Indian Economy Previous Year Questions (PYQ) with Answers – Page 5

The correct answer is A, 1949. The Reserve Bank of India was nationalised on 1 January 1949 under the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. Until then it was owned by private shareholders. The RBI was set up on 1 April 1935 under the Reserve Bank of India Act, 1934, on the recommendation of the Hilton Young Commission. Its first office was in Calcutta and it moved permanently to Bombay, now Mumbai, in 1937. C.D. Deshmukh, appointed in 1943, was its first Indian Governor. B is wrong because 1962 is not linked to the RBI's ownership. C is wrong because 1947 was the year of Independence; the RBI still had private shareholders then. D is wrong because 1955 is when the Imperial Bank of India became the State Bank of India. Exam tip: RBI set up 1 April 1935, nationalised 1 January 1949; SBI formed 1955; 14 major banks nationalised in 1969.

The correct answer is B, Primary sector. Dairying takes its produce directly from nature, so it belongs to the primary sector. Economic activity is usually grouped in three sectors. The primary sector draws on natural resources and covers farming, dairy, poultry, fishing, forestry and mining. The secondary sector turns those raw materials into goods, so a plant that converts milk into butter, cheese or milk powder is doing manufacturing. The tertiary sector provides services that support the other two, such as transport, banking, insurance and trade. Milk drawn from cattle is a natural product, which is why dairying, like beekeeping and sericulture, is counted with agriculture and allied activities. In India the primary sector still employs the largest share of workers while the tertiary sector contributes the largest share of GDP. Option A is wrong because the tertiary sector covers services. Option C is wrong because the secondary sector begins only when milk is processed into another product. Option D is wrong because the quaternary sector means knowledge services such as research and IT. Exam tip: dairy, fishing and mining are primary; processing them is secondary.