Q251. The N.K. Singh Committee was primarily constituted by the Government of India to review which of the following?
Indian Economy: RAS Prelims MCQs
848 RAS Prelims practice MCQs on the Indian economy are on this page, in 10 chapters. They cover economic growth and development, the Human Development Index, monetary and fiscal policy and the Union Budget, fiscal federalism, agricultural development, industrial reforms and LPG, the service sector, energy and transport, skill development and employment, and social justice. Each question has an answer and an explanation.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
Showing 251–260 of 848 questions
Browse Indian Economy chapters
Q252. Which of the following statements best describes ‘Fiscal Consolidation’?
Explanation
This process involves implementing strategic measures to improve the government’s financial position by narrowing the gap between revenue and expenditure. It is achieved through increasing tax collections, rationalizing subsidies, and curbing non-essential spending. Successful consolidation lowers the national debt burden, reduces interest rates, and creates a stable environment for investment, which is essential for maintaining long-term economic health.
Q253. Read the following statements and select the correct option.
Statement I: The FRBM Act originally mandated the elimination of the revenue deficit.
Statement II: The FRBM Act strictly prohibits the RBI from subscribing to the primary issues of Central Government securities.
Statement I: The FRBM Act originally mandated the elimination of the revenue deficit.
Statement II: The FRBM Act strictly prohibits the RBI from subscribing to the primary issues of Central Government securities.
Explanation
The legislation originally set a goal to completely eliminate the revenue deficit to ensure that the government does not borrow for consumption. Furthermore, it strictly prohibited the central bank from participating in the primary market for government securities to prevent the direct monetization of debt. These rules were designed to instill transparency and discipline in the management of public finances.
Q254. A government is striving to meet its FRBM fiscal deficit target of 3% of GDP but is facing a revenue shortfall. Which of the following measures is an acceptable method of fiscal consolidation?
Explanation
To achieve fiscal targets sustainably, the government should focus on enhancing revenue through better tax administration and reducing unnecessary expenditures. This approach improves the quality of the budget without compromising essential investments in infrastructure or social welfare. Methods like printing money or defaulting on debt are harmful and unsustainable, whereas structural reforms lead to long-term stability and increased fiscal space.
Q255. Consider the following statements about the documents mandated by the FRBM Act to be laid before Parliament along with the Union Budget:
I. Macro-Economic Framework Statement.
II. Medium-Term Fiscal Policy Statement.
III. Fiscal Policy Strategy Statement.
IV. Annual Financial Statement.
Which of the above statements are correct?
I. Macro-Economic Framework Statement.
II. Medium-Term Fiscal Policy Statement.
III. Fiscal Policy Strategy Statement.
IV. Annual Financial Statement.
Which of the above statements are correct?
Explanation
The act requires the government to present three specific statements to parliament alongside the budget to ensure transparency. These include the macroeconomic framework, the medium-term fiscal policy, and the fiscal policy strategy. While the annual financial statement is a constitutional requirement for the budget itself, it is not a document specifically created by the mandate of the fiscal responsibility legislation.
Q256. Which of the following is NOT a target parameter typically monitored under the FRBM framework?
Explanation
Fiscal responsibility targets typically focus on indicators related to the government’s budget, such as the fiscal deficit, revenue deficit, and the overall level of public debt relative to the economy’s size. These are fiscal policy metrics. In contrast, the cash reserve ratio is a monetary policy tool managed exclusively by the central bank to regulate liquidity and banking operations effectively.
Q257. From the options provided, select the correct sequence of deficits in India in decreasing order of their typical magnitude (from largest to smallest).
Explanation
The fiscal deficit is the broadest measure, representing the total borrowing requirement, and is typically the largest. The revenue deficit, which covers the gap in day-to-day spending, is generally smaller than the fiscal deficit but larger than the primary deficit. The primary deficit is the smallest as it further excludes interest payments from the total fiscal borrowing needs of the government.
Q258. Under which Article of the Constitution of India is the Union Budget referred to as the "Annual Financial Statement"?
