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 511–520 of 848 questions
Browse Indian Economy chapters
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q511. Given below are two statements, one is labelled as Assertion (A) and the other is labelled as Reason (R). Assertion (A): The government route for FDI approval requires prior consent from the respective ministries or departments. Reason (R): The automatic route does not require prior approval from the Government of India or the Reserve Bank of India, provided the investor notifies the RBI post-investment. Which of the following is correct?
Explanation
Foreign Direct Investment in India enters through two primary channels: the government route and the automatic route. The government route necessitates prior consent from the relevant sectoral ministries. Conversely, the automatic route allows investment without any prior approval from the central government or the Reserve Bank of India. While both statements are factual, they describe distinct mechanisms rather than providing causal explanations.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q512. Which scheme was introduced by the Government of India in 2000 to replace the earlier Export Processing Zones (EPZs) in order to provide an internationally competitive and hassle-free environment for exports?
Explanation
In the year 2000, the Government of India introduced the Special Economic Zones scheme to address the shortcomings of the earlier Export Processing Zones. The objective was to create an internationally competitive and hassle-free environment for exports. These zones are specifically delineated duty-free enclaves and are treated as foreign territories for trade operations, providing various fiscal incentives to attract large-scale investment.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q513. Match List I with List II and select the correct answer.
FDI Route/Concept
Description
A. Automatic Route
i. Building new production facilities from the ground up
B. Government Route
ii. Purchasing or leasing existing production facilities
C. Greenfield Investment
iii. Investment without prior central government approval
D. Brownfield Investment
iv. Investment requiring prior approval from sectoral ministries
Explanation
Foreign investment mechanisms are defined by their approval processes and the nature of the assets acquired. The automatic route requires no prior central government approval, whereas the government route necessitates it. In terms of physical investment, greenfield projects involve building entirely new production facilities from the ground up. In contrast, brownfield investments involve the acquisition or leasing of existing industrial production facilities.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q514. A Special Economic Zone (SEZ) is deemed to be a foreign territory for the purposes of:
Explanation
A Special Economic Zone is a specifically defined geographical region that has economic laws different from a country’s typical economic laws. In India, SEZs are legally deemed to be foreign territory for the limited purposes of trade operations, duties, and tariffs. This means that goods moving into the SEZ from the domestic market are treated as exports, and those moving out are imports.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q515. Read the following statements regarding Special Economic Zones (SEZs) in India: I. The SEZ Act was passed by Parliament in 2005. II. SEZ units enjoy 100% income tax exemption on export income for the first five years. III. Supplies from Domestic Tariff Area (DTA) to a SEZ are treated as physical exports. IV. State governments have no role in the establishment of SEZs. V. SEZs are exempt from Minimum Alternate Tax (MAT) indefinitely. Which of the statements given above are correct?
Explanation
The Special Economic Zones Act of 2005 provides the legal framework for the establishment and operation of SEZs in India. Units within these zones benefit from a 100% income tax exemption on export income for the first five years. Furthermore, any supplies made from the Domestic Tariff Area to an SEZ unit are treated as physical exports, making them eligible for export incentives.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q516. The phenomenon of ‘jobless growth’ in the post-reform Indian economy refers to:
Explanation
Jobless growth is an economic phenomenon where the Gross Domestic Product grows at a high rate, but this growth does not result in a proportional increase in employment opportunities. In the post-reform Indian context, this has often been observed as growth driven by capital-intensive and technology-driven sectors. Consequently, while the economy expands, the labor force does not experience a significant rise in formal jobs.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q517. Identify the incorrect statement regarding the pattern of industrial growth in India post-1991.
Explanation
The post-1991 industrial landscape in India was marked by significant structural shifts. The service sector’s contribution to GDP grew rapidly, outpacing manufacturing, and there was a substantial influx of foreign technology. Crucially, the public sector’s monopoly in many core industries, such as telecommunications, was ended to allow private competition. Therefore, stating that the public sector monopoly in telecommunications was retained is incorrect.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q518. Consider the following constraints faced by the Indian industrial sector post-liberalisation: I. Inadequate infrastructure facilities II. Stringent labor laws III. Lack of access to credit for MSMEs IV. Over-protection from foreign competition Which of the combinations given above incorrectly identifies the constraints?
Explanation
Following liberalisation, the Indian industrial sector faced several genuine challenges, including inadequate infrastructure, rigid labor laws, and limited credit access for Micro, Small and Medium Enterprises. However, over-protection from foreign competition is not a constraint faced after 1991; rather, it was a characteristic of the pre-reform era. Post-liberalisation, industries actually struggled with increased exposure to global competition due to reduced tariffs.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q519. The ‘Make in India’ initiative was launched by the Government of India in which year?
Explanation
The Make in India initiative was launched in 2014 to make India a manufacturing hub, with 25 focus sectors.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q520. Which of the following is not one of the four key pillars of the Make in India initiative?
Explanation
The Make in India initiative is built upon four primary pillars to facilitate investment and innovation. These include New Processes, New Infrastructure, New Sectors, and a New Mindset. The objective is to move away from bureaucratic hurdles and toward a more collaborative relationship with industry. Protectionism, which involves restricting trade to protect domestic industries, is not a pillar; instead, the program promotes global competitiveness.
Answer key for these questions
Q
Correct answer
511
(b) Both A and R are true but R is not the correct explanation of A.
512
(c) Special Economic Zones (SEZ) Scheme
513
(a) A-iii, B-iv, C-i, D-ii
514
(a) Trade operations, duties, and tariffs
515
(b) I, II and III
516
(b) High GDP growth driven by capital- intensive sectors without a proportional rise in employment.
517
(a) The public sector’s monopoly in core industries like telecommunications was completely retained.
518
(c) IV only
519
(b) 2014
520
(c) New Protectionism
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.
