introduction to indian economy section 10 Practice Questions Answers Test with Solutions & More Shortcuts

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)

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: (b)

The Tenth Five-Year Plan (2002–2007) envisaged attainment of 8% GDP growth per year; reduction of poverty ratio by 5 percentage points by 2007; and reduction in gender gaps in literacy and wage rates by at least 50% by 2007.

It set the goal that the rate of literacy must be increased by at least 75%, within the tenure of the Tenth Five Year Plan.

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.