UPSC Editorials Quiz : 6 July 2026

Solution: D

• Statement 1 is Correct. External Commercial Borrowings (ECBs) are commercial loans raised by eligible resident entities from recognized non-resident lenders. They can take the form of bank loans, buyers’ credit, suppliers’ credit, foreign currency bonds, and other approved instruments. The ECB framework is governed under the provisions of FEMA.
• Statement 2 is Incorrect. A concessional Foreign Exchange (FX) swap facility offered by the Reserve Bank of India is intended to reduce, not increase, the hedging cost for Indian borrowers. By enabling banks to swap foreign currency funds with the RBI at concessional rates, such facilities lower the overall cost of hedging exchange rate risk, thereby making ECBs more attractive.

Statement 3 is Correct. The ECB framework is administered by the Government of India, through the Ministry of Finance, in consultation with the Reserve Bank of India. While the RBI issues operational directions and monitors compliance, the broader policy framework is formulated jointly to ensure prudent external borrowing and effective management of India’s external debt profile.

Solution: C

• The India–Bhutan Friendship Treaty revised the original Treaty of Friendship between India and Bhutan to reflect Bhutan’s evolving status as a fully sovereign nation and to modernize bilateral relations.
• A key change was the removal of Article 2 of the 1949 treaty, which stated that:
  • Bhutan agreed to be “guided by the advice of the Government of India in regard to its external relations.”
• This provision had long been viewed as limiting Bhutan’s autonomy in foreign affairs. The 2007 treaty replaced it with language emphasizing close cooperation on issues relating to national interests, thereby affirming Bhutan’s full sovereignty over its foreign policy while preserving the special and friendly relationship between the two countries.
• Option (a) The open border system – Incorrect. The India–Bhutan open border and close movement of people continued and was not removed by the 2007 treaty.
• Option (b) The free trade and transit agreements – Incorrect. Trade and transit arrangements remained in place through separate agreements and were not abolished.

Option (d) The provision for equal justice for residing citizens of both countries – Incorrect. The 1949 treaty contained provisions regarding equal treatment of nationals residing in each other’s territory, and this was not the defining provision removed in the 2007 revision.

Solution: B

• Hantavirus Pulmonary Syndrome (HPS) is a rare but severe viral disease caused by hantaviruses, which are primarily transmitted to humans through contact with infected rodent urine, droppings, or saliva. The disease mainly affects the lungs and can rapidly progress to severe respiratory distress and failure.
• Option (a) is incorrect because both HPS and the common flu are caused by viruses. HPS is caused by hantaviruses, whereas the flu is caused by influenza viruses.
• Option (b) is correct because HPS has a much higher case-fatality rate than seasonal influenza. While seasonal flu generally has a relatively low mortality rate, HPS can be fatal in a substantial proportion of cases, making it one of the more dangerous viral respiratory illnesses.
• Option (c) is incorrect because influenza commonly spreads through respiratory droplets and aerosols from infected individuals. HPS is usually acquired through exposure to contaminated rodent excreta rather than routine human-to-human transmission.
• Option (d) is incorrect because influenza primarily affects the respiratory tract, not the kidneys. HPS also predominantly affects the respiratory system, particularly the lungs, causing pulmonary edema and breathing difficulties.
• Thus, the most important distinguishing feature among the given options is the significantly higher mortality rate associated with HPS compared to the common flu.

Solution: A

• Statement 1 is Incorrect. The disputed area comprising Kalapani, Lipulekh, and Limpiyadhura lies at the northwestern tip of Nepal, but it borders the Indian state of Uttarakhand, not Himachal Pradesh. The tri-junction involves India, Nepal, and the China (Tibet Autonomous Region).
• Statement 2 is Correct. The Lipulekh Pass is one of the principal routes used for the Kailash Mansarovar Yatra to the Mount Kailash and Lake Manasarovar in Tibet. It is strategically important for pilgrimage, trade, and border management.
• Statement 3 is Incorrect. Nepal has not historically accepted the ridge line near Kalapani as the definitive origin of the Kali River in all official maps since 1816. Instead, Nepal’s longstanding position is that the Kali River originates at Limpiyadhura, placing Kalapani and Lipulekh within Nepalese territory. In 2020, Nepal issued a new official political map incorporating Limpiyadhura, Lipulekh, and Kalapani into its territory.

Solution: C

• The Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit swap scheme is a monetary measure introduced by the Reserve Bank of India during periods of significant pressure on the Indian rupee. Under this scheme, banks mobilize foreign currency deposits from Non-Resident Indians (NRIs) and are allowed to swap these foreign currency funds with the RBI at a concessional rate. This reduces the exchange rate risk and hedging cost for banks, encouraging them to attract larger foreign currency deposits.
• The immediate macroeconomic effect is an increase in foreign exchange inflows, which strengthens the capital account of India’s Balance of Payments and augments the country’s foreign exchange reserves. Higher reserves improve investor confidence, enhance the RBI’s ability to intervene in the foreign exchange market, and help stabilize the rupee during episodes of excessive volatility. A more stable rupee also moderates the domestic cost of imports, particularly crude oil and other essential commodities, thereby easing imported inflationary pressures.
• Option (a) is incorrect because the scheme does not directly affect exports or the current account.
• Option (b) is incorrect because the objective is to strengthen, not reduce, capital inflows.
• Option (d) is also incorrect since the RBI does not finance the scheme by printing money; instead, it provides a concessional swap window.