1006
04
INDIAN ECONOMY
The Economy section is one of the most important sections of the CDS examination. Around 8-10 questions
are asked from this section every year. Topics from this section include Basic Economic concepts, Banking
system, Share market, Inflation and Deflation, Foreign exchanges and reserves, Some important financial
institutions, Important economic indices etc.
INTRODUCTION OF INDIAN
ECONOMY
Indian economy is primarily an agricultural economy with
major emphasis on service sector. Two-third of Indian people
earn their living directly or indirectly through agriculture.
Indian economy is the 7th largest economy in the world
measured by nominal GDP and the 3rd largest by Purchasing
Power Parity (PPP).
Main characteristics of Indian economy are as follows
i. Agrarian Economy In an Agrarian economy,
agriculture dominates in both the Gross National
Product (GNP) and employment. More than half of
India’s working population is engaged in agriculture.
ii. Mixed Economy It is an economy where both public
and private sector co-exist. The nature of Indian
economy is a mixed economy. The term was coined by
JM Keynes. India opted for ‘Mixed Economy’ in the
industrial policy of 1948.
iii. Developing Economy Following features shows that
‘Indian economy is a developing economy’
• Low per capita income and occupational pattern is biased
towards primary sector.
CDS Pathfinder
• Heavy population pressure and prevalence of chronic
unemployment and under employment.
• Steadily improving rate of capital formation.
• Low capital per head and unequal distribution of
wealth/assets.
Broad Sectors of Indian Economy
There are three sectors of Indian economy, which are as
follows
i. Primary Sector It is directly related to the extraction or
utilisation of natural resources. Agriculture, mining,
fishing, quarrying, dairy sector and many other such
functions come under the primary sector.
ii. Secondary Sector It utilises the end product of the
primary sector, to manufacture finished goods, through
the refinement and processing of the primary products.
Construction, manufacturing, electricity, gas and water
supply come under the secondary sector.
iii. Tertiary Sector Tertiary sector generally provides
services, instead of goods to other sector. It is also
called as service sector. Business, transport,
telecommunication, banking, insurance, real estate,
community and personal services come under the
tertiary sector.
GENERAL STUDIES Indian Economy
Other Sector of Economy
Quaternary Sector This sector consists of the intellectual and
knowledge based abilities. Research and development,
culture, information technology, consulting, financial
planning, education etc come under the quaternary sector.
Quinary Sector This sector includes highest level of
decision-making. It includes top officials of government,
media, universities etc.
SOCIAL AND ECONOMIC
DEVELOPMENT INDEX
Various economists have proposed different methods to
measure economic growth and development. One of the
important method is Human Development Index.
Human Development Index (HDI)
• The United Nations Development Programme (UNDP)
introduced the HDI in its first Human Development Report
(HDR), prepared under the stewardship of Mahbub-ul-Haq
in 1990.
• HDR, 1990 defined human development as the process of
widening people’s choices as well as raising the level of
well-being achieved.
Indicators of HDI
Three main indicators of HDI are as follows
i. Life Expectancy Index (LEI) Infant mortality is not
considered as a separate indicator in this index. Thus, life
expectancy refers to life expectancy at birth, not at age one.
ii. Education Index (EI) This index is measured by mean of
years of schooling for adults aged 25 years and above and
expected years of schooling for children of school entering
age.
iii. Income Index (II) The standard of living dimension of
human development index is measured by gross national
income per capita. The index uses the logarithm of
income, to reflect the diminishing importance of income
with increasing GNI.
Human Development Report, 2015
In 2020 HDR, Norway, Ireland and Switzerland are placed at
top three positions. India ranked at 131st position with value of
0.645 score in the medium human development category.
NATIONAL INCOME OF INDIA
• National Income (NI) is the net value of all the final goods
and services produced by its nationals during a financial
year. It is a flow concept. In India, the financial year is from
1st April to 31st March. The national income is calculated
annually.
1007
• According to National Income Committee (1949), “A
national income estimate measures the volume of
commodities and service turned out during a given
period counted without duplication”.
• NI = C + G + I + (X −M) + (R − P) − Depreciation −
Indirect tax + Subsidies.
Where, C = Total Consumption Expenditure
G = Total Government Expenditure
I = Total Investment Expenditure
X = Export
M = Import
(R-P) = Net Factor Income from Abroad
∴ R ⇒ Received, P ⇒ Payment
Methods of Measuring
National Income
There are three types of methods, which are as follows
i. Product Method In this method, net value of final
goods and services produced in a country during a
year is obtained, which is called Total Final
Product. This represents Gross Domestic Product
(GDP).
ii. Income Method In this method, a total of net
income earned by working people in different sectors
and commercial enterprises is obtained.
iii. Consumption Method It is also called expenditure
method. Income is either spent on consumption or
saved. Hence, national income is the addition of total
consumption and total savings. In India, a
combination of production method and income
method is used for estimating national income.
Estimates of National
Income in India
• In 1868, the first attempt was made by Dadabhai
Naoroji in his book ‘Poverty and Un-British Rule in
India’. He estimated the per capita annual income to be
` 20.
• The first scientific attempt to measure national income
in India was made by Professor VKRV Rao in
1931-32. He divided the Indian economy into 13
sectors.
• In 1949, National Income Committee under the
Chairmanship of Professor PC Mahalanobis was
constituted. The other members were Professor VKRV
Rao and Professor DR Gadgil.
PLANNING IN INDIA
Economic planning refers to the path of actions in terms
of policy measures to be followed in future, in pursuance
of pre-determined objectives.
1008 CDS Pathfinder

Planning
History of Planning in NITI Aayog Parameter NITI Aayog
Commission
India • NITI Aayog or National Institution States Role State
governments are
States role was
limited to the
for Transforming India Aayog came expected to play National
• The first attempt to initiate economic
into existence on 1st January, 2015. A a more Development
planning in India was made by Sir M policy-making think-tank of significant role. Council and
Visvesvaraya, a noted engineer and government that replaces Planning annual
politician, in 1934 through his book, interaction
Commission and aims to involve during plan
‘Planned Economy for India’. states in economic policy-making. meetings.
