introduction to indian economy section 4 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (a)

In India, a planned economy is based on the socialist system in which all have equal opportunities to education, healthcare, non-exploitation, equality of wealth etc.

The concept was borrowed from Russia and is based on achieving directive principles mentioned in our constitution.

Answer: (d)

There are two components of expenditure - plan and non-plan. Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission.

Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.

Answer: (c)

The national income of a country can be measured by:

1. Product Method or the Output Method
2. Income Method, and
3. Expenditure Method.

The output approach focuses on finding the total output of a nation by directly finding the total value of all goods and services a nation produces.

The expenditure approach is basically an output accounting method.

Under the Income method, national income is measured as a flow of factor incomes.

Answer: (c)

The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975.

Initially, five RRBs were set up on October 2, 1975, which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India.

Capital share being 50% by the central government, 15% by the state government and 35% by the scheduled bank

Answer: (c)

The normal duration of the 5th Five Year Plan was 1974-1979.

However, the newly elected Morarji Desai government rejected the plan in 1978 and introduced a new Sixth Five-Year Plan (1978-1983). This plan was again rejected by the Indian National Congress government in 1980 and a new Sixth Plan was made.