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The economy of India is one of the largest and fastest-growing in the world. With a diverse economy that spans agriculture, manufacturing, services, and digital innovation, understanding its key components is crucial for anyone looking to study Indian economics or stay updated on economic trends. Whether you’re preparing for competitive exams, improving your general knowledge, or simply interested in understanding how India’s economy works, multiple-choice questions (MCQs) can be an excellent tool for reinforcing key concepts.
In this blog post, we present 50 multiple-choice questions on the Economy of India. These questions cover a wide range of topics, including fiscal policies, economic planning, financial institutions, international trade, and more. Let’s dive in!
50 MCQs on the Economy of India
- What is the largest contributor to India’s GDP?
- A) Agriculture
- B) Manufacturing
- C) Services
- D) Mining
Answer: C) Services
- Which is the main objective of India’s economic planning?
- A) Economic growth
- B) Equal distribution of wealth
- C) Financial stability
- D) National security
Answer: A) Economic growth
- What is the currency of India?
- A) Dollar
- B) Euro
- C) Rupee
- D) Pound
Answer: C) Rupee
- Who is the current Finance Minister of India (as of 2024)?
- A) Piyush Goyal
- B) Nirmala Sitharaman
- C) Arun Jaitley
- D) Rajnath Singh
Answer: B) Nirmala Sitharaman
- Which of the following is the largest source of revenue for the Indian government?
- A) Taxes on Income
- B) Corporate Tax
- C) GST
- D) Excise Duty
Answer: C) GST
- What does the acronym ‘GDP’ stand for?
- A) Gross Domestic Product
- B) Gross Development Product
- C) Global Domestic Product
- D) Gross Depreciation Product
Answer: A) Gross Domestic Product
- Which of these is a primary sector activity in India?
- A) Manufacturing
- B) Tourism
- C) Farming
- D) Software development
Answer: C) Farming
- Which institution is responsible for formulating and overseeing monetary policy in India?
- A) Indian Reserve Bank
- B) Securities Exchange Board of India
- C) RBI (Reserve Bank of India)
- D) Ministry of Finance
Answer: C) RBI (Reserve Bank of India)
- What does ‘NITI Aayog’ stand for?
- A) National Investment and Trade Association of India
- B) National Innovation and Technology Integration Agency
- C) National Institution for Transforming India
- D) National Intelligence Taskforce of India
Answer: C) National Institution for Transforming India
- Which year did India adopt its first Five-Year Plan?
- A) 1947
- B) 1951
- C) 1960
- D) 1970
Answer: B) 1951
- What is the term used for a persistent rise in the general price level of goods and services?
- A) Recession
- B) Deflation
- C) Inflation
- D) Stagflation
Answer: C) Inflation
- Which of the following sectors contributes the least to India’s GDP?
- A) Agriculture
- B) Industry
- C) Services
- D) Mining
Answer: A) Agriculture
- India is the world’s largest producer of which of the following crops?
- A) Rice
- B) Wheat
- C) Sugarcane
- D) Cotton
Answer: C) Sugarcane
- Which of these is India’s main stock exchange?
- A) National Stock Exchange (NSE)
- B) Bombay Stock Exchange (BSE)
- C) Both A and B
- D) None of the above
Answer: C) Both A and B
- The Goods and Services Tax (GST) in India was introduced in which year?
- A) 2005
- B) 2012
- C) 2017
- D) 2020
Answer: C) 2017
- What is the primary purpose of the ‘Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)?
- A) Promote rural education
- B) Ensure financial literacy
- C) Provide employment to rural families
- D) Promote rural tourism
Answer: C) Provide employment to rural families
- Which of the following is a major challenge to India’s economy?
- A) Unemployment
- B) Rising poverty
- C) Slow industrial growth
- D) All of the above
Answer: D) All of the above
- Which economic policy is aimed at reducing government interference in business activities in India?
- A) Economic liberalization
- B) Nationalization
- C) Protectionism
- D) Privatization
Answer: A) Economic liberalization
- What does the acronym ‘PMAY’ stand for in India’s housing policy?
- A) Pradhan Mantri Awas Yojana
- B) Pradhan Mantri Aghra Yojana
- C) People’s Mutual Assistance Yojana
- D) Prime Minister Affordable Housing Yojana
Answer: A) Pradhan Mantri Awas Yojana
- Which state has the highest GDP in India?
- A) Maharashtra
- B) Uttar Pradesh
- C) Tamil Nadu
- D) West Bengal
Answer: A) Maharashtra
- Which of the following is a non-tax revenue source for the Indian government?
- A) Income tax
- B) GST
- C) Dividends from public sector enterprises
- D) Customs duty
Answer: C) Dividends from public sector enterprises
- Which of the following is a public sector bank in India?
- A) HDFC Bank
- B) ICICI Bank
- C) State Bank of India (SBI)
- D) Axis Bank
Answer: C) State Bank of India (SBI)
- The Green Revolution in India primarily benefited which sector?
- A) Services
- B) Manufacturing
- C) Agriculture
- D) Trade
Answer: C) Agriculture
- Which of the following is India’s largest export partner?
- A) United States
- B) China
- C) Saudi Arabia
- D) European Union
Answer: A) United States
- The Indian government set up the ‘Make in India’ initiative to promote which sector?
