Indian Economy GK Questions with Answers – Page 56

The Second Plan (1956 to 1961) was built on the model of the statistician P. C. Mahalanobis and aimed at rapid industrialisation with a stress on heavy and basic industries such as steel, machinery and chemicals, on the belief that machines to make machines would speed up growth.

The Bombay Plan of 1944 was drawn up by a group of eight, mostly leading industrialists such as J. R. D. Tata, G. D. Birla, Purushottamdas Thakurdas, Lala Shri Ram and Kasturbhai Lalbhai, with John Mathai among them.

Per capita income is the average income of a person in a year, found by dividing national income by the entire population, including children and those who do not work.

The National Statistical Office, formed by merging the Central Statistical Office with the National Sample Survey Office, prepares the national accounts under the Ministry of Statistics and Programme Implementation.

Exports are goods produced at home and sold abroad, so they belong in domestic production. Imports are produced abroad but are already included in the spending of households, firms and government, so they must be taken out to leave only what the country itself produced.

The deflator compares what the year's output costs at this year's prices with what the same output would cost at base year prices, so nominal GDP goes on top and real GDP below, and the ratio is expressed as a percentage.

When output of every year is valued at the same fixed set of prices, any change in the total must come from a change in the quantity produced.

A market price contains the indirect taxes the buyer pays, which never reach the producer, so they must be taken out.

The committee was appointed in 1949 to prepare official estimates of national income after independence, and it submitted its final report in 1954.

He made the earliest estimate of India's national income in the nineteenth century and used it to argue that British rule was draining wealth out of the country, putting the average income at about twenty rupees a person a year.

Machines, buildings and vehicles wear out as they are used, and the value of that wear and tear must be set aside if the country is to keep its capital intact.

Net factor income from abroad is the income residents earn outside the country minus the income foreigners earn inside it.

GDP measures production inside the borders of a country in one accounting year, whoever the producer may be. A foreign firm making cars in India adds to India's GDP, because the test is the place of production and not the nationality of the producer.

Real GDP measures the value of all final goods and services produced in a year at the prices of one fixed earlier year, called the base year, so that the effect of rising prices is removed and true growth can be seen.

In India the fiscal or financial year runs from 1 April to 31 March, so the year that starts on 1 April 2025 is written as 2025-26.

Under the Coinage Act 2011 the Government of India alone has the right to mint coins, and the work is handled by the Department of Economic Affairs in the Ministry of Finance.

Inflation is a sustained rise in the general price level, measured in India by the CPI and the WPI.

A hawkish stance means the central bank treats inflation as its first enemy and is ready to raise interest rates and tighten money supply, even at some cost to growth.

By the balance between estimated receipts and expenditure, a budget is of only three types. A balanced budget has receipts equal to expenditure.

Monetary policy, the control of money supply and interest rates to keep prices stable, is the job of the central bank, the RBI, set up on 1 April 1935 under the RBI Act 1934 and nationalised on 1 January 1949.