Q521. A major quantitative target of the Make in India initiative was to increase the share of manufacturing in the country’s GDP to what percentage by 2025?
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 521–530 of 848 questions
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Q522. Which of the following best describes the Production Linked Incentive (PLI) scheme?
Explanation
The Production Linked Incentive scheme is a key policy tool designed to boost domestic manufacturing and attract large-scale investments. It provides financial incentives to eligible companies based on their incremental sales of products manufactured in India over a base year. This scheme encourages companies to increase their production capacity and exports, thereby strengthening the local supply chain and making Indian goods more competitive.
Q523. Match List I with List II and select the correct answer.
| Policy/Scheme | Core Objective |
|---|---|
| A. Startup India | i. Promote domestic manufacturing and FDI |
| B. PLI Scheme | ii. Nurture innovation and entrepreneurship |
| C. Make in India | iii. Create export hubs with duty-free enclaves |
| D. SEZ Act | iv. Boost manufacturing capabilities and exports via sales incentives |
Explanation
Various government initiatives target different aspects of industrial growth. Startup India focuses on nurturing innovation and entrepreneurship, while the Production Linked Incentive scheme boosts manufacturing through sales-based incentives. Make in India is a broader push to promote domestic manufacturing and attract foreign direct investment. Additionally, the Special Economic Zones Act was enacted to create specialized export hubs through the development of duty-free enclaves.
Q524. Which of the following sectors is NOT currently covered under the Production Linked Incentive (PLI) scheme?
Explanation
The Production Linked Incentive scheme currently covers several high-tech and high-potential sectors to enhance India’s manufacturing capabilities. These include large-scale electronics, pharmaceuticals, and high-efficiency solar PV modules, among others. Traditional handloom weaving, while culturally and economically significant for rural employment, is not currently part of the PLI framework, which typically focuses on industries with significant potential for large-scale production and exports.
Q525. Consider the following sectors and arrange them in descending order based on their maximum permissible limit of Foreign Direct Investment (FDI) (including both automatic and government routes):
I. Multi-brand retail trading
II. Print Media
III. Telecommunications
Select the correct order:
I. Multi-brand retail trading
II. Print Media
III. Telecommunications
Select the correct order:
Explanation
Foreign Direct Investment limits vary across different sectors in India based on strategic importance. Telecommunications currently allows up to 100% investment through the automatic route. Multi-brand retail trading is permitted up to 51% with prior government approval and specific conditions. Print media, which is considered a sensitive sector regarding information and culture, has a lower maximum permissible limit of 26% under the government route.
Q526. Under the revised 2020 MSME classification, an enterprise is classified as a ‘Medium’ enterprise if:
Explanation
Under the revised 2020 MSME classification, the thresholds for categorization were significantly increased to support business scaling. An enterprise is classified as a ‘Medium’ enterprise if its investment in plant and machinery or equipment does not exceed 50 crore and its annual turnover does not exceed 250 crore. This upward revision allows larger firms to continue enjoying the benefits provided to MSMEs.
Q527. What is the primary role of the Public Sector Undertakings (PSUs) in the post-1991 era in India?
Explanation
In the post-1991 economic era, the role of Public Sector Undertakings has shifted from maintaining a broad monopoly to focusing on strategic and core sectors. PSUs are now expected to operate on a commercial basis, emphasizing efficiency and profitability. Their primary purpose is to manage critical infrastructure where private investment may be insufficient, while competing with private players in other areas of economy.
Q528. Which of the following is an essential criterion for a Central Public Sector Enterprise (CPSE) to be granted ‘Maharatna’ status?
Explanation
To be eligible for the prestigious Maharatna status, a Central Public Sector Enterprise must meet several stringent criteria. It must already hold Navratna status and be listed on the Indian stock exchange with the prescribed minimum public shareholding. Additionally, the company must have a significant global presence and meet specific financial thresholds regarding average annual net profit, net worth, and turnover.
Q529. Given below are two statements, one is labelled as Assertion (A) and the other is labelled as
Reason (R).
Assertion (A): The government introduced the ‘Navratna’ and ‘Miniratna’ schemes for selected Public Sector Enterprises.
Reason (R): The objective was to grant them enhanced financial and operational autonomy to compete globally.
Which of the following is correct?
Reason (R).
Assertion (A): The government introduced the ‘Navratna’ and ‘Miniratna’ schemes for selected Public Sector Enterprises.
Reason (R): The objective was to grant them enhanced financial and operational autonomy to compete globally.
Which of the following is correct?
Explanation
The government introduced schemes like Navratna and Miniratna to categorize high-performing public sector enterprises. The primary objective of these designations is to grant selected companies greater financial and operational autonomy. This empowerment allows them to make critical investment and expansion decisions without frequent government approvals. Consequently, these PSUs can respond more effectively to market dynamics and compete more efficiently with private entities.
Q530. Which of the following CPSEs does NOT hold the ‘Maharatna’ status (as of early 2024 classifications)?
Explanation
As of recent classifications, several major PSUs like BHEL, Indian Oil Corporation, and SAIL have been granted Maharatna status due to their significant financial performance and scale of operations. Hindustan Aeronautics Limited, while a crucial enterprise in the defense and aerospace sector with Navratna status, did not hold the Maharatna designation in early 2024. The status is periodically reviewed based on benchmarks.Answer key for these questions
| Q | Correct answer |
|---|---|
| 521 | (c) 25% |
| 522 | (d) Financial incentives based on incremental sales of domestic products. |
| 523 | (a) A-ii, B-iv, C-i, D-iii |
| 524 | (c) Traditional Handloom Weaving |
| 525 | (c) III, I, II |
| 526 | (c) Investment is up to 50 crore and turnover is up to 250 crore |
| 527 | (d) Strategic and core infrastructure operations on a commercial basis. |
| 528 | (a) It must hold Navratna status and be listed on the Indian stock exchange. |
| 529 | (a) Both A and R are true and R is the correct explanation of A. |
| 530 | (b) Hindustan Aeronautics Limited (HAL) |
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.