- A) Agriculture
- B) Tourism
- C) Manufacturing
- D) Education
Answer: C) Manufacturing
- Which of the following is the primary regulator of the Indian securities market?
- A) SEBI (Securities and Exchange Board of India)
- B) RBI
- C) Ministry of Finance
- D) ICSI (Institute of Company Secretaries of India)
Answer: A) SEBI (Securities and Exchange Board of India)
- Which of the following is a key feature of India’s ‘Fiscal Deficit’?
- A) Government spending exceeds revenue
- B) Revenue exceeds government spending
- C) Government debt is repaid
- D) There is no fiscal deficit in India
Answer: A) Government spending exceeds revenue
- India’s main trade partner for oil is:
- A) Saudi Arabia
- B) Iraq
- C) Iran
- D) Russia
Answer: B) Iraq
- Which of the following is a major foreign exchange earner for India?
- A) Oil exports
- B) Software and IT services
- C) Textiles
- D) Handicrafts
Answer: B) Software and IT services
- The World Bank’s financial arm that helps in providing loans to India is:
- A) IMF
- B) IDA (International Development Association)
- C) IBRD (International Bank for Reconstruction and Development)
- D) World Trade Organization
Answer: C) IBRD (International Bank for Reconstruction and Development)
- Which of these is NOT a type of inflation?
- A) Demand-pull inflation
- B) Cost-push inflation
- C) Deflation
- D) Hyperinflation
Answer: C) Deflation
- What is the primary goal of the ‘Atmanirbhar Bharat’ initiative?
- A) To promote self-reliance in manufacturing
- B) To reduce unemployment
- C) To increase government spending
- D) To enhance trade with foreign countries
Answer: A) To promote self-reliance in manufacturing
- Which financial institution is responsible for regulating the monetary policy of India?
- A) Reserve Bank of India (RBI)
- B) Indian Economic Service
- C) Ministry of Finance
- D) Indian Banks’ Association
Answer: A) Reserve Bank of India (RBI)
- What is the maximum permissible limit for foreign direct investment (FDI) in India’s retail sector?
- A) 49%
- B) 51%
- C) 74%
- D) 100%
Answer: C) 74%
- Which of the following is the largest sector in India’s economy?
- A) Primary Sector
- B) Secondary Sector
- C) Tertiary Sector
- D) Quaternary Sector
Answer: C) Tertiary Sector
- Which Indian city is known as the ‘Financial Capital’ of India?
- A) Mumbai
- B) Delhi
- C) Chennai
- D) Kolkata
Answer: A) Mumbai
- Which of the following is India’s national income accounting agency?
- A) Ministry of Finance
- B) RBI
- C) NITI Aayog
- D) CSO (Central Statistical Organization)
Answer: D) CSO (Central Statistical Organization)
- Which of the following is NOT part of the Indian government’s fiscal policy?
- A) Government spending
- B) Taxation
- C) Monetary control
- D) Borrowing
Answer: C) Monetary control
- Which sector has the fastest-growing share in India’s GDP?
- A) Manufacturing
- B) Agriculture
- C) Services
- D) Mining
Answer: C) Services
- India’s GDP per capita is highest in which state?
- A) Kerala
- B) Tamil Nadu
- C) Maharashtra
- D) Delhi
Answer: D) Delhi
- Which of the following taxes is levied on goods and services in India?
- A) Excise Tax
- B) Sales Tax
- C) GST
- D) Income Tax
Answer: C) GST
- Which of the following is the ‘Indian Stock Market Index’?
- A) Sensex
- B) Nifty
- C) S&P
- D) Both A and B
Answer: D) Both A and B
- Which of the following is India’s largest public sector company by market capitalization?
- A) Indian Oil Corporation
- B) State Bank of India
- C) NTPC
- D) ONGC
Answer: B) State Bank of India
- Which of the following is an export promotion scheme launched by the Indian government?
- A) Make in India
- B) Digital India
- C) M-SIPS
- D) Startup India
Answer: C) M-SIPS
- Which country is the largest recipient of India’s foreign direct investment (FDI)?
- A) United States
- B) Singapore
- C) United Kingdom
- D) Japan
Answer: B) Singapore
- Which of the following is a primary economic activity in India?
- A) Information Technology
- B) Fishing
- C) Construction
- D) Education
Answer: B) Fishing
- India’s inflation target is set by which authority?
- A) Ministry of Finance
- B) RBI
- C) NITI Aayog
- D) Government of India
Answer: B) RBI
- Which of these is a part of the Indian government’s social security scheme?
- A) Pradhan Mantri Jan Dhan Yojana
- B) Swachh Bharat Abhiyan
- C) Atal Pension Yojana
- D) Make in India
Answer: C) Atal Pension Yojana
- Which sector has the highest employment share in India?
- A) Agriculture
- B) Manufacturing
- C) Services
- D) Trade
Answer: A) Agriculture
- Which of the following is an official measure of India’s poverty level?
- A) Human Development Index (HDI)
- B) Poverty Line
- C) Gross National Happiness
- D) Consumer Price Index
Answer: B) Poverty Line
Closing Note:
The economy of India is a complex, dynamic system influenced by a variety of internal and external factors. By studying multiple-choice questions (MCQs) on topics like government policies, sectors, inflation, and trade, you can develop a deeper understanding of the country’s economic landscape. This not only helps in preparing for exams but also enhances your general awareness of how economic decisions impact the growth and development of India.
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