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.
11. SIDO is associated with which of the following industries?
[A] Small industry
[B] Iron industry
[C] Steel industry
[D] Soap industry
Show Answer
Correct Answer: A [Small industry]
Notes:
The Small Industries Development Organization (SIDO) is the national SME Development Agency of India. It is a major constituent of the Ministry of Small Scale Industries of the Government of India. It was Set up in 1954, SIDO provides services to small industry throughout the country by implementing a broad program of activities and services like Entrepreneurship Development, Tool Room Services, Testing Centres, Extension Services, R&D Services, etc.
12. What is the current minimum CRR limit set by the RBI?
[A] No Limit
[B] 3%
[C] 4%
[D] 6%
Show Answer
Correct Answer: C [4%]
Notes:
The RBI (Commercial Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2026 set the minimum CRR at 4% of net demand and time liabilities. Section 42(1) of the RBI Act, 1934 empowers the RBI to prescribe CRR for scheduled banks. Before 2006, the minimum was 3%, but this was amended. The minimum 4% has remained operative as per latest RBI regulations.
13. Which among the following is not an instrument of fiscal policy?
[A] Taxation
[B] Public expenditure
[C] Public debt
[D] Credit Rationing
Show Answer
Correct Answer: D [Credit Rationing]
Notes:
The 3 main instruments of fiscal policy are government taxation and public expenditure and public debt. Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy.
14. How much per cent of the total assets of the company should be deployed in the infrastructure loans?
[A] 75%
[B] 60%
[C] 80%
[D] 50%
Show Answer
Correct Answer: A [75%]
Notes:
As per RBI, any non-banking financial company can be registered as an Infrastructure Finance Company, subject to minimum, 75% of the total assets of the company, should be deployed in the infrastructure loans.
15. Which of the following is the management of securities of the corporate sector offered to the public on a regular basis?
[A] Corporate Issues Management
[B] Public Issues Management
[C] Securities Issues Management
[D] Private Issues Management
Show Answer
Correct Answer: B [Public Issues Management]
Notes:
Public Issue Management is the management of securities of the corporate sector offered to the public on a regular basis, and existing shareholders on a rights basis, is known as public issue management.
16. What are key outcomes of agricultural mechanization? (UPSC Prelims 1988)
[A] Lower cost, higher productivity, and timely operations
[B] Higher productivity and reduced employment
[C] Lower cost, higher productivity, reduced loss
[D] Lower cost, higher productivity, timely operations, reduced employment
Show Answer
Correct Answer: C [Lower cost, higher productivity, reduced loss]
Notes:
Mechanization in agriculture reduces per unit operational costs by increasing efficiency. It enhances per unit productivity and crop yields by improving timeliness of operations. Mechanization minimizes grain losses during harvesting due to precision of machines. Studies in India report that mechanized land preparation decreases labor requirement from 31 hours to around 3 hours per hectare. Improved technical efficiency and better management practices are documented benefits of agricultural mechanization.
17. Who among the following is not part of the Quinary sector?
[A] Scientist
[B] Lawyer
[C] Financial consultant
[D] Florist
Show Answer
Correct Answer: D [Florist]
Notes:
The quinary sector is the part of the economy where the top-level decisions are made. This includes the government which passes legislation. It also comprises the top decision-makers in industry, commerce, and also the education sector. Floriculture comes under Primary Sector.
18. What was the target of the first five-year plan?
[A] Development of agriculture
[B] Development of textile industry
[C] Develpoemnt of manufacturing
[D] Removal of poverty
Show Answer
Correct Answer: A [Development of agriculture]
Notes:
After Independence Indian economy was in a dismal state. The main focus of the first five-year plan was kept on the agricultural development as it is still the backbone of the Indian economy in terms of employment generation.
19. Which Indian law bans the usage of GM seeds without approval?
[A] Seeds Act, 1966
[B] Seeds Rules, 1968
[C] Environmental Protection Act, 1986
[D] Environmental Protection Act, 2000
Show Answer
Correct Answer: C [Environmental Protection Act, 1986]
Notes:
Under the Environmental Protection Act,1986 GM seeds cannot be used without approval. Violation of this can result in a 5-year jail term or fine up to 1 lakh rupees.
20. What is the minimum tree canopy density that an area should have in order to be considered as a forest?
[A] 30%
[B] 15%
[C] 45%
[D] 10%
Show Answer
Correct Answer: D [10%]
Notes:
The forest cover of India includes all patches of land with a tree canopy density of more than 10% and more than 1 hectare in area, irrespective of land use, ownership and species of trees.