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. What is the number of members in the Monetary Policy Committee (MPC)?
[A] 4
[B] 5
[C] 6
[D] 7
Show Answer
Correct Answer: C [ 6 ]
Notes:
Monetary Policy Committee (MPC) committee comprises six members – three officials of the Reserve Bank of India and three external members nominated by the Government of India.
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 statement defines a balanced budget?
[A] Total expenditure exceeds total revenue
[B] Total revenue equals total expenditure
[C] Total revenue exceeds total expenditure
[D] Total revenue equals or exceeds expenditure
Show Answer
Correct Answer: B [Total revenue equals total expenditure]
Notes:
A balanced budget occurs when a government’s total revenue matches its total expenditure within a fiscal year. The concept is found in public finance literature and is used by various countries’ budgets. The Government of India’s budgets list balanced budgets when revenue and expenditure are equal with no deficit or surplus.
4. In which of the following the term “cap and trade” is used?
[A] Share Broking
[B] Mutual Fund Investments
[C] Emission Trading
[D] Commodity Futures
Show Answer
Correct Answer: C [Emission Trading]
Notes:
Emissions trading (aka. cap and trade) refers to the market-based approach to control pollution by providing economic incentives for reducing the emissions of pollutants.
5. Collateralized Borrowing and Lending Obligation (CBLO) is a ____?
[A] Money Market Instrument
[B] Monetary Policy Instrument
[C] Investment fund
[D] Capital Market Instrument
Show Answer
Correct Answer: A [Money Market Instrument]
Notes:
Collateralized Borrowing and Lending Obligation (CBLO) is a money market instrument. It represents the terms and conditions of a loan between a borrower and a lender. CBLO is a short-term investment option that allows investors to earn interest on their excess funds. It also provides a source of short-term funding for borrowers.
CBLO is a discounted instrument that is available in electronic book entry form. The maturity period ranges from one day to one year.
CBLO is a low-risk instrument because it is adequately backed by collateral. It is also a short-term investment option, which means that investors can quickly liquidate their investment if needed.
CBLO is the largest overnight segment in India.
6. Which among the following correctly denotes the Primary Deficit?
[A] Revenue Expenditure – Revenue Receipts
[B] sum of the net increase in holdings of treasury bills of the RBI and its contributions to the market borrowing of the government.
[C] Budgetary Deficit + Govt. market borrowings and liabilities
[D] Fiscal Deficit – Interest Payments
Show Answer
Correct Answer: D [Fiscal Deficit – Interest Payments]
Notes:
The fiscal deficit may be decomposed into primary deficit and interest payment. The primary deficit is obtained by deducting interest payments from the fiscal deficit. Thus, primary deficit is equal to fiscal deficit less interest payments. It indicates the real position of the government finances as it excludes the interest burden of the loans taken in the past.
7. The term OTDS is mainly linked to which WTO negotiation area?
[A] Intellectual Property & Geographical Indications
[B] Non-Agricultural Market Access (NAMA)
[C] Agriculture
[D] Services Trade
Show Answer
Correct Answer: C [Agriculture]
Notes:
Overall Trade-Distorting Domestic Support (OTDS) is defined in the context of WTO agriculture negotiations. OTDS includes Aggregate Measure of Support (AMS), Blue Box payments, and de minimis support. OTDS commitments were discussed during the Doha Round agriculture talks beginning in 2001. WTO ministerial conferences periodically review and negotiate OTDS reduction by member countries. India and other countries have submitted proposals focusing on agriculture OTDS at these negotiations.
8. What is a key feature of Interval Funds in financial markets?
[A] Provide capital appreciation over the medium to long-term
[B] Invest half in stock and half in commodity market
[C] Provide both growth and regular income
[D] Offer redemption at intervals with continuous share purchases
Show Answer
Correct Answer: D [Offer redemption at intervals with continuous share purchases]
Notes:
Interval funds are a hybrid of open-ended and closed-ended funds. They allow continuous purchases but restrict redemptions to specific intervals, usually monthly or quarterly. Redemptions are permitted only during these fixed periods. The Securities and Exchange Commission (SEC) regulates these funds in the United States. Interval funds are different from daily-liquid mutual funds.
9. The Integrated Child Development Services (ICDS) Scheme aims to improve the nutritional and health status of children in the age-group of _?
[A] 0-6 years
[B] 0-10 years
[C] 0-14 years
[D] 6-14 years
Show Answer
Correct Answer: A [0-6 years]
Notes:
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.
10. Which is India’s largest source of power generation as of 2025?
[A] Coal
[B] Solar
[C] Wind
[D] Hydropower
Show Answer
Correct Answer: A [Coal]
Notes:
Coal accounted for about 70% of India’s electricity generation in 2025. Coal-based power output was 1,247 TWh in 2025 after a 3.4% decline. Non-fossil sources contributed 25% collectively in FY 2024-25. India added 35 GW solar in 2025, but total renewable generation reached 270 TWh compared to coal’s 1,247 TWh.