UPSC Current Affairs Quiz, 8 August 2026

Explanation

Under the Centrally Sponsored Scheme implementing the Protection of Civil Rights Act, 1955 and the SC/ST (Prevention of Atrocities) Act, 1989, the Centre provides financial assistance to State Governments and UT Administrations — this is the standard federal architecture of centrally sponsored schemes where the Centre funds but States execute. The scheme is implemented by the respective State Governments and UT Administrations, and the responsibility for its effective implementation rests with them — not with the Central Government. Statement 1 is therefore correct, and Statement 2 is incorrect because it inverts the actual locus of implementation responsibility.

Explanation

Statement 1 is correct. The Payment and Settlement Systems Act, 2007 is the foundational statute governing payment and settlement systems in India. The Reserve Bank of India (RBI) is the statutory regulator under this Act — it authorises and oversees payment system operators, including NPCI. NPCI (National Payments Corporation of India) is an umbrella organisation for retail payment systems but functions under the regulatory oversight of the RBI within the PSS Act framework. Statement 2 is also correct. MDR (Merchant Discount Rate) is the charge borne by the merchant — not the customer — for accepting digital payments. It is a percentage of the transaction value that is shared among the acquiring bank, the issuing bank, and the payment network. The key conceptual distinction is that MDR is a cost on the merchant side of the transaction; it is structurally separate from any fee that might be levied on the consumer making the payment. This distinction is central to the policy debate around UPI charges: the government's stated position is that consumers will never be charged, while any future MDR under the amended PSS Act would apply only to a limited category of merchant transactions.

Explanation

Pair 1 is correctly matched: the repo rate is the rate at which the RBI provides short-term (typically overnight) liquidity to commercial banks against eligible collateral such as government securities. It is the primary signalling tool of monetary policy. Pair 3 is also correctly matched: the Cash Reserve Ratio is a statutory liquidity-management instrument under the RBI Act under which commercial banks are required to maintain a specified proportion of their net demand and time liabilities (NDTL) as cash with the RBI; adjusting the CRR expands or contracts the money supply in the banking system. Pair 2 is incorrectly matched: Foreign Currency Non-Resident (Bank) deposits — FCNR(B) — are fixed-term deposits maintained by non-resident Indians (NRIs) or Persons of Indian Origin (PIOs) in freely convertible foreign currencies (such as USD, GBP, EUR), NOT in Indian rupees. The scheme is used by the RBI as a tool to attract foreign exchange inflows to shore up India's forex reserves, which is precisely the context in which it appears in current RBI operations. The scheme that allows NRIs to hold rupee-denominated deposits is NRE (Non-Resident External) or NRO (Non-Resident Ordinary) accounts — not FCNR(B).

Explanation

Statement 1 is correct: under India's EIA framework, the EIA Notification, 2006 is delegated legislation issued under the Environment Protection Act, 1986. Its substantive requirements — including the mandatory prior environmental clearance — cannot be overridden by a mere executive/administrative order such as an Office Memorandum; any amendment must itself take the form of a subsequent notification of equivalent legal authority. Statement 2 is false: the precautionary principle and sustainable development doctrine do not licence a blanket, perpetual ex post facto clearance regime covering all project categories through an administrative order. Such a regime must be time-bound, select, and linked to identifiable supervening public interest; the absence of an 'intelligible differentia' connecting the projects chosen to supervening public interest renders a perpetual, all-encompassing amnesty order ultra vires the Environment Protection Act, 1986, and violative of Articles 14 and 21. Statement 3 is correct: the law distinguishes between ex post facto clearances granted under a properly framed amnesty notification (which can be legally valid for select, deserving projects of supervening public interest) and those granted under a plain administrative order (which lack legal foundation). The distinction between notification-based amnesty and order-based amnesty is the conceptual core of the EIA framework's approach to retrospective clearances.