Indian Economy MCQs

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At end-March 2025, India’s outstanding commercial borrowings reached $291.6 billion, a 16.4% rise from the previous year. Increase in ECBs directly raises external debt. Macroeconomic stability varies with hedging costs and exchange rate fluctuations, which can affect inflation and liquidity. The impact is also influenced by RBI’s management of foreign exchange reserves and currency volatility, not only the debt quantum.

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Intercontinental Exchange (ICE) Benchmark Administration took over LIBOR calculation in 2014. Refinitiv publishes LIBOR data. The British Bankers’ Association managed LIBOR calculations from 1986 until 2014. Discontinuation of LIBOR was announced in 2017, with USD, EUR, CHF, and JPY LIBOR ceasing in phases between 2021 and 2023. ICE and Refinitiv are based in the United Kingdom.

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BOLT stands for Build, Own, Lease, Transfer. In this model, a private entity constructs and owns the infrastructure facility, leases it to a government or public sector agency for an agreed period, and afterward transfers ownership to the public authority. The model was adopted to attract private investment in public infrastructure in India from the 1990s and is used in sectors like transportation and power.

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The Airports Economic Regulatory Authority (AERA) Bill 2007 ensures that the watchdog monitors performance standards of airports and regulate tariff and other charges for aeronautical services including Airport

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The RBI’s PCA framework mandates intervention if a bank records net NPA above 6%, capital adequacy ratio below 9%, or negative return on assets for four years. PCA restrictions include halting dividend payments and branch expansion. A leverage ratio above 25 times Tier 1 capital also triggers PCA. Leverage ratio measures a bank’s core capital relative to its total assets and exposure.

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The BSE SENSEX consists of 30 large, actively traded stocks. As of January 2026, BSE’s total market capitalization was approximately $5,001.331 billion. Historically, SENSEX 30 stocks account for around 30% of the BSE’s total market capitalization. The SENSEX was established in 1986 and is the primary benchmark index of the Bombay Stock Exchange.

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Arbitrage is the process of simultaneous buying and selling of an asset from different platforms, exchanges or locations to cash in on the price difference. While getting into an arbitrage trade, the quantity of the underlying asset bought and sold should be the same. Only the price difference is captured as the net pay-off from the trade.

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In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. The introduction of a tax drives a wedge between the price consumers pay and the price producers receive for a product, which typically imposes an economic burden on both producers and consumers.

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A prime rate or prime lending rate is an interest rate used by banks, usually the interest rate at which banks lend to favoured customers—i.e., those with good credit.

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Self Help Groups in India started in the 1970s as informal savings and credit groups. NABARD launched the SHG-Bank Linkage Programme in 1992 to facilitate institutional credit access. By February 2024, over nine million SHGs covered around 100 million women. The repayment rate exceeds 96 percent. SHGs target marginalized women for poverty alleviation and financial inclusion through microfinance activities.