Indian Economy MCQs

Notes:
Kerala produces approximately 78% of India’s natural rubber. Major rubber plantations in Kerala span around 400,000 hectares. The state’s tropical climate supports high rubber yield. Kerala has historically led rubber production in India, a trend continuing since the late 20th century. Plantation development began under British colonial rule in the early 1900s. Thrissur, Kottayam, and Pathanamthitta are key rubber-producing districts.

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Collateralized Borrowing and Lending Obligation (CBLO) was introduced in India in 2003. It is a money market instrument developed by the Clearing Corporation of India Limited (CCIL) and approved by the Reserve Bank of India. CBLO facilitates collateralized borrowing and lending among financial institutions by using government securities as collateral and operates under the RBI’s regulatory framework, with maturity periods from one day to one year.

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The Marrakesh Agreement, manifested by the Marrakesh Declaration, was an agreement signed in Marrakesh, Morocco, by 123 nations on 15 April 1994, marking the culmination of the 8-year-long Uruguay Round and establishing the World Trade Organization, which officially came into being on 1 January 1995.

Notes:
The correct answer is “Elimination of primary deficit.” The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 aimed to ensure fiscal discipline in India by targeting the elimination of revenue deficits and limiting government borrowing. However, it did not explicitly mandate the elimination of the primary deficit, which is the fiscal deficit excluding interest payments. The Act focuses on sustainable fiscal management rather than eliminating all forms of deficits.

Notes:
The Reserve Bank of India sets the Bank Rate to influence lending rates. When the Bank Rate increases, borrowing from the RBI becomes costlier for commercial banks. This leads to higher lending and deposit rates in the economy. The last significant change in India’s Bank Rate was in May 2022, set at 4.65%. The Bank Rate mechanism is used as a monetary policy tool.

Notes:
First option is the correct answer
Countervailing duty is a tariff imposed on imported goods to offset the subsidies offered by the exporting country to its producers. It is imposed to provide level playing field to domestic producers and foreign producers.

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The Small Finance Banks can accept deposits and lend to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities. It can also distribute mutual fund units, insurance products, pension products, etc. with the prior approval of the RBI.

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The fifth plan was terminated by the Janta Government in 1977-78 and they launched their own sixth plan for the period 1978-83 and called it ” rolling plan” later the Janta government came down and Indira Gandhi again became prime minister of India who immediately discarded the sixth plan by the Janta government and launched her own plan for year 1980-85. The year 1978-79 was restored back to fifth plan of 1974-79.

Notes:
The Department of Economic Affairs, Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget. It is prepared under the guidance of the Chief Economic Adviser, Finance Ministry. It is the ministry’s view on the annual economic development of the country.

Notes:
Opportunity costs represent the benefits an individual, investor or business misses out on when choosing one alternative over another. It is the “cost” incurred by not enjoying the benefit associated with the best alternative choice.