🧷 Authentic Classroom Explanation by IAS Monk

📌 The Question:

With reference to physical capital in Indian economy, consider the following pairs:

How many of the above pairs are correctly matched?

(a) Only one
(b) Only two
(c) Only three
(d) All four

✅ Correct Answer: (b) Only two

🧠 Curiosity Raiser

Why does UPSC repeatedly test fixed vs working capital using everyday objects like plough, yarn, petrol, computer?

👉 Because this topic looks simple but silently tests whether you understand time horizon of use, not the importance or cost of the item.

📘 Enrichment Notes (UPSC Concept Clarity)

🔹 What is Physical Capital?

Physical capital consists of man-made goods used in the production process. It is broadly divided into:

🟦 Fixed Capital

• Used repeatedly over many production cycles
• Not exhausted in one cycle
• Examples:
  • Tools
  • Machines
  • Buildings
  • Computers
  • Farmer’s plough

✔ Pair 2: Computer — Fixed capital (Correct)
❌ Pair 1: Farmer’s plough — wrongly shown as working capital
📌 A plough lasts many years → Fixed capital

🟩 Working Capital

• Consumed within a single production cycle
• Short-term use
• Examples:
  • Raw materials
  • Fuel
  • Cash
  • Intermediate goods

✔ Pair 4: Petrol — Working capital (Correct)
❌ Pair 3: Yarn used by the weaver — wrongly shown as fixed capital
📌 Yarn is a raw material → Working capital

🧩 Pair-wise Verdict

➡️ Correct pairs = 2

🧘‍♂️ IAS Monk Whisper

What lasts is fixed, what gets exhausted is working — never confuse durability with value.