UPSC Prelims 2022— Question 61

This question belongs to Economy and tests External Commercial Borrowings. The economic principle must be read in the institutional and policy context used in the question. UPSC often tests whether an apparently familiar term is being applied to the correct mechanism, authority or balance-sheet category. The final key treats this question as dropped, so no option is assigned for scoring. A useful way to solve the question is to separate the individual propositions from the answer-code combinations. A statement can look broadly reasonable while still being incorrect because it uses an absolute term, assigns a function to the wrong institution, confuses two related concepts, or places a feature in the wrong region or period. The keyed response should therefore be treated as the outcome of checking each proposition rather than as a memory-only exercise. Option A: this cannot be treated as a scored answer because the question was subsequently dropped. Option B: likewise, it is not assigned a scoring value in the final treatment. Option C: it is not selected for scoring. Option D: it is also not selected for scoring. The important database point is that the question remains in the source sequence, but its answer field is recorded as Dropped so that the historical paper is preserved without manufacturing a correct option. The exam-oriented takeaway is to identify the governing fact first and only then map it to the answer code. This reduces errors caused by choosing an option because one individual statement appears familiar. For database use, the classification and explanation should be read together: the subject gives the broad domain, the topic identifies the recurring UPSC theme, and the subtopic records the precise knowledge point tested. This also makes the question useful for later topic-wise search and revision.