Explanation
The Constitution requires the President to present an estimate of the government’s receipts and expenditures for each financial year to the parliament. This document, known as the annual financial statement, outlines the planned fiscal activities of the Union. This constitutional mandate ensures legislative oversight over the executive’s power to tax and spend, forming the legal basis for the budget.
Q259. Consider the following statements regarding the Union Budget:
I. The budget is presented in the Lok Sabha by the Finance Minister.
II. The Rajya Sabha has the power to vote on the Demands for Grants.
III. The Finance Bill contains provisions for giving effect to the financial proposals of the Government.
IV. The Appropriation Bill authorizes withdrawal of funds from the Consolidated Fund of India.
V. The budget must be passed before the beginning of the new financial year to avoid a Vote on Account.
Which of the above statements are correct?
I. The budget is presented in the Lok Sabha by the Finance Minister.
II. The Rajya Sabha has the power to vote on the Demands for Grants.
III. The Finance Bill contains provisions for giving effect to the financial proposals of the Government.
IV. The Appropriation Bill authorizes withdrawal of funds from the Consolidated Fund of India.
V. The budget must be passed before the beginning of the new financial year to avoid a Vote on Account.
Which of the above statements are correct?
Explanation
The budget process involves several key steps and documents. While the upper house discusses the budget, it does not have the power to vote on demands for grants. The finance and appropriation bills are essential for tax changes and fund withdrawals. Ensuring the budget is passed before April prevents the need for temporary funding measures to keep the government running.
Q260. Which constitutional fund is primarily utilized to meet the expenditures of the Government of India, and requires parliamentary approval for withdrawal?
Explanation
This fund is the primary account of the government where all revenues, including taxes and loans, are deposited. Any withdrawal of money from this fund for public expenditure must be authorized by the parliament through the passing of an appropriation bill. It serves as the main source for financing the budget and ensures that public money is spent with legislative consent.Answer key for these questions
| Q | Correct answer |
|---|---|
| 251 | (c) Reviewing FRBM implementation and fiscal framework |
| 252 | (b) Government policies aimed at reducing deficits and accumulation of debt |
| 253 | (a) Both Statement I and Statement II are correct |
| 254 | (c) Rationalizing non-essential spending and improving compliance |
| 255 | (b) I, II and III only |
| 256 | (d) Cash Reserve Ratio as a percentage of NDTL |
| 257 | (b) Fiscal Deficit, Revenue Deficit, Primary Deficit |
| 258 | (c) Article 112 |
| 259 | (b) I, III, IV and V only |
| 260 | (a) Consolidated Fund of India |
Key facts from Indian Economy
- The RPSC syllabus lists economic concepts and the Indian economy as the first part of the Economy paper, followed by the economy of Rajasthan.
- Concept questions test definitions: nominal and real GDP, GNP and NDP, per capita income and the value-added method.
- Policy questions pair a tool with its effect, for example a rise in CRR reduces the lendable resources of banks.
- Scheme questions ask for the target group, ministry or year of schemes such as PMKVY, NAPS, PM SVANidhi and PM-SYM.
- Questions on Finance Commission and GST link the body to its Article, such as Article 280.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Indian Economy?
This page has 848 practice MCQs on Indian Economy. Each has the correct answer, and most have an explanation.
Which chapters does the Indian economy set cover?
Ten chapters: economic growth, development and sustainable development; measurement of development (HDI); monetary and fiscal policy and the Union Budget; fiscal federalism and the Finance Commission; agricultural development; industrial growth and LPG reforms; the service sector; energy, transport and communication; skill development and employment; and social justice and empowerment.
Is the Indian economy in the RAS Prelims syllabus?
Yes. RPSC lists Economic Concepts and the Indian Economy as the first part of the Economy paper. The second part covers the economy of Rajasthan, which is on its own page.
How should I revise economy for RAS Prelims?
Learn the definitions and the cause-and-effect chains first, then the schemes with their year, ministry and target group. Attempt each chapter, read every explanation and keep a one-line note for each scheme and body.