SawaalBoxसवाल बॉक्स

Indian Economy

621 questions asked in UPSC Prelims.

2011 · Q16Indian EconomyTaxationmoderate

Which one of the following is not a feature of “Value Added Tax”?

  1. (a)It is a multi-point destination-based system of taxation
  2. (b)It is a tax levied on value addition at each stage of transaction in the production-distribution chain
  3. (c)It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
  4. (d)It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
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Official answer(d) It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation

2011 · Q28Indian EconomyExternal Sector & Balance Of Paymentsmoderate

Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

  1. (a)FII helps bring better management skills and technology, while FDI only brings in capital
  2. (b)FII helps in increasing capital availability in general, while FDI only targets specific sectors
  3. (c)FDI flows only into the secondary market, while FII targets primary market
  4. (d)FII is considered to be more stable than FDI
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Official answer(b) FII helps in increasing capital availability in general, while FDI only targets specific sectors

2011 · Q30Indian EconomyHuman Development, Poverty & Employment Schemesmoderate

With reference to "Aam Aadmi Bima Yojana", consider the following statements: 1. The member insured under the scheme must be the head of the family or an earning member of the family in a rural landless household. 2. The member insured must be in the age group of 30 to 65 years. 3. There is a provision for free scholarship for up to two children of the insured who are studying between classes 9 and 12. 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(c) 1 and 3 only

2011 · Q35Indian EconomyInfrastructure & Industrymoderate

With what purpose is the Government of India promoting the concept of "Mega Food Parks"? 1. To provide good infrastructure facilities for the food processing industry. 2. To increase the processing of perishable items and reduce wastage. 3. To provide emerging and eco-friendly food processing technologies to entrepreneurs. Select the correct answer using the codes given below:

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

2011 · Q38Indian EconomyDigital Payments & Financial Inclusioneasy

Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under microfinance is/are: 1. Credit facilities 2. Savings facilities 3. Insurance facilities 4. Fund Transfer facilities Select the correct answer using the codes given below the lists:

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

2011 · Q59Indian EconomyInternational Trade & WTOmoderate

With reference to the period of colonial rule in India, "Home Charges" formed an important part of drain of wealth from India. Which of the following funds constituted "Home Charges"? 1. Funds used to support the India Office in London. 2. Funds used to pay salaries and pensions of British personnel engaged in India. 3. Funds used for waging wars outside India by the British. Select the correct answer using the codes given below:

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

2011 · Q74Indian EconomyFiscal Policy & Budgetmoderate

What is the difference between "vote-on-account" and "interim budget"? 1. The provision of a "vote-on-account" is used by a regular Government, while an "interim budget" is a provision used by a caretaker Government. 2. A "vote-on-account" only deals with the expenditure in Government's budget, while an "interim budget" includes both expenditure and receipts. Which of the statements given above is/are correct?

  1. (a)1 only
  2. (b)2 only
  3. (c)Both 1 and 2
  4. (d)Neither 1 nor 2
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Official answer(b) 2 only

2011 · Q80Indian EconomyBanking & Financial Sectormoderate

Why is the offering of "teaser loans" by commercial banks a cause of economic concern? 1. The teaser loans are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future. 2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units. Which of the statements given above is/are correct?

  1. (a)1 only
  2. (b)2 only
  3. (c)Both 1 and 2
  4. (d)Neither 1 nor 2
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Official answer(a) 1 only

2011 · Q85Indian EconomyFiscal Policy & Budgetmoderate

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt. 2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/are correct?

  1. (a)1 only
  2. (b)2 only
  3. (c)Both 1 and 2
  4. (d)Neither 1 nor 2
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Official answer(d) Neither 1 nor 2

2010 · Q17Indian EconomyInternational Trade & WTOdifficult

In order to comply with TRIPS Agreement, India enacted the Geographical Indications of Goods (Registration & Protection) Act, 1999. The difference/differences between a “Trade Mark” and a Geographical Indication is/are 1. A Trade Mark is an individual or a company’s right whereas a Geographical Indication is a community’s right. 2. A Trade Mark can be licensed whereas a Geographical Indication cannot be licensed. 3. A Trade Mark is assigned to the manufactured goods whereas the Geographical Indication is assigned to the agricultural goods/products and handicrafts only. Which of the statements given above is/are correct ?

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

2010 · Q19Indian EconomyInflation & Price Indiceseasy

Which one of the following statements is an appropriate description of deflation ?

  1. (a)It is a sudden fall in the value of a currency against other currencies
  2. (b)It is a persistent recession in both the financial and real sectors of economy
  3. (c)It is a persistent fall in the general price level of goods and services
  4. (d)It is a fall in the rate of inflation over a period of time
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Official answer(c) It is a persistent fall in the general price level of goods and services

2010 · Q26Indian EconomyFiscal Policy & Budgetmoderate

Which one of the following was NOT stipulated in the Fiscal Responsibility and Budget Management Act, 2003?

  1. (a)Elimination of revenue deficit by the end of the fiscal year 2007-08
  2. (b)Non-borrowing by the Central Government from Reserve Bank of India except under certain circumstances
  3. (c)Elimination of primary deficit by the end of the fiscal year 2008-09
  4. (d)Fixing government guarantees in any financial year as a percentage of GDP
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Official answer(c) Elimination of primary deficit by the end of the fiscal year 2008-09