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 among the following is the branch of economics that deals with the performance, structure, and behavior of the economy of the entire community, either a nation, a region, or the entire world?
[A] Heterodox approaches
[B] Micro Economics
[C] Macro Economics
[D] All of the above
Show Answer
Correct Answer: C [Macro Economics]
Notes:
Macroeconomics is a branch of economics, which deals with how an economy functions on a large scale. It deals with the structure, and behavior of the economy of either a region, country or the whole world.
2. Round-tripping is associated with which of the following?
[A] Capital Markets
[B] Foreign Direct Investments
[C] Cash Deposits
[D] Foreign Remittances
Show Answer
Correct Answer: B [Foreign Direct Investments]
Notes:
Round-tripping involves domestic funds sent abroad and returning as foreign direct investment (FDI), often through offshore financial centers like Mauritius and Cyprus. India has observed FDI inflows suspected to involve round-tripping, especially in the 2000s and 2010s. The Department for Promotion of Industry and Internal Trade monitors FDI trends. Round-tripping bypasses tax regulations on FDI in multiple countries, including India.
3. What was the nationality of Mahbub ul Haq, one of the pioneers of Human development theory and co-founder of the Human Development Report?
[A] Uk
[B] USA
[C] Pakistan
[D] India
Show Answer
Correct Answer: C [Pakistan]
Notes:
Human Development Report was first launched in 1990 by the Pakistani Economist Mahbub ul Haq and Indian Nobel laureate Amartya Sen.
4. What fraction of BSE market capitalization is from BSE SENSEX 30 stocks?
[A] 10%
[B] 20%
[C] 30%
[D] 40%
Show Answer
Correct Answer: C [30%]
Notes:
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.
5. National Social Assistance programme was initially rolled out in which of the following five year plans?
[A] Fifth Five Year Plan
[B] Sixth Five Year Plan
[C] Seventh Five Year Plan
[D] Eighth Five Year Plan
Show Answer
Correct Answer: D [Eighth Five Year Plan]
Notes:
The National Social Assistance Programme was launched in 1995 during 8th five year plan as a Centrally Sponsored Scheme of the Government of India. The scheme provides financial assistance to the elderly, widows and persons with disabilities in the form of social pensions.
6. Cultural command area calculations are used in which of the following?
[A] Preparation of a Land Development Plan
[B] Designing an Irrigation Plan
[C] Prepare a plan for new crops introduction
[D] Design the agricultural policy
Show Answer
Correct Answer: B [Designing an Irrigation Plan]
Notes:
Cultural command area refers to the area that can be irrigated and cultivated after suitable preparation. It is a key parameter in designing irrigation plans to determine the extent of land that irrigation projects can serve effectively. Calculation of cultural command area is a standard part of planning for canal and irrigation networks in Indian agriculture and water resource engineering.
7. The Public Debt Office acts as investment banker to which entity?
[A] Public
[B] Commercial Banks
[C] Central Bank
[D] Government
Show Answer
Correct Answer: D [Government]
Notes:
The Public Debt Office was established in 1946 as a part of the Reserve Bank of India. It manages government securities and public debt on behalf of the Government of India. The office handles the issue, interest payment, repayment, and transfer of government securities. The PDO operates in major RBI regional offices to support central and state governments in debt management operations.
8. Which is India’s largest investor in the debt market?
[A] LIC of India
[B] ICICI Bank
[C] State Bank of India
[D] EPFO
Show Answer
Correct Answer: D [EPFO]
Notes:
EPFO, Employees’ Provident Fund Organisation, manages over Rs 28 lakh crore in assets as of 2023. EPFO allocates more than 89% of its portfolio to debt instruments. The organization invests in central and state government securities, State Development Loans, and corporate bonds. EPFO was established in 1952 under the Employees’ Provident Funds and Miscellaneous Provisions Act.
9. Which among the following require Sponsorship in Indian banking Industry?
[A] Cooperative Banks
[B] Regional Rural Banks
[C] Local Area Banks
[D] Private Banks
Show Answer
Correct Answer: B [ Regional Rural Banks ]
Notes:
Regional Rural Banks (RRBs) require sponsorship in the Indian banking industry. They were established under the RRB Act of 1976 to provide credit and develop agriculture and rural infrastructure. Each RRB is sponsored by a commercial bank, which provides financial and managerial support. This sponsorship is crucial for their operations and stability, differentiating them from cooperative banks, local area banks, and private banks, which do not require such sponsorship.
10. The Consumer Welfare Fund is mainly financed through which source?
[A] Excise duty on manufactured goods
[B] Mandatory business contributions
[C] Unclaimed duty refunds and unused indirect tax
[D] Voluntary consumer donations
Show Answer
Correct Answer: C [Unclaimed duty refunds and unused indirect tax]
Notes:
The Consumer Welfare Fund was established under Section 57 of the CGST Act, 2017. Its main sources are unclaimed duty refunds under Central Excise and Customs Acts and unutilized indirect tax amounts not refundable to individuals. Receipts under GST, including unclaimed tax refunds, also finance the fund. The Department of Consumer Affairs administers the fund.
