Indian Economy MCQs

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Government of India on the basis of the Coinage Act, 1906

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Bank notes are defined as negotiable instruments under the Reserve Bank of India Act, 1934. They are payable to bearer on demand and transferable by delivery. Bank notes circulate as legal tender in India and other countries. Negotiable Instruments Act, 1881 governs negotiable instruments in India, specifically mentioning promissory notes, bills of exchange, and cheques.

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India and Bermuda signed a Tax Information Exchange Agreement (TIEA) in 2010. This was the first TIEA being signed by India.

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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.

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Commercial Paper is issued as an unsecured promissory note. It was first introduced in India in 1990. CPs have maturities ranging from 7 days to 1 year. Only companies with a high credit rating can issue CPs. The Reserve Bank of India regulates CP issuance. CPs are used for short-term funding needs by corporate bodies, primary dealers, and financial institutions.

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The call money is the short-term money market instrument where money is borrowed or lent on demand for a day. It is also known as overnight money market instrument. Intervening holidays and/or Sunday are excluded for this purpose. Thus, it is money borrowed on a day and repaid on the next working day (irrespective of the number of intervening holidays).

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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.

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There are two different sets of classifications ‘revenue vs capital expenditure’ and ‘ plan vs non-plan.’
In general, expenditure used to create assets (building a road for instance) is capital expenditure while revenue expenditure consists of expenses such as salaries and other administrative costs. Plan expenditure covers money spent on schemes or projects run by different ministries under the five-year plans.
Schemes Such as the MG National Rural Employment Guarantee Scheme can have both revenue and capital components. For instance, the administrative costs of a plan scheme could be classified as revenue expenditure while the expenditure on the scheme itself (e.g. building a village road) might be capital expenditure. Non-plan expenditure consists of any expenditure by the government not covered by the five year plans. These include interest payments on government debt and expenditure on organs of the state such as the judiciary and the police.

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The ICDS Scheme offers a package of six services, viz. Supplementary Nutrition; Pre-school non-formal education; Nutrition & health education; Immunization; Health check-up and Referral services. This programme was launched on 2nd October, 1975, as one of the flagship programmes of the Government of India and represents one of the world’s largest and unique programmes for early childhood care and development. The Integrated Child Development Services (ICDS) Scheme is a centrally sponsored Scheme implemented by States/UTs across the country.

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Customs duty is governed by the Customs Act, 1962. It is imposed to regulate import and export of goods. The Directorate General of Foreign Trade (DGFT) administers India’s foreign trade policies. The Foreign Trade Policy of India is updated every five years. Customs duties are revised to align with international agreements and World Trade Organization guidelines.