• In 1938, National Planning • It will provide strategic and technical Member To be known as Secretaries or
Commission was set-up under the advice to the central and the state Secretary the CEO and to Member
be appointed by Secretaries were
Chairmanship of Jawaharlal Nehru governments. the Prime appointment
by the Indian National Congress. Minister. through the
usual process.
• Its recommendation could not be Structure under NITI
implemented because of the Aayog Part-time To have a Full Planning
Members number of Commission had
beginning of the World War II and part-time no provision for
• NITI Aayog will be headed by the
changes in the Indian political members, part-time
situation. In 1944, Bombay Plan was Prime Minister and will have a depending on members.
presented by eight leading Governing Council, comprising the need from
Chief Ministers of States and Heads time-to-time.
industrialists of Bombay.
of all the Union Territories. The
• Gandhian Plan was given by Shriman Government Council replaces the
Narayan Agarwal in this year. In
1945, People’s Plan was given by MN
earlier National Development
Council (NDC).
FIVE YEAR PLANS
Roy and in 1950, Sarvodaya Plan was
• In addition, there will also be a First Five Year Plan (1951-56)
given by Jai Prakash Narayan. A few
points of this plan were accepted by Regional Council comprising of • This was based on Harrod Domar
the government. Chief Ministers and Lieutenant model. Highest priority accorded to
Governors of Union Territories, agriculture in view of large import of
which will be mandated to develop
National Development plans that are region specific.
foodgrains and inflation.
• Target growth 2.1% and achieved
Council • The Aayog will have 7-8 full time
3.6%.
members and two well-known and
All the plans made by the Planning • Many irrigation project were initiated
accomplished part-time members,
Commission was to be approved by including the Bhakra, Hirakud and
drawn from leading research
National Development Council (NDC) Damodar Valley dams.
organisations and major universities.
first. It was constituted to build
cooperation between the states and the • Four Union Ministers, nominated by
Second Five Year Plan (1956-61)
Planning Commission for economic the Prime Minister, will also be
• Rapid industrialisation with particular
planning. It is an extra-constitutional included in ex-officio capacity.
emphasis on the development of basic
and extra-legal body.
Difference Between NITI and heavy industry, also called Nehru
Mahalanobis Plan.
Planning Commission Aayog and Planning • To increase the rate of investment
• The Planning Commission was set-up Commission from 7% to 11% of GDP. Atomic
on 15th March, 1950 under the Planning Energy Commission came into being
Chairmanship of Pt Jawaharlal Nehru. Parameter NITI Aayog and TIFR was set-up.
Commission
It was to formulate plans for the Financial To be an Enjoyed the • Targeted growth rate was 4.5% but
economic development of the country Clout advisory body, powers to achieved 4.1%.
on the basis of the available physical, or a think-tank. allocated funds
The powers to to Ministries and • Durgapur (UK), Bhilai (USSR) and
capital and human resources. allocate funds State Rourkela (Germany) steel plant was
• It was a non-statutory and might be vested Governments.
set-up with foreign help.
in the Finance
non-constitutional advisory body. Ministry.
On 1st January, 2015, Government Third Five Year Plan (1961-66)
Full-time The number of The last
of India established NITI Aayog Members full-time commission had • This is also known as Gadgil Yojana.
(National Institution for members could eight full-time
The basic goal was to make India a
Transforming India Aayog) to be fewer than members.
Planning self-reliant and self-generation
replace planning commission. Commission. economy.
GENERAL STUDIES Indian Economy
• To increase the national income by
30% and per-capita income by 17%.
Targeted growth 5.6%, achieved
growth 2.8%.
• The situation created by Indo-Pakistan
conflict (1965), two successive years of
severe drought, devaluation of
currency by 57%, general rise in
prices and erosion of resources caused
delay in subsequent plan.
Annual Plan (1966-69)
• Due to unfortunate failure of the
Third Plan, the production in various
sectors of the economy became
stagnant.
• In 1966, the Government of India
declared the devaluation of rupee
with a view to increase the exports of
the country.
• Fourth Plan was postponed and three
Annual Plan were implemented. Some
of the economists called this period
(1966 to 1969) as plan holiday.
Fourth Five Year Plan (1969-74)
• Objective was growth with stability
and progressive achievement of
self-reliance. Targeted growth 5.7%
however, achieved growth 3.3%.
• First 2 years of the plan were
successful with record foodgrain
production on account of Green
Revolution.
• Also known as Ashok Rudrah Manne
Model.
Fifth Five Year Plan (1974-1979)
• Original approach to plan was
prepared by C Subramaniam, who
proposed economic growth alongwith
direct attack on poverty. Target
growth 4.4% and achieved growth
4.8%.
• The Twenty-Point Programme was
launched in 1975.
Rolling Plan (1979-80)
• Rolling plan (Gunnar Myrdal) was
brought out by Janata Party
Government under Morarji Desai in
1978.
• The focus of the plan was
enlargement of the employment
potential in agriculture and allied
activities to raise the income of the
lowest income classes.
Sixth Five Year Plan (1980-85)
• The emphasis was laid on greater
management, efficiency and
monitoring of various schemes.
Targeted growth 5.2%, achieved
growth 5.4%.
• Indian economy made on all round
progress and most of the targets
fixed by the plan was achieved.
Seventh Five Year Plan
(1985-1990)
• It saw the beginning of liberalisation
of Indian economy.
• Average annual growth rate was
6.0% as against the targeted 5.0%.
Annual Plan (1990-92)
• The Eighth Plan could not take off
due to fast changing political
situations at the centre. Therefore,
in 1990-1991 and 1991-1992 two
Annual Plans were formulated.
