UPSC Prelims 2015— Question 87

Correct answer: Option C. A reduction in the growth of money circulation, all else equal, can reduce aggregate demand pressures and help moderate inflation. In India, inflation management is not solely the responsibility of the Union government; the RBI has an important monetary-policy role. Increased money circulation is not generally an anti-inflationary measure. Thus decreased money circulation is the correct statement. Option-wise analysis: Option A: “Controlling the inflation in India is the responsibility of the Government of India only” is incorrect. It does not match the specific fact, definition, institutional role, geographical association, or constitutional/economic principle required here. The key distinction is the one identified in the core explanation, so this option can be eliminated. Option B: “The Reserve Bank of India has no role in controlling the inflation” is incorrect. It does not match the specific fact, definition, institutional role, geographical association, or constitutional/economic principle required here. The key distinction is the one identified in the core explanation, so this option can be eliminated. Option C: “Decreased money circulation helps in controlling the inflation” is correct. It directly matches the factual or conceptual requirement tested by the question and is supported by the principle explained above. Option D: “Increased money circulation helps in controlling the inflation” is incorrect. It does not match the specific fact, definition, institutional role, geographical association, or constitutional/economic principle required here. The key distinction is the one identified in the core explanation, so this option can be eliminated. Prelims takeaway: Focus on the precise institutional role, constitutional provision, geographical association, or technical definition being tested. UPSC questions often place a broadly familiar fact beside a narrowly incorrect qualifier; identifying that qualifier is essential for elimination.