Economics · Banking Financial Awareness

Indian Economy and Policy

1,777 Questions

Indian economy and policy questions cover the structural dynamics and regulatory measures shaping the national market. Topics include foreign direct investment, taxation reforms, and government initiatives for growth. This section is highly relevant for competitive exams requiring economic awareness.

Foreign direct investmentGST impactEconomic reformsTrade policyGovernment economic initiatives

Indian Economy and Policy Questions

Multiple choice

India has adopted

  1. Mixed Economy

  2. Socialist Economy

  3. Gandhian Economy

  4. Free Economy

  5. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

India adopted a mixed economy model, which incorporates both private and public sectors. This allows the government to intervene in key areas while permitting private enterprise to drive growth.

Multiple choice

Globalisation of Indian Economy means

  1. Increasing External Borrowing

  2. Increasing the size of the Indian Business abroad

  3. Increasing the size of the business of foreign MNCs

  4. Having minimum possible restrictions on economic relations with other countries

  5. None of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Globalisation involves the integration of the domestic economy with the world economy by reducing barriers to international trade and investment, allowing for freer movement of goods and services.

Multiple choice

Indian Government is in favour of mergers and acquisitions in banks. Which of the following cannot be considered a direct benefit of merger and acquisition?

  1. Most efficient and trained staff

  2. Increased market share

  3. Multiple and additional locations

  4. Opportunity to have a large customer base
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Mergers and acquisitions (M&A) directly provide scale, such as more locations and a larger customer base. However, they often lead to significant human resource challenges and redundancies, meaning 'most efficient and trained staff' is not a guaranteed or direct benefit of the merger process itself.

Multiple choice

The New Economic Policy deals with

  1. privatisation

  2. liberalisation

  3. globalisation

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The New Economic Policy (NEP) introduced in 1991 is characterized by the 'LPG' model: Liberalisation, Privatisation, and Globalisation, aimed at making the Indian economy more market-oriented.

Multiple choice

Directions: Read the passage and complete the sentence.

Engineers India Limited provides specialist services in

Directions: In this Section you have six short passages. After each passage you will find several questions based pm the passage. First, read Passage- I, and answer the questions based on it then go on the other passages.
PASSAGE-II

            Engineers India Limited (EIL), a public sector undertaking was set up in 1965. It is the leading design and engineering company in the field of petroleum refineries, petrochemicals, oil and gas processing offshore structures and platforms, fertilizers, metallurgy, and power. The services provided by EIL include design, engineering, procurement construction management, commissioning services in the areas of environmental engineering, heat and mass transfer equipment, information technology materials and maintenance, risk analyses, energy conservation and advance control and optimization. It was to its credit over 4000 assignments including 250 major projects. EIL has exported its services to a number of countries in Asia and Africa.

  1. procurement

  2. construction management

  3. risk analysis

  4. project management
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The passage lists 'design, engineering, procurement construction management, commissioning services' as services provided by EIL. While 'project management' is a broad term encompassing these, the specific list in the text makes this a slightly ambiguous question; however, in many exam contexts, project management is the intended aggregate answer for these services.

Multiple choice

Directions: Read the passage and answer the question.

Engineers India Limited does not deal in which of the following areas?

Directions: In this Section you have six short passages. After each passage you will find several questions based pm the passage. First, read Passage- I, and answer the questions based on it then go on the other passages.
PASSAGE-II

            Engineers India Limited (EIL), a public sector undertaking was set up in 1965. It is the leading design and engineering company in the field of petroleum refineries, petrochemicals, oil and gas processing offshore structures and platforms, fertilizers, metallurgy, and power. The services provided by EIL include design, engineering, procurement construction management, commissioning services in the areas of environmental engineering, heat and mass transfer equipment, information technology materials and maintenance, risk analyses, energy conservation and advance control and optimization. It was to its credit over 4000 assignments including 250 major projects. EIL has exported its services to a number of countries in Asia and Africa.

  1. Construction management

  2. Environment management

  3. Heat and mass transfer equijpment

  4. Cement manufacture
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The passage comprehensively lists EIL's areas: petroleum refineries, petrochemicals, oil and gas processing, offshore structures, fertilizers, metallurgy, and power. It also mentions environmental engineering and heat/mass transfer equipment. Cement manufacture (option D) is the only area NOT mentioned in the passage, making it the correct answer for what EIL does NOT deal in.

Multiple choice

Foreign direct investors, because of their increasing confidence in their ability for making sound investments in India, have been led to move from passive involvement in industrial joint ventures to active involvement in their own increasingly ambitious enterprises.

