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Deciphering the Economics

Indian Economic Development Practice Test – 1

Indian Economic Development Practice Test

1. Objectives of planning in India are………

a. Growth 

b. Self-reliance

c. Modernisation 

d. All of these

ANS. D

2. Who is the Chairperson of the Planning Commission of India?

a. President 

b. Prime Minister

c. Finance Minister 

d. Leader of Opposition

ANS. B

3. After independence India opted for:

a. Capitalist economy 

b. Socialist economy

c. Both a. and b. . 

d. Mixed economy

ANS. D

4. Who among the following is considered the chief architect of Indian Planning?

a. Pt.Jawaharlal Nehru 

b. Sir Benegal Rama Rau

c. Prasanta Chandra Mahalanobis 

d. Rajendra Prasad

ANS. C

5. The Twelfth Five Year Plan covered the period:

a. 1997-02 

b. 2002-07

c.2007-12 

d. 2012-17

ANS. D

6.Mention the period of the Third Five Year Plan:

a. 1956-61 

b. 1961-66

c. 1951-56 

d. 1967-74

ANS. B

7. NITI Aayog is headed by:

a.Finance Minister 

b.President

c. Prime Minister 

d.Governor of RBI

ANS. C

8. Equity refers to

(a) Equitable distribution of GDP 

(b) Development of Backward regions

(c )Both A & B 

(d) None of the above

ANS. C

9. Post-independence, India has always focused to become a self-sufficient or a self-reliant nation. This goal in the present Modi-era has been termed as

(a) Safal Bharat 

(b) Kaushal Bharat

(c) Atmanirbhar Bharat 

(d) Apna Bharat

ANS. C

10. Who is the originator of the Green Revolution in India

(a) Shri Jawahar Lal Nehru 

(b) Shri M.S.Swaminathan

(c ) DR.Manmohan Singh 

(d) None of these

ANS. B

11. Read the following statements: Assertion (A) and Reason (R). Itself-reliant chooses one of the correct alternatives.

Assertion

(A) Modernisation implies the adoption of new technology along with a change in the social and economic outlook.

Reason

(R) Over the years, there has been a reduction in the gender wage parity and the female labor force participation rate.

Alternatives:

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A).

(c) Assertion (A) is true but Reason (R) is false.

(d) Assertion (A) is false but Reason (R) is true

ANS. C

12. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives.

Assertion

(A): The Green Revolution resulted in multiple rises in food production. It helped in recovering the country from regular food shortages in the pre-revolution period. Green Revolution resulted in a Marketable or Marketed surplus.

Reason

(R): The use of High Yielding Variety (HYV) seeds, fertilizer, and pesticide in the correct quantities as well as regular supply of water caused a large increase in the production and productivity of food grains in India.

Alternatives:

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A).

(c) Assertion (A) is true but Reason (R) is false.

(d) Assertion (A) is false but Reason (R) is true

ANS. A

13. CASE STUDY

Read the following case study and answer the given questions

The performance of the Indian economy during the period of the first seven five year plans

(1950-1990) was satisfactory if not very impressive. On the eve of independence, India was an industrially backward country, but during this period of the first seven plans, our industries became far more diversified, with the stress being laid on the public investments in the industrial sector. The policy of import substitution led to the protection of the domestic industries against the foreign producers but we failed to promote a strong export surplus. Although the public sector expanded to a large extent it could not bring the desired level of improvement in the secondary sector. Excessive government regulations prevented the natural trajectory of growth of entrepreneurship as there was no competition, no innovation, and no modernization on the front of the industrial sector. Many Public Sector Undertakings (PSUs) incurred huge losses due to operational inefficiencies, red tapisril, poor technology, and other similar reasons. These PSUs even continued to function because it was difficult to close a government undertaking even if it is a drain on the country’s limited resources. On the agricultural front, due to the measures taken under the Green Revolution, India more or less became self-sufficient in the production of food grains. So the need for reforms of economic policy was widely felt in the context of changing global economic scenarios to achieve desired growth in the country.

Questions:

Q1. Which of the following was not a reason for the public sector to play a major role in the initial phase of Indian economic planning?

(a) Private entrepreneurs lacked sufficient capital for investment

(b) Government aimed for social welfare

(c) The market was big enough to encourage private industrialists for investment

(d) The government wanted to protect the indigenous producers from foreign competition

ANS. C

Q2. Inward looking trade policy aimed at

(a) Substituting imports with domestic production

(b) Substituting imports of consumer goods with capital goods

(c) Following an open economy model

(d) Restrictions on the movement of currency flows

ANS. A

Q3. The mechanization of Indian agriculture was one of the causes of the Green Revolution in India. The given statement is

(a) True (b) False

(c) Partially true (d) Partially false

ANS. A

14. CASE STUDY

Read the following case study and answer the given questions:

Criticism on the effects of the green revolution includes the cost for many small farmers using HYV seeds, with their associated demands of increased irrigation systems and pesticides. A case study is found in India, where farmers are buying Monsanto BT cotton seeds—sold on the idea that these seeds produced ‘non-natural insecticides’. In reality, they need to still pay for expensive pesticides and irrigation systems, which might lead to increased borrowing to finance the change from traditional seed varieties. Many farmers have difficulty in paying for the expensive technologies, especially if they have a bad harvest. These high costs of cultivation push rural farmers to take out loans—typically at high-interest rates. Over-borrowing commonly entraps farmers into a cycle of debt.

On top of this, India’s liberalized economy further exacerbates the farmers’ economic conditions. Indian environmentalist Vandana Shiva writes that this is the “second Green Revolution”. The first Green Revolution, she suggests, was mostly publicly funded (by the Indian Government).

Farmer’s financial issues have become especially apparent in Punjab, where its rural areas have witnessed an alarming rise in suicide rates. Excluding the countless unreported cases, there has been estimated to be a 51.97% increase in the number of suicides in Punjab in 1992–93, compared to the recorded 5.11% increase in the country as a whole. According to a 2019 Indian news report, indebtedness continues to be a grave issue affecting Punjabi people today, demonstrated by the more than 900 recorded farmer committed suicide in Punjab in the last two years.

Questions:

Q1. The green revolution includes the cost for many small farmers using……………seeds, with their associated demands of increased irrigation systems and pesticides. (Fill in the Blank)

ANS. HYV

Q2. There has been estimated to be a 51.97% increase in the number of suicides in Punjab in 1992–93. (True or False)

ANS. TRUE

Q3. According to a 2019 Indian news report, indebtedness continues to be a grave issue affecting Punjabi people today, demonstrated by the more than…………..recorded farmer committed suicide in Punjab in the last two years.

ANS. 900

Indian Economic Development Practice Test

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