Indian Economy MCQs

Notes:
Muriate of potash is a common name for potassium chloride. It is chemically neutral and does not significantly alter soil pH. Farmers use it mainly as a source of potassium. Urea and ammonia may acidify soil with repeated use, while rock phosphate tends to make soil slightly acidic over time. Muriate of potash is widely produced and used worldwide.

Notes:
Market-wide circuit breakers in the United States are triggered if the S&P 500 Index falls by 7%, 13%, or 20% from the previous day’s closing value. Level 1 and Level 2 trigger 15-minute trading halts if before 3:25 p.m. A Level 3 decline causes trading to be halted for the remainder of the day. Circuit breakers were introduced in 1988 after the 1987 Black Monday crash.

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From Budget 2017-18 onward, the Government of India did away with the Plan and Non-Plan classification of expenditure. The budget now uses the more standard and meaningful classification into Revenue expenditure and Capital expenditure, which better reflects the nature of government spending.

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Green Field Investment refers to setting up a new facility on previously undeveloped land. The term is commonly used in foreign direct investment when a parent company builds its operations in a foreign country from scratch. Such investments involve construction of new plants, buildings, and infrastructure, often in areas where no prior facilities exist. This is distinct from Brown Field Investment, which involves modifying or upgrading an existing facility.

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The tertiary (services) sector is the largest contributor to India’s GDP in FY26, with a share of 56.4% in Gross Value Added, according to the First Advance Estimates. The services sector grew by 9.1% in FY26.

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India’s derivative market now includes credit index derivatives under the RBI’s credit derivatives framework, alongside other regulated futures products. Currency futures, interest rate futures and commodity futures are also permitted in their respective market segments under the applicable regulatory framework. Therefore, the correctly permitted instrument in this context is credit index derivatives. This question tests awareness of the current status of RBI-regulated derivatives in India.

Notes:
Fees and charges for government services refer to user charges for specific services like public utilities, hospital fees, and tolls. These are not taxes, which are compulsory payments. Tax revenue sources include excise taxes, property taxes, and customs duties. User charges represent voluntary payments for direct services and are classified as non-tax revenue.

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Suresh Tendulkar chaired the expert committee on estimation of poverty in India. The committee examined poverty measurement and recommended using consumption expenditure-based indicators for identifying BPL households, instead of relying on income alone. Its report became an important reference point for poverty estimation in India and influenced later debates on poverty lines, methodology, and welfare targeting. Hence, Suresh Tendulkar is the correct answer.

Notes:
The term Washington Consensus is commonly linked with policy ideas associated with institutions based in Washington, D.C., especially the International Monetary Fund, the World Bank, and the US Treasury Department. It is not usually associated with the World Trade Organization, which was created later and is not part of the original framework. Hence, statements 1, 2 and 4 are correct.

Notes:
In 2026, oil production and hydrocarbon exports remain the main growth drivers for the MENA region, especially within GCC states. Despite efforts toward economic diversification in areas like AI and tourism, hydrocarbons still overwhelmingly contribute to real GDP growth and export revenues in the region.