Indian Economy MCQs
Indian Economy Multiple Choice Questions (MCQs) for SSC, State and all One Day Examinations of India. Objective Questions on Indian Economy for competitive examinations.
1. Which industry is not part of the Index of Eight Core Industries?
[A] Electricity
[B] Crude Oil
[C] Natural Gas
[D] Pharmaceuticals
Show Answer
Correct Answer: D [Pharmaceuticals]
Notes:
The Index of Eight Core Industries includes Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Pharmaceuticals are not included in this index. The Index serves as an indicator for measuring the industrial performance in India, and is released monthly by the Ministry of Commerce and Industry since 2004.
2. In which year, Planning Commission was established in India?
[A] 1950
[B] 1951
[C] 1952
[D] 1955
Show Answer
Correct Answer: A [1950]
Notes:
Planning Commission was set up by a Government of India Resolution in 1950 as an advisory and specialized institution. It was charged with the responsibility to formulate a strategy of development for independent India in a long-term perspective and for making assessment of all resources of the country, augmenting deficient resources, formulating plans for the most effective and balanced utilization of resources and determining priorities.
3. Which of the following indices measures gender inequalities in human development achievements across health, education, and economic resources?
[A] Gender Inequality Index
[B] Gender Development Index
[C] Gender Empowerment Measure
[D] Human Development Index
Show Answer
Correct Answer: B [Gender Development Index]
Notes:
The Gender Development Index was introduced by UNDP in 1995. It assesses gender gaps in health (life expectancy at birth), education (years of schooling), and income (estimated earned income). GDI uses the ratio of female to male Human Development Index values. A value of 1 indicates gender parity. It was released with the Gender Empowerment Measure. The Gender Inequality Index was introduced in 2010 and includes reproductive health and labour market participation.
4. What is India’s yearly branch limit for foreign banks under WTO and FTAs?
[A] 12 branches per year
[B] 15 branches per year
[C] 12 branches under GATS; 15 under FTAs
[D] 20 branches per year
Show Answer
Correct Answer: C [12 branches under GATS; 15 under FTAs]
Notes:
India’s WTO commitments via GATS restrict foreign bank branches to 12 annually. Bilateral FTAs, such as with New Zealand (December 2025), raise this to 15 branches over four years. The annual cap depends on whether GATS or bilateral FTA terms apply.
5. ” Income generated from Tourism” can be placed in which among the following?
[A] Invisible Import
[B] Invisible Export
[C] Visible Import
[D] Visible Export
Show Answer
Correct Answer: B [Invisible Export]
Notes:
The correct answer is “Invisible Export.” Income from tourism is classified as an invisible export because it involves services provided to foreign visitors, generating revenue without the physical transfer of goods. This aligns with the economic concept where exports of services (like tourism) contribute to a country’s balance of payments.
6. How many key infrastructure sectors are known as Core sector in Indian Economy, used for Index of Industrial Production (IIP) data?
[A] 5
[B] 6
[C] 7
[D] 8
Show Answer
Correct Answer: D [8]
Notes:
There are 8 Core Industries or core sectors of the economy viz. coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity used in Index of Industrial Production (IIP).
7. Which of the following is / are auctioned in Open Market Operations?
[A] Shares
[B] Debentures
[C] Securities
[D] Bullion
Show Answer
Correct Answer: C [ Securities ]
Notes:
Open Market Operations refer to the purchase and sale of the Government securities (G-Secs) by RBI from / to market.
8. What is the objective of the Central Government in creating the “Non-lapsable Central Pool of Resources”?
[A] To provide development funding in Naxalite affected areas
[B] To provide additional development grant to most backward 200 districts all over country
[C] To provide time to time fiscal stimulation to the economy
[D] To provide development funding to North East and Sikkim
Show Answer
Correct Answer: D [ To provide development funding to North East and Sikkim ]
Notes:
NLCPR The broad objective of the Non-Lapsable Central Pool of Resources (NLCPR) is to ensure speedy development of infrastructure in the North Eastern Region and Sikkim by increasing the flow of budgetary financing for specific viable infrastructure projects/schemes in the region. The provision is for funding these projects. The outlay includes a provision of Rs. 50 crore for funding special projects/schemes for the economic development of the Karbi Anglong Autonomous Territorial Council (KAATC) area in Assam.
9. Which issue caused the collapse of Doha Round WTO talks in July 2008?
[A] Elimination of agricultural export subsidies
[B] Special safeguard mechanism for developing countries in agriculture
[C] Tariff elimination timelines in industrial products
[D] Intellectual property rights protections
Show Answer
Correct Answer: B [Special safeguard mechanism for developing countries in agriculture]
Notes:
The Doha Round negotiations collapsed in July 2008 over disagreements regarding the special safeguard mechanism (SSM) for developing countries in agriculture. The SSM was meant to allow developing nations to raise tariffs temporarily in response to import surges. India and China sought more flexibility, which the United States and others opposed, leading to a breakdown.
10. The steel plants of Durgapur, Bhilai & Rourkela were set up under which of the following five year plans?
[A] First Five Year Plan
[B] Second Five Year Plan
[C] Third Five Year Plan
[D] Fourth Five Year Plan
Show Answer
Correct Answer: B [Second Five Year Plan]
Notes:
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.
