Indian Economy MCQs

Notes:
Chittaranjan Locomotive Works was established at Chittaranjan in West Bengal, and it produced its first steam locomotive in 1950. The workshop later became one of India’s major locomotive manufacturing centres. Among the given options, Chittaranjan is the correct place associated with the manufacture of the first steam locomotive by CLW.

Notes:
Dematerialization means holding securities in electronic form instead of physical certificates. In India, shares and other eligible securities are credited to demat accounts through depository systems, which makes transfer and settlement faster and safer. It also reduces risks such as loss, theft, forgery, and bad delivery. This concept is widely used in modern capital markets and is an important part of securities trading and settlement infrastructure.

Notes:
Kerala produces approximately 78% of India’s natural rubber. Major rubber plantations in Kerala span around 400,000 hectares. The state’s tropical climate supports high rubber yield. Kerala has historically led rubber production in India, a trend continuing since the late 20th century. Plantation development began under British colonial rule in the early 1900s. Thrissur, Kottayam, and Pathanamthitta are key rubber-producing districts.

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Government spending refers to the money spent by the government or public sector on the acquisition of goods and services such as education, healthcare, social protection, defence etc. It does not come under monetary policy.

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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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A NOSTRO account is a bank account that a domestic bank holds in a foreign country in the currency of that country. The term is derived from the Latin word meaning “ours.” For Union Bank of India, holding an account with Citibank in New York in US dollars constitutes a NOSTRO account. Such accounts are used for international transactions and settlements.

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The Reserve Bank of India conducts Open Market Operations to manage liquidity. It sells government securities when there is surplus liquidity, such as during large foreign capital inflows that increase rupee supply. Selling securities absorbs excess funds from the banking system. In periods of liquidity shortage, RBI buys securities. In FY26, liquidity injections were handled through purchases, not sales.

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The Bank for International Settlements (BIS) calculates the broad real effective exchange rate (REER) index using a basket of 64 currencies. The BIS methodology weights these currencies according to trade shares to reflect the competitiveness of a country in the global market. BIS also publishes narrower REER indices, like a 27-currency basket, but the broadest index uses 64 currencies.

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:
Karnataka produced 13,278 tonnes of raw silk in 2024-25, about 32% of India’s total. The state contributes approximately 45% of India’s mulberry silk. Major silk-producing districts are Mandya, Kolar, Chikkaballapur, and Ramanagara. Silk cultivation in Karnataka covers about 1.2 lakh hectares. The Silk Samagra-2 scheme supports sericulture in the state.