National income, growth & inflation

Answer: (b) price levels vary from State to State

A poverty line is the money needed to buy a fixed minimum basket of goods and services. Because the same basket costs different amounts in different States, the Planning Commission set separate State poverty lines that reflect inter-state price differences.

• ✓ (b) The Planning Commission's 2011-12 estimates (Tendulkar method) gave all-India lines of Rs 816 (rural) and Rs 1,000 (urban) per person per month and stated that these vary by State because of inter-state price differentials.
• ✗ (a) Poverty rates are the result of applying the line to consumption data; they do not set the line.
• ✗ (c) State income (GSDP) affects how many people fall below the line, not the cost of the minimum basket that defines it.
• ✗ (d) PDS quality influences household consumption, but the official line is priced from the consumption basket, not from PDS performance.

Remember · Poverty line = cost of a minimum consumption basket; State lines differ because prices differ (Tendulkar 2011-12: Rs 816 rural, Rs 1,000 urban per capita per month, all-India).

Question and answer: UPSC's official GS Paper I (2019, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (a) 1 and 2 only

Statements 1 and 2 are correct. The Second Plan (1956-61) made heavy and capital-goods industries the core of its strategy, and the Fourth Plan (1969-74) set out to reduce the concentration of income, wealth and economic power. UPSC's key treats statement 3 as wrong.

• ✓ 1. The Second Plan document stresses that basic and capital goods industries are 'major determinants of the rate of growth' and says it is desirable to go farthest in developing heavy and capital goods industries. This was the industrialisation strategy of the Second Plan.
• ✓ 2. The Fourth Plan document says that benefits of development must reach the less privileged and there should be 'progressive reduction of the concentration of incomes, wealth and economic power'. It also noted no sign of any reduction in that concentration so far.
• ✗ 3. UPSC's official key treats this statement as incorrect; we could not confirm the detail from an official source, so we do not explain it here.

Remember · Second Plan: heavy and capital-goods industry. Fourth Plan: reduce concentration of wealth and economic power.

Question and answer: UPSC's official GS Paper I (2019, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 1 Oct 2026 (how we verify). Permalink · Report an error

Answer: (d) The level of mutual trust and harmony in the society

Social capital means the networks, shared norms and trust that let people in a society cooperate, so the level of mutual trust and harmony is part of it. Literacy, buildings and machines, and the size of the workforce are other kinds of resource, not social capital.

• ✓ (d) The World Bank defines social capital in terms of social networks and norms, and measures it through dimensions such as trust and solidarity and social cohesion.
• ✗ (a) Literacy is education and skill, which economists count as human capital, not social capital.
• ✗ (b) Buildings, infrastructure and machines are physical capital: material assets, not relationships between people.
• ✗ (c) The size of the working-age population is a demographic (labour) resource; it says nothing about how far people trust and cooperate with each other.

Remember · Social capital = networks, shared norms and trust that help people cooperate. Roads and machines are physical capital; literacy and skills are human capital.

📘 Read it in NCERT: Class 12 Indian Society, Ch 5 (practise this chapter)

Question and answer: UPSC's official GS Paper I (2019, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (a) 1 only

PPP exchange rates are worked out by comparing what the same goods and services cost in different countries, so statement 1 is correct. In PPP terms India was the third largest economy, behind China and the USA, not the sixth, so statement 2 is wrong.

• ✓ 1. The World Bank's International Comparison Program collects prices of the same goods and services in many economies and uses them to compute PPPs, which convert a common basket of goods into 'international dollars'.
• ✗ 2. In the 2017 ICP round India's GDP in PPP terms was $8,051 billion, 6.7 per cent of the world total and third after China (16.4 per cent) and the USA (16.3 per cent). India has held third place in PPP terms since 2008, when it passed Japan.

Remember · PPP compares the price of the same basket across countries. On a PPP basis India has been the world's third largest economy since 2008.

Question and answer: UPSC's official GS Paper I (2019, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error