Indian Economy MCQs

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The Central Statistics Office (CSO) is a governmental agency in India under the Ministry of Statistics and Programme Implementation. It is responsible for estimating National Income, Index of Industrial Production and Consumer Price Indices.

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WIPO-World Intellectual Property Organization

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The Balance of Payments (BOP) crisis struck India in 1991. This triggered an economic crisis due to escalating oil prices, inflation and low foreign exchange reserves, which beleaguered India’s ability of import payments. Repercussions included severe rupee devaluation. The crisis incited economic liberalization, lowering of import tariffs and eased foreign exchange restrictions. With help from International Monetary Fund and other organizations, India managed to stabilize its situation, highlighting the necessity for constant economic overhauls to sustain financial equilibrium.

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An account becomes a Non-Performing Asset (NPA) when it is classified as such due to the borrower’s failure to meet repayment obligations. Specifically, a cash credit account is considered out of order if it remains overdrawn for more than 90 days. According to the Reserve Bank of India (RBI) guidelines, an account is classified as NPA when interest or principal payments are overdue for 90 days or more. This classification helps banks manage risk and maintain financial stability.

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The Trade and Economic Relations Committee (TERC) in India is headed by the Prime Minister. This committee was established to enhance India’s trade relations and economic policies, reflecting the government’s focus on international trade as a key driver of economic growth. The Prime Minister’s leadership underscores the importance of trade in India’s economic strategy.

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The correct answer is “Only 1 is correct.” Explanation: 1. The Market Stabilization Scheme (MSS) allows the government to issue Treasury Bills and dated securities to manage liquidity, but it does not involve a separate borrowing program beyond the normal limits. 2. The money raised under the MSS is not kept in the MSS Account as part of the Consolidated Fund of India. instead, it is maintained in a separate account. 3. While the Comptroller and Auditor General of India (CAG) audits government accounts, the MSS Fund itself is not specifically audited by the CAG. Trivia Fact: The MSS was introduced in 2004 to help the Reserve Bank of India manage excess liquidity in the economy, particularly during periods of high capital inflows.

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The green shoe option is a clause in the underwriting agreement of an IPO, which allows to sell additional shares, usually 15%, to the public if the demand exceeds expectations and the stock trades above its offering price. This option, also known as the over-allotment provision. It gets its name from the Green Shoe company, which was the first company to allow such an option.

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Economies are divided into IDA, IBRD, and Blend countries based on the operational policies of the World Bank. International Development Association (IDA) countries are those with low per capita incomes that lack the financial ability to borrow from the International Bank for Reconstruction and Development (IBRD). Blend countries are eligible for IDA loans but are also eligible for IBRD loans because they are financially creditworthy.

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The Engine division of Hindustan Aeronautics Limited (HAL), a defence enterprise of the Government of India, is located at Sunabeda, 15 km from Koraput town. This factory manufactures aircraft engines for MiG and Sukhoi fighter aircraft. Koraput is a district of Odisha, India, and known for rich and diverse types of mineral deposits. It is located along the Eastern Ghats.

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In 1991-92, interest payments were the largest non-plan expenditure, estimated at Rs. 27,450 crores, surpassing other items like subsidies and compensations. This reflected the high fiscal burden due to accumulated government debt and was a key reason for economic reforms initiated that year.