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. Which of the following clearly defines land ceiling?
[A] To fix a land area for irrigation purposes
[B] To fix rural land holdings at the existing level
[C] To fix urban land holdings at the existing level
[D] To fix the quantum of land held by a family
Show Answer
Correct Answer: D [To fix the quantum of land held by a family]
Notes:
Land ceiling implies settling maximum size of land holding that an individual/family can own. Land over and above the ceiling limit, called surplus land. This surplus land is handed over to landless laborers without any fair compensation.
12. What was India’s share in world tea exports in 2024?
[A] More than 40%
[B] Between 20% and 30%
[C] About 13%
[D] Less than 5%
Show Answer
Correct Answer: C [About 13%]
Notes:
According to Tea Board India’s 2024 data, India exported 256 million kg of tea, giving it about 13% of global tea exports. India remained among the major tea-exporting countries, alongside Kenya, Sri Lanka and China. The share is far below 20% but clearly higher than 10%, making about 13% the best answer. This reflects India’s strong position in the global tea trade during 2024.
13. Which crop has the lowest international trade compared to total global production? (UPSC Prelims 1995)
[A] Rice
[B] Coffee
[C] Rubber
[D] Wheat
Show Answer
Correct Answer: A [Rice]
Notes:
In 2023–2024, global rice production was about 520 million metric tons. International rice trade accounts for less than 10 percent of total production. Rice is mainly consumed domestically in producing countries such as China and India. The largest exporters export a small share of total production. Rice is a staple for over half the world’s population, contributing to low export volumes.
14. Why is full convertibility of the Indian rupee advocated? (UPSC Prelims 1996)
[A] It stabilizes the rupee’s exchange value globally.
[B] It attracts more foreign capital into India.
[C] It helps promote Indian exports.
[D] It helps India secure loans on attractive terms.
Show Answer
Correct Answer: B [It attracts more foreign capital into India.]
Notes:
Full convertibility allows the rupee to be freely exchanged with foreign currencies for all transactions at market rates without Reserve Bank of India restrictions. India achieved current account convertibility in 1994. Full capital account convertibility is under consideration. Currency stability and reduced exchange rate uncertainty are key reasons for advocating convertibility to stabilize the rupee’s value against global currencies.
15. How are persons below the poverty line classified in India? (UPSC Prelims 1999)
[A] Their daily wages fall below minimum wage
[B] They belong to scheduled caste or tribe groups
[C] They get work for a minimum number of days
[D] Their per capita consumption expenditure is below a set threshold
Show Answer
Correct Answer: D [Their per capita consumption expenditure is below a set threshold]
Notes:
In India, poverty status is identified using consumption expenditure, not caste, wages, or guaranteed days of work. A person is considered below the poverty line when his or her per capita consumption expenditure falls below the prescribed threshold used for poverty measurement. This method is based on household survey data and is used to estimate poverty in both rural and urban areas. Therefore, the correct answer is the option referring to per capita consumption expenditure below a set threshold.
16. Which one of the following statements regarding the levying, collecting and distribution of Income Tax is correct? (UPSC Prelims 1999)
[A] The Union levies, collects and distributes the proceeds of income-tax between itself and the States
[B] The Union levies, collects and keeps all the proceeds of income-tax to itself
[C] The Union levies and collects the tax but all the proceeds are distributed among the States
[D] Only the surcharge levied on income-tax is shared between the Union and the States
Show Answer
Correct Answer: A [The Union levies, collects and distributes the proceeds of income-tax between itself and the States]
Notes:
Article 270 permitted mandatory sharing of the net proceeds of income tax levied and collected by the Union with the States. Such proceeds assigned to States did not form part of the Consolidated Fund of India. Article 272 provided for sharing of Union excise duties, if Parliament by law so provided.
17. Which factor limits tourism growth in India despite its vast attractions? (UPSC Prelims 1999)
[A] Distances between attractions are too large
[B] India is too hot for tourists
[C] Picturesque resorts are inaccessible
[D] Tourism infrastructure is inadequate
Show Answer
Correct Answer: D [Tourism infrastructure is inadequate]
Notes:
The Ministry of Tourism recognizes infrastructure inadequacy as a major barrier to tourist arrivals. India’s tourist accommodation density and quality lag behind global averages. Major cities and remote tourist destinations face deficits in hotels, transportation, and sanitation. Government schemes like Swadesh Darshan and PRASHAD launched in 2014 and 2015 target these infrastructural gaps. Despite natural and cultural attractions, visitor growth remains below international benchmarks due to these limitations.
18. What does free market in an economy imply?
[A] Minimum government intervention in trade and maximum regulations
[B] Maximum government intervention in trade and maximum regulations
[C] Minimum government intervention in trade and minimum regulations
[D] Maximum government intervention in trade and maximum regulations
Show Answer
Correct Answer: C [Minimum government intervention in trade and minimum regulations]
Notes:
In a free market economy, the law of supply and demand, rather than a central government, regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services
19. What does a good with positive externalities known as?
[A] Giffen goods
[B] Public goods
[C] Merit goods
[D] Snob good
Show Answer
Correct Answer: C [Merit goods]
Notes:
Merit goods are the goods that are provided generally by the government to certain sections of society. Unlike in the case of pure public goods, merit goods are not provided to the entire society; rather they are given to certain targeted people. They Have positive externalities Ex: health, education
20. Which economist was the first Vice-Chairman of NITI Aayog?
[A] Arvind Panagariya
[B] Amartya Sen
[C] Rajiv Kumar
[D] Arvind Subramanian
Show Answer
Correct Answer: A [Arvind Panagariya]
Notes:
Arvind Panagariya, an Indian-American economist and professor at Columbia University, served as the first Vice-Chairman of NITI Aayog from January 2015 to August 2017.
