Indian Economy GK Questions with Answers – Page 55

Fiscal policy is the government's use of taxation and public spending, so taxes are its main tool. In India, fiscal policy is run by the Union Government through the Ministry of Finance, and the Union Budget is its yearly statement.

The Reserve Bank of India was nationalised on 1 January 1949 under the Reserve Bank of India (Transfer to Public Ownership) Act, 1948.

Gulzarilal Nanda became the first Deputy Chairman when the Planning Commission began work in 1950, and he later became interim Prime Minister twice, in 1964 and 1966.

Regional Rural Banks were set up under the Regional Rural Banks Act, 1976, after the Narasimham Working Group of 1975 recommended small banks close to the villages.

Total fertility rate (TFR) adds up the age-specific fertility rates of women aged 15 to 49 to show how many children a woman would have if she lived through these years at current rates.

The government bond market and the stock market deal in long-term funds, so they are capital markets; call money and treasury bills belong to the money market.

Sterilization means cancelling out the effect of foreign exchange operations on the domestic money supply, and the RBI does it mainly through open market operations.

Selling dollars supports a falling rupee and buying dollars absorbs heavy inflows, but to fight inflation the RBI sells, not buys, securities.

When people keep more of their money in banks instead of as cash, banks can lend more, so each rupee of reserve money creates more money in the economy.

Under Section 22 of the RBI Act, 1934, the Reserve Bank has the sole right to issue banknotes in India.

The Seventh Five Year Plan (1985–90), launched under Prime Minister Rajiv Gandhi, had the slogan 'food, work and productivity'. It aimed to raise food grain production, create jobs and improve productivity, and it laid stress on modern technology.

The First Five Year Plan (1951–56) gave top priority to agriculture, irrigation and power, because India faced food shortages after Partition and needed to feed its people first.

Kshitish Chandra Neogy chaired the First Finance Commission, set up by the President in November 1951, which gave its report in 1952 for the period 1952 to 1957.

In a progressive tax the rate rises as income rises, so each extra rupee is taxed at a higher rate than the rupees before it.

The Second Five-Year Plan, 1956 to 1961, moved the focus from farming to rapid industrialisation, especially heavy and basic industries.

It is the advance grant the Lok Sabha makes so that the government can keep spending from 1 April until the full budget is passed.

A unicorn is a startup that is not listed on the stock market and is valued at more than one billion US dollars.

The expert group headed by Suresh Tendulkar, which reported in 2009, recommended measuring poverty through MPCE on the Mixed Reference Period.

When the government runs a deficit, it borrows heavily from the same pool of savings that private firms use, so interest rates rise and private investment falls.

All four plans came before the First Five Year Plan started on 1 April 1951. The Bombay Plan of 1944 was prepared by eight industrialists led by J. R. D. Tata and G. D. Birla and favoured state-led heavy industry.