Eighth Five Year Plan
(1992-1997)
• To provide a new dynamism to the
economy and improve the quality of
life of the common man.
• Also called as Rao and Manmohan
Singh Model of economic
development.
• Higher economic growth rate of
6.68% achieved as against the
targeted 5.6%.
Ninth Five Year Plan
(1997-2002)
• Emphasis on seven basic minimum
services which included safe
drinking water, universalisation of
primary education, streamining PDS
among others.
• Growth rate of 5.4 achieved as
against targeted 6.5%.
• Empowerment of women,
SC/STs/OBCs was initiated.
Tenth Five Year Plan
(2002-2007)
• It aimed at increasing domestic
saving rate from 23.52%. to 29.4%.
Target growth of 8.1% achieved was
7.7%.
1009
• Reduction in gender gap in literacy
and wage rates by atleast 50%.
Eleventh Five Year Plan
(2007-2012)
• Sex ratio for age group of 0-6 years
to be raised to 9.35 by 2011-12 and
to 9.50 by 2016-17. Targeted growth
rate was 8.1% and achieved 7.9%.
• As against the target of 4% growth
in the agricultural sector only 3.1
was achieved.
Twelfth Five Year Plan (2012-17)
• This plan is based on the theme
‘‘faster, sustainable and more
inclusive growth”.
• The paper indicates 14 key areas to
be focussed by the Twelfth Five
Year Plan. Some of these are energy,
transport, natural resources, rural
transformation, health, transport,
education and skill development.
Key Targets
There are twelve key targets of
Twelfth Five Year Plan, which are as
follows
i. Real GDP growth rate-8% (down
from earlier 8.2%).
ii. Agricultural growth rate-4%.
iii. Manufacturing growth rate-10%.
iv. Consumption poverty to be
reduced by 10%.
v. Employment 50 million new work
opportunities in the non-farm
sector.
vi. Mean years of schooling-Increase
it to 7 years by 2017.
vii. Infant Mortality Rate (IMR)-
Reduce to 25 per 1000 live births.
viii. Maternal Mortality Rate
(MMR)-Reduce to 1 per 1000 live
births.
ix. Child (0-6) sex ratio-Raise it to
950 by 2017.
x. Total fertility rate-Reduce it to
2.1.
xi. Gross irrigated area-Increase it
from 90 million hectare to 103
million hectare by 2017.
xii. Renewable energy capacity-Add
30000 MW of new power
capacity.
1010
15 YEARS’ VISION
DOCUMENT
The first 15 years vision document
will come into effect from 2017-18
after the end of the Twelfth Five
Year Plan. It will be formulated with
central objective of eradication of
poverty. It will come alongwith 7
years National Development Agenda
which will lay down the
programmes, schemes and strategies
to achieve a long-term vision. The
long vision document (perspective
plan) will comprise of 3 years
macro economic framework.
POVERTY
• When a person is unable to fulfil his
basic needs of food, clothing and
shelter, he is said to be living in
poverty.
• The Millennium Development Goals
(MDGs) have driven the most
successful anti-poverty movement in
history and brought more than a
billion people out of extreme poverty,
but their achievements have been
mixed and the world remains deeply
driven by inequality, the United
Nation’s (UN’s) final report on the
goals has concluded.
• The world has reduced the number of
people living on less than $ 1.25 a day
from 1.9 billion in 1990 to 836 million
in 2015.
• World Bank raised the international
poverty line to $ 1.90 per day from the
existing $ 1.25 in October, 2015.
Types of Poverty
The poverty has two aspects, which are as
follows
i. Absolute Poverty Low level of
income, which is not sufficient to
fulfil required basic minimum needs.
ii. Relative Poverty It refers to
poverty on the basis of comparison
of per capita income of different
countries.
Measurement of Poverty
A common method used to measure
poverty is based on the income or
consumption level. Generally, an average
calorie intake of 2400 calorie for rural
person and 2100 calorie for urban
person is taken as a determining value.
Poverty Estimation
by Committees in
India
Various economists and organisations
have studied on the extent of poverty
in India. Some of them are as follows
i. Lakdawala Committee In
September, 1989, the Planning
Commission constituted an Expert
Group to consider methodological
and computational aspects of
estimation of proportion and
number of poor in India. The
Chairman of the Expert Group
was Professor DT Lakdawala.
ii. Tendulkar Committee
Report Tendulkar Committee
submitted its report in December,
2009, to the Planning
Commission. In its findings, this
committee has moved away from
just calorie criterion definition to
a broader definition of poverty
that also includes expenditure on
health, education, clothing in
addition to food. The updated
poverty estimates of the
Tendulkar Committee have
lowered the poverty line from
` 32 a day to ` 28.
iii. SR Hashim Committee The
Planning Commission had
constituted an expert group under
the Chairmanship of SR Hashim
on 13th May, 2010, to recommend
detailed methodology for
identification of BPL families in
urban areas in the context of the
Twelfth Five Year Plan. The panel
has suggested that the government
should use three-stage approach–
automatic exclusion, automatic
inclusion and scoring index to
identify urban poor.
iv. Rangarajan Report on
Poverty The Expert Group under
the Chairmanship of Dr C
Rangarajan has submitted its
report on 30th June, 2014. The
report retained consumption
expenditure estimates of NSSO as
CDS Pathfinder
the basis for determining poverty.
On the basis of this, it pegged
the total number of poor in India
at 363 million or 29.6% of the
population which is higher than
the report of Suresh Tendulkar
Committee.
State of Poverty
(World Bank Report)
World Bank on 18th April, 2013, in
its report entitled ‘Where are the Poor
and Most Poor’, observed that
• One-third of the global poor are in
India and the poor in India live on
less than US$ 1.25 a day. There are
around 120 crore extremely poor
persons in the world today.
Between 1981-2010, the developing
countries have witnessed a decline
in poverty rate from 50% to 21%.
