introduction to indian economy section 5 MCQ Questions & Answers Detailed Explanation

Answer: (b)

The Finance Commission of India came into existence in 1951. It was established under Article 280 of the Indian Constitution by the President of India.

It was formed to define the financial relations between the centre and the state. The Constitution of India has made several provisions to bridge the gap of finances between the Centre and the States.

These include various articles in the constitution like Article 268, which facilitates a levy of duties by the Centre but equips the states to collect and retain the same.

Similarly, there are Articles 269, 270, 275, 282 and 293 all of which specify ways and means of sharing resources between Union and States. Apart from the above-mentioned provisions, The Indian Constitution provides an institutional framework to facilitate Centre-State TransfeRs.This body is the Finance Commission

Answer: (c)

Taxes levied, collected and retained by the Centre are:

1. Corporation Tax (Corporate tax)
2. Customs Duties.
3. Surcharge on Income Tax.
4. Taxes on the capital value of assets of individuals and companies.
5. Fees on matters of the Union list.

These taxes belong to the centre exclusively. In other words, no part of the proceeds of these taxes can be assigned to the states.

Answer: (a)

At present, the index is being developed only for the residential housing sector.

However, at a later stage, the index could be expanded to develop separate indices for commercial property and land. Primary data on housing prices is being collected from real estate agents by commissioning the services of private consultancy/research organisations of national repute.

In addition, data on housing prices is also being collected from the housing finance companies and banks, which is based on housing loans contracted by these institutions.

Answer: (b)

The State Bank of India, the largest banking and financial services company in India by revenue, assets and market capitalization; traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent.

Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turn became the State Bank of India.

The Government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India

Answer: (b)

Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003.

As of 10 May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.

Answer: (a)

In its report, McKinsey Global Institute (MGI) estimated that 680 million Indians, or 56 per cent of the population, lacks the means to meet their essential needs.

It proposed a new “empowerment line” that aims to measure the minimum economic cost for a household to fulfil the eight most basic needs.