UPSC Prelims 2026Question 98Economy

With reference to different Committees in India, consider the following details:
In which of the above rows are all the details correctly matched ? S No. — Committee — Objective — Organization|
under which
it was
formed; 1. — R. N. Malhotra Committee — Comprehensive reforms of Insurance sector in India — Insurance Regulatory and Development Authority of India; 2. — L. C. Gupta Committee — Preparing a roadmap for the introduction of derivatives trading in India — Securities and Exchange Board of India; 3. — Urjit R Patel Committee — Preparing a roadmap for reforming bank lending to the Housing sector — Reserve Bank of India; 4. — Y. H. Malegam Committee — Preparing a roadmap for reforms in Microfinance sector in India — Reserve Bank of India

Options

(a)2 only
(b)2 and 3
(c)1, 3 and 4
(d)2 and 4

Correct answer: d

Decision rule

Both the objective and the parent body must hold: a committee whose reforms created a regulator cannot have been formed under that regulator.

Explanation

Correct Answer

(d) 2 and 4

Explanation of the Correct Answer

Rows 2 and 4 are correctly matched.

L. C. Gupta Committee was associated with the introduction of derivatives trading in India and was formed under Securities and Exchange Board of India (SEBI).
Y. H. Malegam Committee was associated with reforms in the microfinance sector and was formed under the Reserve Bank of India.

Rows 1 and 3 are incorrectly matched because:

R. N. Malhotra Committee was related to insurance sector reforms, but it was not formed under Insurance Regulatory and Development Authority of India (IRDAI). IRDAI itself came later as a result of insurance sector reforms.
Urjit R. Patel Committee was related to reforming the monetary policy framework, not bank lending to the housing sector.

Therefore, the correct answer is 2 and 4 only.

Why Other Options Are Incorrect

Option	Verdict	Explanation
(a) 2 only	Incorrect	Row 2 is correct, but Row 4 is also correct.
(b) 2 and 3	Incorrect	Row 2 is correct, but Row 3 is incorrect because the Urjit Patel Committee dealt with monetary policy framework, not housing sector lending.
(c) 1, 3 and 4	Incorrect	Rows 1 and 3 are incorrect. Only Row 4 among these is correct.
(d) 2 and 4	Correct	Both L. C. Gupta Committee and Y. H. Malegam Committee are correctly matched with their objectives and organizations.

Relevant Supplementary Information

Correct Analysis of Given Committees

S No.	Committee	Given Objective	Given Organization	Verdict	Correct Explanation
1	R. N. Malhotra Committee	Insurance sector reforms	IRDAI	Incorrect	Objective is correct, but it was not formed under IRDAI. IRDAI came later after reforms.
2	L. C. Gupta Committee	Roadmap for derivatives trading	SEBI	Correct	It recommended the framework for introduction of derivatives trading in India.
3	Urjit R. Patel Committee	Bank lending to housing sector	RBI	Incorrect	It was related to revising and strengthening the monetary policy framework.
4	Y. H. Malegam Committee	Microfinance sector reforms	RBI	Correct	It examined issues and concerns in the microfinance sector, especially NBFC-MFIs.

Important Financial Sector Committees in India

Committee	Year / Period	Associated With	Key Objective / Recommendation
R. N. Malhotra Committee	1993–94	Insurance sector	Recommended insurance sector reforms and private sector participation
L. C. Gupta Committee	1997–98	Securities market	Recommended framework for derivatives trading
J. R. Varma Committee	1998	Derivatives risk management	Suggested risk containment measures for derivatives market
Y. H. Malegam Committee	2010–11	Microfinance	Recommended regulation of NBFC-MFIs and borrower protection
Urjit Patel Committee	2013–14	Monetary policy	Recommended CPI inflation targeting and Monetary Policy Committee framework
Narasimham Committee I	1991	Banking sector reforms	Suggested financial sector liberalization and prudential norms
Narasimham Committee II	1998	Banking sector reforms	Recommended strengthening banking system, NPAs management, capital adequacy
Nachiket Mor Committee	2013	Financial inclusion	Suggested comprehensive financial services for small businesses and low-income households