• Despite development in Africa,
poverty is still widespread.
UNEMPLOYMENT
According to National Sample Survey
Organisation (NSSO), a person who,
owing to lack of work, had not
worked, but either sought work
through employment exchanges,
intermediaries, friends or relatives or
by making applications to prospective
employers or expressed his willingness
or availability for work under the
prevailing conditions of work and
remuneration, is considered as those
seeking or available for work (or
unemployed).
Types of
Unemployment
Generally, unemployment can be
classified into two types, which are as
follows
1. Voluntary
Unemployment
This type of unemployment is on
account of persons not interested to
take the employment i.e. jobs are
available, but the persons are not
interested in being employed.
GENERAL STUDIES Indian Economy
2. Involuntary Unemployment
It refers to a situation in which the persons
are interested to work, but the jobs are not
available. Under this, there are various
categories of unemployment
• Structural Unemployment It refers to a
mismatch of job vacancies with the
supply of labour available, caused by
shifts in the structure of the economy.
• Disguised Unemployment This is a
situation in which more people are
available for work than shown in the
unemployment statistics.
• Open Unemployment It is a condition
in which people have no work to do.
They are able to work and are also willing
to work, but there is no work for them.
• Seasonal Unemployment It is on
account of the seasonal nature of the
productive activities i.e. some productive
activities are carried out only for certain
duration of a year.
• Cyclical Unemployment This type of
unemployment is due to the recession in
the economy. This type of
unemployment is prevalent in the
developed countries. This is also known
as Keynesian Unemployment.
• Frictional Unemployment It occur when
a worker is shifting from one job to the
other. It is temporary phenomenon.
WELFARE
PROGRAMMES
AND SCHEMES
Indian state is a welfare state, which takes
steps to do away the human sufferings and
provides an infrastructure that is condusive
to development. The Indian Government,
since Independence, has been launching
various multi-dimensional social welfare
programmes.
Rural Development Schemes
Rural development schemes are as follows
Pradhan Mantri Gramin Digital
Saksharta Abhiyan (PMGDISHA)
PMGDISHA was launched on 8th October,
2017. It aims at imparting digital literacy to
citizens in rural areas free of cost. It aims
to provide access to information,
knowledge, education and
healthcare. It will create avenues
for livelihood generation and
financial inclusion through digital
payments and help bridge the
digital divide.
Deendayal Upadhyay Gram
Jyoti Yojana
This scheme is designed to provide
continuous power supply to the
entire rural India. It is one of the
flagship scheme of power ministry
and will facilitate 24×7 supply of
electricity. This scheme will replace
Rajiv Gandhi Grameen Vidyutikaran
Yojana (RGGVY) but features of
RGGVY have been subsumed in
this scheme. Major component of
this scheme includes separation of
agriculture and non-agriculture
feeder facilitating judicious supply
of electricity to consumers in rural
areas.
Sansad Adarsh Gram
Yojana
It is a rural development and
cleanliness programme broadly
focusing upon the development in
the villages, which includes social
development, cultural development
and spread motivation among the
people on social mobilisation of the
village community.
The goal is to develop three Adarsh
Grams by March 2019, of which
one would be achieved by 2016.
Thereafter, five such Adarsh Grams
(one per year) will be selected and
developed by 2024.
MGNREGA
The National Rural Employment
Guarantee Act (NREGA) was
enacted in 2005. It was
implemented in three phases,
starting with 200 districts on 2nd
February, 2006 to cover the whole
country by 2008.
On 2nd October, 2009, it was
renamed as Mahatma Gandhi
National Rural Employment
Guarantee Act (MGNREGA).
India’s rural employment guarantee
programme MGNREGA has been
ranked as the world’s largest public
work programme.
1011
The features of MGNREGA are as
follows
• It seeks to provide at least 100 days
(150 days for tribals) of guaranteed
wage employment in one financial
year to at least one adult member of
every rural household who
volunteers to do unskilled manual
work.
• At least 33% of the beneficiaries are
to be women.
• Originally, it promised a wage rate
of ` 100 per day. From January,
2011, wages have been linked to
increase with Consumer Price Index
for Agricultural Labour (CPI-AL)
for each state.
• It provides time bound employment
guarantee and wage payment within
15 days.
Urban Development
Schemes
The urban development schemes are as
follows
Heritage City Development and
Augmentation Yojana (HRIDAY)
Union Government has launched a
Heritage City Development and
Augmentation Yojana (HRIDAY)
scheme to preserve and rejuvenate the
rich cultural heritage of the country.
The scheme aims to preserve and
revitalise soul of the heritage city to
reflect the city’s unique character by
encouraging aesthetically appealing,
accessible, informative and secured
environment.
AMRUT
Under Atal Mission for Rejuvenation
and Urban Transformation (AMRUT),
the government is targeting 500 cities.
It aims to transform cities and towns
into efficient urban living spaces with
special focus on a healthy and green
environment for children.
500 cities and towns will be selected on
the basis of population i.e. one lakh and
above, while the other criteria of
selection will apply for certain locations
like tourist popularity, certain popular
hill towns and some selected islands.
1012
Social Security Schemes
Social Security Schemes are schemes
imposed and controlled by
government units for the purpose of
providing social benefits of particular
sections of the community.
The social security schemes are as
follows
Pradhan Mantri Vaya Vandana
Yojana for Senior Citizens
The Pradhan Mantri Vaya Vandana
Yojana (PMVVY) was launched on
22nd July, 2017. It is a pension
scheme exclusively for senior citizens
aged 60 years and above. Under this
scheme, senior citizens will get a
guaranteed interest of 8% for 10
years depending upon the investment
made by them.
Tele-Law Initiative
‘Tele-Law’ Initiative was launched in
collaboration with the Ministry of
Electronics and Information
Technology on 12th June, 2017. The
aim of this scheme is to provide legal
aid services to the marginalized
communities and citizens living in
rural areas through the Common
Service Centres (CSC) at the
Panchayat level, spread across the
country.
