12 previous year UPSC Prelims questions on Indian Economy in the UPSC 2001 Prelims. Choose an option to see the answer and explanation.
Explanations state facts as of the year each question was asked; words like “recently” refer to that year.
Showing 11–12 of 12 questions
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UPSC 2001Indian Economy · Public Finance
Q11. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I (Term)
List-II (Explanation)
A. Fiscal deficit
1. Excess of Total Expenditure over Total Receipts
B. Budget deficit
2. Excess of Revenue Expenditure over revenue receipts
C. Revenue deficit
3. Excess of Total Expenditure over Total Receipts less borrowings
D. Primary deficit
4. Excess of Total Expenditure over Total Receipts less Payments borrowings and Interest
Explanation
A is correctly matched with 3: The fiscal deficit is the excess of total expenditure over total receipts, excluding borrowings. It measures the overall borrowing requirement of the government. B is correctly matched with 1: The budget deficit is the difference between total expenditure and total receipts, including borrowings. It is no longer used as a measure in India’s budgets. C is correctly matched with 4: The revenue deficit is the excess of revenue expenditure over revenue receipts, indicating a shortfall in current income. D is correctly matched with 2: The primary deficit is the fiscal deficit minus interest payments, reflecting the government’s borrowing requirement, excluding interest obligations.
UPSC 2001Indian Economy · External Sector of India
Q12. Assertion (A): Ceiling on foreign exchange for a host of current account transaction heads was lowered in the year 2000. Reason (R): There was a fall in foreign currency assets also.
Explanation
Assertion (A) is true: According to the annual report of the Reserve Bank of India, 2000, India further liberalized foreign exchange regulations by lowering restrictions on current account transactions under the Foreign Exchange Management Act (FEMA), allowing individuals and businesses greater access to foreign currency for trade, education, medical expenses, and travel. This move was part of India’s economic liberalization process aimed at integrating the country into global markets. Reason (R) is false: During the same period, India’s foreign currency assets were actually increasing due to a steady inflow of foreign direct investment (FDI), robust export growth, and rising remittances from overseas Indians. Hence, the relaxation of current account transaction limits was not due to a fall in foreign currency assets, but rather to boost economic activity and international trade. As per the Reserve Bank of India (RBI) Annual Report 2000, the liberalization of foreign exchange transactions under FEMA was undertaken to enhance India’s trade competitiveness, while foreign exchange reserves continued to rise.
Answer key for these questions
Q
UPSC year
Correct answer
11
2001
(d) A-3; B-1; C-4; D-2
12
2001
(c) A is true but R is false
Frequently asked questions
How many previous year UPSC questions are there on Indian Economy?
This page covers 12 previous year UPSC Prelims GS Paper-I questions on Indian Economy in the UPSC 2001 Prelims, asked from 1996 to 2025. Each has the correct answer and an explanation.
How should I use previous year UPSC questions for Prelims?
Attempt each question first, then open the answer and read the explanation for every option. Repeat by chapter, and track which statements UPSC reuses across years. Previous year questions show the exam pattern and difficulty level.
Which years are covered for Indian Economy?
Questions on Indian Economy in the UPSC 2001 Prelims are available for 30 years, from 1996 to 2025. Use the Year filter to practise a single paper.
