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. Shankar-6 or Sankar-6 is a variety of which of the following commodities?
[A] Mustard
[B] Cotton
[C] Groundnut
[D] Soyabean
Show Answer
Correct Answer: B [ Cotton ]
Notes:It is a much traded Cotton variety. Some other varieties are:
- Suvin – Known for its long staple length and premium quality, it is a hybrid of Egyptian and Indian cotton.
- DCH-32 – A hybrid cotton known for its extra-long staple.
- Bunny – A high-yielding variety of cotton.
- Jaydhar – An indigenous variety grown mainly in Maharashtra.
- LH-1556 – A hybrid variety, often grown in Northern India.
- Varalaxmi – A hybrid variety popular in South India.
- Shankar-4 – Similar to Shankar-6, this variety is also known for its medium staple cotton.
- Mech-184 – A genetically modified (Bt) cotton variety.
2. Which is the largest source of irrigation in India after rainfall?
[A] Canals
[B] Rivers
[C] Tanks
[D] Tubewells
Show Answer
Correct Answer: D [Tubewells]
Notes:
Tubewells provide the highest share of irrigation among artificial sources in India after rainfall. According to the 2015-16 Agricultural Census, tubewells accounted for about 46% of the net irrigated area. Tubewell irrigation is most prevalent in northern Indian states such as Uttar Pradesh and Punjab. Canals, rivers, and tanks contribute comparatively less to the total irrigated area.
3. Which among the following is a correct definition of Dollarization?
[A] when the inhabitants of a country use US dollars in parallel to or instead of the domestic currency
[B] when the inhabitants of a country use only US Dollars instead of a domestic currency
[C] when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency
[D] None of the above
Show Answer
Correct Answer: C [when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency]
Notes:
when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency, The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency.
4. Which currency did Keynes propose for global trade from 1940 to 1942?
[A] The Whuffie system managed by the International Trade Organization
[B] The Unitas managed by the World Monetary Authority
[C] The Bancor managed by the International Clearing Union
[D] The Terra managed by the Global Central Bank
Show Answer
Correct Answer: C [The Bancor managed by the International Clearing Union]
Notes:
Keynes and E. F. Schumacher proposed the Bancor as a supranational currency between 1940–1942. The International Clearing Union was suggested to manage its use in global trade. The Bancor proposal was presented by the United Kingdom at the Bretton Woods Conference in 1944. The concept was intended to prevent persistent surpluses or deficits among countries. The Bancor was not adopted; instead, the U.S. dollar was chosen as the main reserve currency.
5. Consider the following:
- Allotting of the shares of net proceeds of taxes
- Laying down principles governing grants in aid
- Looking into the financial relations between the central government and the state Governments
The above mentioned functions are carried out by which among the following?
[A] Cabinet Committee on Economic Affairs
[B] National Development Council
[C] Finance Commission
[D] NITI Aayog
Show Answer
Correct Answer: C [Finance Commission]
Notes:
The correct answer is the Finance Commission. The Finance Commission is a constitutional body established under Article 280 of the Indian Constitution. Its primary role is to recommend the distribution of tax revenues between the central and state governments, ensuring fiscal federalism. It also lays down principles for grants-in-aid to states, addressing financial relations between different levels of government. The Finance Commission is constituted every five years, and its recommendations are crucial for maintaining balanced economic development across states.
6. What percent of India’s external debt did ECBs comprise by March 2025?
[A] Decreased due to multilateral borrowing
[B] Nearly 40%, the largest component
[C] Remained constant at 27%
[D] Replaced by NRI deposits
Show Answer
Correct Answer: B [Nearly 40%, the largest component]
Notes:
By end-March 2025, external commercial borrowings formed 39.6% of India’s total external debt. Outstanding ECBs reached $291.6 billion, a 16.4% increase from the previous year. ECBs surpassed other categories, becoming the single largest component of India’s external debt until 2025. ECBs are medium or long-term loans raised from abroad by Indian companies.
7. Which among the following was the main objective of the Fiscal Responsibility and Budget Management Act, 2003?
[A] Achieve Fiscal Surplus
[B] Eliminate Revenue deficit
[C] Eliminate Fiscal Deficit
[D] Stop Money Laundering
Show Answer
Correct Answer: B [Eliminate Revenue deficit]
Notes:
The main objective of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, was to eliminate the revenue deficit. This act aimed to ensure fiscal discipline by setting targets for the government to reduce its fiscal deficit and improve the overall financial health of the economy. The act mandates the government to present a medium-term fiscal policy and aims to enhance transparency in fiscal operations. It was introduced in response to rising fiscal deficits in the late 1990s and early 2000s, which posed risks to economic stability.
8. 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).
9. Which port exports the highest value of seafood from India?
[A] Visakhapatnam
[B] Tuticorin
[C] Kochi
[D] Jawaharlal Nehru Port Authority (JNPT)
Show Answer
Correct Answer: A [Visakhapatnam]
Notes:
Visakhapatnam Port handled 2.19 billion or 29.72% of India’s seafood exports in FY24. In FY25, Visakhapatnam’s seafood export value exceeded 2 billion out of India’s total 7.45 billion. The port exported 314,199 tonnes, while JNPT exported 240,253 tonnes valued at 779.49 million. Andhra Pradesh’s aquaculture, mainly Vanammei shrimp, supports Visakhapatnam’s status as the top exporter.
10. Which of the following bodies procures, distributes, exports and imports agricultural commodities?
[A] FCI
[B] NAFED
[C] NABARD
[D] All of them
Show Answer
Correct Answer: B [ NAFED ]
Notes:
NAFED is the apex body in cooperative sector and deals in procurement , distribution, export and import of selected agricultural commodities.