Inclusive India Initiative
The conference “Inclusive India
Initiative: Towards an Inclusive India”
for Intellectual and Developmental
Disabilities (IDDs) was launched on
6th June, 2017. The initiative is
specifically catering to persons with
intellectual and developmental
disabilities; with an objective to
include these people in the
mainstream and in all important
aspects of social life.
Rashtriya Vayoshri Yojana
The Union Ministry of Social Justice
and Empowerment has launched
Rashtriya Vayoshri Yojana in Nellore
District of Andhra Pradesh on 4th
April, 2017. The scheme aims at
providing physical aids and
assisted-living devices for senior
citizens belonging to Below Poverty
Line (BPL) category. The scheme will
be distribute free of cost physical aids
and assisted-living devices for senior
citizens belonging to BPL category in
Camp mode.
Pradhan Mantri Jeevan Jyoti
Bima Yojana
The PMJJBY is available to people in the
age group of 18 to 50 and having a bank
account. People who join the scheme
before completing 50 years can, however,
continue to have the risk of life cover
upto the age of 55 years subject to
payment of premium. Aadhar would be
the primary Know Your Customers
(KYC) for the bank account.
Pradhan Mantri Suraksha Bima
Yojana
Under PMSBY, the insurance subscriber
will get annual life insurance in case of
accidental death, partial disability or full
disability. The insurance is available to
any person in the age group of 18 to 70
years. For accidental death and full
disability ` 2 lakh and for partial
disability ` 1 lakh will be provided.
Atal Pension Yojana
The Atal Pension Yojana (APY) will
focus on all citizens in the unorganised
sector, who join the National Pension
System (NPS) administered by the
Pension Fund Regulatory and
Development Authority (PFRDA) and
who are not members of any statutory
social security scheme. The minimum age
of joining APY is 18 years and maximum
age is 40 years. Therefore, minimum
period of contribution by the subscriber
under APY would be 20 years or more.
This scheme is mainly targeted at
unorganised sector workers.
PM Sharam Yogi Maan Dhah Scheme
This is an government scheme meant for
Old Age Protection and social security of
unorganised workers. The entry age
between 18 to 40 years and monthly
income is less than ` 15000.
Health Oriented Programmes
‘Swasth Bachche, Swasth Bharat’
Programme
This programme was launched on 22nd
August 2017. The programme will provide
a comprehensive and inclusive report card
for children covering all age groups and
children of different abilities. It will make
students, teachers and parents aware
CDS Pathfinder
about the importance of good health
and fitness and encourage 60 minutes
of play each day.
Intensified Mission Indradhanush
The Union Ministry of Health and
Family Welfare has launched
Intensified Mission Indradhanush
(IMI) on 8th October 2017 to
accelerate full immunization coverage
to more than 90% by December 2018.
Through this programme, Government
aims to reach each and every child
under two years of age and all those
pregnant women who have been left
uncovered under the routine
immunisation programme.
NITI Aayog’s SATH Programme
National Institution for Transforming
India (NITI) Aayog’s SATH
(Sustainable Action for Transforming
Human capital) programme was
launched on 22nd September 2017. The
SATH programme aims to provide
structured support to Assam in
identifying key health priorities and
implement the solutions towards
transforming the health and improving
the well-being of people of state.
Kilkari Project
The government launched Kilkari
(literally baby noises), a mobile voice
message service that delivers weekly
messages to families about pregnancy,
family planning, nutrition, childbirth
and maternal and childcare. The Bill
and Melinda Gates Foundation has
provided the mobile phone application
for Kilkari and mobile academy; the
latter is a 240-minute free training
module for ASHAs.
In the first phase, the Kilkari
application is expected to benefit 1.84
crore pregnant women/newborns in
Jharkhand, Odisha, Uttar Pradesh,
Uttarakhand and in some districts of
Madhya Pradesh and Rajasthan.
Mission Indradhanush
Mission Indradhanush aims to achieve
full immunisation coverage for all
children by 2020. The mission aims to
cover all those children who are either
unvaccinated or are partially vaccinated
against seven vaccine preventable
diseases including diphtheria,
whooping cough, tetanus, polio,
tuberculosis, measles and hepatitis-B.
GENERAL STUDIES Indian Economy
Under the programme, 201 high focus districts in the country
having nearly 50% of all unvaccinated or partially vaccinated
children have been identified and will be covered in the first
phase of the mission.
National Ayush Mission
The basic objective of National Ayush Mission is to promote
AYUSH medical systems through cost effective AYUSH
services, strengthening of educational systems, facilitate the
enforcement of quality control of Ayurveda, Siddha, Unani and
Homeopathy drugs and sustainable availability of raw materials
for drugs. It contemplates establishment of a National Mission
as well as corresponding missions at state level.
Women Empowerment Programmes
Empowerment of women is a major social phenomenon
which requires an understanding of its multi-dimensional
influence, including our family structures and units.
‘Beti Bachao Beti Padhao’ Scheme (BBBP)
Alarmed by sharp decline in child sex ratio, the government
has introduced Beti Bachao, Beti Padhao (BBBP) programme
in 100 gender critical districts. The overall goal of this scheme
is to celebrate the girl child and enable her education. It aims
to prevent gender biased sex selective elimination, ensure
survival and protection of the girl child and ensure education
of the girl child. The Beti Bachao Beti Padhao initiative has
two major components– mass communication campaign and
multi-sectoral action in 100 selected districts.
National Mission for
Empowerment of Women (NMEW)
This mission aims to achieve holistic empowerment of women
through covergence of schemes of different
ministeries/department of Central and State Government. It
aims to strengthen the conceptual and programmatic basis of
women centric schemes implemented by ministry of women
and child development, other ministeries and State
Government with the mechanism for covergence.
