UPSC Prelims Practice Questions — West Asia war cuts India’s growth outlook to 6.6%

Q1. With reference to the World Bank's April 2026 India Development Update, consider the following statements: 1. It projects India's GDP growth at 6.6% for FY27 (2026-27). 2. This 6.6% figure represents a downward revision from an earlier projection of 7.2%. 3. In the same round of assessment, South Asia's regional growth is projected to slow to 6.3% in 2026 from 7% in 2027. Which of the statements given above is/are correct?

  1. It projects India's GDP growth at 6.6% for FY27 (2026-27).
  2. This 6.6% figure represents a downward revision from an earlier projection of 7.2%.
  3. In the same round of assessment, South Asia's regional growth is projected to slow to 6.3% in 2026 from 7% in 2027.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q2. Regarding the World Bank's April 2026 downgrade of India's FY27 growth outlook, consider the following statements: 1. The downgrade is attributed primarily to the West Asia (Middle East) conflict's disruption of global oil and gas supply. 2. Industrial growth is projected to slow to 7.5% in 2026-27 from 8.8% in 2025-26. 3. Reduced export demand from the Gulf region is cited as a drag on India's growth. 4. Manufacturing, including electronics and automobiles, is identified as the worst-hit, contracting sector. Which of the statements given above is/are NOT correct?

  1. The downgrade is attributed primarily to the West Asia (Middle East) conflict's disruption of global oil and gas supply.
  2. Industrial growth is projected to slow to 7.5% in 2026-27 from 8.8% in 2025-26.
  3. Reduced export demand from the Gulf region is cited as a drag on India's growth.
  4. Manufacturing, including electronics and automobiles, is identified as the worst-hit, contracting sector.
  • A. 1 and 2
  • B. 3 only
  • C. 4 only
  • D. 2 and 4

Q3. With reference to the India Development Update and the South Asia Economic Update, consider the following statements: 1. The India Development Update is published by the World Bank, whereas the South Asia Economic Update is published by the Asian Development Bank. 2. The April 2026 India Development Update was released as a companion to the South Asia Economic Update. 3. The April 2026 South Asia Economic Update carried the theme 'Working with Industrial Policy'. Which of the statements given above is/are correct?

  1. The India Development Update is published by the World Bank, whereas the South Asia Economic Update is published by the Asian Development Bank.
  2. The April 2026 India Development Update was released as a companion to the South Asia Economic Update.
  3. The April 2026 South Asia Economic Update carried the theme 'Working with Industrial Policy'.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. In the context of the World Bank's publications, the 'India Development Update' is best described as which one of the following?

  • A. A periodic World Bank country report tracking India's macroeconomic developments and outlook, typically issued alongside the South Asia Economic Update
  • B. A statutory annual economic survey tabled in the Indian Parliament by the Ministry of Finance ahead of the Union Budget
  • C. The World Bank's global flagship report ranking countries on ease of doing business
  • D. An IMF Article IV consultation report assessing India's fiscal and monetary position

Q5. With reference to the World Bank's April 2026 South Asia Economic Update, consider the following statements: 1. South Asia's growth is projected to slow to 6.3% in 2026. 2. This is down from 7% recorded in 2025. 3. Regional growth is projected to recover to 6.9% in 2027. 4. The slowdown is driven mainly by a collapse in India's domestic demand. Which of the statements given above is/are NOT correct?

  1. South Asia's growth is projected to slow to 6.3% in 2026.
  2. This is down from 7% recorded in 2025.
  3. Regional growth is projected to recover to 6.9% in 2027.
  4. The slowdown is driven mainly by a collapse in India's domestic demand.
  • A. 1 and 2
  • B. 2 and 3
  • C. 1, 2 and 3
  • D. 4 only

Q6. The South Asia Economic Update, which in April 2026 projected regional growth of 6.3% for 2026, is a flagship regional report published solely under the authority of which one of the following institutions?

  • A. The World Bank
  • B. The International Monetary Fund
  • C. The Asian Development Bank
  • D. The UN Economic and Social Commission for Asia and the Pacific (ESCAP)

Q7. Consider the following as channels through which the West Asia conflict was projected to transmit into India's economy: 1. Higher crude oil and gas import costs raising input costs for industry. 2. Reduced export demand from the Gulf region weighing on manufacturing. 3. Pressure on household and government consumption. 4. A sharp appreciation of the rupee lowering the cost of imported energy. Which of the statements given above is/are NOT correct?

  1. Higher crude oil and gas import costs raising input costs for industry.
  2. Reduced export demand from the Gulf region weighing on manufacturing.
  3. Pressure on household and government consumption.
  4. A sharp appreciation of the rupee lowering the cost of imported energy.
  • A. 1 and 4
  • B. 2 and 3
  • C. 4 only
  • D. 1, 2 and 3

Q8. Which of the following are correctly identified in the World Bank's April 2026 assessment of India's FY27 outlook amid the West Asia conflict? 1. Manufacturing, including electronics and automobiles, is treated as a relative bright spot. 2. India remains among the fastest-growing major economies despite the slowdown. 3. Low inflation, substantial foreign reserves and a healthy financial sector provide resilience. 4. The conflict is expected to boost India's growth through higher petroleum export earnings. Which of the statements given above is/are correct?

  1. Manufacturing, including electronics and automobiles, is treated as a relative bright spot.
  2. India remains among the fastest-growing major economies despite the slowdown.
  3. Low inflation, substantial foreign reserves and a healthy financial sector provide resilience.
  4. The conflict is expected to boost India's growth through higher petroleum export earnings.
  • A. 1 and 2 only
  • B. 1, 2 and 3 only
  • C. 2, 3 and 4 only
  • D. 1, 2, 3 and 4

Q9. Among India's Strategic Petroleum Reserve (SPR) storage facilities established under Phase-I by ISPRL, which one has the largest crude oil storage capacity?

  • A. Padur (Karnataka) — 2.5 MMT
  • B. Mangaluru (Karnataka) — 1.5 MMT
  • C. Visakhapatnam (Andhra Pradesh) — 1.33 MMT
  • D. Chandikhol (Odisha) — 4 MMT

Q10. India's Strategic Petroleum Reserves are built and managed exclusively by Indian Strategic Petroleum Reserves Limited (ISPRL), which functions as a Special Purpose Vehicle under which one of the following?

  • A. Ministry of Petroleum and Natural Gas
  • B. Ministry of Finance
  • C. NITI Aayog
  • D. Ministry of Commerce and Industry

Q11. Among the institutions that publish growth forecasts for India — such as the World Bank's 6.6% projection for FY27 — which one of the following is India's domestic central bank rather than a multilateral or international financial institution?

  • A. Reserve Bank of India (RBI)
  • B. International Monetary Fund (IMF)
  • C. Asian Development Bank (ADB)
  • D. World Bank

Q12. Within the World Bank Group, the International Development Association (IDA) is best described as which one of the following?

  • A. The World Bank's fund that provides concessional loans and grants to the world's poorest countries
  • B. The arm that lends on market-based terms to middle-income and creditworthy low-income countries
  • C. The Group member that provides political risk insurance to private investors
  • D. The institution that settles investment disputes between states and foreign investors