Indian Economy Questions and Answers

Answer: B

The Union Budget is generally presented in February.

Under Article 112 the government lays the Annual Financial Statement before Parliament every year. By long practice it was presented on the last working day of February, and since 2017 it has been presented on 1 February, so that it can be passed before the financial year starts on 1 April.

A full budget has been presented in July only in election years, after a new government takes office (an interim budget in February is followed by the full one later, as in 2014 and 2019). January and December are never the regular months.

Answer: B

The answer is SIDBI.

The Small Industries Development Bank of India was established on 2 April 1990 under the SIDBI Act, 1989, as a wholly owned subsidiary of IDBI, the Industrial Development Bank of India. It is the principal financial institution for promoting, financing and developing micro, small and medium enterprises. Ownership was later transferred to public sector banks, insurers and other institutions.

The RBI was set up in 1935 under its own Act, NABARD in 1982, and ICICI in 1955 as a private development finance institution, so none of them was created by the SIDBI Act.

Answer: A

The first Finance Minister of independent India was R. K. Shanmukham Chetty (printed in the paper as Shanmukhan).

He held the office from 1947 to 1948 and presented independent India's first budget on 26 November 1947.

John Mathai succeeded him and presented the first budget of the Republic, and C. D. Deshmukh, the first Indian Governor of the RBI, was Finance Minister from 1950 to 1956. Liaquat Ali Khan was Finance Member of the Interim Government in 1946-47, before independence, so he does not count.

Answer: A

The Green Revolution is associated with agriculture.

The Green Revolution was the rapid rise in food-grain production in India from the mid-1960s, built on high-yielding varieties of wheat and rice, assured irrigation, chemical fertilisers and pesticides. It was led in India by M. S. Swaminathan and drew on Norman Borlaug's wheat research; Punjab, Haryana and western Uttar Pradesh were its heartland.

Sericulture is silk farming, fisheries are linked with the Blue Revolution, and bee-keeping with the Sweet Revolution; none of them was the field of the Green Revolution.

Answer: B

The Blue Revolution is related to the aquaculture industry.

The Blue Revolution refers to the rapid growth of fish production, especially through aquaculture (fish and shrimp farming) and modernised fisheries. India's fish output rose greatly from the 1970s onwards, and the term was later used for the government's integrated scheme for fisheries development.

The dairy industry is linked with the White Revolution (Operation Flood). Rubber and petrochemicals have no revolution associated with them in this sense.

Answer: C

The motif is on the Rs. 50 note.

The new Rs 50 note in the Mahatma Gandhi (New) Series, issued in 2018, carries the motif of Hampi with Chariot, the stone chariot of the Vittala temple at Hampi in Karnataka, on its reverse, depicting India's cultural heritage.

The Rs 500 note shows the Red Fort and the Rs 2,000 note shows Mangalyaan, the Mars Orbiter Mission. The one rupee note does not carry Hampi.

Answer: C

The New Economic Policy, with liberalisation, privatisation and globalisation, was introduced in 1991 during the prime ministership of P.V. Narasimha Rao, with Manmohan Singh as finance minister. Indira Gandhi, Rajiv Gandhi and Vajpayee were not in office at that time. The reforms of 1991 followed a balance of payments crisis, and they reduced licensing, opened the economy to foreign investment and lowered import duties. They began under Narasimha Rao's government, so no other prime minister in the list fits.

Answer: A

Octroi is a tax.

It was a levy by a local body on goods entering its area for use or sale, collected at checkposts on the town's boundary. Maharashtra was the last state to abolish it, in 2017, when GST subsumed such levies.

Answer: B

The RBI became state-owned in 1949.

It had been set up in 1935 as a shareholders' bank on the Hilton Young Commission's recommendation. The Reserve Bank (Transfer to Public Ownership) Act brought it fully into government hands from 1 January 1949.

Answer: C

Total deposits would neither increase nor decrease.

The deposits of the banking system as a whole depend on the cash base and the reserve ratio, not on how many banks share the business. Merging them changes only the internal transfers between banks; the aggregate credit creation is unchanged.