introduction to indian economy section 10 MCQ Questions & Answers Detailed Explanation

Answer: (d)

The Minimum Alternative Tax (MAT) was introduced for the first time in the Budget for the year 1996-97.

Minimum alternate tax or MAT is a tax levied on firms/ companies or limited liability partnerships (LLPs) making abundant profits as well as distributing dividends to its shareholders who leveraging on the features of the Indian Taxation system do not contribute towards the government’s taxation kitty.

Thus, for such corporates, a minimal tax amounting to some fixed percentage of book profits i.e. profits according to accounting records is charged as minimal alternative tax (MAT).

Answer: (b)

Madan Mohan Malaviya raised Rs.50,000 rupees to acquire the Hindustan Times along with the help of nationalist leaders Lajpat Rai and M. R. Jayakar and industrialist G. D. Birla, who paid most of the cash. Due to involvement of Lala Lajpat Rai with Punjab National Bank. Malaviya received much needed funds from the bank to revive the paper.

Answer: (b)

The Directorate of Marketing and Inspection (DMI) is an attached office of the Ministry of Agriculture. It was set up in the year 1935 to implement the agricultural marketing policies and programmes of the Central Government.

It aims at bringing integrated development of marketing of agricultural and allied products in the country. It is entrusted with the promotion of standardisation and grading of agricultural and allied produce.

Answer: (c)

Devaluation happens in countries with a fixed exchange rate. In a fixed-rate economy, the government decides what its currency should be worth compared with that of other countries. The exchange rate can change only when the government decides to change it.

If a government decides to make its currency less valuable, the change is called devaluation. Depreciation happens in countries with a floating exchange rate. A floating exchange rate means that the global investment market determines the value of a country’s currency.

Answer: (a)

The government of India is divesting its share from public sector undertakings. Most of the government undertakings were incurring losses during the pre liberalization period.

Hence, after the introduction of a new economic policy in 1991, the government started downsizing its share in PSU. But the process of disinvestment is very slow due to a host of legal and political hurdles.

Answer: (c)

In an economy, the sectors are classified into private and public on the basis of ownership. Private sector is owned and managed by proprietors and partnerships while the public sector is wholly owned and managed by government.