MPSC 2026 Prelims Paper-I · Question 92 of 100

Correct — option (4), '(a), (b), (c) and (d)'. All four propositions are drawn from the Economic Survey 2025-26, and the structure of the option list makes the question solvable even for a candidate who has not read the document. Start with what the options do rather than with what the statements say. Statement (a) appears in every single option — (1), (2), (3) and (4) all include it. That means it cannot separate any option from any other, and no time should be spent adjudicating it. The entire question turns on statements (b), (c) and (d). Now read those three together. Statement (b) says global trade is increasingly influenced by geopolitical alignments and economic statecraft. Statement (c) says global trade policy is driven by protectionist and retaliatory tariffs. Statement (d) says geoeconomic factors are now critical determinants of key bilateral trade patterns. These are three descriptions of one phenomenon — the shift from a rules-based trading order to one in which trade is used as an instrument of national strategy. There is no evidence a candidate could hold that would make one of them true and another false, and the Survey itself makes all three points: that economic statecraft has intensified globally, with tariffs, export controls, subsidies and sanctions used as strategic tools; that global trade is increasingly strategic rather than rules-based; and that friend-shoring has strengthened while near-shoring has stayed weak, reflecting a preference for politically aligned partners. Options (1), (2) and (3) each accept some members of this trio and reject others, which cannot be justified on any reading. Only option (4) treats them consistently. Statement (a) is also sound on its own terms, and the Commission's key confirms it as a Survey observation. The mechanism is straightforward: India is the world's largest recipient of remittances, those remittances come from Indians working abroad, and the destinations that matter most are a small set of Gulf economies and advanced economies. If those countries tighten immigration rules, the number of new Indian workers entering them grows more slowly, and the growth of the remittance flow slows with it. Note the careful wording — 'may reduce the growth in remittances', not 'will reduce remittances'. It is a statement about the rate of increase, hedged with a modal verb, and that is the kind of statement an examiner leaves true. The general lesson is worth more than the four facts: in a statement set, first find the statement common to every option and set it aside, then look for statements that restate one another, because no option that splits a set of paraphrases can be the answer.

• (1)(a), (b) and (c) — This accepts that geopolitical alignment and economic statecraft shape trade, and that protectionist and retaliatory tariffs drive trade policy, but rejects statement (d) — that geoeconomic factors are critical determinants of bilateral trade patterns. That is the same proposition as the two it has just accepted, expressed at the level of the bilateral relationship rather than the system. There is no coherent position from which (b) and (c) are true and (d) is false.
• (2)(a), (c) and (d) — This drops statement (b), the claim that geopolitical alignments and economic statecraft increasingly influence global trade. It is arguably the best documented of the four, and the Survey states it in nearly those words — economic statecraft has intensified globally, with tariffs, export controls, subsidies and sanctions used as strategic tools. An option that keeps the tariff statement while discarding the statecraft statement has separated a symptom from its cause.
• (3)(a) and (d) — The narrowest option, and it discards both (b) and (c) while keeping (d) — that is, it accepts that geoeconomic factors shape bilateral trade while denying that geopolitical alignment influences global trade and that protectionist and retaliatory tariffs drive trade policy. Those denials are hard to sustain in a year defined by reciprocal tariff announcements and friend-shoring. Candidates reach this option by over-applying the instinct that the longest option must be a trap.

The Economic Survey is prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance, under the supervision of the Chief Economic Adviser, and is tabled in Parliament by the Finance Minister customarily a day before the Union Budget. It reviews the year's economic developments sector by sector and sets out an outlook and a policy argument. It is not binding on the government and does not announce measures — the Budget does that — but it establishes the analytical frame in which the Budget is read, and the framing chapters are the ones examiners quarry for statement sets. The vocabulary of the 2025-26 edition is worth learning as vocabulary. 'Economic statecraft' is the use of economic instruments — tariffs, export controls, subsidies, sanctions, investment screening — for strategic rather than commercial ends. 'Geoeconomics' is the study of how such power considerations shape economic outcomes. 'Friend-shoring' is the relocation of supply chains towards politically aligned partners, as distinct from 'near-shoring', which relocates them towards geographically closer ones.

