Indian Economy MCQs

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The Reserve Bank of India can use credit rationing to limit money supply. Credit rationing is a monetary policy tool of RBI. Progressive taxation and public sector expenditure are managed by the Government of India as fiscal policy. Regulation of foreign direct investment flows is also executed by the government. RBI and government use separate policy instruments for inflation control.

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Cross-selling involves suggesting additional complementary products to a customer’s original purchase. In fast-food chains, offering fries with a sandwich exemplifies this. According to retail practices adopted since the 1970s, cross-selling combos are widely used to increase overall sales figures. Major restaurant chains such as McDonald’s and Burger King commonly use this technique globally.

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Road and railways are economic overheads as they provide essential infrastructure for transportation and movement of goods, stimulating economic activity. Hospitals, schools, and sanitation are social overheads, catering mainly to health, education, and hygiene rather than direct economic productivity.

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Human Development Report was first launched in 1990 by the Pakistani Economist Mahbub ul Haq and Indian Nobel laureate Amartya Sen.

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The correct answer is “Private Banks.” In India, “Other Scheduled Commercial Banks” referred to banks that did not fall into the categories of National Banks or Foreign Banks. Private Banks, which are owned by private entities, were classified under this term before the regulatory framework evolved. As of now, the Reserve Bank of India (RBI) categorizes banks into various groups, including Public Sector Banks, Private Sector Banks, Foreign Banks, and Scheduled Cooperative Banks. Notably, the first private bank in India was the “Oudh Commercial Bank,” established in 1881.

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Transfer pricing refers to pricing of transactions between associated enterprises, specified in Section 92 of the Income Tax Act, 1961. India implemented transfer pricing provisions in 2001 to prevent shifting profits to low-tax jurisdictions by related parties. The law requires use of the arm’s length principle for cross-border and certain domestic transactions between related parties.

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First statement is incorrect. The “Adopt a Heritage Scheme” is an initiative under Ministry of Tourism. Second statement is correct. Under this scheme, the government has appointed private as well as public companies as “Monument Mitras” for making heritage tourism more sustainable through conservation and development. The short-listed companies, to be called Monument Mitras, are from various sectors such as hospitality, travel, and banking.

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The New Development Bank which is also known as BRICS Development Bank has its headquarters in Shanghai, China. It is multilateral development bank established by BRICS states (Brazil, Russia, India, China and South Africa).

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Bangladesh ranks as the world’s second-largest jute producer after India. Bangladesh is the leading global exporter of raw jute and jute products. In 2023, Bangladesh exported about $162 million worth of jute, with India as the primary market. The jute industries of Bangladesh and India dominate global jute supply, with Bangladesh’s exports competing directly with Indian products in international markets.

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Karnataka produced 13,278 tonnes of raw silk in 2024-25, the highest in India. The state has consistently led silk production, accounting for around one-third of the country’s total output annually. Major silk-producing districts in Karnataka include Mandya, Kolar, Chikkaballapur, and Ramanagara. The Central Silk Board reports Karnataka’s dominance in mulberry silk production nationwide for several years.