UPSC Prelims Practice Questions — Research, Development and Innovation Fund Announces First Cohort of 19 Second Level Fund Managers

Q1. With reference to the Technology Readiness Level (TRL) scale used to assess how mature a technology is, consider the following statements: Which of the statements given above is/are correct?

  1. At TRL 4, the component pieces of a technology are tested together, but a fully functional prototype has not yet been demonstrated.
  2. Building a proof-of-concept model through analytical and laboratory studies comes before the stage at which component pieces are tested together.
  3. A technology reaches the top of the scale as soon as a fully functional prototype exists, even before it has been proven in actual operation.
  • A. 1 and 2 only
  • B. 1, 2 and 3
  • C. 1 only
  • D. 2 and 3 only

Q2. A public anchor fund commits capital to intermediate fund managers. Each manager must raise private capital equal to the public contribution and then select and finance enterprises. With reference to this fund-of-funds model, consider the following statements: Which of the statements given above is/are correct?

  1. The public anchor fund ends up holding a larger share of the total investible pool than the private co-investors do.
  2. A given public commitment can support a total pool of investment larger than the commitment itself.
  3. Routing capital through professional managers reduces the state's role in picking individual firms, but adds management fees and a principal-agent problem.
  • A. 1, 2 and 3
  • B. 2 and 3 only
  • C. 3 only
  • D. 1 and 2 only

Q3. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Under the Research, Development and Innovation (RDI) Scheme, the Special Purpose Fund within ANRF does not itself invest the corpus directly in enterprises.
  2. Financing under the RDI Scheme is extended mainly as long-term loans at low or nil interest rather than as grants.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q4. With reference to the categories of Alternative Investment Funds (AIFs) under SEBI regulations, consider the following statements: Which of the statements given above is/are correct?

  1. Category I AIFs are those for which no specific incentives or concessions are given by the government or any other regulator.
  2. Category II AIFs, such as private equity and debt funds, may employ leverage, including through derivatives, to amplify their returns.
  3. Category III AIFs include hedge funds that trade with a view to making short-term returns.
  • A. 2 and 3 only
  • B. 1 and 2 only
  • C. 3 only
  • D. 1, 2 and 3

Q5. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Venture capital funds investing in start-ups and early-stage ventures are registered with SEBI as Category I Alternative Investment Funds.
  2. Category I Alternative Investment Funds are permitted to employ leverage to amplify returns on their investments.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q6. With reference to the Anusandhan National Research Foundation (ANRF), consider the following statements: Which of the statements given above is/are correct?

  1. Its Governing Board provides strategic direction and monitors implementation, while its Executive Council undertakes implementation.
  2. It is financed exclusively through budgetary grants from the Central Government.
  3. The rules for utilising its funds are prescribed by the Central Government.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 and 3 only

Q7. Other things remaining the same, which one of the following would raise India's gross expenditure on R&D (GERD) as a proportion of GDP?

  • A. Nominal GDP rising during the year while total R&D spending stays at its earlier level
  • B. A shift of R&D spending from government to private firms, with total R&D spending unchanged
  • C. Total R&D spending and nominal GDP both growing at exactly the same rate during the year
  • D. Private R&D spending rising faster than nominal GDP while government R&D grows at GDP's pace

Q8. Consider the following data from DST's R&D statistics: India's gross expenditure on R&D (GERD) rose from ₹60,196.75 crore in 2010-11 to ₹1,27,380.96 crore in 2020-21. In 2020-21, government accounted for 63.6% of GERD and the private sector for 36.4%. Which of the following inferences can be validly drawn from the above data alone?

  1. In 2020-21, R&D spending by government in India was larger in absolute terms than R&D spending by the private sector.
  2. India's GERD as a proportion of GDP rose between 2010-11 and 2020-21.
  3. India's GERD more than doubled in real terms between 2010-11 and 2020-21.
  • A. 1 and 3 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 2 only