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 statement accurately describes the Rolling Plan in economic planning? (UPSC Prelims 1980).
[A] Plan for full 5 years
[B] Formulation of annual plans
[C] Perspective of Five-Year Plan with annual extension for constant 5-year horizon
[D] Aims and achievements reviewed yearly in a Five-Year Plan
Show Answer
Correct Answer: C [Perspective of Five-Year Plan with annual extension for constant 5-year horizon]
Notes:
The Rolling Plan, introduced in 1978 by India, provided a flexible planning method by extending the plan each year, maintaining a constant five-year horizon. This system allowed for annual adjustments in targets and allocations, replacing the rigid fixed Five-Year Plans previously followed.
12. Which one of the following is not an instrument of selective credit control in India? (UPSC Prelims 1995)
[A] Regulation of consumer credit
[B] Rationing of credit
[C] Margin requirements
[D] Variable cost reserve ratios
Show Answer
Correct Answer: D [Variable cost reserve ratios]
Notes:
The variable reserve ratio device springs from the fact that the central bank, in its capacity as Bankers Bank, must hold a part of the cash reserves of commercial banks. The customary minimum cash reserve ratio is an important limitation on the lending capacity of banks.
13. What is the extra cost imposed by the government which increase the price for a customer is known as?
[A] Subsidy
[B] Tax
[C] Inflation
[D] Fine
Show Answer
Correct Answer: B [Tax]
Notes:
Tax is the cost imposed by the government over goods and services in an economy to generate revenue for the government for its expenditure. This includes capital as well as revenue expenditure.
14. What is subtracted from personal income to get personal disposable income?
[A] Indirect taxes
[B] Direct taxes
[C] subsidies
[D] None of the above
Show Answer
Correct Answer: B [Direct taxes]
Notes:
Personal Disposable Income(PDI) is obtained when personal direct taxes are subtracted from personal income.
PDI = Personal Income – Direct Taxes
PDI = Consumption + Saving
15. Which of the following is the limitation of the Socialist Economic system?
[A] High Taxes
[B] Easy Mobilization of resources
[C] Concentration of wealth is prevented
[D] Market Monopoly doesn’t exist
Show Answer
Correct Answer: A [High Taxes]
Notes:
In a socialist economy, taxes are high on the people as the state has to provide all the goods and services to all. The other options given are the advantages of the system.
16. Which of the following is most directly affected by agricultural growth?
[A] Poverty eradication
[B] Inflation
[C] Employment
[D] Balance of Payments
Show Answer
Correct Answer: D [Balance of Payments]
Notes:
Agricultural growth can influence several macroeconomic indicators. Higher farm output raises rural incomes, creates seasonal and allied-sector employment, and can help moderate food inflation by improving supply. It also affects the balance of payments through agricultural exports, reduced food imports, and foreign-exchange earnings. Therefore, among the given options, balance of payments is also directly affected, making it a relevant indicator of agricultural growth.
17. Where is the Global seed vault located?
[A] Switzerland
[B] Norway
[C] Finaland
[D] Denmark
Show Answer
Correct Answer: B [Norway]
Notes:
The Global seed vault is located at Svalbard, Norway. The seeds are stored here from across the globe to make sure seeds of plants are there in case of an emergency.
18. Which wool grade has the highest production in India?
[A] Coarse grade
[B] Apparel grade
[C] Export grade
[D] Carpet grade
Show Answer
Correct Answer: D [Carpet grade]
Notes:
India produces over 90% of its wool in the carpet grade category. Carpet grade wool is coarser and used mainly for making carpets and blankets. Data from the Ministry of Textiles shows that carpet grade wool dominates total production, while apparel grade is a minor share. India ranks second globally in total raw wool production after China as of 2022.
19. How many major ports are there in India at present (2026)?
[A] 12 operational major ports
[B] 13 operational major ports
[C] 14 notified major ports
[D] 20 operational major ports
Show Answer
Correct Answer: C [14 notified major ports]
Notes:
India currently has 14 notified major ports, of which 12 are operational. The total increased after the notification of Vadhavan Port and Galathea Bay Port in 2024, while Port Blair was previously de-notified. Hence, 14 is the correct present-day count for notified major ports.
20. Which Indian state has the highest rural household dependency on fuelwood?
[A] Maharashtra
[B] Chhattisgarh
[C] Rajasthan
[D] Odisha
Show Answer
Correct Answer: B [Chhattisgarh]
Notes:
Chhattisgarh reports the highest percentage of rural households dependent on fuelwood as their primary energy source. The Forest Survey of India data in 2021 stated that 93.2% of rural households in Chhattisgarh rely on fuelwood, more than other states including Rajasthan and Odisha. This rate is the highest among Indian states based on the latest survey figures.
