Indian Economy MCQs

Notes:
Pair 1 is correctly matched: PMEGP is a credit-linked subsidy scheme implemented by the Khadi and Village Industries Commission (KVIC) under the Ministry of Micro, Small and Medium Enterprises (MoMSME) to generate self-employment via micro-enterprises. Pair 2 is incorrectly matched: Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is the flagship skill certification scheme implemented by the Ministry of Skill Development and Entrepreneurship (MSDE), not the Ministry of Labour and Employment. Pair 3 is correctly matched: DAY-NULM aims to reduce poverty and vulnerability of urban poor households by enabling self-employment and skilled wage employment opportunities, managed by the Ministry of Housing and Urban Affairs.

Notes:
Gross Budgetary Support refers to the budgetary support provided by the Union Government for development expenditure and schemes. It is a funding source used to finance public programmes and capital or developmental outlays in the budget. The term is used in government finance to denote support from budgetary resources rather than total receipts or a percentage share of expenditure. Hence, option 2 gives the correct definition.

Notes:
The correct answer is State Bank of India (SBI). It was established in 1955, evolving from the Imperial Bank of India, which itself was formed in 1921. The Imperial Bank was a successor to the Bank of Calcutta, founded in 1806, making SBI one of the oldest banks in India. SBI is now the largest bank in India, serving millions of customers worldwide.

Notes:
The Tendulkar Committee was formed in 2005 and submitted its report in 2009. It shifted poverty measurement from a calorie-based model to a broader Poverty Line Basket approach. This included private expenditure on health and education alongside food and other needs. The committee recommended separate monetary values for rural and urban areas, utilized the Mixed Reference Period data, and made adjustments for price changes based on consumption patterns.

Notes:
RBI’s revised PCA framework for scheduled commercial banks focuses on three broad parameters: capital, asset quality and leverage. The trigger indicators include capital ratios such as CRAR and CET1, net NPA ratio, and leverage ratio. Return on assets is not part of the current trigger set, and the leverage-related trigger is framed as a low Tier 1 leverage ratio. Therefore, among the given options, low Tier 1 leverage ratio is not a non-trigger; the other three are used as PCA trigger indicators.

Notes:

Various irrigation schemes in India were classified by the erstwhile planning commission into three parts viz. Minor, Medium and Major Irrigation schemes.

• Major irrigation Scheme: Major irrigation schemes are those schemes which have a Culturable Command Areas of More than 10,000 hectares.
• Medium irrigation Schemes: The Medium Irrigation Schemes have a CCA of 2,000-10,000 hectares.
• Minor Schemes: Those with Culturable command areas up to 2000 hectares.

Cultural command area is the basis for the design of water course and basis for the design of an irrigation project. It is the proportion of the Gross Command Area which is Culturable and cultivable.

Notes:
Portfolio investments comprise financial assets such as stocks, bonds, and depository receipts. Foreign Institutional Investments (FII), American Depository Receipts (ADR), and Global Depository Receipts (GDR) are all considered portfolio investments because they do not confer direct control over the underlying asset or enterprise, whereas Foreign Direct Investments involve ownership and control, and are not part of portfolio investment.

Notes:
Chetan Bhagat worked as an investment banker at Goldman Sachs and Deutsche Bank in Hong Kong for about 11 years. He graduated from IIT Delhi in 1995 and IIM Ahmedabad in 1997. Bhagat wrote his first novel, Five Point Someone, while still an investment banker. He left banking after publishing his third novel in 2008.

Notes:
In case of High-income elasticity of demand, an increase in income is accompanied by a relatively larger increase in quantity demanded for normal goods. Thus, among the given options Car has highest income elasticity of demand.

• Car: A luxury good with high income elasticity; demand rises sharply with an increase in income.
• Milk: A necessity good with low to moderate income elasticity.
• Paddy: A basic necessity and staple food, with very low income elasticity.
• Tobacco: Considered an addictive good with low or even negative income elasticity in some cases, as demand is less income-sensitive.

Notes:
Frictional unemployment refers to temporary unemployment that occurs when people are between jobs or are actively looking for work. It is a normal part of labor market movement and usually reflects the time taken to find a suitable job match. Unlike cyclical unemployment, it is not caused by recession, and unlike structural unemployment, it is not due to a mismatch of skills or job locations. Hence, the correct answer is frictional unemployment.