Indian Economy Mixed Quiz: Set 43

The correct answer is A, the Basic Savings Bank Deposit Account. The Reserve Bank asked banks in 2005 to offer a no-frills account with nil or very low minimum balance so that poor households would not be kept out by charges, and in 2012 the product was renamed the Basic Savings Bank Deposit Account, with a free debit card and a limited number of free withdrawals. It is the account opened under the Jan Dhan Yojana. Option B is wrong because a recurring deposit is a savings instrument with fixed monthly instalments. Option C is wrong because a current account is meant for business and usually carries a higher balance requirement. Option D is wrong because a fixed deposit locks a sum for a term and is not an inclusion account.

The correct answer is C, Brazil. India has no bilateral free trade agreement with Brazil. Its only preferential link with Brazil is through the limited India-MERCOSUR Preferential Trade Agreement, which covers a short list of products at reduced duty and is not a free trade agreement. Option A is wrong because India signed a Comprehensive Economic Partnership Agreement with South Korea that came into force in 2010, covering goods, services and investment. Option B is wrong because the India-Japan Comprehensive Economic Partnership Agreement came into force in 2011 and removes duties on the great majority of goods traded between the two countries. Option D is wrong because India has an Early Harvest Scheme with Thailand from 2004 and, more importantly, covers Thailand through the India-ASEAN Trade in Goods Agreement, since Thailand is a member of ASEAN.

The correct answer is C, 2013. The authority first worked as an interim body set up by a government resolution in October 2003, and it was given statutory status by the Pension Fund Regulatory and Development Authority Act of 2013, which came into force on 1 February 2014. Option A is wrong because 2003 is the year of the interim body, a date examiners often offer as a near miss; the authority had no statutory backing then. Option B is wrong because 1 May 2009 is the date from which the National Pension System was opened to all citizens of India on a voluntary basis, not the date of the Act. Option D is wrong because 2015 is the year of the Insurance Laws Amendment Act, which renamed the insurance regulator and raised foreign investment to forty-nine per cent, and also the year the Atal Pension Yojana was launched.

The correct answer is B, it is a price lower than the market price. Issue price is the subsidised rate at which grain from the government's buffer stock is sold through ration shops, and it is deliberately kept below the market price.

India's food security system works in three steps. The Food Corporation of India buys grain from farmers at the minimum support price, stores it as a buffer stock, and releases it to fair price shops under the public distribution system. The rate charged at those shops is the issue price, and the gap between what the government pays and what it charges is the food subsidy. Keeping the issue price low is exactly what makes grain affordable to poor households.

A is wrong: if it matched the market price there would be no subsidy and no reason for ration shops. C is wrong: the issue price is fixed by the government, not by the farmer. D is wrong: a price above the market rate would drive buyers away from ration shops altogether.

Exam tip: the farmer gets the MSP, the ration shop charges the issue price, and the difference between them is the food subsidy.

The correct answer is A, the committee chaired by Vijay Kelkar. Set up by the Finance Ministry after a decade in which stalled road and power concessions turned into bad loans, the Kelkar Committee reported in 2015 that risk had been pushed on to whoever would accept it rather than on to the party best able to manage it. It asked for independent sector regulators, a specialised dispute resolution mechanism instead of years of litigation, better preparation of projects before bidding, and an end to the use of PPP for small works. B led committees on poverty estimation and on the Twelfth Plan approach. C headed a group on the Reserve Bank economic capital framework. D is remembered for the two banking sector reform committees of 1991 and 1998.

The correct answer is B, 20 per cent. Viability Gap Funding is a one-time or deferred capital grant for a project that is economically necessary but commercially unviable, such as a rural road or a water supply line whose user charges can never repay the capital. The Department of Economic Affairs gives up to twenty per cent of the project cost, and the sponsoring ministry, State government or statutory authority may give a further twenty per cent, so support can reach forty per cent in total. That is why C is a tempting distractor: forty per cent is the combined ceiling, not the central share alone. A understates the scheme, and D is not available under it at all. Remember the pair of figures as twenty plus twenty.

The correct answer is D, Mauritius. The India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement, or CECPA, took effect in 2021 and is the first trade agreement India concluded with any African country. It covers goods, services and economic cooperation. Option A is wrong because India has no free trade agreement with South Africa; the two are linked only through the limited India-Southern African Customs Union talks, which have not produced an agreement, and through groupings such as BRICS, which are not trade agreements. Option B is wrong because India has no free trade agreement with Egypt, although the two countries have long-standing trade ties. Option C is wrong because India has no bilateral trade agreement with Kenya either, so Mauritius remains the answer for the African first.

