introduction to indian economy section 1 MCQ Questions & Answers Detailed Explanation

Answer: (d)

Antyodaya Anna Yojana (AAY) is a centrally sponsored scheme launched on December 2000 for one crore of the poorest families. It is on the lookout for the ‘poorest of the poor’ by providing them 35 kilos of rice and wheat at Rs.2 per kg.

Answer: (b)

The Gadgil formula was evolved in 1969 for determining the allocation of central assistance for state plans in India. It was adopted for distribution of plan assistance during Fourth and Fifth Five Year Plans.

It was named after the then deputy chairman of the Planning Commission Dr D R Gadgil.

Answer: (b)

Agriculture contributed more than 50 per cent of India’s GDP in 1950-51.

The contribution of agriculture and allied sectors to India’s GDP has been declining since then.  Agriculture’s contribution fell down to 14.5 per cent in 2010-11 and to 14.1 per cent in 2011-12.

Answer: (a)

Interest payments are the single largest item of expenditure. They account for more than 40% of the total non-development expenditure.

These items of expenditure are charged on the Consolidated Fund of India and are not required to be voted by the Lok Sabha.

Answer: (c)

In the parlance of economy, Gild-edged market is called market of safe securities. “Gildedged” denotes high-grade securities, consequently carrying low yields.

Answer: (c)

Credit control is the most important function of the Reserve Bank of India.  By using credit control methods RBI tries to maintain monetary stability.

There are two types of methods:

1. Quantitative control to regulate the volume of total credit; and
2. Qualitative Control to regulate the flow of credit.