Ujjawala Scheme
It is a comprehensive scheme for prevention of trafficking and
rescue, rehabilitation and re-integration of victims of
trafficking for commercial sexual exploitation. The objective
of the scheme include social mobilisation and involvement of
local communities, awareness generation programmes,
generate public discourse through workshop and seminars.
Target group include women and children who are vulnerable
for trafficking for commercial sexual exploitation.
Swadhar Scheme
The Swadhar Scheme was launched by the Union Ministry of
Women and Child Development in 2002 for rehabilitation of
women in difficult circumstances. The scheme provides shelter,
food, clothing and care to the marginalised women/girls who
are in need.
1013
The beneficiaries include widows deserted by their families
and relatives, women prisoners released from jail and
without family support, women survivors of natural
disasters, women victims of terrorist/extremist violence etc.
The implementing agencies are mainly NGOs. An
Evaluation Study conducted through Centre for Market
Research and Social Development to assess the
performance of the scheme observed that the scheme is
successful for which it was formulated/implemented.
Education Oriented Programmes
The education oriented programmes are as follows
“JIGYASA” – Student-Scientist connect
Programme
This programme has been launched by the government on
7th July, 2017. The programme would be implemented by
the Council of Scientific and Industrial Research (CSIR) in
collaboration with Kendriya Vidyalaya Sangathan (KVS).
The main focus of the programme is to connect school
students and scientists as well as to extend student’s
classroom learning to a very well-planned research
laboratory based learning.
Global Initiative of
Academic Network Planning (GIAN)
GIAN aims at tapping the talent pool of scientists and
entrepreneurs to engage with the institutes of higher
education in India, to augment the country’s existing
academic resources, accelerated the pace of quality
reforms, and further strengthen India’s scientific and
technological capabilities.
Nai Manzil Scheme
Under the scheme, girls from minority communities will
be imparted three-month skill development training in
seven identified sectors relevant to the region. It is a
bridge course to fill the academic and skill development
gaps of the deeni Madarsa passouts with their mainstream
counterparts. It will be introduced in all Madarsas in
phased manner.
ACCREDITED SOCIAL HEALTH ACTIVISTS
(ASHAs)
ASHAs are community health workers instituted by the
Government of India’s Ministry of Health and Family
Welfare (MoHFW) as a part of the National Rural Health
Mission (NRHM). The mission, begun in 2005, full
implementation, was targeted for 2012. Once fully
implemented there would be an ASHA in every village in
India, a target that translates into 250000 ASHAs in
10 states. ASHAs are local women trained to act as health
educators and promoters in their communities.
1014
Other Programmes
Pradhan Mantri LPG Panchayat
Country-wide Pradhan Mantri LPG
Panchayat scheme was launched on
22nd September, 2017 to distribute LPG
connections among rural areas where
conventional fuel is used for domestic
purposes. It is backup scheme to
existing Pradhan Mantri Ujjwala Yojana.
Sampoorna Bima Gram (SBG)
Yojana
It was launched to expand coverage of
Postal Life Insurance (PLI) in a bid to
provide affordable life insurance services
to people particularly those living in
rural areas. Under SBG Yojana, at least
one village (having a minimum of 100
households) will be identified in each of
revenue districts of country to cover all
households of identified village with
minimum of one RPLI (Rural Postal
Life Insurance) policy each.
Saubhagya Scheme
Sahaj Bijli Har Ghar Yojana –
“Saubhagya” was launched on 25th
September, 2017 with an aim at providing
last mile electricity connectivity to all
rural and urban households. Under the
scheme, government will provide free
electricity to all households identified
under Socio-Economic and Caste Census
(SECC) data 2011.
Mentor India Campaign
The National Institution for
Transforming India (NITI) Aayog has
launched Mentor India Campaign on
22nd August, 2017. It is a strategic nation
building initiative to engage leaders for
guiding and mentoring students at Atal
Tinkering Labs. The Mentor India
Campaign aims at maximising the impact
of Atal Tinkering Labs by engaging
leaders who will nurture and guide
students in the Atal Tinkering Labs.
National Biopharma Mission
The Union Ministry of Science &
Technology has launched National
Biopharma Mission on 1st July 2017. It
is a first ever Industry-Academia
mission to accelerate biopharmaceutical
development in India. Under this
mission, the ministry also launched
Innovate in India (i3) program to create
an enabling ecosystem to promote
entrepreneurship and indigenous
manufacturing in the sector.
Pravasi Kaushal Vikas Yojana
(PKVY)
It is a skill development programme
launched on 9th January, 2017. It is
targeted at Indian youth seeking
overseas employment to make India
the Skill Capital of the World. PKVY
will provide training and certify
Indians who are seeking overseas
employment in selected sectors that
have high demand in the global labour
market in line with international
standards.
Pradhan Mantri Yuva Yojana
This scheme was launched to scale up
an ecosystem of entrepreneur for
youngsters. It will provide
entrepreneurship education and
training to over 7 lakh students in 5
years through 3,050 institutes. It will
provide easy access to information and
mentor network, incubator, credit and
accelerator and advocacy to create a
pathway for the youth.
Urja Ganga Yojana
It is the highly ambitious gas pipeline
project in Varanasi, Uttar Pradesh. The
gas pipeline project aims to provide
Piped Cooking Gas (PNG) to residents
of the Eastern region of the country and
CNG gas for the vehicles.
Udan Scheme
Regional Connectivity Scheme
(RCS)-UDAN (Ude Desh ka Aam
Nagrik) scheme was launched on 21st
October, 2016. It will provide
connectivity to un-served and
under-served airports of the country.
The primary objective of RCS is to
facilitate and stimulate regional air
connectivity by making it affordable.
Pradhan Mantri Ujjwala Yojana
The objective of the scheme is to
provide cooking gas connections to
5 million beneficiaries below the
poverty line in the next 3 years (till the
year 2019).