Committee	Year / Period	Associated Organization / Authority	Main Area	Key Objective / Recommendation
R. N. Malhotra Committee	1993–94	Government of India	Insurance sector	Recommended insurance sector reforms and opening insurance to private sector
L. C. Gupta Committee	1997–98	SEBI	Derivatives market	Recommended roadmap for introduction of derivatives trading in India
J. R. Varma Committee	1998	SEBI	Derivatives risk management	Recommended risk containment measures for derivatives trading
Y. H. Malegam Committee	2010–11	RBI	Microfinance	Recommended regulation of NBFC-MFIs and borrower protection norms
Urjit Patel Committee	2013–14	RBI	Monetary policy	Recommended CPI-based inflation targeting and Monetary Policy Committee framework
Narasimham Committee I	1991	Government of India	Banking sector reforms	Recommended financial sector liberalization and reduction of SLR/CRR
Narasimham Committee II	1998	Government of India	Banking sector reforms	Recommended banking consolidation, capital adequacy, and NPA management
Nachiket Mor Committee	2013	RBI	Financial inclusion	Recommended universal access to financial services and differentiated banking
Bimal Jalan Committee	2018–19	RBI	Economic capital framework	Recommended framework for RBI’s capital reserves and surplus transfer
P. J. Nayak Committee	2014	RBI	Bank governance	Recommended governance reforms in public sector banks
Deepak Mohanty Committee	2015	RBI	Financial inclusion	Recommended medium-term path for financial inclusion
Usha Thorat Committee	2019	RBI	Offshore rupee markets	Recommended measures to deepen offshore rupee markets
Khan Working Group	1997	RBI	Money market	Recommended development of money market instruments
Raghuram Rajan Committee	2008	Planning Commission	Financial sector reforms	Recommended broad reforms for inclusive financial development
Kelkar Committee	2002	Government of India	Tax reforms	Recommended direct and indirect tax reforms
Vijay Kelkar Committee	2015	Government of India	PPP model	Recommended revitalization of public-private partnership projects

Key Takeaways from the Tables

Point	Explanation
Malhotra Committee = Insurance reforms	But it was not formed under IRDAI because IRDAI did not exist then.
L. C. Gupta Committee = Derivatives trading	Associated with SEBI and securities market reforms.
Urjit Patel Committee = Monetary policy framework	Linked to inflation targeting, not housing-sector lending.
Malegam Committee = Microfinance reforms	Associated with RBI and regulation of NBFC-MFIs.
Correct rows are 2 and 4	Hence option (d) is correct.

Point	Explanation
Correct pairs in the question are 2 and 4	L. C. Gupta and Malegam Committees were correctly matched.
Malhotra Committee was not under IRDAI	It recommended insurance reforms before IRDAI was established.
Urjit Patel Committee was about monetary policy	It is linked to inflation targeting and the MPC framework.
L. C. Gupta Committee is linked to derivatives	It prepared the roadmap for derivatives trading in India.
Malegam Committee is linked to microfinance	It examined NBFC-MFIs and borrower protection issues.
Committee questions require triple matching	Name, objective, and organization must all be correct.

Context and Current Relevance

These committees shaped India’s financial sector reforms in areas such as insurance, banking, securities markets, monetary policy, and microfinance.
The question tests whether the objective and parent organization are both correctly matched.
A common trap is the Malhotra Committee, because it led to insurance reforms and eventually IRDAI, but it was not formed under IRDAI.

Table: Committees Mentioned in the Question

Committee	Given Objective in Question	Given Organization	Correct Position
R. N. Malhotra Committee	Insurance sector reforms	IRDAI	Objective correct, organization incorrect. It was set up by Government of India before IRDAI was created.
L. C. Gupta Committee	Roadmap for derivatives trading	SEBI	Fully correct.
Urjit R. Patel Committee	Bank lending to housing sector	RBI	Organization correct, objective incorrect. It dealt with monetary policy framework.
Y. H. Malegam Committee	Microfinance sector reforms	RBI	Fully correct.

Table: Commonly Confused Financial Committees

Committee	Often Confused With	Correct Area	Memory Clue
Malhotra Committee	IRDAI formation directly	Insurance reforms	Malhotra opened the door for insurance reform; IRDAI came later
L. C. Gupta Committee	J. R. Varma Committee	Derivatives introduction	Gupta = introduction of derivatives
J. R. Varma Committee	L. C. Gupta Committee	Derivatives risk management	Varma = risk containment
Urjit Patel Committee	Banking or housing finance	Monetary policy framework	Urjit Patel = inflation targeting
Malegam Committee	Financial inclusion committee	Microfinance regulation	Malegam = microfinance
Nachiket Mor Committee	Malegam Committee	Financial inclusion and small business finance	Mor = universal financial access
Narasimham Committee I	Narasimham Committee II	First-generation banking reforms	1991 = liberalization banking reforms
Narasimham Committee II	Narasimham Committee I	Banking strengthening and consolidation	1998 = stronger banks and NPAs

Table: Sector-wise Important Committees

Sector	Important Committees	Main Focus
Insurance	R. N. Malhotra Committee	Insurance sector reforms, private participation
Banking	Narasimham I, Narasimham II, P. J. Nayak	Banking reforms, governance, NPAs, capital adequacy
Monetary Policy	Urjit Patel Committee	Inflation targeting, Monetary Policy Committee
Derivatives Market	L. C. Gupta Committee, J. R. Varma Committee	Introduction and risk management of derivatives
Microfinance	Y. H. Malegam Committee	Regulation of NBFC-MFIs and borrower protection
Financial Inclusion	Nachiket Mor Committee, Deepak Mohanty Committee	Universal financial services, inclusion roadmap
Taxation	Kelkar Committee	Direct and indirect tax reforms
Public-Private Partnership	Vijay Kelkar Committee	Revitalizing PPP infrastructure projects
RBI Capital Framework	Bimal Jalan Committee	RBI reserves and surplus transfer framework

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