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GS Paper IUPSC Prelims 2011
Indian Economic Planning & Growth
Question No. 279Interactive Test Mode
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+2-0.66

Q279. Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

Select the correct option below (or cross out options to eliminate)
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Official Answer Key & Detailed Solution

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Official UPSC Answer KeyUPSC Prelims 2011 • Indian Economy

Correct Answer: Option (B) — FII helps in increasing capital availability in general, while FDI only targets specific sectors

Concept & Option Breakdown

Standard Reference Verified

FDI involves direct, long-term capital deployment into specific enterprises or productive sectors accompanied by managerial control and technology. FII represents portfolio flows into broader financial markets (stocks and debt), enhancing general liquidity and capital availability without enterprise-specific control.

Elimination Heuristic & Exam Approach

FDI brings technology and management (negating A). FDI is far more stable than 'hot money' FII (negating D).

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2011 (Q279)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Indian Economic Planning & Growth
Official Answer KeyOption (B) — FII helps in increasing capital availability in general, while FDI only targets specific sectors

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Frequently Asked Questions — UPSC Prelims 2011 Q279

What is the official answer for UPSC Prelims 2011 GS Paper I Question 279 (Indian Economy)?

The official UPSC answer key for this 2011 Indian Economy (Indian Economic Planning & Growth) question is Option (B): "FII helps in increasing capital availability in general, while FDI only targets specific sectors". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2011 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Indian Economic Planning & Growth". You can explore all repeated questions from Indian Economic Planning & Growth in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Indian Economic Planning & Growth UPSC Prelims question using option elimination?

FDI brings technology and management (negating A). FDI is far more stable than 'hot money' FII (negating D).

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