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 would most likely follow if the Reserve Bank of India effects selling of the securities?
[A] The cash resources at the disposal of the commercial banks increase.
[B] The cash resources at the disposal of the commercial banks get diminished.
[C] The cash resources of the commercial banks remain unchanged
[D] None of the above
Show Answer
Correct Answer: B [The cash resources at the disposal of the commercial banks get diminished.]
Notes:
The Reserve Bank of India starts selling the Government Securities, on behalf of the Government. Either the commercial banks or retail investors buy the securities, resulting in decrease of cash resources at the disposal of the commercial banks.
2. Who among the following Indian Economists played a crucial role in inception of MNREGA?
[A] Amartya Sen
[B] Jean Dreze
[C] Jagdish Natwarlal Bhagwati
[D] Dr. Vijay Kelkar
Show Answer
Correct Answer: B [Jean Dreze]
Notes:
Jean Dreze is an Economist of Indian Origin born in Belgium. He conceptualized and drafted the first version of MGNREGA. He was the member of National Advisory Council and has coauthored “An Uncertain Glory: India and its Contradiction” with noted economist Amartya Sen.
3. Which approach did the Tendulkar Committee use to measure poverty in India?
[A] Calorie-based model only
[B] Comprehensive Poverty Line Basket including health and education
[C] Inequality and growth measures
[D] Vulnerability and mobility analyses
Show Answer
Correct Answer: B [Comprehensive Poverty Line Basket including health and education]
Notes:
The Tendulkar Committee was formed in 2005 and submitted its report in 2009. It shifted poverty measurement from a calorie-based model to a broader Poverty Line Basket approach. This included private expenditure on health and education alongside food and other needs. The committee recommended separate monetary values for rural and urban areas, utilized the Mixed Reference Period data, and made adjustments for price changes based on consumption patterns.
4. Which among the following phrases generally denotes National Income?
[A] Gross National Product at Market Prices
[B] Net National Product at Market Prices
[C] Gross National Product at Factor Cost
[D] Net National Product at Factor Cost
Show Answer
Correct Answer: D [Net National Product at Factor Cost]
Notes:
Net National Product at Factor Cost generally denotes National Income.
5. Who was the first Deputy Chairman of India’s Planning Commission?
[A] V.T. Krishnamachari
[B] C.M. Trivedi
[C] Gulzari Lal Nanda
[D] Ashok Mehta
Show Answer
Correct Answer: C [Gulzari Lal Nanda]
Notes:
Gulzari Lal Nanda was the first Deputy Chairman of the Planning Commission and later served twice as interim Prime Minister of India. He played a key role in planning policy after independence.
6. Who benefits most from deflation in the short term?
[A] Salary earners with stable employment
[B] Pensioners with fixed incomes
[C] Equity holders
[D] Borrowers with long-term fixed-rate debt
Show Answer
Correct Answer: A [Salary earners with stable employment]
Notes:
Deflation increases the real value of money, allowing salary earners with stable employment to purchase more goods and services with unchanged nominal wages. Since their income remains steady while prices fall, their purchasing power temporarily rises. The Reserve Bank of India has identified deflation’s short-term impact on employed individuals as increased real wages due to price drops. Deflation generally reduces income for most others.
7. 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.
8. Which has the highest weightage in the Index of Industrial Production (IIP)?
[A] Electricity
[B] Steel Industry
[C] Refinery Products
[D] Coal
Show Answer
Correct Answer: C [Refinery Products]
Notes:
Refinery products have the highest weightage of 28.04% in the Index of Industrial Production as per the IIP series with base year 2011-12. The Index of Industrial Production was first published in 1937. The IIP is calculated and released by the National Statistical Office, Ministry of Statistics and Programme Implementation, Government of India.
9. From time to time, which among the following body publishes the “Exchange Control Manual” in context with the Foreign Exchange in India?
[A] Foreign Trade Promotion Board
[B] Department of Commerce
[C] Reserve Bank of India
[D] SEBI
Show Answer
Correct Answer: C [Reserve Bank of India]
Notes:
The correct answer is the Reserve Bank of India (RBI). The RBI is responsible for regulating foreign exchange in India under the Foreign Exchange Management Act (FEMA) of 1999. The “Exchange Control Manual” provides guidelines for foreign exchange transactions and is crucial for maintaining the stability of the Indian economy. The RBI also plays a key role in managing the country’s foreign exchange reserves and ensuring compliance with international financial regulations.
10. Which Ministry set “Haat to Hypermarket” as the Rural Business Hubs’ objective?
[A] Ministry of Panchayati Raj
[B] Ministry of Corporate Affairs
[C] Ministry of Skill Development and Entrepreneurship
[D] Ministry of Rural Development
Show Answer
Correct Answer: A [Ministry of Panchayati Raj]
Notes:
The Ministry of Panchayati Raj launched the Rural Business Hubs (RBH) initiative in 2007. The “Haat to Hypermarket” objective aims to connect rural producers to wider markets. The ministry focuses on rural empowerment through economic partnerships and market linkages for local artisans. RBH projects involve village industries, micro-enterprises, and cooperatives under the ministry’s schemes.