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Question No. 149Interactive Test Mode
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Q149. Consider the following statements: 1. The Governor of the Reserve bank of India (RBI) is appointed by the Central Government. 2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest. 3. The Governor of the RBI draws his power from the RBI Act. Which of the above statements are correct?

Consider the following statements:

  1. The Governor of the Reserve bank of India (RBI) is appointed by the Central Government.
  2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest.
  3. The Governor of the RBI draws his power from the RBI Act. Which of the above statements are correct?
Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2021 • Indian Economy

Correct Answer: Option (C) — 1 and 3 only

Concept & Option Breakdown

Standard Reference Verified

Statement 1 is correct: The RBI Governor is appointed by the Central Government (specifically the Appointments Committee of the Cabinet) as per the provisions of Section 8 of the RBI Act, 1934. Statement 2 is incorrect: The power of the Central Government to issue directions to the RBI in public interest is derived from Section 7 of the Reserve Bank of India Act, 1934, not from the Constitution of India (the RBI is a statutory body, not a constitutional one). Statement 3 is correct: The RBI Governor's executive powers, responsibilities, and statutory mandate are derived from the Reserve Bank of India Act, 1934.

Elimination Heuristic & Exam Approach

The RBI is not mentioned in the Constitution of India; it is a statutory body created by an Act of Parliament (RBI Act, 1934). Thus, constitutional provisions cannot govern RBI directions.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2021 (Q149)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (C) — 1 and 3 only

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Frequently Asked Questions — UPSC Prelims 2021 Q149

What is the official answer for UPSC Prelims 2021 GS Paper I Question 149 (Indian Economy)?

The official UPSC answer key for this 2021 Indian Economy (Banking & Financial System) question is Option (C): "1 and 3 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2021 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Banking & Financial System". You can explore all repeated questions from Banking & Financial System 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 Banking & Financial System UPSC Prelims question using option elimination?

The RBI is not mentioned in the Constitution of India; it is a statutory body created by an Act of Parliament (RBI Act, 1934). Thus, constitutional provisions cannot govern RBI directions.

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