Indian Economy MCQs

Notes:
Plantation crops are crops that are grown on large farms, called plantations, and are typically grown for commercial purposes. These crops are often grown on a large scale using specialized techniques and equipment, and are typically exported to other countries for sale. Some examples of plantation crops include:

1. Sugar cane: This is a tropical grass that is grown for its sweet, juicy stalks, which are used to make sugar.
2. Rubber: This is a tree that is grown for its latex, which is used to make rubber.
3. Tea: This is a bush that is grown for its leaves, which are used to make tea.
4. Coffee: This is a shrub that is grown for its beans, which are used to make coffee.
5. Coconut: This is a tree that is grown for its fruit, which is used to make coconut milk and oil.
6. Banana: This is a tree that is grown for its fruit, which is a popular food around the world.
7. Palm oil: This is a tree that is grown for its fruit, which is used to make palm oil.
8. Tobacco: This is a plant that is grown for its leaves, which are used to make tobacco products such as cigarettes.
9. Cotton: This is a plant that is grown for its fibers, which are used to make textiles and other products.

Plantation crops are an important source of income and employment for many countries, and they contribute significantly to the global economy.

Notes:
The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.

Notes:
Economic Planning refers to any plans of economic activity which point to achieve specific social and economic outcomes. It is a subject matter of concurrent list in 7th schedule of Indian constitution.

Notes:
Call Money / Notice Money Market is the most active segment of the money market in India.

Notes:
Narrow Banking involves mobilizing the large part of the deposits in Risk Free assets such as Government Securities. It does not mean that the banks limit their activities to only accepting deposits and providing loans. Thus first statement is incorrect. Since large part of deposits are in government securities, there is rarely asset liability mismatch. Thus, option 2 is correct.

Notes:
The correct answer is “Central Government.” In India, the Deputy Governors of the Reserve Bank of India (RBI) are appointed by the Central Government under Section 8 of the Reserve Bank of India Act, 1934. The RBI has four Deputy Governors, and their roles include overseeing various departments such as monetary policy, financial markets, and banking regulation. This appointment process reflects the government’s influence on the central bank’s operations.

Notes:
The Public Debt Office (PDO) functions as an investment banker to the Government. It manages the issuance and servicing of government securities, ensuring that the government can finance its operations and manage public debt effectively. The PDO plays a crucial role in maintaining the stability of the financial system by facilitating government borrowing and managing the national debt portfolio.

Notes:
The core method of stabilizing markets under the Market Stabilisation Scheme (MSS) is purchasing Treasury Bills and/or dated securities. The MSS was introduced by the Reserve Bank of India in 2004 to manage liquidity and stabilize the rupee. By purchasing securities, the RBI absorbs excess liquidity, helping to control inflation and stabilize the currency. This method is crucial for maintaining economic stability, especially during periods of volatility.

Notes:
The government of India provides food subsidies through multiple mechanisms: 1. Fixing Central Issue Prices (CIP): The government sets these prices to ensure affordable access to essential food items for the public. 2. Public Distribution System (PDS): This system distributes subsidized food grains to low-income households, ensuring food security. 3. Funding the Food Corporation of India (FCI): The FCI is responsible for procurement, storage, and distribution of food grains, and government funding supports these operations. These combined efforts aim to alleviate hunger and improve nutrition among the population.

Notes:
Micro Units Development and Refinance Agency Bank renamed as MUDRA (SIDBI) Bank to undertake refinance operations refinance all banks, Micro-finance Institutions (MFIs) and Non-Banking Financial Company which then provide credit to MSMEs. The MUDRA aims to give loans below Rs 10 lakh.