Q1. According to the Economic Survey 2025–26, which of the following is identified as a key emerging global financial risk that could contribute to a crisis worse than the 2008 global financial crisis?
- Excessive sovereign debt in emerging economies
- Overvaluation of real estate markets in developed countries
- Highly leveraged investments in artificial intelligence (AI)
- Decline in global trade due to demographic ageing
Correct Option: 3. Highly leveraged investments in artificial intelligence (AI)
Explanation: The Survey explicitly highlights highly leveraged AI investments as a major emerging risk.
These investments are characterised by:
• Optimistic execution timelines
• Narrow customer concentration
• Long-duration capital commitments
A correction in this segment could tighten global financial conditions, trigger risk aversion, and spill over into broader capital markets.
The Survey warns that if such a correction coincides with geopolitical escalation or trade disruptions, the resulting crisis could be worse than the 2008 global financial crisis.
Other options are not mentioned in the Survey as primary triggers for such a severe global crisis.
Q2. Which of the following arguments is used by the Economic Survey 2025–26 to justify the scrapping of MGNREGA?
- MGNREGA failed to increase women’s participation in rural employment
- Declining person-days indicate reduced dependence on the scheme due to improved rural labour markets
- The scheme was fiscally unsustainable for the Union government
- MGNREGA led to persistent rural inflation
Correct Option: 2. Declining person-days indicate reduced dependence on the scheme due to improved rural labour markets
Explanation: The Economic Survey highlights a steady decline in MGNREGA person-days, from 389.09 crore in 2020–21 to 183.77 crore in 2025–26, a drop of over 53%.
It links this decline to:
• Falling rural unemployment (from 3.3% to 2.5%)
• Improved access to non-farm and alternative employment
The Survey interprets this trend as evidence that households are less dependent on MGNREGA, supporting the case for re-examining and ultimately replacing the scheme.
Q3. According to the Economic Survey 2025–26, which of the following reflects the ‘structural issues’ that limited the effectiveness of MGNREGA?
- Excessive centralisation of programme design
- Mismatch between expenditure and physical progress, and misuse of machinery
- Inadequate legal backing for wage payments
- Low participation by marginal farmers
Correct Option: 2. Mismatch between expenditure and physical progress, and misuse of machinery
Explanation: The Survey identifies several deep structural problems in MGNREGA’s implementation, including:
• Mismatch between financial expenditure and actual work completed
• Works not executed despite funds being allocated
• Use of machines in labour-intensive works, contrary to programme norms
• Bypassing or manipulation of digital attendance systems
These issues led to:
• Accumulated misappropriation
• Weak delivery of the promised 100 days of work
The other options are not cited in the Survey as key structural limitations.
Q4. Which of the following trends regarding State finances is highlighted by the Economic Survey 2025–26?
- States have improved their fiscal position due to higher tax devolution
- The number of revenue-surplus States has increased since 2019
- Collective revenue deficit of States has widened in recent years
- State capital expenditure has declined due to lower borrowing limits
Correct Option: 3. Collective revenue deficit of States has widened in recent years
Explanation:
The Economic Survey cautions that State finances have deteriorated, even as the Centre’s fiscal position improves.
It notes that:
• Revenue-surplus States fell from 19 in 2018–19 to 11 in 2024–25.
• As a result, the collective revenue deficit of States increased from 0.1% of GDP to 0.7% of GDP.
This worsening position is linked to:
• Lower revenue growth
• Higher revenue expenditure, including cash transfer schemes
Q5. According to the Economic Survey 2025–26, what is the primary reason for adolescents aged 14–18 dropping out of school in India?
- Lack of schools in urban areas
- Poor quality of education
- Need to supplement household income and domestic responsibilities
- Lack of interest in higher education
Correct Option: 3. Need to supplement household income and domestic responsibilities
Explanation:
• The Survey highlights that nearly 2 crore adolescents (14–18 years) are out of school.
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44% leave to supplement household income, with 67% of boys citing this as the reason.
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55% of girls drop out due to domestic and care responsibilities.
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While school availability is an issue (only 17% of rural schools offer secondary education), the single largest driver is economic and social pressures, not lack of interest or education quality.
Q6. Which of the following statements is true regarding adolescents’ vocational training and NEP 2020 targets, according to the Economic Survey 2025–26?
- Over 50% of adolescents aged 14–18 have received institutional skills training.
- NEP 2020 aims to increase Expected Years of Schooling (EYS) to 15 years for ages 3–18.
- Vocational education is not considered necessary to reduce dropout rates.
- All rural schools currently provide secondary education.
Correct Option: 2. NEP 2020 aims to increase Expected Years of Schooling (EYS) to 15 years for ages 3–18.
Explanation:
• The Survey mentions that current EYS is 13 years, and NEP 2020 targets 15 years via the 5+3+3+4 schooling structure.
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Only 0.97% of adolescents aged 14–18 have received institutional skills training, so statement A is false.
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Vocational education is considered critical to retain students and address dropouts, so statement 3 is false.
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Statement 4 is incorrect because only 17% of rural schools provide secondary education.