Main objectives of this scheme are as
follows
– Free LPG gas connection in the
name of the female members. It
will be a cylinder and regulator.
CDS Pathfinder
– The scheme will include the rural
and urban BPL family. ` 1600 will
be sent to Pradhan Mantri Jan
Dhan Yojana bank as subsidies.
Ujala Yojana
The UJALA scheme is being
implemented by Energy Efficiency
Services Limited (EESL), a joint
venture of PSUs under the Union
Ministry of Power.
The scheme will help reduce electricity
bills of consumers, contribute to the
energy security of India and also help
in environment protection.
The main motive of this policy is
energy efficiency in the country.
Consumers can buy the bulbs from
distributor by showing any
identification card.
PM Gati Shakti Plan
The Gati Shakti is a National master
plan aimed at the cordinated planning
and execution of infrastructure project
in India to reduce logistics costs.
POPULATION
Population is the dynamic factor of an
economy. The growth of an economy
is determined on the basis of
development level of masses.
DEMOGRAPHY
• Demography is a statistical study of
human population. There are four
stages of the demographic transition
i. The first stage, birth and death
rates are both high, population
growth is slow and fluctuating.
ii. In the second stage, birth rate
remains high, death rate falls.
Population begins to rise rapidly.
iii. In the third stage, birth rate starts
to fall, death date continues to fall.
Population continues to rise.
iv. In the fourth stage, birth and
death rates both are low.
Population is steady or declining.
It is called a stage of stationary
population.
v. The period 1911-1921 is known
as the great divide in the
demographic history of India.
GENERAL STUDIES Indian Economy 1015

rise constantly. But from the livelihood point of view,

Census of India about 48.9% people of India depend on agricultural sector.
We got the evidence of Census in India from Kautilya’s The sector, thus, presents challenging opportunities for the
Arthashastra. During the Mughal era, ‘Ain-e-Akbari’, written plant farmers in India, as much as these workers represent
by Abul Fazal also mentions about census. Sequential census an enormous pool of labour that can fuel labour intensive
was started by Lord Rippon in the year 1881. Since then, industrialisation over the coming decades.
after every ten years, the work of census is undertaken by the
Government of India. Green Revolution
• The introduction of high-yielding varieties of seeds after
Census of India, 2011 1965 and the increased use of fertilizers and irrigation are
• The Census 2011, was the 15th National Census of India known collectively as the Green Revolution, which
(since 1872) and 7th Census after Independence. The motto provided the increase in production needed to make India
of census 2011 was ‘Our census, Our future’. self-sufficient in foodgrains.
• Total Population - 1210.19 million • The term ‘Green Revolution’ is a general one that is
applied to successful agricultural experiments in many third
• Males - 623.7 million (51.54%)
world countries. It is not specific to India, but it was most
• Females - 586.46 million (48.46%) successful in India.
• Population of 0-6 age group - 164.4 million • There were three basic elements in the method of the
• Literacy - 74.04% Green Revolution
• Decadal Growth Rate - 17.64% i. Continued expansion of farming areas.
• Population Increase (2001-2011)- 181 million ii. Double-cropping existing farmland.
• Sex Ratio - 943 iii. Using seeds with improved yields.
• Population Density - 382
Second Green Revolution
AGRICULTURE • Second Green Revolution consist of a number of different
programmes working towards the same goals. Some of the
• Agriculture is the largest sector of the Indian economy and initiatives, which will help in this direction are as follows
has a crucial role to play in the country’s economic – Increasing crop yields in Eastern states.
development by providing food, raw materials and
– Organic farming and contract farming.
employment to a very large proportion of population,
capital for its own development and surpluses for national – Amending the Agricultural Produce Marketing

economic development. Committee (APMC) Acts.

– Investing in research to drought proof crops as well as
• This is the biggest unorganised sector of the economy
accounting for more than 90% share in total unorganised to tackle climate change.
labour force (93% of the total labour force of the economy – Use of plant breeding and biotechnology.
i.e. 39.7 crore, is employed in the unorganised sector). – Rainwater harvesting and watershed
development.
Importance of Agriculture in – Improving credit availability.
– Refocusing on land reforms.
Indian Economy – Improving soil quality and reclaiming degraded land.
Agriculture is an important sector of around Indian economy.
It is the spinal cord of the Indian economy. Around 48.9%
of labour force is working in this sector. Importance of
MAJOR AGRICULTURAL REVOLUTIONS
agriculture in Indian economy can be analysed by the Green Revolution : Cereals, wheat and leguminous
following points plants
Contribution of Agriculture in National Income White Revolution : Milk and dairy products
Agricultural sector contributes a significantly large share Silver Revolution : Egg and poultry
to the national income of India. However, it has come Yellow Revolution : Edible oil
down from as high as 56% during the 1950s to 13.7% in Blue Revolution : Fishery
2012-13 and is projected to go further down in
Pink Revolution : Prawns/Meat processing
immediate future.
Golden Revolution : Honey
Contribution of Agriculture in Employment The share of
Golden Fibre Revolution : Jute
agriculture has been falling in the country’s gross income
while industrial and service sectors’ shares have been on a Silver Fibre Revolution : Cotton
1016
National Food Security Act, 2013
(NFSA)
• NFSA is the biggest intervention of its kind in the world
in the realm of food security. If implemented property this
law can improve the lives of millions in this country.
• Some of the highlights of this act are as follows
– It extends to the whole of India. Priority households
are entitled to 5 kgs of foodgrains per person per
month and Antyodaya households to 35 kgs per
household per month.
– Combined coverage of priority and Antyodaya
households will extend to 75% of the rural population
and 50% of the urban population.
– PDS issue prices will be 3/2/1 per kg for
rice/wheat/millets. These may be revised after 3 years.
– For children in the age group 6 months to 6 years, an
age-appropriate meal will be provided through the local
Anganwadi.
– For children aged 6-14 years, one free mid-day meal in
all government and government aided schools up to
class VII.
