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 statements is not correct for economically underdeveloped countries? (UPSC Prelims 1987)
[A] Involvement of a very little proportion of labour in primary occupations
[B] Lower percentage of literacy
[C] Mass unemployment
[D] High birth rate
Show Answer
Correct Answer: A [Involvement of a very little proportion of labour in primary occupations]
Notes:
Primary jobs involve getting raw materials from the natural environment e.g. Mining, farming and fishing. There are a lot of people who are engaged in primary occupations in an economically underdeveloped country.
12. Which tax contributes most to India's central revenue in Budget 2026-27 estimates?
[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 2026-27, taxes on income are estimated at ₹14.56 lakh crore, which is higher than corporate tax at ₹12.31 lakh crore and GST at ₹10.19 lakh crore. Customs duty is much lower at ₹2.71 lakh crore. Hence, income tax remains the biggest single contributor among these central tax heads. This makes option 2 the correct answer.
13. What does low price elasticity of demand for a commodity show?
[A] Necessity of good
[B] It is luxury good
[C] It doesn’t have importance
[D] It is inferior good
Show Answer
Correct Answer: A [Necessity of good]
Notes:
Price Elasticity is the measure of the degree of responsiveness of demand for a commodity to change in its price. That means the low price elasticity is demand doesn’t change with the price. These are the necessary goods.
14. Which among the following best describes scarcity in economics?
[A] Low demand for a good
[B] High demand and less supply of a good
[C] Low demand as people do not want to consume it
[D] Resources are limited relative to unlimited wants
Show Answer
Correct Answer: D [Resources are limited relative to unlimited wants]
Notes:
Scarcity in economics means that resources are limited, while human wants are unlimited. It is not the same as low demand or a temporary shortage. Because of scarcity, people and economies must make choices about how to allocate scarce resources among competing uses.
15. What is subtracted from Gross Value Added to get Net Value Added?
[A] Depreciation
[B] Value added
[C] Production flow
[D] Investment
Show Answer
Correct Answer: A [Depreciation]
Notes:
Net Value Added is obtained by subtracting depreciation from Gross Value Added. Depreciation represents the wear and tear or consumption of fixed capital during the production process. It is a key measure in national income accounting.
16. Who is the founder of Madras School of Economics?
[A] Dr.Manmohan Singh
[B] Dr.P.C.Mahalonibis
[C] Dr.Raja Chelliah
[D] Dr.C.Rangarajan
Show Answer
Correct Answer: C [Dr.Raja Chelliah]
Notes:
The founder and Chairman of Madras School of Economics, Dr. Raja Jesudoss Chelliah was one of the top economists this country has produced.
17. Who was the first President of the New Development Bank?
[A] Arundhati Bhattacharya
[B] K V Kamath
[C] Arvind Subramanian
[D] Kaushik Basu
Show Answer
Correct Answer: B [K V Kamath]
Notes:
K. V. Kamath was the first President of the New Development Bank, the BRICS-led multilateral development bank. He served as the bank’s inaugural head before being succeeded by Marcos Prado Troyjo in July 2020.
18. The classification of Sectors in an economy into the public and privates sector is on the basis of which of the following?
[A] On the basis of activity
[B] On the basis of work condition
[C] On the basis of Ownership
[D] None of the above
Show Answer
Correct Answer: C [On the basis of Ownership]
Notes:
On the basis of ownership, the economy is divided into public and private sectors. The public sector is owned by the government whereas the private sector is owned by Private individuals.
19. Which of the following are part of the Quaternary sector?
[A] Banking
[B] Agriculture
[C] Restaurant
[D] Information technology
Show Answer
Correct Answer: D [Information technology]
Notes:
The quaternary sector consists of intellectual activities often associated with technological innovation. It is sometimes called the knowledge economy.
20. In which years were annual plans first implemented in India?
[A] 1966 to 1969
[B] 1971 to 1975
[C] 1988 to 1991
[D] 1969 to 1972
Show Answer
Correct Answer: A [1966 to 1969]
Notes:
India introduced annual plans during the Plan Holiday period from 1966 to 1969. The government opted for three consecutive annual plans in 1966–67, 1967–68, and 1968–69 after the failure of the Third Five-Year Plan. The annual plans bridged the gap until the Fourth Five-Year Plan began in 1969.
