Indian Economy Questions and Answers

Answer: C

Dr Verghese Kurien was the father of Operation Flood.

He built the Amul co-operative at Anand and, as chairman of the National Dairy Development Board, ran Operation Flood from 1970. William Gaud coined the term green revolution; Norman Borlaug and M.S. Swaminathan led it.

Answer: C

Core industries are the critical industries.

The eight core industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - supply inputs to the rest of the economy and carry about 40 per cent of the weight of the index of industrial production, which is why their output is watched as a leading indicator.

Answer: B

Indian Railways earn most from freight.

Goods traffic supplies about two-thirds of revenue while carrying a smaller share of the traffic units, and it cross-subsidises passenger fares, which are held below cost. Coal is by far the largest single commodity carried.

Answer: A

Barter is still practised in parts of Calcutta.

Pockets of direct exchange survive in old commodity markets and in some tribal periodic markets, where goods are traded against goods rather than money - but such exchange requires a double coincidence of wants, which is why money displaced it almost everywhere.

Answer: D

The Tax Reforms Committee was chaired by Raja Chelliah.

Appointed in 1991, it recommended fewer and lower rates on a broader base, and its work underlies the reduction of the peak income tax rate to 30 per cent and of customs duties from over 300 per cent.

Answer: B

Operation Flood began in 1970.

Run by the National Dairy Development Board under Verghese Kurien, it linked village milk producers to urban markets through a chain of co-operatives on the Amul pattern. It made India the world's largest milk producer and is called the White Revolution.

Answer: B

They were set up during the Second Plan.

Rourkela with German help, Bhilai with Soviet and Durgapur with British were all built between 1955 and 1959, giving effect to the Mahalanobis strategy of building heavy industry first.

Answer: B

Real national income is national income at constant prices.

Valuing output at the prices of a fixed base year strips out the effect of inflation, so that a rise in the figure means more goods and services and not merely dearer ones. National income at current prices is the nominal measure.

Answer: C

Black money is unaccounted money.

It is income on which tax due has not been paid and which is therefore kept out of the books. It arises from evasion, from smuggling and from other illegal dealing, and it drives a parallel economy that distorts both revenue and policy.

Answer: C

It is the sum of the budgetary deficit and the net increase in internal and external borrowings.

Equivalently, the fiscal deficit is total expenditure minus total receipts other than borrowings - that is, the government's entire borrowing requirement for the year. The revenue deficit and the primary deficit are narrower measures.