Indian Economy MCQs

Notes:
The correct answer is SEBI (Securities and Exchange Board of India). SEBI was established in 1988 and became a statutory body in 1992. It regulates the securities market in India, protecting investor interests and promoting the development of the market. The RBI (Reserve Bank of India) primarily oversees monetary policy and banking regulation, while BSE (Bombay Stock Exchange) is a stock exchange, not a regulatory body.

Notes:
Countervailing duty is a trade remedy levied on imported goods when those goods receive subsidies in the exporting country. The purpose is to neutralize the unfair price advantage created by the subsidy and protect domestic producers from injury. Such duties are generally used after an investigation confirms the presence of subsidization and its impact on competing domestic industry. Therefore, the duty is imposed on subsidized imports, not on exports.

Notes:
Clearing House Automated Payment System (CHAPS) is a payment system associated with the United Kingdom, not India. Real Time Gross Settlement (RTGS), National Automated Clearing House (NACH) and National Electronic Funds Transfer (NEFT) are recognised payment and settlement systems used in India. Among the given options, CHAPS is therefore the one that does not belong to India’s important payment infrastructure.

Notes:
The Reserve Bank of India acts as lender of last resort by granting emergency funds to solvent commercial banks facing temporary liquidity shortages. RBI does not provide funds to insolvent banks. RBI charges a penal rate to discourage frequent usage. This function aims to avert bank runs and ensure overall banking system stability. RBI’s LOLR role traditionally applies to commercial banks, not all financial institutions.

Notes:
The Reserve Bank of India regulates foreign currency accounts and remittances for Indian residents. RBI acts under the Foreign Exchange Management Act, 1999 and the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015. Amendments until 2025 empower RBI to set conditions for outward and inward remittance and opening of overseas bank accounts. RBI issues notifications for compliance with FEMA rules.

Notes:
Under India’s FDI policy, proposals for single brand retail trading that require Government approval are examined by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry. DPIIT is the competent authority for processing such approval-route FDI proposals. The Reserve Bank of India’s regional offices do not grant these approvals, and the Foreign Investment Promotion Board no longer functions as the approving body for such cases.

Notes:
Udyami Helpline with number 1800 180 6763 is a Call Centre of Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. It was launched in 2010 to work as a single point facility for MSMEs needing different kinds of information and accessibility of Banks and other MSME-related organisations.

Notes:
In case of High-income elasticity of demand, an increase in income is accompanied by a relatively larger increase in quantity demanded for normal goods. Thus, among the given options Car has highest income elasticity of demand.

• Car: A luxury good with high income elasticity; demand rises sharply with an increase in income.
• Milk: A necessity good with low to moderate income elasticity.
• Paddy: A basic necessity and staple food, with very low income elasticity.
• Tobacco: Considered an addictive good with low or even negative income elasticity in some cases, as demand is less income-sensitive.

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.

Notes:
An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks. The central bank can either buy or sell government bonds in the open market.