  1. Foreign direct investors, because of their increasing confidence in their ability for making sound investments in India, have been led

  2. Foreign direct investors, increasing confident about their ability for making sound investments in India, has led them

  3. Increasing confidence in their ability to make sound investments in India has led foreign direct investors

  4. Increasing confidence in their ability for making sound investments in India have led foreign direct investors

  5. Increasing confident about their abilities for making sound investments in India, foreign direct investors have been led
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Only option (3) uses the correct preposition ‘ability to .... do something’. Hence (3)

Multiple choice

Among the reasons for the decline of Indian manufacturing in the last three decades were the high cost of land, the pressure of housing and commercial development, and basing a marketing and distribution system on importing products from China and South-East Asia.

  1. basing a marketing and distribution system on importing products from China and South-East Asia

  2. a marketing and distribution system based on importing products from China and South-East Asia

  3. basing a system of marketing and distribution on the import of products from China and South-East Asia

  4. basing a marketing and distribution system on the imported products of China and South-East Asia

  5. a marketing and distribution system importing products from China and South-East Asia as its base
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Parallelism is tested here. High cost and the pressure are concrete nouns. So the third parallel noun can only be a concrete noun. Basing being a simple gerund would not fit the bill. A marketing and distribution system is the correct choice as it is a concrete noun. But option (5) is incorrect as its structure implies that a marketing and distribution system is importing products. Hence (2).

Multiple choice

What cause did Bill Gates take up on his recent visit to India?

  1. Education

  2. Poverty eradication

  3. Minority rights

  4. AIDS awareness
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

During his 2002 visit to India, Bill Gates pledged 100 million dollars through the Bill and Melinda Gates Foundation to combat the spread of HIV/AIDS. This initiative was one of the foundation's first major commitments to global health in India. The funds were aimed at improving awareness, prevention, and healthcare infrastructure for the disease.

Multiple choice

Which of the following investments was significantly effected by the Sub-Prime Crises 2008?

  1. Final investment in India

  2. Foreign investment in India

  3. Formal investment in India

  4. Fair institutional investment
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The 2008 Sub-Prime Crisis in the United States caused a global financial meltdown, leading to a significant withdrawal of foreign institutional investment from the Indian markets. This liquidity crunch impacted the stock market and the value of the rupee. Other options like final or formal investment are not standard economic terms in this context.

Multiple choice

Which one of the following describes the “home charges” policy adopted by the British in India?

  1. Paying for the secretary of State and his establishment at the India Office in London

  2. House tax in urban areas and agriculture tax

  3. Amount of investment earmarked for infrastructure development in India

  4. Charges on the transfer of finished products from England to India
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Home charges referred to the expenditure incurred by the British government in England for the administration of India. This included interest on public debt, pensions for retired officers, and the cost of the India Office in London.

Multiple choice

Directions: The last sentence in the following passage has been deleted. Select the sentence, out of the available options, that best suits the end of the passage

Readers are familiar with the concept of jobless growth. But India is now demonstrating a less familiar phenomenon, which, for want of a better phrase, can be called industry-less growth. This was unsurprising last year, when the global recession forced down industrial growth everywhere, including India. Industry typically grows more slowly, or falls faster, than GDP in a business downswing. But in 2002 the world has swung up out of the recession, notwithstanding some fears of a second downward dip in coming months. Many of our Asian neighbours have recorded big jumps in industrial growth, with Singapore leading the pack at 18.9 per cent. But in India Industrial growth continues to lag behind GDP growth even in a global recovery.

  1. India is lagging behind many Asian countries in terms of industrial growth.

  2. India goes through the unusual phenomena of slow industrial growth in a phase of recovery.

  3. Indian industry grows slowly even as GDP grows quickly.

  4. Industry less growth is a new phenomenon that is characterizing an increasing number of economies.

  5. It is a sad story of India's growth trajectory.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The preceding line mentions that Indian industry is growing surprisingly slowly even as the world is going through a phase of recovery. Option (2) is cogent both with the opening lines as well as the concluding lines of the passage. 

Multiple choice

Which of the following is not a characteristic of Indian economy?

  1. High rate of population growth.

  2. Extensive disguised unemployment.

  3. Low level of adult literacy.

  4. High level of exports.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

India is a developing economy characterized by a large population, disguised unemployment, and lower literacy rates compared to developed nations. A high level of exports is typically a characteristic of an advanced industrial economy, not India's.

Multiple choice

What is ' Look east' policy often in the news?

  1. Government of India' s initiative for the infrastructural development in the north eastern state

  2. India' s Search for oil & gas in its Eastern shoreline

  3. India' s Collaboration with some east asian countries in the exploration of oil & gas

  4. India' s continuing pursuit of close relations with South East Asian countries
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The 'Look East' policy was launched by India in 1991 to cultivate extensive economic and strategic relations with the nations of Southeast Asia.