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UPSC PREVIOUS YEAR's  ECONOMICS QUESTIONS- Part-2 Q.3 Discuss the steps taken by the government in recent years to control inflation. (10 marks, 150 words) Ans: Inflation occurs when an economy grows due to increased spending . When this happens, prices rise and the currency within the economy is worth less than it was before leading to weakening of its exchange rate . Controlling inflation has always been a priority area for the government. According to the Economic Survey 2018-19 , the economy witnessed a gradual transition from a period of high and variable inflation to more stable and low level of inflation . "The government has taken a number of measures to control inflation specially food inflation," as per the survey. The measures, inter alia, taken include both general measures and specific measures. Regular monitoring of inflation , issuing advisories to states against hoarding and black marketing , holding regular review meetings on prices and

UPSC PREVIOUS YEAR's  ECONOMICS QUESTIONS- Part-1 Q.1 It is being suggested that the commercial banks in India should reduce their holdings of non-performing assets. Does it mean that the former should abandon social priorities? (250 words, 15 marks) Ans: Banks play a very useful and dynamic role in the economic life of every modern state. The two basic functions of commercial banks are: mobilization of the savings of the people and disbursement of credit according to socio-economic priorities , thus accelerating the pace of economic development in the desired direction.   But a major threat to banking sector is prevalence of Non-Performing Assets (NPAs). All those assets which do not generate periodical income are called as “ Non-Performing Assets (NPA) ” or “ bad loans ” If the customers do not repay principal amount and interest for a certain period of time then such loans become Non-Performing Assets (NPA). In the last five financial years and governance failures