The correct answer is B, giving loans and issuing credit cards. Payments banks were licensed on the recommendation of the Nachiket Mor Committee to widen access to deposits and payments, and the Reserve Bank's guidelines expressly bar them from lending and from issuing credit cards; their funds must go into government securities and deposits with other banks. Option A is wrong because taking deposits, up to a ceiling for each customer, is their main business. Option C is wrong because they may issue debit and ATM cards. Option D is wrong because they are allowed to distribute simple financial products such as insurance and mutual funds as an agent. Small finance banks are the other new category and they do lend, mainly in small amounts to the priority sector.

The correct answer is B, 1 January 2004. The National Pension System, a defined contribution arrangement, applies compulsorily to central government employees who joined service on or after 1 January 2004, with the armed forces excluded; employees recruited before that date remain under the older defined benefit pension. Option A is wrong because April 2000 is when the insurance regulator became a statutory body, not a pension milestone. Option C is wrong because 1 May 2009 is the date from which the system was extended to all citizens of India on a voluntary basis, which is a different and equally examinable date. Option D is wrong because 1 February 2014 is the date the Pension Fund Regulatory and Development Authority Act of 2013 came into force. Hold the three dates together: 2004 for government employees, 2009 for all citizens, 2014 for the statute.

The correct answer is B, the National Company Law Tribunal. For companies and limited liability partnerships the application for insolvency is filed before the Tribunal, which admits or rejects it, declares the moratorium and appoints the interim resolution professional; appeals lie to the National Company Law Appellate Tribunal and then to the Supreme Court. Option A is wrong for companies, though the Debt Recovery Tribunal is indeed the adjudicating authority under the Code for individuals and partnership firms, which is the distinction most often tested. Option C is wrong because the Securities Appellate Tribunal hears appeals against orders of the market regulator. Option D is wrong because winding up by the High Court belonged to the older company law regime, which the Code and the Companies Act of 2013 replaced.

The correct answer is C, 2022. The India-UAE Comprehensive Economic Partnership Agreement was signed on 18 February 2022 and came into force on 1 May 2022, a gap of barely ten weeks that makes it one of the fastest agreements India has brought into operation. Option A is wrong because 2019 is the year India announced at Bangkok that it would not join the Regional Comprehensive Economic Partnership, a different event altogether. Option B is wrong because no major Indian trade agreement entered into force in 2020; negotiations with the United Arab Emirates had not even formally begun by then. Option D is wrong because 2024 is the year the Trade and Economic Partnership Agreement with the EFTA states was signed, on 10 March, and that agreement entered into force only on 1 October 2025.

The correct answer is C, Mahila Samriddhi Yojna. It is the micro-finance scheme under which women borrow small sums at a concessional rate of interest, so the rebate in interest is built into the scheme itself. It is run by the National Backward Classes Finance and Development Corporation under the Ministry of Social Justice and Empowerment, and the money reaches women through State Channelising Agencies and self-help groups, mostly for petty trade and self-employment. A parallel scheme is run for Scheduled Caste women by the National Scheduled Castes Finance and Development Corporation. Option A is wrong because the National Maternity Benefit Scheme paid a one-time cash grant to poor pregnant women and was later merged into Janani Suraksha Yojana. Option B is wrong because it is a pilot for social security cover, not a credit scheme for women. Option D is wrong because Raj Rajeshwari Mahila Kalyan Yojana is a personal accident insurance cover for women, not a loan. Exam tip: Mahila Samriddhi Yojana means micro-credit for women at a concessional interest rate, run by NBCFDC.

The correct answer is B. Under the National Pension System a subscriber holds a Permanent Retirement Account Number and a Tier I account, which is the pension account proper and permits only restricted withdrawal before retirement, and may additionally open a Tier II account, which is a voluntary savings account from which money can be withdrawn freely. Option A is wrong because it reverses the two, the commonest error in this question. Option C is wrong because free withdrawal is the feature of Tier II alone; if Tier I allowed it, the scheme would cease to be a pension arrangement. Option D is wrong because Tier II is an add-on and cannot exist on its own: an active Tier I account is a precondition for opening it. The architecture around these accounts, the trust, the recordkeeping agency, the pension funds and the points of presence, is also asked.

