introduction to indian economy section 5 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (b)

Answer: (a)

A progressive tax is a tax in which the tax rate increases as the taxable amount increases. Progressive taxes are imposed in an attempt to reduce the tax incidence of people with a lower ability to pay, as such taxes shift the incidence increasingly to those with a higher ability-to-pay.

It reduces tax burdens on people who can least afford to pay them and is, thus, considered effective in reducing economic inequalities.

Answer: (c)

Ways and means advances (WMA) is a mechanism used by the Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments.

This is guided under Section 17(5) of RBI Act, 1934, and are repayable in each case not later than three months from the date of making that advance'.

Answer: (a)

State Government transactions are carried out by RBI in terms of the agreement entered into with the State Governments in terms of section 21 A of the RBI Act.

As of now, such agreements exist between RBI and all the State Governments except with the Government of Jammu and Kashmir.

Answer: (d)

The Ninth Plan recognised the integral link between rapid economic growth and the quality of life of the mass of the people. Ensuring environmental sustainability of the development process through social mobilisation and participation of people at all levels was one of the specific objectives of the Ninth Plan as approved by the National Development Council.

In the Ninth Plan document, policies and programmes during the Eighth Plan period were reviewed, shortcomings identified and a new policy framework suggested overcoming the shortcomings and ensuring the sustainability of the development process not only in economic terms but also in terms of social and environmental factors.