent.
If the investment rate is 30 per cent and the ICOR is 5, the approximate growth rate is:
Correct Answer: C [6 per cent]
Explanation:
30 ÷ 5.
Foreign savings used by an economy are equal to its:
Correct Answer: D [current account deficit]
Explanation:
A current account deficit is financed by net capital inflows, so it measures the foreign savings an economy uses.
A revenue deficit of the Government represents:
Correct Answer: B [public dis-saving]
Explanation:
A revenue deficit means current spending exceeds revenue receipts, so the Government dis-saves rather than saves.
Disinvestment receipts are classified as:
Correct Answer: B [non-debt capital receipts]
Explanation:
Disinvestment proceeds reduce government assets and create no repayment obligation, so they are non-debt capital receipts.
Which of the following are methods of disinvestment used in India?
1. Offer for sale through stock exchanges
2. Exchange-traded funds of CPSE shares
3. Strategic sale with transfer of control
Select the correct answer:
Correct Answer: C [1, 2 and 3]
Explanation:
India has used offers for sale, CPSE and Bharat 22 ETFs, and strategic sales such as Air India – all three methods.
The Department of Disinvestment was renamed DIPAM in:
Correct Answer: D [2016]
Explanation:
14 April 2016.
Under the New Public Sector Enterprise Policy (2021), which of the following is a strategic sector?
Correct Answer: A [Banking, insurance and financial services]
Explanation:
Banking, insurance and financial services is one of the four strategic sector groups named in the New PSE Policy, 2021.
The stake in IDBI Bank approved for sale in October 2026 was:
Correct Answer: B [60.72 per cent]
Explanation:
The CCEA approved selling 60.72 per cent – 30.48 per cent held by the Government and 30.24 per cent by LIC.
Assertion (A): A high-saving economy may not grow fast if its capital is used inefficiently.
Reason (R): A high incremental capital-output ratio means more capital is needed for each extra unit of output.
Correct Answer: A [Both A and R are true, and R is the correct explanation of A]
Explanation:
Growth ≈ investment rate ÷ ICOR, so a high ICOR lowers growth even when saving is high; R explains A.
In asset monetisation under the National Monetisation Pipeline:
Correct Answer: C [ownership stays with the Government while revenue rights are transferred for a period]
Explanation:
Monetisation transfers only revenue rights in brownfield assets for a fixed period; ownership remains with the Government.
The aggregate potential of NMP 2.0 (2025–30) is about:
Correct Answer: D [₹16.72 lakh crore]
Explanation:
NMP 2.0 (FY26–FY30) has an aggregate monetisation potential of ₹16.72 lakh crore, including about ₹5.8 lakh crore of private investment.
Consider the following statements:
1. The LIC IPO of May 2022 was a strategic sale.
2. Air India was handed over to the Tata group in January 2022.
3. The CPSE ETF was launched in 2014.
Which of the statements given above are correct?
Correct Answer: D [2 and 3 only]
Explanation:
the LIC IPO was a minority stake sale.
Arrange the following in chronological order:
1. Bharat 22 ETF
2. National Investment Fund
3. Department of Disinvestment
4. New PSE Policy
Select the correct answer:
Correct Answer: C [3-2-1-4]
Explanation:
1999, 2005, 2017, 2021.
The 1993 committee that recommended disinvestment of generally under 49 per cent in industries reserved for the public sector was headed by:
Correct Answer: A [C. Rangarajan]
Explanation:
The 1993 Committee on Disinvestment of Shares in Public Sector Enterprises was chaired by C. Rangarajan.
Total receipts from disinvestment and asset monetisation in 2025-26 were about:
Correct Answer: C [₹45,306 crore]
Explanation:
A Lok Sabha reply put 2025-26 receipts at ₹45,306 crore – ₹16,886 crore disinvestment plus ₹28,420 crore asset monetisation.
Which of the following is an intangible asset?
Correct Answer: A [Intellectual property]
Explanation:
Intellectual property has no physical form, so it is an intangible asset, unlike inventory, machinery or buildings.
Small savings collected through schemes such as PPF and NSC are pooled in the:
Correct Answer: B [National Small Savings Fund]
Explanation:
Collections under PPF, NSC and other small savings schemes are credited to the National Small Savings Fund in the Public Account.
Strategic disinvestment means:
Correct Answer: D [sale of a substantial stake in a public sector enterprise along with transfer of management control]
Explanation:
Strategic disinvestment sells a substantial stake along with management control, as in the Air India sale to the Tata group.
Consider the following:
1. Exchange-Traded Funds (ETF)
2. Motor vehicles
3. Currency swap
Which of the above is/are considered financial instruments?
Correct Answer: D [1 and 3 only]
Explanation:
ETFs and currency swaps are contracts giving financial claims, so they are financial instruments; motor vehicles are real assets.
Consider the investments in the following assets:
1. Brand recognition
2. Inventory
3. Intellectual property
4. Mailing list of clients
How many of the above are considered intangible investments?
Correct Answer: C [Only three]
Explanation:
all except inventory.
With reference to the expenditure made by an organization or a company, which of the following statements is/are correct?
1. Acquiring new technology is capital expenditure.
2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.
Select the correct answer using the code given below:
Correct Answer: A [1 only]
Explanation:
Acquiring new technology creates a lasting asset, so it is capital expenditure; debt and equity are sources of finance.
What does venture capital mean?
Correct Answer: B [A long-term start-up capital provided to new entrepreneurs]
Explanation:
Venture capital is long-term, risk-bearing capital given to new entrepreneurs, usually in return for an equity stake.
➤ 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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