UPSC Current Affairs Quiz, 27 October 2026

Explanation

Statement 1 is correct. When the RBI sells foreign currency (dollars) to support the rupee, it receives rupees in return, withdrawing those rupees from circulation. This reduces domestic banking-system liquidity, which may necessitate offsetting open-market operations — a well-recognised tension in forex intervention management. Statement 2 is incorrect and reflects a common misconception. India operates a managed-float (also called a 'dirty float') regime, NOT a fixed exchange rate or a target-zone/band system. Under a managed float, there is no pre-announced band or level that the central bank is legally obligated to defend; instead, the RBI intervenes at its discretion to contain excessive volatility and prevent disorderly market conditions. The RBI has no statutory obligation to hold any specific rate. Statement 3 is correct. A weaker currency does raise the domestic-currency cost of imports (aggravating the oil import bill) but simultaneously makes exports cheaper in foreign-currency terms, improving the competitiveness and volume potential of export sectors — this is the standard expenditure-switching effect of depreciation that is central to open-economy macroeconomics.

Explanation

Statement 1 is correct. The GEAC (Genetic Engineering Appraisal Committee), which functions under the Ministry of Environment, Forest and Climate Change, is India's apex technical regulator for GM crop biosafety. However, as illustrated by the 2010 Bt brinjal episode — where then-Environment Minister Jairam Ramesh imposed an indefinite moratorium despite GEAC's technical clearance — the Minister retains independent authority and is not obligated to follow the regulator's recommendation. This structural asymmetry between technical advice and political decision-making is a defining feature of India's GM governance. Statement 2 is incorrect. India permits Bt cotton for commercial cultivation but has not approved any GM food crop for commercial release. Bt brinjal was placed under an indefinite moratorium in 2010, GM mustard's release stalled despite technical clearance, and no other GM food crop has received full environmental release approval — making the claim that at least one GM food crop has been cleared factually wrong. Statement 3 is correct. CRISPR-Cas9 works through a two-component system: a guide RNA (gRNA) that is programmed to match the target DNA sequence, and the Cas9 nuclease enzyme that the gRNA steers to that precise chromosomal location, where Cas9 cuts the double-stranded DNA. This cut then allows scientists to delete, alter, or insert genetic material at the target site. This mechanism is foundational to understanding how gene-edited crops differ from transgenic crops like Bt cotton or GM mustard.

Explanation

Statement 1 is correct. Under the RBI Act, 1934, as amended by the Finance Act, 2016, if the MPC fails to meet the inflation target (4% with a tolerance band of 2–6%) for three consecutive quarters, it is deemed a failure, and the RBI is obligated to submit a report to the Central Government explaining the reasons for the breach and proposing corrective actions. Statement 2 is incorrect. The flexible inflation-targeting framework does not make price stability an absolute override of growth. The statutory mandate under Section 45ZA of the RBI Act is to maintain price stability 'while keeping in mind the objective of growth.' Growth is a co-objective, not merely residual — the word 'flexible' in the framework precisely signals that the MPC balances both. The statement misrepresents this by implying growth only matters when it does not conflict with price stability. Statement 3 is correct. The MPC has six members: the RBI Governor (chairperson with a casting vote in the event of a tie), the Deputy Governor in charge of monetary policy, and one RBI officer nominated by the Central Board — these three from the RBI side — and three external members nominated by the Central Government. Decisions are taken by a majority of votes cast.

Explanation

India's exchange rate regime is officially a 'managed float' (also called a dirty float), meaning the RBI does not fix the rupee at a target level but intervenes in currency markets to smooth out excessive or disorderly fluctuations — this is correctly described in Pair 1. FCNR(B) — Foreign Currency Non-Resident (Bank) deposits — are a well-established RBI instrument used to attract dollar inflows from the Indian diaspora; they have been mobilised during periods of stress (notably 2013) as a special measure to shore up forex reserves, making Pair 2 correct. Pair 3 is incorrect because defending a specific exchange rate level as a standing policy commitment is not how the RBI operates under a managed float; the RBI's consistent stated policy is to prevent disorderly movements, not to peg the rupee to a particular value — which is also precisely the concern Rajan raises: that spending reserves to 'defend a level' contradicts India's historical approach.

Explanation

Statement 1 is incorrect. Crude protein content (as reported on food labels) and protein bioavailability are distinct and non-equivalent metrics. Food labels typically declare total protein by weight using methods such as the Kjeldahl or Dumas nitrogen-conversion technique, which measure nitrogen content and back-calculate protein mass. This figure does not account for digestibility or actual absorption by the body. Bioavailability — or absorbable protein — depends on factors including essential amino acid profile, digestibility coefficients, and the presence of anti-nutritional factors. A food with high crude protein but poor digestibility (e.g., cereals with incomplete amino acid profiles) may deliver far less nutritional benefit than the label implies. Statement 2 is correct. Processing methods such as pressure cooking, fermentation, and sprouting are well-established food-science tools that reduce anti-nutritional factors — phytates, tannins, trypsin inhibitors — which otherwise inhibit protein digestion. In pulses such as cowpea and mung beans, pressure cooking and fermentation have been shown to substantially raise bioavailable protein fractions, because these processes denature enzyme inhibitors and improve digestibility of storage proteins. Millets similarly respond favourably to biological processing like sprouting, which activates endogenous enzymes and pre-digests complex seed proteins. Statement 3 is correct. India is among the world's largest producers of millets and pulses, yet imports the majority of its plant protein concentrates and isolates (the refined, high-protein ingredients used in food manufacturing). This reflects a structural gap in domestic agri-processing — the capacity to convert primary crop output into value-added, ingredient-grade protein fractions. Bridging this gap is central to building a self-reliant protein ecosystem and is a stated objective of institutions such as CSIR-IHBT working on indigenous crop valorisation.