The Indian Economy forms a dynamic, high-weightage component of the UPSC Civil Services Examination, evaluating a candidate’s understanding of macroeconomic principles, fiscal policies, banking structures, and developmental planning. This domain tests awareness of national income accounting, inflation dynamics, poverty alleviation schemes, agricultural reforms, and international trade frameworks. Practicing structured multiple-choice questions helps aspirants master economic terminology, budget indicators, and policy shifts required for preliminary screening and descriptive Main examinations.
1. Which of the following organizations calculates and publishes the Gross Domestic Product (GDP) data in India?
Correct Answer: b) National Statistical Office (NSO)
Explanation:
The National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), is responsible for the collection, compilation, and publication of national income statistics and GDP data in India.
2. What is the primary objective of the Monetary Policy Committee (MPC) in India?
Correct Answer: b) Fixing the benchmark interest rates to maintain price stability while keeping in mind growth
Explanation:
The primary mandate of the MPC is inflation targeting, maintaining price stability while keeping growth in mind, within the statutory inflation target framework set by the central government.
3. Which of the following indices is currently used by the Reserve Bank of India (RBI) for inflation targeting?
Correct Answer: b) Consumer Price Index - Combined (CPI-C)
Explanation:
Under the amended Reserve Bank of India Act, 1934, the central bank targets inflation based on the Consumer Price Index - Combined (CPI-C), aiming for 4% with a tolerance band of +/- 2%.
4. What does 'Repo Rate' signify in the monetary policy framework?
Correct Answer: b) The rate at which the RBI lends money to commercial banks against government securities
Explanation:
Repo rate (Repurchase rate) is the benchmark interest rate at which the central bank provides overnight or short-term liquidity to commercial banks against collateral securities.
5. What is meant by 'Statutory Liquidity Ratio (SLR)'?
Correct Answer: b) The percentage of net demand and time liabilities that banks must maintain in liquid assets like gold, cash, or approved securities
Explanation:
SLR requires commercial banks to maintain a specified fraction of their deposits in safe, liquid assets such as government securities before lending to the public.
6. What is 'Fiscal Deficit' in government finance?
Correct Answer: b) Excess of total government expenditure over total receipts excluding borrowings
Explanation:
Fiscal deficit indicates the total borrowing requirements of the government from all domestic and external sources during a given fiscal year.
7. Which of the following components constitutes the largest share of India's current account receipts in the Balance of Payments?
Correct Answer: b) Software and IT-enabled services exports
Explanation:
While merchandise exports form a large share of trade, services exports—led predominantly by IT and IT-enabled business services—constitute a massive and vital component of India's current account receipts.
8. What is the primary function of NITI Aayog in the Indian economic structure?
Correct Answer: b) Acting as the apex public policy think tank providing strategic and technical advisory inputs
Explanation:
NITI Aayog (National Institution for Transforming India) serves as the premier policy think tank of the government, fostering cooperative federalism and strategic planning.
9. What does the 'GDP Deflator' measure?
Correct Answer: b) The overall price inflation across all domestic goods and services included in GDP
Explanation:
The GDP deflator measures the changes in prices for all domestically produced goods and services in an economy, calculated as the ratio of nominal GDP to real GDP multiplied by 100.
10. Which of the following sectors has historically contributed the largest share to India's Gross Value Added (GVA)?
Correct Answer: c) Services sector
Explanation:
The services sector (tertiary sector) accounts for over 50% of India's Gross Value Added and economic output, making it the dominant growth engine.
11. What is 'Priority Sector Lending (PSL)' in the Indian banking system?
Correct Answer: a) Mandatory lending by banks to sectors like agriculture, MSMEs, and weaker sections deemed critical for development
Explanation:
The RBI mandates commercial banks to allocate a specified percentage of their adjusted net bank credit to priority sectors to promote inclusive growth.
12. What is the term for an economic situation characterized by simultaneous high inflation, stagnant economic growth, and high unemployment?
Correct Answer: b) Stagflation
Explanation:
Stagflation is a rare and challenging macroeconomic condition where economic stagnation coincides with high price inflation and unemployment.
13. Which organization releases the 'Ease of Doing Business' report historically, or compiles similar global economic indicators?
Correct Answer: b) World Bank Group
Explanation:
The World Bank historically published the Ease of Doing Business rankings to evaluate regulatory environments for businesses across economies.
