Which is the first Indian state to ratify the GST Constitution Amendment Bill, recently passed by the Parliament of India?

The correct answer is C, FRBM Act. The Fiscal Responsibility and Budget Management Act, 2003 is a fiscal reform: it binds the Union government to cut its fiscal and revenue deficits and to report on its borrowing. It deals with the government's budget, not with banks and financial markets. Financial sector reforms after 1991 began with the Narasimham Committee on the financial system, which asked for sound banking rules. Banks had to keep capital in proportion to their risky assets, the capital adequacy ratio based on the Basel norms, and to recognise bad loans honestly as non-performing assets (NPAs) instead of hiding them in their books. Option A is wrong because capital adequacy norms were a core banking reform. Option B is wrong because clear rules for NPAs were part of the same reform. Option D is wrong because the SARFAESI Act, 2002 lets banks seize and sell the security of defaulting borrowers without going to court, a major step to recover bad loans. Exam tip: banking reforms = capital adequacy, NPA norms, SARFAESI; FRBM = fiscal discipline of the government.

The correct answer is B, Both (A) and (B) are correct. Headline inflation is the change in the overall Consumer Price Index, which tracks the average price of a fixed basket of goods and services bought by a typical household, including food, fuel, clothing, housing and services. Core inflation removes the items whose prices swing the most, mainly food and fuel, to show the underlying trend in prices. The difference matters for policy: a jump in vegetable prices after a poor monsoon may fade in a few months, but a steady rise in core inflation tells the central bank that price pressure has spread across the economy. That is why the RBI's Monetary Policy Committee watches both numbers. In India the all-India CPI is compiled every month by the National Statistics Office. Option A is wrong because both statements are correct definitions. Option C is wrong because statement A is also correct. Option D is wrong because statement B is also correct. Exam tip: headline = the whole basket; core = the basket minus food and fuel.

The correct answer is D, Gas and water supply. The Index of Industrial Production (IIP) covers only three sectors: mining, manufacturing and electricity. It is a monthly index released by the National Statistics Office under the Ministry of Statistics and Programme Implementation, and it shows how fast the volume of industrial output is rising or falling compared with a base year. Manufacturing carries by far the largest weight in the index, so a slowdown in factories pulls the IIP down quickly. Gas and water supply are counted in the wider industry sector of national income, together with electricity, but they are not part of the IIP basket, and that is the trap in this question. Option A is wrong because mining is one of the three sectors of the IIP. Option B is wrong because electricity is also a sector of the IIP. Option C is wrong because manufacturing is the biggest part of the index. Exam tip: IIP = mining + manufacturing + electricity; the index of eight core industries is a separate, smaller index.

The correct answer is B, To maintain price stability and ensure economic growth. Monetary policy is run by the central bank, the Reserve Bank of India, which controls the supply and the cost of money in the economy. Under the RBI Act, 1934, as amended in 2016, its main goal is to keep prices stable while keeping in mind the objective of growth. In 2016 India adopted flexible inflation targeting, with a CPI inflation target of 4 per cent within a band of 2 to 6 per cent, and a six-member Monetary Policy Committee sets the repo rate. Tools such as the repo rate, the cash reserve ratio and open market operations let the RBI make credit cheaper or dearer. Option A is wrong because raising government expenditure is a fiscal policy step decided through the Budget. Option C is wrong because cutting the fiscal deficit is also a fiscal policy goal of the government. Option D is wrong because managing forex reserves is a supporting task of the RBI, not the main aim of monetary policy. Exam tip: monetary policy means the RBI and the repo rate; fiscal policy means the government, taxes and spending.

The correct answer is A, M. Visvesvaraya. Sir M. Visvesvaraya, the engineer and former Diwan of Mysore, wrote ‘Planned Economy for India’ in 1934, the first book to set out a plan for India’s development. He proposed doubling the national income in ten years by shifting people from farming to industry, which is why he is seen as a pioneer of economic planning in India. His birthday, 15 September, is observed as Engineers’ Day, and he received the Bharat Ratna in 1955. Other plans followed: the Congress set up the National Planning Committee under Jawaharlal Nehru in 1938, and a group of industrialists released the Bombay Plan in 1944. Option B is wrong because J. R. D. Tata was one of the industrialists who signed the Bombay Plan, not the author of this book. Option C is wrong because G. D. Birla was also a signatory of the Bombay Plan. Option D is wrong because Pattabhi Sitaramayya is known for writing a history of the Indian National Congress. Exam tip: Visvesvaraya’s book 1934, National Planning Committee 1938, Bombay Plan and Gandhian Plan 1944, People’s Plan 1945.