Indian Economy Questions and Answers

Answer: B

GIC was established in 1972.

General insurance was nationalised that year and 107 insurers were merged into four subsidiaries of the General Insurance Corporation. GIC became a pure reinsurer in 2000, when the four companies were separated from it.

Answer: A

FERA is the Foreign Exchange Regulation Act.

Enacted in 1973, it treated foreign exchange as a scarce national resource and made contravention a criminal offence with the burden of proof on the accused. FEMA replaced it in 1999, converting the regime into a civil one in which most current-account transactions are free.

Answer: A

The Mira Seth Committee dealt with the development of handlooms.

Appointed in 1996, it reviewed the handloom sector and recommended a shift from protection under the reservation order towards raising productivity, design and marketing.

Answer: D

It is the Swarnajayanti Gram Swarozgar Yojana.

Launched in 1999, it merged the IRDP and its allied schemes into a single self-employment programme built around self-help groups, credit and subsidy. It was itself restructured as the National Rural Livelihoods Mission in 2011.

Answer: C

The Banking Regulation Act was passed in 1949.

It gave the Reserve Bank comprehensive powers over banking companies - licensing, branch expansion, management, reserves, inspection and moratorium. It was originally the Banking Companies Act and was renamed in 1966.

Answer: D

India's exports are spread over several commodity groups.

At independence they were a handful of primary products - jute, tea, cotton. They now range across petroleum products, gems and jewellery, engineering goods, pharmaceuticals, textiles, chemicals and software services, with no single group dominant.

Answer: C

It was headed by M. Narasimham.

The Committee on the Financial System reported in 1991 and recommended lower statutory pre-emptions, prudential norms for income recognition and provisioning, and entry for new private banks. Its second report of 1998 dealt with capital adequacy and consolidation.

Answer: B

It refers to the rapid growth of population after 1921.

Before 1921 population rose and fell with famine and epidemic; 1911-21 was the only decade of the century to show a fall, because of the influenza pandemic. After 1921 the death rate declined steadily while the birth rate did not, so growth became continuous.

Answer: C

It was introduced in 1999.

The National Agricultural Insurance Scheme replaced the Comprehensive Crop Insurance Scheme from the rabi season of 1999-2000, extending cover to all farmers and all crops. It was itself replaced by the Pradhan Mantri Fasal Bima Yojana in 2016.

Answer: C

Deficit financing means public expenditure in excess of public revenue.

In Indian usage it means meeting that gap by borrowing from the Reserve Bank, which in effect creates new money. It can finance development when there is idle capacity, but beyond that it raises money incomes without raising output and so causes inflation.