14. What does 'Open Market Operations (OMOs)' conducted by the Reserve Bank of India involve?
Correct Answer: a) Buying and selling of government securities in the open market to regulate liquidity
Explanation:
OMOs are quantitative monetary policy instruments where the RBI buys or sells government securities to inject or absorb liquidity in the banking system.
15. What is the main objective of the 'Insolvency and Bankruptcy Code (IBC)' enacted in India in 2016?
Correct Answer: b) To consolidate and time-bound the resolution process for insolvent companies and individuals
Explanation:
The IBC provides a single, time-bound legal framework for resolving insolvency and bankruptcy in India, improving the ease of doing business and credit recovery.
16. Which institution in India acts as the regulator for the capital and securities markets?
Correct Answer: b) Securities and Exchange Board of India (SEBI)
Explanation:
SEBI is the statutory regulatory body established under the SEBI Act, 1992, to protect investors and regulate the securities and capital markets in India.
17. What is 'Current Account Deficit (CAD)' in the balance of payments?
Correct Answer: a) When a country's total imports of goods, services, and transfers exceed its total exports
Explanation:
CAD occurs when the value of total imported goods, services, and net transfers is higher than the value of exports, indicating net reliance on foreign capital.
18. What is 'Universal Basic Income (UBI)' proposed in economic policy discussions?
Correct Answer: a) A government welfare program providing a regular, unconditional cash transfer to every citizen
Explanation:
UBI is a social welfare model where all citizens receive a fixed, unconditional sum of money from the government regardless of their income or employment status.
19. Which of the following taxes was subsumed under the Goods and Services Tax (GST) framework in India?
Correct Answer: b) Excise duty, service tax, and value-added tax (VAT)
Explanation:
GST is a comprehensive indirect tax that subsumed multiple cascading central and state indirect levies, including central excise duty, service tax, and state VAT.
20. What does 'Capital Adequacy Ratio (CAR)' measure for commercial banks?
Correct Answer: a) The proportion of a bank's capital to its risk-weighted assets
Explanation:
CAR (also known as Capital to Risk-Weighted Assets Ratio) ensures that banks have enough cushion of capital to absorb a reasonable amount of losses before becoming insolvent.
21. What are 'Non-Performing Assets (NPAs)' in the banking sector?
Correct Answer: a) Loans or advances where principal or interest payments are overdue for a period of 90 days or more
Explanation:
An asset becomes non-performing when it ceases to generate income for the bank, specifically classified as an NPA if interest or principal payments remain overdue for 90 days.
22. Which of the following indices is published by the UNDP to measure a country's overall achievement in health, education, and standard of living?
Correct Answer: b) Human Development Index (HDI)
Explanation:
The Human Development Index, published annually by the United Nations Development Programme, is a composite statistic of life expectancy, education, and per capita income indicators.
23. What is the primary purpose of 'Zero-Based Budgeting (ZBB)'?
Correct Answer: b) Requiring every item of expenditure to be justified afresh from zero for each new period
Explanation:
ZBB is a budgeting method where all expenses must be justified for each new period, starting from a base of zero rather than incremental adjustments from previous budgets.
24. What is 'Green GDP'?
Correct Answer: b) An indicator of economic growth that factors in environmental degradation and depletion of natural resources
Explanation:
Green GDP adjusts traditional economic output measures by accounting for environmental costs such as pollution, resource depletion, and climate damage.
25. Which of the following refers to 'Hot Money' in international finance?
Correct Answer: b) Portfolio investments that move swiftly between financial markets seeking short-term high returns
Explanation:
Hot money refers to capital flows that quickly shift from one country to another for short-term profit or interest rate differentials, posing risks of sudden capital flight.
26. What is the primary mandate of the 'Fair and Remunerative Price (FRP)' in Indian agriculture?
Correct Answer: a) The legally mandated minimum price that sugar mills must pay to sugarcane farmers
Explanation:
FRP is determined under the Sugarcane (Control) Order, 1966, representing the minimum price sugar mills are legally bound to pay cane growers.
27. What is 'Crowding Out Effect' in fiscal economics?
Correct Answer: a) When high government borrowing drives up interest rates and reduces private sector investment
Explanation:
Crowding out occurs when heavy government borrowing increases domestic interest rates, making it costlier for private businesses to borrow and invest.
28. Which of the following is considered an indirect tax in India?
Correct Answer: c) Goods and Services Tax (GST)
Explanation:
GST is an indirect tax levied on the supply of goods and services, where the incidence of the tax can be passed on to the final consumer, unlike direct taxes.
