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Indian Economy

621 questions asked in UPSC Prelims.

2012 · Q31Indian EconomyHuman Development, Poverty & Employment Schemesmoderate

How does the National Rural Livelihood Mission seek to improve livelihood options of rural poor? 1. By setting up a large number of new manufacturing industries and agribusiness centres in rural areas 2. By strengthening 'self-help groups' and providing skill development 3. By supplying seeds, fertilizers, diesel pump-sets and micro-irrigation equipment free of cost to farmers Select the correct answer using the codes given below :

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

2012 · Q32Indian EconomyHuman Development, Poverty & Employment Schemesmoderate

The Multi-dimensional Poverty Index developed by Oxford Poverty and Human Development Initiative with UNDP support covers which of the following? 1. Deprivation of education, health, assets and services at household level 2. Purchasing power parity at national level 3. Extent of budget deficit and GDP growth rate at national level Select the correct answer using the codes given below :

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

2012 · Q33Indian EconomyFiscal Policy & Budgetdifficult

Which of the following is/are among the noticeable features of the recommendations of the Thirteenth Finance Commission? 1. A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design 2. A design for the creation of lakhs of jobs in the next ten years in consonance with India's demographic dividend 3. Devolution of a specified share of central taxes to local bodies as grants Select the correct answer using the codes given below :

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

2012 · Q34Indian EconomyInfrastructure & Industrymoderate

What is/are the recent policy initiative(s) of Government of India to promote the growth of manufacturing sector? 1. Setting up of National Investment and Manufacturing Zones 2. Providing the benefit of 'single window clearance' 3. Establishing the Technology Acquisition and Development Fund Select the correct answer using the codes given below :

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

2012 · Q39Indian EconomyInfrastructure & Industryeasy

In India, in the overall Index of Industrial Production, the Indices of Eight Core Industries have a combined weight of 37·90%. Which of the following are among those Eight Core Industries? 1. Cement 2. Fertilizers 3. Natural gas 4. Refinery products 5. Textiles Select the correct answer using the codes given below :

  1. (a)1 and 5 only
  2. (b)2, 3 and 4 only
  3. (c)1, 2, 3 and 4 only
  4. (d)1, 2, 3, 4 and 5
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Official answer(c) 1, 2, 3 and 4 only

2012 · Q58Indian EconomyAgriculture & Rural Developmentmoderate

How do District Rural Development Agencies (DRDAs) help in the reduction of rural poverty in India? 1. DRDAs act as Panchayati Raj Institutions in certain specified backward regions of the country. 2. DRDAs undertake area-specific scientific study of the causes of poverty and malnutrition and prepare detailed remedial measures. 3. DRDAs secure inter-sectoral and inter-departmental coordination and cooperation for effective implementation of anti-poverty programmes. 4. DRDAs watch over and ensure effective utilization of the funds intended for anti-poverty programmes. Which of the statements given above is/are correct?

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

2012 · Q77Indian EconomyMonetary Policy & Money Supplymoderate

Which of the following measures would result in an increase in the money supply in the economy? 1. Purchase of government securities from the public by the Central Bank 2. Deposit of currency in commercial banks by the public 3. Borrowing by the government from the Central Bank 4. Sale of government securities to the public by the Central Bank Select the correct answer using the codes given below :

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

2012 · Q79Indian EconomyExternal Sector & Balance Of Paymentsmoderate

Consider the following statements : The price of any currency in international market is decided by the 1. World Bank 2. demand for goods/services provided by the country concerned 3. stability of the government of the concerned country 4. economic potential of the country in question Which of the statements given above are correct?

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

2012 · Q80Indian EconomyBanking & Financial Sectoreasy

The basic aim of Lead Bank Scheme is that

  1. (a)big banks should try to open offices in each district
  2. (b)there should be stiff competition among the various nationalized banks
  3. (c)individual banks should adopt particular districts for intensive development
  4. (d)all the banks should make intensive efforts to mobilize deposits
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Official answer(c) individual banks should adopt particular districts for intensive development

2012 · Q84Indian EconomyInfrastructure & Industrymoderate

Despite having large reserves of coal, why does India import millions of tonnes of coal? 1. It is the policy of India to save its own coal reserves for future, and import it from other countries for the present use. 2. Most of the power plants in India are coal-based and they are not able to get sufficient supplies of coal from within the country. 3. Steel companies need large quantity of coking coal which has to be imported. Which of the statements given above is/are correct?

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

2011 · Q4Indian EconomyInflation & Price Indicesmoderate

India has experienced persistent and high food inflation in the recent past. What could be the reasons? 1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%. 2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change. 3. The food supply chain has structural constraints. Which of the statements given above are correct?

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

2011 · Q8Indian EconomyFiscal Policy & Budgeteasy

Which one of the following statements appropriately describes the “fiscal stimulus”?

  1. (a)It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth
  2. (b)It is an intense affirmative action of the Government to boost economic activity in the country
  3. (c)It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation
  4. (d)It is an extreme affirmative action by the Government to pursue its policy of financial inclusion
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Official answer(b) It is an intense affirmative action of the Government to boost economic activity in the country

2011 · Q13Indian EconomyInflation & Price Indiceseasy

A rapid increase in the rate of inflation is sometimes attributed to the "base effect". What is "base effect" ?

  1. (a)It is the impact of drastic deficiency in supply due to failure of crops
  2. (b)It is the impact of the surge in demand due to rapid economic growth
  3. (c)It is the impact of the price levels of previous year on the calculation of inflation rate
  4. (d)None of the statements (a), (b) and (c) given above is correct in this context
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Official answer(c) It is the impact of the price levels of previous year on the calculation of inflation rate