UPSC Prelims Practice Questions — Government of India launches CBDC-based Digital Food Currency pilot for Direct Benefit Transfer (DBT) under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Puducherry
Q1. In the context of the CBDC-based Digital Food Currency pilot, which one of the following best describes the Retail Digital Rupee (e₹-R)?
- A. A digital token issued directly by the Reserve Bank of India that represents legal tender
- B. A prepaid wallet balance operated by the National Payments Corporation of India over commercial-bank deposits
- C. A privately-issued stablecoin fully backed by government securities held with scheduled banks
- D. A blockchain-based crypto-asset whose value is determined by market demand
Q2. The Reserve Bank of India's Digital Rupee (e₹) is being piloted in how many distinct variants distinguished by their user segment?
- A. Two
- B. Three
- C. Four
- D. Five
Q3. With reference to the banks that participated in the Reserve Bank of India's Retail Digital Rupee (e₹-R) pilot, consider the following:
1. State Bank of India
2. Bank of Baroda
3. Paytm Payments Bank
4. Kotak Mahindra Bank
Which of the above is/are correctly identified as participating banks in the pilot?
- State Bank of India
- Bank of Baroda
- Paytm Payments Bank
- Kotak Mahindra Bank
- A. 1 and 4 only
- B. 1, 2 and 4
- C. 2, 3 and 4
- D. 1, 2, 3 and 4
Q4. The Reserve Bank of India's Retail Digital Rupee (e₹-R) pilot for members of the public went live with effect from which of the following?
- A. 1 December 2022
- B. 1 November 2022
- C. 1 December 2021
- D. 1 April 2023
Q5. With reference to the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) as continued from 1 January 2024, consider the following statements:
1. It provides foodgrains to about 81.35 crore beneficiaries.
2. Its current phase runs for a period of five years.
3. Its estimated outlay is about ₹11.80 lakh crore over five years.
4. Beneficiaries pay a subsidised price of ₹1 to ₹3 per kg for the foodgrains.
Which of the above statements is/are NOT correct?
- It provides foodgrains to about 81.35 crore beneficiaries.
- Its current phase runs for a period of five years.
- Its estimated outlay is about ₹11.80 lakh crore over five years.
- Beneficiaries pay a subsidised price of ₹1 to ₹3 per kg for the foodgrains.
- A. 4 only
- B. 1 and 4
- C. 2 and 3
- D. 3 only
Q6. Comparing the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) as continued from 2024 with the original entitlement under the National Food Security Act, 2013, consider the following statements:
1. Under the current PMGKAY foodgrains are provided free of cost, whereas the original NFSA entitlement was at subsidised prices.
2. PMGKAY covers a substantially larger beneficiary universe than the NFSA.
3. PMGKAY delivers the NFSA entitlement of 5 kg per person per month to priority households.
Which of the statements given above is/are correct?
- Under the current PMGKAY foodgrains are provided free of cost, whereas the original NFSA entitlement was at subsidised prices.
- PMGKAY covers a substantially larger beneficiary universe than the NFSA.
- PMGKAY delivers the NFSA entitlement of 5 kg per person per month to priority households.
- A. 1 and 2 only
- B. 1 and 3 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q7. India's first CBDC-based Public Distribution System pilot was launched at which of the following locations?
- A. Gandhinagar, Gujarat
- B. Puducherry
- C. Chandigarh
- D. New Delhi
Q8. In the context of the CBDC-based PDS pilot, 'Annapurti' refers to which one of the following?
- A. An automated grain-dispensing machine (Grain ATM) that dispenses foodgrains to beneficiaries
- B. The mobile application used to open a beneficiary's e₹ wallet
- C. The programmable voucher code embedded in the digital food coupon
- D. The nodal implementing agency that issues the digital food currency
Q9. The legal entitlement of eligible households to subsidised foodgrains under the Targeted Public Distribution System — the entitlement now delivered through PMGKAY — is derived from which one of the following?
- A. The National Food Security Act, 2013
- B. The Essential Commodities Act, 1955
- C. The Food Corporations Act, 1964
- D. The Public Distribution System (Control) Order, 2001
Q10. With reference to the National Food Security Act, 2013, consider the following statements:
1. Antyodaya Anna Yojana households are entitled to 35 kg of foodgrains per family per month.
2. Priority households are entitled to 5 kg of foodgrains per person per month.
3. The Act provides for coverage of up to 75% of the rural population.
4. The Act provides for coverage of up to 75% of the urban population.
Which of the above is/are correctly identified?
- Antyodaya Anna Yojana households are entitled to 35 kg of foodgrains per family per month.
- Priority households are entitled to 5 kg of foodgrains per person per month.
- The Act provides for coverage of up to 75% of the rural population.
- The Act provides for coverage of up to 75% of the urban population.
- A. 1, 2 and 3
- B. 1 and 2 only
- C. 2, 3 and 4
- D. 1, 3 and 4
Q11. Comparing programmable Central Bank Digital Currency (e₹) with ordinary bank-account-based Direct Benefit Transfer, consider the following statements:
1. Programmable e₹ can restrict spending to a specific purpose, merchant category or geolocation, unlike ordinary bank-account DBT.
2. The G-SAFAL pilot uses programmable e₹ to restrict assistance to approved agricultural inputs.
3. Programmability entirely removes the need for the Reserve Bank of India to act as the issuer of the currency.
Which of the statements given above is/are correct?
- Programmable e₹ can restrict spending to a specific purpose, merchant category or geolocation, unlike ordinary bank-account DBT.
- The G-SAFAL pilot uses programmable e₹ to restrict assistance to approved agricultural inputs.
- Programmability entirely removes the need for the Reserve Bank of India to act as the issuer of the currency.
- A. 1 and 2 only
- B. 1 and 3 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q12. Which one of the following provided the primary legal basis empowering the Reserve Bank of India to issue the Digital Rupee (e₹) as legal tender?
- A. The Finance Act, 2022, which amended the definition of 'bank note' in the Reserve Bank of India Act, 1934
- B. The Payment and Settlement Systems Act, 2007
- C. The Coinage Act, 2011
- D. The Prevention of Money Laundering Act, 2002