Society · 7 Aug 2026

politics of accommodation

Consider the following statements regarding India's FCNR(B) swap window and the rupee's behaviour in 2026:

  1. FCNR(B) dollars are sold directly in the open currency market, where genuine supply-and-demand price discovery for the spot rupee occurs.
  2. In 2013, the FCNR(B) swap window under RBI Governor Raghuram Rajan mobilised around 34 billion dollars and lifted the rupee nearly 10% in 42 days.
  3. The Foreign Exchange Management Act, 1999 governs all foreign exchange transactions in India.
  4. RBI had already sold $103 billion net in the forward market before the 2026 swap window opened, with a share of new inflows plausibly used to meet these prior commitments.

How many of the above statements are correct?

ABoth A and R are true and R is the correct explanation of A
BBoth A and R are true but R is NOT the correct explanation of A
CA is true but R is false
DA is false but R is true

Tests the ability to judge whether a reasoning statement is the actual causal explanation for a claim, not just a true but tangential fact - a distinctly higher-order analytical skill.

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This question is based on: The $49 Billion That Never Touched the Rupee
Take this in full test mode → Instructions for 7 Aug 2026
About this question

Why in news

Commentator Pratap Bhanu Mehta argues that Gen Z protests over exam fairness and institutional accountability indict the post-liberalisation generation's "politics of accommodation" as much as any single government.

Why for UPSC

This tests the ability to evaluate whether a causal mechanism genuinely explains a stated claim, rather than merely being a true but disconnected statement - a core Assertion-Reasoning skill.

Prelims summary

The "politics of accommodation" describes a strategy favouring individual careers over collective mobilisation; its critique holds that cumulative small professional compromises, not just political capture, drove institutional decay.

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