The remittance point in statement (a) sits on one of India's most important external balances. India is the world's largest recipient of remittances, and these inflows are a stable, non-debt-creating source of foreign exchange that has repeatedly cushioned the current account when merchandise trade has deteriorated. The two great source blocs are the Gulf economies, which host large numbers of Indian workers, and the advanced economies, above all the United States, whose share has grown with the migration of skilled professionals. Because the flow rests on the stock of Indians working abroad, any tightening of visa regimes, quotas or work-permit rules in those destinations acts on the flow with a lag — it does not cut the existing stock's remittances, but it slows the addition of new remitters, which is precisely the growth effect the Survey flags. The trade chapters describe the other half of the external picture: an order in which tariffs are announced reciprocally, supply chains are being rearranged by political alignment, and bilateral outcomes turn as much on strategy as on comparative advantage.

• The Economic Survey is prepared by the Economic Division of the Department of Economic Affairs under the Chief Economic Adviser, and is tabled by the Finance Minister ahead of the Union Budget
• The 2025-26 Survey describes economic statecraft as having intensified globally, with tariffs, export controls, subsidies and sanctions increasingly used as strategic tools, and global trade as increasingly strategic rather than rules-based
• It notes stronger friend-shoring — the shift of supply chains towards politically aligned partners — alongside persistently weak near-shoring, and the effect of the reciprocal tariff announcements made by the United States in April 2025
• India is the world's largest recipient of remittances; the flows are non-debt-creating, come chiefly from the Gulf economies and the advanced economies, and act as a cushion for the current account
• Because remittances depend on the stock of Indians working abroad, tighter immigration control in destination countries slows the growth of the flow rather than cutting the existing flow

• Spending time on a statement that appears in every option. Statement (a) is in all four choices here and therefore cannot decide anything — scan the option column before you start reading statements
• Splitting statements that paraphrase one another. Statements (b), (c) and (d) describe the same shift at different levels; any option that admits some and rejects others is internally inconsistent
• Misreading a hedged claim as an absolute one. 'May reduce the growth in remittances' is a claim about the rate of increase and is guarded by a modal verb; testing it as though it said 'will reduce remittances' turns a true statement into a false one

The Economic Survey and the Union Budget generate several questions in every State PSC current-affairs section. Two shapes dominate. The first is numerical — the growth projection, the fiscal deficit target, an allocation figure — where the only defence is having the number. The second, as here, is thematic: a set of broad statements taken from the Survey's framing chapters, where the statements are usually all true because the Survey's own language is cautious, and the marks go to whoever can read the option structure quickly. When the statements in such a set are qualitative and hedged, suspect that the inclusive option is intended, and confirm it by checking whether the partial options split a group of near-identical claims.

No directly related past PYQ was found.

• practice — not a real PYQ

  The Economic Survey of India is prepared by which body and presented in Parliament by whom ?

  • (a)NITI Aayog; presented by the Vice-Chairman of NITI Aayog
  • (b)The Reserve Bank of India; presented by the Governor
  • (c)The Department of Economic Affairs under the Chief Economic Adviser; presented by the Finance Minister
  • (d)The Comptroller and Auditor General; presented by the President

  Answer(c) The Department of Economic Affairs under the Chief Economic Adviser; presented by the Finance Minister — the Survey is prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and is tabled by the Finance Minister, customarily a day before the Union Budget. It reviews the year and sets out an outlook, but announces no measures.

• practice — not a real PYQ

  In the context of global supply chains, 'friend-shoring' refers to :

  • (a)relocating production to countries that are geographically closest to the market
  • (b)relocating production to politically aligned or allied countries
  • (c)returning production to the home country from abroad
  • (d)distributing production across the largest possible number of countries

  Answer(b) relocating production to politically aligned or allied countries — as distinct from near-shoring, which relocates production to geographically closer countries, and re-shoring, which brings it home. The Economic Survey 2025-26 notes stronger friend-shoring alongside persistently weak near-shoring, reflecting a preference for politically aligned partners.