The correct answer is A, Marginal product curve. The marginal product of a variable factor first rises, reaches a peak and then falls, so the curve traced out is an inverted U. This is the law of variable proportions at work. In the first stage the extra units of labour get plenty of the fixed factor to work with and each one adds more to output than the last; at the peak the fixed factor is being used best; after that each extra worker has too little of the fixed factor, so the addition to output keeps shrinking and can even turn negative. B is wrong because the short run marginal cost curve is U-shaped, falling and then rising, as cost moves opposite to product. C is wrong because the average variable cost curve is U-shaped for the same reason. D is wrong because the long run average cost curve is a flatter U-shaped envelope of the short run curves. Exam tip: product curves are inverted U, cost curves are U.

The correct answer is B, 2019, Bangkok. At the Regional Comprehensive Economic Partnership summit held in Bangkok in November 2019, India announced that it would not join the agreement. Its objections were a likely surge of cheap Chinese imports, the use of 2014 as the base year for tariff reduction, the absence of a workable safeguard against import surges and the failure to open services and professional mobility. Option A is wrong because the 2017 Manila summit was a stage of the negotiations, not the point of withdrawal. Option C is wrong because the remaining fifteen countries signed RCEP in 2020 at a virtual summit chaired by Vietnam, after India had already stayed out. Option D is wrong because no RCEP decision of India was taken at Jakarta in 2021.

The correct answer is C, about 40 per cent; the precise figure is 40.27 per cent. The eight core industries are the energy and basic material industries on which the rest of manufacturing depends, and because they make up two-fifths of the IIP their monthly index is read as an advance signal of what the fuller index will report a little later. Options A and B, 25 and 33 per cent, understate the share and are offered because candidates often confuse this figure with the share of manufacturing in gross value added or with the forest cover target of a third. Option D, 50 per cent, overstates it; no single group inside the IIP reaches half the weight except manufacturing as a whole, which stands at 77.63 per cent. Remembering the pair 40.27 for the core sector and 77.63 for manufacturing keeps the two apart.

The correct answer is A, 18 to 40 years. The Atal Pension Yojana was launched in 2015 in place of the earlier Swavalamban scheme and is aimed at workers of the unorganised sector. A subscriber must be between eighteen and forty years of age when joining, so that at least twenty years of contribution are made before the guaranteed monthly pension of one thousand to five thousand rupees begins at the age of sixty. It is administered by the Pension Fund Regulatory and Development Authority. Option B is wrong because eighteen to fifty is the eligible age band for the Pradhan Mantri Jeevan Jyoti Bima Yojana, a life insurance cover. Option C is wrong because there is no such band in this scheme. Option D is wrong because joining at fifty-nine would leave no accumulation period, which is why the upper limit is forty.

The correct answer is C, Customs union. A customs union removes duties on trade among its members and, in addition, requires every member to levy the same tariff on goods coming from outside the union, which is the common external tariff. Option A is wrong because a preferential trade agreement only lowers duties on a listed set of products and leaves external tariffs entirely to each country. Option B is wrong because a free trade area removes internal duties but each member keeps its own external tariff; this is the single commonest confusion in the topic. Option D is wrong because an economic union is a higher stage that already includes a common external tariff but adds the free movement of labour and capital and common economic policies, so the defining feature asked about belongs to the customs union stage.

The correct answer is B, indemnity. The principle of indemnity means a general insurance claim restores the insured to the position held before the loss but never pays more than the loss actually suffered, which is why a motor or fire claim is settled on the value of the damage. It does not apply to life insurance, because a human life has no measurable money value and the sum assured is fixed in advance. Option A is wrong because utmost good faith requires both parties to disclose all material facts, and it applies to every insurance contract including life. Option C is wrong because subrogation means that once the insurer has paid a claim it takes over the insured rights against any third party responsible for the loss. Option D is wrong because insurable interest means the insured must stand to suffer from the event insured against, and it too applies to life insurance.

The correct answer is A, Australia. The India-Australia Economic Cooperation and Trade Agreement, abbreviated ECTA, was signed in April 2022 and came into force in December 2022 as an interim step towards a wider comprehensive agreement. Option B is wrong because India and Canada have held talks on an Early Progress Trade Agreement but have signed no trade agreement, so no abbreviation attaches to Canada. Option C is wrong because the agreement with the United Kingdom is the Comprehensive Economic and Trade Agreement, or CETA, signed on 24 July 2025. Option D is wrong because the agreement with Japan is the Comprehensive Economic Partnership Agreement, a CEPA, in force since 2011. Keeping ECTA with Australia and CETA with the United Kingdom apart is exactly what this question tests.