UPSC Prelims 2019— Question 2

This question tests the concept of Inter-Creditor Agreement and Stressed Assets. The key principle is that The Inter-Creditor Agreement was intended to provide a common framework among lenders in consortium lending for faster resolution of stressed assets, particularly exposures of Rs 50 crore and above. The correct answer marked for this question is option D. The distinction matters because UPSC often combines a familiar factual statement with one carefully qualified or overly broad statement. A reliable way to solve such questions is to identify the governing concept first and then test every statement against its precise wording rather than relying on general familiarity. The answer should therefore be selected only after checking whether each component of the option is consistent with the underlying constitutional, economic, scientific, historical or geographical principle. Option A — To lessen the Government of India’s perennial burden of Fiscal deficit and current account deficit.: This is not the correct choice. It either excludes a statement that must be included, includes a statement that is inaccurate, or identifies a different institution, process, location, technology or historical development from the one tested. Its wording should therefore be rejected when checked against the core principle described above. Option B — To support the infrastructure projects of central and state governments.: This is not the correct choice. It either excludes a statement that must be included, includes a statement that is inaccurate, or identifies a different institution, process, location, technology or historical development from the one tested. Its wording should therefore be rejected when checked against the core principle described above. Option C — To act as independent regulator in case of applications for loans of ₹ 50 crore or more.: This is not the correct choice. It either excludes a statement that must be included, includes a statement that is inaccurate, or identifies a different institution, process, location, technology or historical development from the one tested. Its wording should therefore be rejected when checked against the core principle described above. Option D — To aim at faster resolution of stressed assets of ₹ 50 crore or more which are under consortium lending.: This is the correct choice. It is consistent with the governing fact or with the valid combination identified above. The important point is not merely that the wording appears familiar, but that it matches the specific scope of the question and does not add an unsupported condition. In exam terms, the safest approach is to break the question into its smallest factual units. Where statements are combined, verify each statement independently and then compare the resulting combination with the four codes. Where the question asks for a single institution, event, technology or location, distinguish the exact term from closely related alternatives. This prevents elimination based only on familiarity and is especially useful in UPSC questions where one small qualifier can change the correctness of an otherwise plausible statement. Thus, after checking the individual propositions and the scope of the alternatives, option D is the answer.