29. What does 'Disinvestment' by the government entail?
Correct Answer: b) Selling a part or whole of shares of Central Public Sector Enterprises (CPSEs) to private investors
Explanation:
Disinvestment involves the government liquidating its equity stake in public sector undertakings to raise resources, improve efficiency, and reduce fiscal burdens.
30. Which organization releases the 'World Economic Outlook' report periodically?
Correct Answer: b) International Monetary Fund (IMF)
Explanation:
The World Economic Outlook is a flagship survey published biannually by the IMF, providing analysis of global macroeconomic developments and economic projections.
31. What is 'Lumpenproletariat' or similar economic terminology for structural unemployment characterized by technological displacement?
Correct Answer: b) Structural unemployment
Explanation:
Structural unemployment occurs when shifts in technology or economic structure render certain job skills obsolete, causing mismatch between workers and available jobs.
32. What is 'M3' measure of money supply in India commonly referred to as?
Correct Answer: b) Broad Money
Explanation:
M3 represents Broad Money in India, comprising currency with the public, demand deposits with banks, time deposits with banks, and other deposits with the RBI.
33. What is the primary function of the 'National Bank for Agriculture and Rural Development (NABARD)'?
Correct Answer: b) Acting as an apex development bank providing credit and refinance for agriculture and rural development
Explanation:
NABARD is a apex development financial institution established in 1982 to promote sustainable agriculture and rural prosperity through credit support and institutional development.
34. What does 'Base Effect' mean in the context of inflation measurement?
Correct Answer: a) The distortion in inflation rates caused by unusually high or low price levels in the corresponding period of the previous year
Explanation:
Base effect refers to the impact of the price level in the reference period on the calculation of inflation rates; a low base last year can make current inflation appear artificially high.
35. Which of the following is categorized as a 'Navratna' public sector undertaking characteristic?
Correct Answer: a) Enhanced financial autonomy permitting capital investments up to specific limits without prior government approval
Explanation:
Navratna status is granted to high-performing public sector enterprises, giving them greater financial and operational autonomy to compete globally.
36. What is 'Universal Credit' or direct benefit transfer (DBT) primarily aimed at achieving in public finance?
Correct Answer: a) Eliminating leakages in welfare subsidies by transferring funds directly to beneficiaries' bank accounts
Explanation:
Direct Benefit Transfer (DBT) uses Aadhaar and digital banking infrastructure to route welfare payments directly to intended recipients, plugging leakages and administrative inefficiencies.
37. What is 'Purchasing Power Parity (PPP)' used to compare across different countries?
Correct Answer: b) The relative cost of a common basket of goods and services to measure real living standards and exchange rates
Explanation:
PPP theory states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries, widely used to compare GDP.
38. Which of the following measures represents 'Primary Deficit'?
Correct Answer: a) Fiscal deficit minus interest payments on previous borrowings
Explanation:
Primary deficit shows the borrowing requirements of the government excluding interest liabilities on past loans, reflecting current fiscal stance.
39. What is 'Microfinance' primarily designed to provide?
Correct Answer: b) Small financial services, microcredit, and savings facilities to low-income individuals or self-help groups
Explanation:
Microfinance provides financial services to unemployed or low-income individuals who lack access to traditional banking systems, fostering entrepreneurship and self-reliance.
40. What is the primary objective of India's 'Production-Linked Incentive (PLI)' scheme?
Correct Answer: a) To boost domestic manufacturing capacity, attract investments, and enhance export competitiveness
Explanation:
The PLI scheme offers financial incentives to companies based on incremental sales from products manufactured in India, aiming to build global manufacturing champions.
41. Which index is released by the World Bank measuring the quality of regulations and business environments across countries?
Correct Answer: a) Ease of Doing Business (historically)
Explanation:
The Ease of Doing Business index evaluated business regulations, startup procedures, tax compliance, and contract enforcement across economies.
42. What is 'Deficit Financing' in government economic management?
Correct Answer: a) Financing government budget deficits by borrowing from the central bank or printing new currency
Explanation:
Deficit financing occurs when government expenditures exceed revenues and the gap is met by borrowing from the RBI or printing money, which can be inflationary if unchecked.
