Indian Economy MCQs

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Public goods are non-excludable and non-rivalrous commodities or services. They are made available to all members of society without direct payment. Examples include national defense, clean air, and street lighting. Governments usually fund public goods due to the free rider problem. Paul Samuelson formally defined public goods in 1954. Provision and maintenance typically rely on taxation and government administration.

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The Airports Economic Regulatory Authority (AERA) Bill 2007 ensures that the watchdog monitors performance standards of airports and regulate tariff and other charges for aeronautical services including Airport

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The ability to pay principle is a basis for progressive taxation, taxing individuals according to their income levels. Progressive tax rates increase as income rises under this principle. India’s income tax is based on this principle, with tax slabs laid down in the Income Tax Act, 1961. Most modern tax systems, including those of the UK and India, use this approach.

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In 1944 Eight Industrialists of Bombay including Mr. JRD Tata, GD Birla, Purshottamdas Thakurdas , Lala Shriram, kasturbhai lalbhai, AD Shroff , Ardeshir Dalal, & John Mathai working together prepared “A Brief Memorandum Outlining a Plan of Economic Development for India” which was popularly known as Bombay Plan. This plan envisaged doubling the per capita income in 15 years and tripling the national income during this period.

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Deflation increases the real value of money, allowing salary earners with stable employment to purchase more goods and services with unchanged nominal wages. Since their income remains steady while prices fall, their purchasing power temporarily rises. The Reserve Bank of India has identified deflation’s short-term impact on employed individuals as increased real wages due to price drops. Deflation generally reduces income for most others.

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The “Government Route” in the language of foreign investments refers to the scenario where a foreign investor needs to acquire prior approval from the government to make an investment. This route is usually applicable for sectors which are of strategic importance or have implications for national security, where it would be imperative for the host country to have an additional level of scrutiny and control.

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The National Social Assistance Programme was launched in 1995 during 8th five year plan as a Centrally Sponsored Scheme of the Government of India. The scheme provides financial assistance to the elderly, widows and persons with disabilities in the form of social pensions.

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Cartelization describes independent firms entering formal agreements to control prices, limit supply, or divide markets. It typically involves actions such as price fixing or market-sharing. Cartelization is prohibited under the Competition Act, 2002 in India. In 2022, India’s Competition Commission imposed penalties on cement companies for cartelization. Cartels are illegal in many countries and are monitored by regulatory bodies to ensure market competition.

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The Central Board of Indirect Taxes and Customs (CBIC) was renamed in 2018 from CBEC. CBIC is a statutory body under the Department of Revenue, Ministry of Finance. It is responsible for administration of GST, customs, excise and service tax in India. The board was originally established in 1964 by the Central Boards of Revenue Act, 1963.

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Consider agriculture in the developed countries such as United States and Canada. There, the small family farms are not able to earn a profit and are being replaced by large corporate farms.