Indian Economy MCQs
Indian Economy Multiple Choice Questions (MCQs) for SSC, State and all One Day Examinations of India. Objective Questions on Indian Economy for competitive examinations.
11. Which is the largest source of installed power capacity in India as of January 2026? (UPSC Prelims 1982)
[A] Thermal (fossil fuel-based)
[B] Solar
[C] Non-fossil fuel (renewables and nuclear)
[D] Hydro-electric
Show Answer
Correct Answer: C [Non-fossil fuel (renewables and nuclear)]
Notes:
As of January 31, 2026, India’s installed capacity is 520,511 MW. Non-fossil fuel sources, including renewables and nuclear, total 271,969 MW, accounting for over 52% of total installed capacity. This exceeds the fossil fuel-based capacity of 248,542 MW. Major components of non-fossil fuel capacity are solar and wind energy.
12. What is the primary function of the Finance Commission? (UPSC Prelims 1982)
[A] Passing the money bills
[B] Approving money bills
[C] Drafting the budget
[D] Making recommendations on tax revenue distribution between Union and States
Show Answer
Correct Answer: D [Making recommendations on tax revenue distribution between Union and States]
Notes:
The Finance Commission, constituted under Article 280 of the Indian Constitution, recommends the distribution of net tax proceeds between the Centre and States and suggests principles for grants-in-aid. It is constituted every five years or earlier as deemed necessary by the President.
13. The Indian rupee’s exchange rate is managed against which of the following? (UPSC Prelims 1988)
[A] US Dollar
[B] British Pound Sterling
[C] A basket of foreign currencies
[D] Japanese Yen
Show Answer
Correct Answer: C [A basket of foreign currencies]
Notes:
The Reserve Bank of India manages the rupee’s exchange rate against a basket of foreign currencies since 1975. Before 1975, the rupee was pegged to the British Pound Sterling. The currency basket includes the US Dollar, Euro, Japanese Yen, and British Pound. India shifted from single-currency pegs to mitigate external shocks and improve stability.
14. Which sector mainly employs ‘pink-collar workers’?
[A] Tertiary
[B] Primary
[C] Quaternary
[D] Secondary
Show Answer
Correct Answer: A [Tertiary]
Notes:
Pink-collar workers, often in services like nursing and teaching, are primarily found in the tertiary sector, which includes service-oriented jobs. The primary sector covers agriculture, secondary involves manufacturing, and quaternary relates to knowledge and information-based activities.
15. When was Tata Iron and Steel Company (TISCO) formally established and registered?
[A] 1906
[B] 1907
[C] 1908
[D] 1909
Show Answer
Correct Answer: B [1907]
Notes:
TISCO was officially established and registered on 26 August 1907 at Jamshedpur, Jharkhand by Jamsetji Tata. Renamed Tata Steel Limited in 2005, it was a pivotal venture in India’s industrialization. The first steel production started in 1912. Headquartered in Mumbai, it is part of the Tata Group.
16. What was the target of the first five-year plan?
[A] Development of agriculture
[B] Development of textile industry
[C] Develpoemnt of manufacturing
[D] Removal of poverty
Show Answer
Correct Answer: A [Development of agriculture]
Notes:
After Independence Indian economy was in a dismal state. The main focus of the first five-year plan was kept on the agricultural development as it is still the backbone of the Indian economy in terms of employment generation.
17. Who is not a member of the NITI Aayog Governing Council?
[A] Chief Ministers of Delhi and Puducherry
[B] Governors of States
[C] All Chief Ministers of the states
[D] Lieutenant Governors of Union Territories
Show Answer
Correct Answer: B [Governors of States]
Notes:
The Governing Council of NITI Aayog includes all Chief Ministers of States, Chief Ministers of Delhi and Puducherry, and Lieutenant Governors of Union Territories. Governors of States are not part of the NITI Aayog Governing Council. The NITI Aayog was established on 1 January 2015. The Prime Minister of India chairs the Governing Council.
18. In which state India’s first mega food park was established?
[A] Andhra Pradesh
[B] Telangana
[C] Maharastra
[D] Gujarat
Show Answer
Correct Answer: A [Andhra Pradesh]
Notes:
The first mega food park in the country is Srini mega food park at Chittoor in Andhra Pradesh. It was established in 2012.
19. Which body currently publishes the Index of Industrial Production in India?
[A] Department of Economic Affairs
[B] National Statistics Office (NSO)
[C] National Sample Survey Office
[D] Central Statistical Organisation (CSO)
Show Answer
Correct Answer: B [National Statistics Office (NSO)]
Notes:
The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation compiles and publishes the Index of Industrial Production (IIP) every month. The CSO was merged with the NSO in 2019. The IIP measures changes in the industrial sector including mining, manufacturing, and electricity. NSO releases IIP data approximately 28 days after the reference month.
20. What is the FDI allowed in brownfield pharma under the automatic route?
[A] 100%
[B] 74%
[C] 51%
[D] 49%
Show Answer
Correct Answer: B [74%]
Notes:
Indian government allows 74% in the brownfield pharms under the automatic route and thereafter through the government approval route. 100% Foreign Direct Investment (FDI) under the automatic route for greenfield pharma.
