Indian Economy MCQs

Notes:
Income tax was introduced in India in 1860 by Sir James Wilson. Income tax rates in India increase with higher income slabs as per the Finance Act. The income tax structure is defined in the Income Tax Act, 1961. Income tax collection is administered by the Central Board of Direct Taxes. A progressive tax system is implemented where tax liability rises as an individual’s income increases, with no fixed single rate for all.

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Security holdings are classified as assets on a commercial bank’s balance sheet according to Reserve Bank of India regulations. Security holdings include investments in government securities, shares, bonds, debentures, or other instruments. Liabilities include deposits like demand and time deposits and borrowings from other banks. The Banking Regulation Act, 1949, specifies asset and liability classifications for scheduled commercial banks in India.

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A wage-price spiral occurs when rising wages increase production costs leading to higher prices, which then prompt further wage demands. This describes cost-push inflation. Cost-push inflation is driven by increased costs of inputs such as wages and raw materials. During the 1970s, wage-price spirals contributed to persistent inflation in many developed countries due to frequent labor market adjustments and price hikes.

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The Reserve Bank of India (RBI) has two currency printing presses in India:  Mysore, Karnataka and Salboni, West Bengal.
The RBI’s presses are owned by Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a subsidiary of the Reserve Bank. The other two currency presses in India are owned by the government and are located in Nasik and Dewas.

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Collateralized Borrowing and Lending Obligation (CBLO) is a money market instrument. It represents the terms and conditions of a loan between a borrower and a lender. CBLO is a short-term investment option that allows investors to earn interest on their excess funds. It also provides a source of short-term funding for borrowers.
CBLO is a discounted instrument that is available in electronic book entry form. The maturity period ranges from one day to one year.
CBLO is a low-risk instrument because it is adequately backed by collateral. It is also a short-term investment option, which means that investors can quickly liquidate their investment if needed.
CBLO is the largest overnight segment in India.

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Karnataka produced 13,278 tonnes of raw silk in 2024-25, about 32% of India’s total. The state contributes approximately 45% of India’s mulberry silk. Major silk-producing districts are Mandya, Kolar, Chikkaballapur, and Ramanagara. Silk cultivation in Karnataka covers about 1.2 lakh hectares. The Silk Samagra-2 scheme supports sericulture in the state.

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Consider agriculture in the developed countries such as United States and Canada. There, the small family farms are not able to earn a profit and are being replaced by large corporate farms.  

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NAFED is the apex body in cooperative sector and deals in procurement , distribution, export and import of selected agricultural commodities.

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The World Bank groups economies into IBRD, IDA, and Blend categories for operational lending. IDA members have low GNI per capita below $1,325 for fiscal year 2026. IBRD includes creditworthy economies. Blend countries qualify for both IDA and IBRD support. Seventy-eight countries are currently eligible for IDA resources. The World Bank comprises the IBRD and IDA institutions.

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Second Five Year Plan of 1956 to 1961 was given Importance to an establishment of heavy industries only. The main thrust of industrial development was on iron and steel,Heavy engineering and fertilizer industries. Three new iron and steel plants were located in Bhilai, Durgapur, and Rourkela.