UPSC Prelims 2019— Question 26

This question tests the concept of Measures to Support the Rupee. The key principle is that An expansionary monetary policy normally increases liquidity and can put downward pressure on the currency, so it is not a typical measure for arresting a rupee slide. Import restraint, Masala Bonds and easing external borrowing can support foreign-exchange availability. The correct answer marked for this question is option D. The distinction matters because UPSC often combines a familiar factual statement with one carefully qualified or overly broad statement. A reliable way to solve such questions is to identify the governing concept first and then test every statement against its precise wording rather than relying on general familiarity. Because the question asks for the statement or option that is not correct, the task is to identify the choice that conflicts with the established position; the other choices must be assessed as plausible or correct within the wording of the question. Option A — Curbing imports of non-essential goods and promoting exports: This is not the correct choice. It either excludes a statement that must be included, includes a statement that is inaccurate, or identifies a different institution, process, location, technology or historical development from the one tested. Its wording should therefore be rejected when checked against the core principle described above. Option B — Encouraging India borrowers to issue rupee denominated Masala Bonds: This is not the correct choice. It either excludes a statement that must be included, includes a statement that is inaccurate, or identifies a different institution, process, location, technology or historical development from the one tested. Its wording should therefore be rejected when checked against the core principle described above. Option C — Easing conditions relating to external commercial borrowing: This is not the correct choice. It either excludes a statement that must be included, includes a statement that is inaccurate, or identifies a different institution, process, location, technology or historical development from the one tested. Its wording should therefore be rejected when checked against the core principle described above. Option D — Following an expansionary monetary policy: This is the correct choice. It is consistent with the governing fact or with the valid combination identified above. The important point is not merely that the wording appears familiar, but that it matches the specific scope of the question and does not add an unsupported condition. In exam terms, the safest approach is to break the question into its smallest factual units. Where statements are combined, verify each statement independently and then compare the resulting combination with the four codes. Where the question asks for a single institution, event, technology or location, distinguish the exact term from closely related alternatives. This prevents elimination based only on familiarity and is especially useful in UPSC questions where one small qualifier can change the correctness of an otherwise plausible statement. Thus, after checking the individual propositions and the scope of the alternatives, option D is the answer.