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. If a company has “Trade Receivables”, this implies that __:
[A] It has made a sale but yet to collect payments
[B] It has received payments but yet to make a delivery
[C] It has received an order but yet to make delivery
[D] None of the above is a correct definition
Show Answer
Correct Answer: A [ It has made a sale but yet to collect payments ]
Notes:
If a company has receivables, this means it has made a sale but has yet to collect the money from the purchaser.
12. What does Revenue Neutral Rate (RNR) mean?
[A] A policy where revenue receipts equal revenue expenditures
[B] A tax rate to ensure income tax equity
[C] A property tax rate generating same revenue as previous year
[D] A tax policy increasing revenue without hearings
Show Answer
Correct Answer: C [A property tax rate generating same revenue as previous year]
Notes:
The Revenue Neutral Rate is a property tax rate calculated so total tax revenue equals the previous year’s amount, based on current assessed property valuations. The formula is previous year’s tax revenue divided by current year’s assessed valuation, multiplied by 1,000. If property values increase, the RNR decreases to keep tax revenue flat.
13. Consider the following statements regarding the proposed Wholesale & Long-Term Finance Banks (WLTF):
- They cannot accept saving deposits.
- They will raise funds by issuing rupee denominated bonds, locally as well as abroad.
- They are required to maintain 40 percent of their branches in rural areas.
Which of the above statements is / are correct?
[A] Only 2 and 3
[B] Only 1 and 3
[C] Only 1 and 2
[D] 1, 2 and 3
Show Answer
Correct Answer: C [Only 1 and 2]
Notes:
The first and second statements are correct: WLTF banks cannot accept saving deposits and may raise funds via rupee denominated bonds both locally and abroad. The third is incorrect: WLTF banks are exempt from maintaining a mandatory branch network in rural areas, differing from universal banks, and thus have no such requirement.
14. Micro credit or micro finance is a novel approach to bank with the poor. In this approach bank credit is extended to the poor through which of the follwing?
[A] Self Help Groups
[B] Anganwadees
[C] Co-operative Credit Societies
[D] RBI
Show Answer
Correct Answer: A [Self Help Groups]
Notes:
Microfinance is a category of financial services targeted at individuals and small businesses who lack access to conventional banking and related services.
15. Which of the following problems is needed to be resolved under issue management?
[A] Problems with staff
[B] Technical failures
[C] Material shortages
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Issue management is the process of identifying and resolving issues. Problems with staff or suppliers, technical failures, material shortages – these might all have a negative impact on your project
16. Which of the following clearly define Stagflation? (UPSC Prelims 1984)
[A] Constant rate of inflation
[B] Low inflation with high recession
[C] High inflation with low recession
[D] Stagnation and inflation
Show Answer
Correct Answer: D [Stagnation and inflation]
Notes:
Stagflation is a condition of slow economic growth and relatively high unemployment, or economic stagnation, accompanied by rising prices, or inflation. It can also be defined as inflation and a decline in gross domestic product (GDP).
17. Which tax contributes most to India’s central revenue in Budget 2026 estimates? (UPSC Prelims 1991)
[A] Goods and Services Tax (GST)
[B] Income Tax
[C] Customs Duty
[D] Corporate Tax
Show Answer
Correct Answer: B [Income Tax]
Notes:
In the Union Budget 2026 estimates, income tax is projected as the largest contributor to central tax revenue at 32%. The government expects income tax collections of around ₹13.6 lakh crore for FY26. The share of GST is approximately 27.6%. Customs duty accounts for about 5-6%. Direct taxes overall form 61.2% of gross tax revenue, with income tax being the leading component.
18. How much FDI is permitted in e-commerce in India?
[A] 75% in marketplace; 0% in inventory-based
[B] 100% in B2B and marketplace; 0% inventory-based
[C] 100% in all e-commerce models
[D] 51% in marketplace; 100% in B2B
Show Answer
Correct Answer: B [100% in B2B and marketplace; 0% inventory-based]
Notes:
India allows 100% FDI under the automatic route in B2B e-commerce and marketplace model since Press Note 3 (2016). FDI is not permitted in the inventory-based model. The marketplace model connects buyers and sellers without holding inventory. The restrictions were reiterated in Press Note 2 (2018). The Department for Promotion of Industry and Internal Trade regulates these FDI norms.
19. In which year the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) was established?
[A] 1960
[B] 1954
[C] 1965
[D] 1949
Show Answer
Correct Answer: B [1954]
Notes:
The Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) was set up in 1954 to extend all possible assistance to Indian exporters of synthetic and rayon textiles and to overseas buyers with business in India.
20. In which year was the Essential Commodities Act enacted?
[A] 1960
[B] 1955
[C] 1950
[D] None of the above
Show Answer
Correct Answer: B [1955]
Notes:
The Essential Commodities Act was enacted by the Parliament of India in 1955. This Act empowers the government to regulate the production, supply, and distribution of essential commodities. The Act helps prevent hoarding and black marketing of items such as foodgrains, drugs, and petroleum products. The Essential Commodities Act was last amended in 2020.