43. What does 'Liquidity Adjustment Facility (LAF)' enable the RBI to do?
Correct Answer: a) Control short-term money market liquidity through repo and reverse repo operations
Explanation:
LAF is the primary operational framework for monetary policy through which the RBI absorbs or injects liquidity using repo and reverse repo rates.
44. Which of the following is a direct tax levied by the Central Government of India?
Correct Answer: b) Corporate Tax
Explanation:
Corporate tax is levied directly on the net income or profits of corporations by the Central Government, making it a direct tax.
45. What is 'Venture Capital'?
Correct Answer: b) Financing provided by investors to startup companies and small businesses with high growth potential
Explanation:
Venture capital is private equity investment directed toward early-stage, high-risk innovative enterprises offering high potential returns.
46. What is 'Disguised Unemployment' commonly observed in the Indian agricultural sector?
Correct Answer: b) A situation where more people are employed in an activity than actually required, resulting in zero marginal productivity
Explanation:
Disguised unemployment occurs when extra workers do not contribute to total output; if they are removed, total production remains unchanged.
47. Which institution regulates the insurance sector in India?
Correct Answer: b) Insurance Regulatory and Development Authority of India (IRDAI)
Explanation:
IRDAI is the statutory regulatory body set up under the IRDA Act, 1999, to regulate and promote the insurance and reinsurance industries in India.
48. What is the primary function of the 'Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002'?
Correct Answer: a) Enabling banks and financial institutions to auction residential or commercial properties (securing loans) without court intervention
Explanation:
The SARFAESI Act empowers banks and financial institutions to recover non-performing assets expeditiously by seizing and selling securities without court intervention.
49. What does 'Depreciation of Currency' imply in international trade?
Correct Answer: b) A decrease in the value of domestic currency relative to foreign currencies driven by market forces
Explanation:
Currency depreciation means domestic currency loses value against foreign currencies in a floating exchange rate system, making imports costlier and exports cheaper.
50. Which of the following bodies is responsible for fixing the Minimum Support Prices (MSP) for major agricultural crops in India?
Correct Answer: b) Commission for Agricultural Costs and Prices (CACP)
Explanation:
The CACP recommends MSPs for various agricultural commodities to the government, which officially announces them based on these recommendations.
51. What is 'Demographic Dividend'?
Correct Answer: a) Economic growth potential resulting from shifts in a population's age structure, specifically when the share of the working-age population is larger
Explanation:
Demographic dividend occurs when a country has a high proportion of working-age adults relative to dependents, boosting productivity and savings if supported by proper education and job creation.
52. What is 'Reverse Repo Rate'?
Correct Answer: a) The rate at which the RBI borrows short-term funds from commercial banks or absorbs liquidity
Explanation:
Reverse repo rate is the rate at which commercial banks park their surplus funds with the RBI, acting as a tool to absorb excess liquidity from the system.
53. Which of the following is considered a 'Navratna' or 'Maharatna' enterprise attribute?
Correct Answer: a) Substantial turnover, net profit, and net worth thresholds with global presence
Explanation:
Maharatna and Navratna statuses are conferred on central public sector enterprises meeting rigorous financial criteria regarding turnover, net profit, and net worth.
54. What is 'Inclusive Growth' in economic development policy?
Correct Answer: a) Economic growth that creates employment opportunities and ensures widespread sharing of economic benefits across all sections of society
Explanation:
Inclusive growth focuses on equity, poverty reduction, and broad-based participation so that the fruits of economic expansion are shared by marginalized and vulnerable sections.
55. What is the primary function of the 'Food Corporation of India (FCI)'?
Correct Answer: b) Procuring food grains at MSP, maintaining buffer stocks, and distributing them for public distribution systems
Explanation:
The FCI is the nodal agency entrusted with safeguarding food security by procuring grains from farmers at MSP, maintaining buffer reserves, and distributing supplies for welfare programs.
56. What does 'Inflation' imply for the purchasing power of money?
Correct Answer: b) Decreases the purchasing power of money
Explanation:
Inflation is the general rise in prices over time, which means each unit of currency buys fewer goods and services, thereby reducing its purchasing power.
57. What is 'Angel Tax' in the Indian taxation ecosystem historically?
Correct Answer: b) Income tax levied on funding received by unlisted startups from angel investors if the share price exceeds fair market value
Explanation:
Angel tax refers to the tax levied under Section 56(2)(viib) of the Income Tax Act on capital raised by unlisted startups through issue of shares above fair market value.
