Indian Economy MCQs

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Any export that does not have a tangible physical presence (e.g. expertise, insurance underwriting). Here, Invisible Export means export of Services

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Sterilization involves central banks selling government securities in the open market to absorb liquidity created by foreign capital inflows. The Reserve Bank of India uses open market operations for this purpose. By selling government securities, the central bank withdraws excess rupee liquidity from the banking system. This method helps limit the expansion of the money supply and manage inflationary pressures resulting from increased foreign exchange reserves.

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Under the former Plan/Non-Plan classification, Non-Plan Expenditure covered routine and committed items such as interest payments, defence, and pensions. Central Assistance to States for developmental projects was treated as Plan Expenditure because it was linked to development schemes and projects. Therefore, it does not fall under Non-Plan Expenditure in the pre-2017 budget framework. This distinction was used in the Indian budget before the classification was discontinued.

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Suresh Tendulkar chaired the expert committee on estimation of poverty in India. The committee examined poverty measurement and recommended using consumption expenditure-based indicators for identifying BPL households, instead of relying on income alone. Its report became an important reference point for poverty estimation in India and influenced later debates on poverty lines, methodology, and welfare targeting. Hence, Suresh Tendulkar is the correct answer.

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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.

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India’s WTO commitment under GATS limits market access for foreign bank branches to 12 branches in a year for all foreign banks taken together. In the India–EU FTA financial services offer, the branch licensing framework is more liberal and allows up to 15 bank branches to be established over a four-year period. The two figures apply to different trade arrangements, so they should not be read as the same annual cap.

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Stamp duty on promissory notes is a Union levy under the Indian Stamp Act, but the revenue is assigned to the States. In constitutional terms, the Union imposes the duty, while the States collect and retain the proceeds under Article 268. This makes the proceeds a State revenue item, even though the taxing power for these instruments is not exercised by the States themselves.

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Bank of America introduced BankAmericard in 1958, which became the first highly successful modern revolving-credit card program. It allowed customers to make purchases on credit and repay the balance over time, making it a landmark innovation in consumer banking. The program later evolved into Visa, helping to shape the global credit card industry and modern payment systems.

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The Reserve Bank of India purchases government securities in open market operations to increase liquidity in the banking system. Increased liquidity leads to higher money supply in the economy. Higher money supply may lower interest rates and promote borrowing. This process is utilized to support economic growth and is considered an expansionary monetary policy. Open market purchase of securities is not used to control inflation.

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ITDC is an hospitality, retail and Education company owned by Government of India, under Ministry of Tourism. Its headquarters is located in New Delhi.