Indian Economy MCQs

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CRISIL was the first credit rating agency in India, formed in the year1988. In 2005, it became a subsidiary of American company S&P Global. The highest credit risk rating awarded to any company is ‘AAA’ and the lowest is ‘D’.

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Credit index derivatives have not been formally permitted for trading in India. The Reserve Bank of India released draft revised Master Directions on Credit Derivatives in 2022, proposing a regulatory framework for these products. Public consultation for these directions closed in February 2023, and final approval is pending. Only credit default swaps are currently permitted for eligible participants.

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The correct answer is “State Government 100%.” In India, stamp duty on promissory notes is governed by the Stamp Act of 1899, which allows state governments to levy stamp duty. Each state has the authority to set its own rates, and the revenue collected from stamp duty is retained entirely by the state government. This is a important source of revenue for states, contributing to their financial resources for development and public services.

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Department of Industrial Policy and Promotion is mandated to receive FDI proposals under the Government Route since 2017. It operates under the Ministry of Commerce and Industry. The Foreign Investment Facilitation Portal is managed by the Department for Promotion of Industry and Internal Trade, previously DIPP. FDI proposals in single brand retailing must be filed online with this department, complying with FEMA regulations.

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Round-tripping is the practice of moving domestic funds to foreign jurisdictions and then reinvesting them in the original country to evade taxes or regulatory restrictions. Round-tripping is commonly linked to misuse of tax havens. In 2008, round-tripping was estimated to cause a global tax revenue loss of 8 billion to 27 billion. This practice is illegal in several countries, including India.

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Outsourcing goods and services to foreign countries (statements 1 and 2) increases payments made abroad, thereby worsening the current account deficit. Domestic tourism spending (3) does not affect the current account, as funds remain within the economy. Increase in foreign tourist arrivals (4) actually improves the current account by bringing foreign currency into the country.

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Amortization refers to scheduled loan repayment through periodic payments including both principal and interest. Each payment gradually reduces the outstanding loan balance. Early payments cover more interest; later ones pay more principal. Mortgages and term loans typically follow an amortization schedule with set time frames like 15 or 30 years. The balance decreases with every regular installment.

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Andhra Pradesh secured the top position in the Business Reforms Action Plan (BRAP) 2019 assessment for ease of doing business in India. The assessment was conducted jointly by the Department for Promotion of Industry and Internal Trade and the World Bank. Andhra Pradesh implemented 100% of the reforms suggested under BRAP 2019. This ranking was released in September 2020.

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Tank irrigation is concentrated in South India, especially in Tamil Nadu, Andhra Pradesh, and Karnataka. South India receives irregular rainfall, making tank irrigation essential for water storage. Tank irrigation systems have existed in South India since ancient times, supported by regional rulers and local communities. The percentage of tank-irrigated area is highest in South Indian states compared to other regions of India.

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Traditional film photography was popular throughout the 20th century before digital photography emerged. Digital cameras became widely available in the late 1990s. Global sales of film cameras dropped substantially after 2000. Companies like Kodak, once leading film producers, filed for bankruptcy in 2012. The industry decline is linked to the mass adoption of digital imaging technology worldwide.