58. Which of the following organizations compiles and publishes the 'Multidimensional Poverty Index (MPI)' globally?
Correct Answer: b) UNDP and Oxford Poverty and Human Development Initiative (OPHI)
Explanation:
The global MPI is published jointly by the UNDP and OPHI, measuring multiple deprivations in health, education, and standard of living at the household level.
59. What is 'Monopsony' in market structures?
Correct Answer: b) A market characterized by a single buyer facing many sellers
Explanation:
Monopsony is a market structure in which a single buyer exerts overwhelming control over purchasing power from multiple sellers (e.g., government as sole buyer in certain sectors).
60. What is 'Capital Formation' in macroeconomic theory?
Correct Answer: a) The net addition to a country's stock of capital goods such as machinery, factories, and infrastructure
Explanation:
Capital formation refers to the increase in physical capital assets, which enhances productive capacity and drives long-term economic growth.
61. What is 'Standing Deposit Facility (SDF)' introduced by the RBI?
Correct Answer: a) A collateral-free liquidity absorption tool that allows the RBI to absorb surplus funds from commercial banks
Explanation:
The SDF is part of the RBI's liquidity management framework allowing the central bank to absorb liquidity from commercial banks without needing to provide government securities as collateral.
62. Which of the following is considered a key objective of 'Economic Planning' in developing economies?
Correct Answer: b) Optimal utilization of scarce national resources to achieve rapid growth, equity, and self-reliance
Explanation:
Economic planning aims to channel national resources efficiently to foster rapid economic development, bridge regional disparities, and promote social justice.
63. What does 'External Commercial Borrowing (ECB)' refer to?
Correct Answer: a) Loans taken by Indian entities from non-resident lenders in foreign currency
Explanation:
ECBs refer to commercial loans raised by eligible resident entities from external sources in foreign currency, regulated under FEMA guidelines.
64. What is 'National Income' in macroeconomic terms?
Correct Answer: b) Net National Product at Factor Cost (NNP at FC)
Explanation:
National Income is formally defined as Net National Product at Factor Cost, representing the total income earned by residents of a country from producing goods and services.
65. What is 'Fiscal Federalism' concerned with?
Correct Answer: a) The division of financial powers and responsibilities between different levels of government (Centre and States)
Explanation:
Fiscal federalism deals with the vertical and horizontal allocation of tax powers, expenditures, and revenue-sharing transfers between federal and sub-national governments.
66. What is 'Wholesale Price Index (WPI)' primarily used for tracking?
Correct Answer: a) Changes in the price of goods traded in wholesale bulk markets before retail stage
Explanation:
The WPI tracks price movements of goods at the wholesale or bulk stage before they reach retail consumers, though it excludes services.
67. What is 'Vicious Circle of Poverty' proposed by economists like Ragnar Nurkse?
Correct Answer: a) A circular constellation of forces tending to act and react upon one another in such a way that a poor country keeps remaining poor
Explanation:
The vicious circle of poverty explains how low income leads to low savings, low investment, low productivity, and back to low income, trapping nations in underdevelopment.
68. Which of the following is a key indicator of financial inclusion in India?
Correct Answer: a) Expansion of Pradhan Mantri Jan Dhan Yojana (PMJDY) bank accounts
Explanation:
PMJDY and similar initiatives drive financial inclusion by ensuring universal access to banking facilities, credit, insurance, and pension services for unbanked populations.
69. What does 'Aatmanirbhar Bharat' economic strategy emphasize?
Correct Answer: a) Self-reliance through strengthening domestic manufacturing, resilience, and global supply chain integration
Explanation:
Aatmanirbhar Bharat (Self-Reliant India) aims to make the country self-sustaining and globally competitive by boosting domestic capacities across key economic sectors.
70. What is 'Tobin Tax' proposed in international finance?
Correct Answer: a) A tax levied on spot currency transactions to deter speculative capital volatility
Explanation:
Originally proposed by James Tobin, a Tobin tax is a levy on international currency transactions designed to curb short-term speculative capital flows.
71. Which of the following institutions is responsible for regulating pension funds in India?
Correct Answer: b) Pension Fund Regulatory and Development Authority (PFRDA)
Explanation:
PFRDA is the statutory authority established to promote, develop, and regulate the pension sector in India, overseeing schemes like the National Pension System (NPS).
