UPSC Indian Economy – Chapter 30: Investment Models – PPP to InvITs (25 MCQs)
UPSC Indian Economy – Chapter 30: Investment Models – PPP to InvITs (25 MCQs) – 25 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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Which of the following is fixed capital?
Correct Answer: B [A computer used in an office]
Explanation:
A computer is a durable asset used again and again in production, so it is fixed capital.
The National Infrastructure Pipeline, as finalised by the Task Force (2020), projected investment of about:
Correct Answer: B [₹111 lakh crore]
Explanation:
The Task Force's final report of April 2020 raised the pipeline to about ₹111 lakh crore for 2019-20 to 2024-25.
Under the Hybrid Annuity Model, the Government's share of project cost during construction is:
Correct Answer: A [40 per cent]
Explanation:
Under HAM the Government (NHAI) pays 40 per cent of project cost during construction; the private partner arranges the rest.
In which model does the private partner pay upfront to operate an existing public road and collect toll?
Correct Answer: D [TOT]
Explanation:
Under Toll-Operate-Transfer an investor pays an upfront sum to operate and toll an existing public road for a fixed period.
In the BOO model, after the concession:
Correct Answer: D [the private partner keeps ownership]
Explanation:
Build-Own-Operate has no transfer stage, so the private partner keeps ownership of the asset permanently.
The traffic risk in a BOT-Toll highway project is borne by:
Correct Answer: B [the private concessionaire]
Explanation:
In BOT-Toll the concessionaire collects toll, so lower-than-forecast traffic directly cuts its revenue.
Consider the following statements about NIIF:
1. The Government holds 49 per cent.
2. It is an organ of NITI Aayog.
3. Its planned corpus was ₹40,000 crore.
Which of the statements given above are correct?
Correct Answer: C [1 and 3 only]
Explanation:
NIIF has 49 per cent Government holding and a planned corpus of ₹40,000 crore; it is not a NITI Aayog organ.
Viability Gap Funding is given to:
Correct Answer: B [socially needed PPP projects that are not commercially viable]
Explanation:
VGF is a capital grant that makes socially needed but commercially unviable infrastructure PPP projects bankable.
NaBFID was set up under an Act of:
Correct Answer: A [2021]
Explanation:
The National Bank for Financing Infrastructure and Development Act was enacted in 2021, creating NaBFID as a statutory DFI.
The Global Infrastructure Facility is associated with:
Correct Answer: C [the World Bank Group]
Explanation:
The Global Infrastructure Facility is a World Bank Group platform that helps prepare and structure complex infrastructure PPPs.
Assertion (A): InvITs help the Government finance new infrastructure without new borrowing.
Reason (R): Operating assets are transferred to an InvIT, and the money raised from unitholders is reinvested in new projects.
Correct Answer: A [Both A and R are true, and R is the correct explanation of A]
Explanation:
Both are true, and moving operating assets to an InvIT and reinvesting the proceeds is exactly how new borrowing is avoided.
InvITs and REITs in India are regulated by:
Correct Answer: D [SEBI]
Explanation:
SEBI regulates both through the SEBI (InvIT) Regulations, 2014 and SEBI (REIT) Regulations, 2014.
India's first listed REIT (2019) was:
Correct Answer: B [Embassy Office Parks REIT]
Explanation:
Embassy Office Parks REIT, listed in April 2019, was India's first listed real estate investment trust.
Consider the following statements:
1. InvITs are recognised as borrowers under the SARFAESI Act.
2. Interest distributed by InvITs is exempt from tax in the hands of unitholders.
3. The Raajmarg InvIT is sponsored by NHAI.
Which of the statements given above are correct?
Correct Answer: D [1 and 3 only]
Explanation:
interest is taxable.
Arrange the following in chronological order:
1. NaBFID Act
2. VGF scheme
3. SEBI InvIT regulations
4. Raajmarg InvIT listing
Select the correct answer:
Correct Answer: C [2-3-1-4]
Explanation:
2006, 2014, 2021, 2026.
The 2015 committee on revisiting and revitalising the PPP model was headed by:
Correct Answer: D [Vijay Kelkar]
Explanation:
Vijay Kelkar headed the committee whose November 2015 report revisited and revitalised the PPP model of infrastructure.
The Kelkar Committee advised against which method of awarding PPP projects?
Correct Answer: A [Swiss challenge]
Explanation:
The Kelkar Committee said unsolicited Swiss challenge proposals should be actively discouraged as they reduce transparency.
A major reason why many highway PPPs stalled after 2010 was:
Correct Answer: B [land-acquisition and clearance delays]
Explanation:
Delays in land acquisition and clearances stalled many highway PPPs, along with aggressive bids and traffic below forecasts.
The Tiruppur water supply project in Tamil Nadu is often cited as an early example of:
Correct Answer: A [a PPP in urban water supply]
Explanation:
The Tiruppur water supply and sewerage project of NTADCL is widely cited as India's first PPP water supply and sewerage project.
Which of the following is a focus sector of UNOPS S3i?
Correct Answer: C [Affordable housing]
Explanation:
UNOPS S3i invests in affordable housing, renewable energy and health infrastructure in developing countries.
With reference to physical capital in Indian economy, consider the following pairs:
Items – Category
1. Farmer's plough – Working capital
2. Computer – Fixed capital
3. Yarn used by the weaver – Fixed capital
4. Petrol – Working capital
How many of the above pairs are correctly matched?
Correct Answer: B [Only two]
Explanation:
pairs 2 and 4.
Consider the following statements:
Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors are exempted from tax, but the dividend is taxable.
Statement-II: InvITs are recognized as borrowers under the 'Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002'.
Which one of the following is correct in respect of the above statements?
Correct Answer: D [Statement-I is incorrect but Statement-II is correct]
Explanation:
Statement-I is wrong because InvIT interest is taxable; Statement-II is right since the Finance Act, 2021 made InvITs SARFAESI borrowers.
Consider the following infrastructure sectors:
1. Affordable housing
2. Mass rapid transport
3. Health care
4. Renewable energy
How many of the above does UNOPS Sustainable Investments in Infrastructure and Innovation (S3i) initiative focus on for its investments?
Correct Answer: C [Only three]
Explanation:
1, 3 and 4.
With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct?
1. It is an organ of NITI Aayog.
2. It has a corpus of ₹4,00,000 crore at present.
Select the correct answer using the code given below:
Correct Answer: D [Neither 1 nor 2]
Explanation:
NIIF is a Government-anchored fund with 49 per cent Government holding, not a NITI Aayog organ, and its planned corpus was ₹40,000 crore.
The Global Infrastructure Facility is a/an
Correct Answer: B [World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of private sector and institutional investor capital.]
Explanation:
The Global Infrastructure Facility is a World Bank Group collaboration for preparing and structuring complex infrastructure PPPs.
➤ 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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