UPSC Prelims Practice Questions — Bursting at the seams

Q1. Consider the following statements comparing India's Consumer Price Index (CPI) and Wholesale Price Index (WPI): 1. Services are excluded from the WPI basket but are, to varying degrees, covered under the CPI. 2. The CPI assigns a larger weight to food than the WPI does. 3. Both the CPI and the WPI currently use 2011-12 as their base year. Which of the statements given above is/are correct?

  1. Services are excluded from the WPI basket but are, to varying degrees, covered under the CPI.
  2. The CPI assigns a larger weight to food than the WPI does.
  3. Both the CPI and the WPI currently use 2011-12 as their base year.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. The Wholesale Price Index (WPI, base 2011-12) classifies all its constituent commodities into how many major groups?

  • A. 2
  • B. 3
  • C. 4
  • D. 5

Q3. Consider the following statements about India's flexible inflation targeting (FIT) framework: 1. The inflation target is set in terms of the Consumer Price Index, not the Wholesale Price Index. 2. The Central Government, in consultation with the RBI, revises the inflation target every year. 3. The 4% target carries an upper tolerance limit of 6% and a lower tolerance limit of 2%. Which of the statements given above is/are correct?

  1. The inflation target is set in terms of the Consumer Price Index, not the Wholesale Price Index.
  2. The Central Government, in consultation with the RBI, revises the inflation target every year.
  3. The 4% target carries an upper tolerance limit of 6% and a lower tolerance limit of 2%.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. Under which section of the Reserve Bank of India Act, 1934 does the Central Government, in consultation with the RBI, determine and notify the inflation target?

  • A. Section 45ZA
  • B. Section 45ZB
  • C. Section 45ZL
  • D. Section 45IC

Q5. Consider the following statements about the deregulation of fuel pricing in India: 1. Petrol prices were made market-determined in 2010, ahead of diesel. 2. Diesel prices were made market-determined with effect from October 2014. 3. The nationwide daily ('dynamic') revision of petrol and diesel retail prices began in 2010 alongside petrol decontrol. Which of the statements given above is/are correct?

  1. Petrol prices were made market-determined in 2010, ahead of diesel.
  2. Diesel prices were made market-determined with effect from October 2014.
  3. The nationwide daily ('dynamic') revision of petrol and diesel retail prices began in 2010 alongside petrol decontrol.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q6. The Petroleum Planning & Analysis Cell (PPAC), which tracks under-recoveries of oil marketing companies, functions under which Union Ministry?

  • A. Ministry of Petroleum & Natural Gas
  • B. Ministry of Commerce & Industry
  • C. Ministry of Finance
  • D. Ministry of Statistics & Programme Implementation

Q7. India's April 2026 Wholesale Price Index reading of 8.3% was compiled and released by which of the following?

  • A. Office of the Economic Adviser, DPIIT (Ministry of Commerce & Industry)
  • B. National Statistical Office, MoSPI
  • C. Reserve Bank of India
  • D. Petroleum Planning & Analysis Cell

Q8. Regarding India's April 2026 inflation readings, consider the following identifications: 1. Retail (CPI) inflation — 3.48% 2. Wholesale (WPI) inflation — 8.3% 3. Fuel & power WPI inflation — 24.71% 4. 'Crude petroleum & natural gas' WPI inflation — 12.5% Which of the above is/are correctly identified?

  1. Retail (CPI) inflation — 3.48%
  2. Wholesale (WPI) inflation — 8.3%
  3. Fuel & power WPI inflation — 24.71%
  4. 'Crude petroleum & natural gas' WPI inflation — 12.5%
  • A. 1, 2 and 3
  • B. 2 and 4
  • C. 1 and 4
  • D. 1, 2, 3 and 4

Q9. In the Wholesale Price Index (base 2011-12), the 'WPI Food Index' is best described as:

  • A. 'Food Articles' from Primary Articles combined with 'Manufacture of Food Products' from Manufactured Products
  • B. only the 'Food Articles' sub-group under Primary Articles
  • C. the food component of the CPI mirrored within the WPI
  • D. all Primary Articles, including non-food articles and minerals

Q10. Consider the following statements about the weighting of major groups in the Wholesale Price Index (base 2011-12): 1. Manufactured Products carry the largest weight, at 64.23%. 2. Primary Articles carry a larger weight than Fuel & Power. 3. Services form a separate major group in the WPI with a weight above 20%. Which of the statements given above is/are correct?

  1. Manufactured Products carry the largest weight, at 64.23%.
  2. Primary Articles carry a larger weight than Fuel & Power.
  3. Services form a separate major group in the WPI with a weight above 20%.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q11. In the context of the 2026 crude price shock's transmission to India, the 'Strait of Hormuz' is significant primarily because it is:

  • A. a maritime chokepoint through which a large share of Gulf oil and LNG exports transit
  • B. the pipeline linking Iran's oilfields directly to Indian refineries
  • C. India's largest domestic offshore crude oil basin
  • D. the pricing benchmark used for India's crude oil import basket

Q12. The 'Administered Pricing Mechanism' (APM), dismantled for petrol (2010) and diesel (2014), refers to a regime in which:

  • A. retail prices of petroleum products were fixed by the Government rather than determined by the market
  • B. oil marketing companies revised pump prices daily on the basis of international benchmarks
  • C. fuel prices were fully deregulated and linked to global crude movements
  • D. the RBI set petroleum prices in order to anchor headline inflation