72. What is 'Moral Suasion' as a qualitative tool of monetary policy used by the RBI?
Correct Answer: a) Persuasion and advice given by the central bank to commercial banks to align with monetary policy objectives
Explanation:
Moral suasion involves psychological pressure, meetings, and informal requests by the central bank urging commercial banks to adhere to credit guidelines and national priorities.
73. What is 'Capital Flight'?
Correct Answer: a) The rapid outflow of financial assets and capital from a country due to political or economic instability
Explanation:
Capital flight occurs when investors hastily withdraw their capital from a country due to fears of currency devaluation, economic crisis, or political turmoil.
74. What is the primary objective of the 'Insolvency and Bankruptcy Code (IBC)' framework regarding failing firms?
Correct Answer: a) Ensuring quick resolution or orderly liquidation to maximize asset value and protect creditor interests
Explanation:
The IBC aims to resolve insolvency in a time-bound manner, prioritizing revival plans or orderly liquidation to preserve economic value and improve credit discipline.
75. What does 'Quantitative Easing (QE)' by a central bank involve?
Correct Answer: a) An unconventional monetary policy where the central bank purchases long-term securities from the open market to inject money into the economy
Explanation:
Quantitative easing is an expansionary monetary policy tool used when standard interest rates are near zero, injecting liquidity directly into financial markets.
76. Which of the following is considered a 'Public Good' in economic theory?
Correct Answer: a) National defense, street lighting, and public roads
Explanation:
Public goods are non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from use and use by one does not reduce availability to others.
77. What is 'Laffer Curve' in supply-side economics?
Correct Answer: a) A graphical representation showing the relationship between tax rates and government tax revenue
Explanation:
The Laffer curve illustrates that excessively high tax rates can discourage economic activity and result in lower total government tax revenue than moderate rates.
78. What is 'Lorenz Curve' used to represent in economics?
Correct Answer: a) Income or wealth inequality within a population
Explanation:
The Lorenz curve is a graphical distribution of income or wealth inequality, serving as the basis for calculating the Gini coefficient.
79. What is 'Gini Coefficient'?
Correct Answer: a) A statistical measure of economic inequality ranging from 0 (perfect equality) to 1 (perfect inequality)
Explanation:
Derived from the Lorenz curve, the Gini coefficient quantifies income or wealth distribution inequality within a nation on a scale from 0 to 1.
80. Which of the following constitutes 'Foreign Direct Investment (FDI)' as opposed to Foreign Portfolio Investment (FPI)?
Correct Answer: a) Investment in physical assets, management control, and long-term business operations in a foreign country
Explanation:
FDI involves establishing direct business interests or owning lasting management control in an enterprise operating in another country, distinct from passive portfolio investments.
81. What is 'Securitization' in financial markets?
Correct Answer: a) The process of pooling various types of debt assets (like mortgages or loans) and packaging them into interest-bearing securities sold to investors
Explanation:
Securitization transforms illiquid financial assets (like loans) into tradable marketable securities, freeing up bank capital for new lending.
82. What is 'Phillips Curve' in macroeconomics?
Correct Answer: a) A historical inverse relationship between rates of unemployment and corresponding rates of inflation
Explanation:
The Phillips curve illustrates the economic observation that lower unemployment is associated with higher inflation, and vice versa in the short run.
83. What is 'Recession' in economic cycles?
Correct Answer: a) A significant decline in general economic activity spanning more than a few months, normally visible in real GDP, income, employment, and industrial production
Explanation:
A recession is a formal business cycle contraction, commonly defined by economists as a decline in real GDP for two or more consecutive quarters.
84. What is 'Subsidies Rationalization' in fiscal policy reform?
Correct Answer: a) Targeting subsidies efficiently to needy beneficiaries while eliminating leakages and wasteful expenditure
Explanation:
Subsidy rationalization optimizes government spending by directing fiscal support to genuine poor households via targeted mechanisms like DBT, curbing fiscal strains.
85. What is 'Inclusive Insurance' or schemes like PMJJBY and PMSBY aimed at promoting?
Correct Answer: a) Expanding financial and social security net coverage to low-income and vulnerable rural populations at affordable premiums
Explanation:
Schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) provide low-cost life and accident insurance to deepen social protection.
86. What is 'Gross National Product (GNP)'?
Correct Answer: a) The total market value of all final goods and services produced by the residents of a country, including net factor income from abroad, within a given period
Explanation:
GNP measures the total economic output produced by a country's citizens and businesses, both domestically and internationally, adding net factor income from abroad to GDP.