– For children below 6 months ‘exclusive breast feeding
will be promoted’.
– Every pregnant and lactating mother is entitled to a
free meal at the local Anganwadi (during pregnancy
and 6 months after) and maternity benefits of ` 6000. t
Major Schemes of Agriculture
Pradhan Mantri Fasal Bima Yojana
This is the new crop damage insurance scheme that has been
approved by the Union Cabinet in January 2016. It will
replace the existing 2 insurance schemes NAIS and Modified
NAIS. The theme of the scheme is One Nation–One Scheme.
In this, all shortcomings and weaknesses of all previous
schemes were removed and incorporated with the best
features of all schemes.
Mega Food Park Scheme (MFPS)
The 10th Plan scheme of food parks was renamed as the
Mega Food Park Scheme (MFPS) in 2008. The scheme has
been launched with the objective of implementing the express
objectives of the Vision 2015, document through creation of
excellent infrastructure.
At present, 13 mega food parks are at various stages of
implementation. 12th Plan (2012-17), has targeted to set-up
50 mega food parks during the plan period.
Objectives of the Mega Food Park Scheme are as follows
• To provide state of the art infrastructure for food
processing in the country on a pre-identified cluster basis.
CDS Pathfinder
• To ensure value addition of agricultural commodities.
• To establish a sustainable raw material supply chain for
each cluster.
• To facilitate induction of latest technology.
• Quality assurance through better process control and
capacity building.
Rashtriya Krishi Vikas Yojana (RKVY)
The RKVY was launched in 2007-08, with an outlay of
` 25000 crore in the Eleventh Plan for incentivising states to
enhance public investment to achieve a 4% growth rate in
agriculture and allied sectors. The RKVY permits taking up
national priorities as sub-schemes allowing flexibility in
project selection and implementation.
Pradhan Mantri Krishi Sinchai Yojana
(PMKSY)
With an eye on improving farm productivity, the
government has decided to spend ` 50,000 crore over the
next 5 years under the Pradhan Mantri Krishi Sinchai
Yojana (PMKSY). The major objective of the PMKSY is to
achieve convergence of investments in irrigation at the field
level expand cultivable area under assured irrigation
improve on farm water use efficiency to reduce wastage of
water, enhance adoption of precision irrigation and other
water saving technologies.
INDUSTRIES
Industries constitute an important part of an economy.
Economic development of an economy is founded on the
advances made in the industrial sector. The Indian
Government has been trying to promote rapid industrial
growth since Independence. As a result of the various
efforts, the industrial sector in India has grown in
multifarious dimensions.
Important Industries of India
Iron and Steel Industry
• First Steel industry was set-up at Kulti (West Bengal)
‘Bengal Iron Works Company’ in 1870.
• First large scale steel plant TISCO was set-up at
Jamshedpur in 1907 followed by IISCO at Burnpur in
1919. Both belonged to private sector.
• The first public sector unit was ‘Visveshvaraya Iron and
Steel Works’ at Bhadrawati.
• All these are managed by SAIL. (At present all important
steel plants except TISCO, are under Public Sector).
• Steel Authority of India Limited (SAIL) was established
in 1974 and was made responsible for the development
of the steel industry.
GENERAL STUDIES Indian Economy 1017

Public Sector Steel Plants • The total oil reserves in India have been estimated to
be about 13 crore tonnes. Domestic production of
Location Assistance
oil in India is much less to meet the domestic
Rourkela (Odisha) Germany
demand. India currently produces just over 32
Bhilai (Chhattisgarh) Russian Government million tonnes of crude oil against its annual demand
Durgapur (West Bengal) Britain Government of 105 million tonnes meeting only 30.5% of
Bokaro (Jharkhand) Russian Government demand from domestic resources.
Burnpur (West Bengal) Acquired by Private Sector in
1976 Core Industries
Visakhapatnam (Andhra Pradesh) Russian Government • Eight core industries in the index of industrial
Salem (Tamil Nadu) — production consist of (with their weightage)
Vijaynagar (Karnataka) — – Cement (2.41%) – Coal (4.38%)
– Crude oil (5.22%) – Natural gas (1.71%)
Bhadrawati (Karnataka) Nationalisation of
Vishveshvarayya Iron and Steel – Electricity (10.32%) – Fertilizer (1.25%)
Limited (owned by Central and – Steel (6.68%)
State Government)
• They have a combined weight of 37.9% in overall
• Bhilai, Durgapur and Rourkela were established during the index of industrial production.
Second Five Year Plan. Bokaro was established during the
Third while the steel plants at Salem, Vijai Nagar and
Visakhapatnam were established in the Fourth Five Year Plan.
Maharatnas
• Presently India is the 5th largest steel producing country in the • In 2009, the government established the Maharatna
world, ranked behind China, Japan, US and Russia in that status, which raises a company’s investment ceiling
order. from ` 1000 crore to ` 5000 crore.
• The Maharatna firms can now decide on investments
Cotton and Textile Industry of upto 15% of their net worth in a project. In
• Oldest industry of India and employs largest number of
terms of turnover, ONGC is the largest PSU in
India.
workers. It is the largest organised and broad-based industry
which accounts for about 4% of GDP, 20% of manufacturing The six criteria for eligibility as Maharatna are as
value added and one-third of total export earnings. follows :
i. Having Navratna status.
• The first Indian modernised cotton cloth mill was established
ii. Listed on Indian stock exchange with minimum
in 1818 at Fort Gloaster near Calcutta, but this mill was not
prescribed public shareholding under SEBI
successful. The second mill named Bombay Spinning and regulations.
Weaving Company was established in 1854 at Bombay by
iii. An average annual turnover of more than ` 20000
KGN Daber. crore during the last 3 years. Earlier it was ` 25000
crore.
Cement Industry iv. An average annual net worth of more than ` 10000
• Production of cement was started in 1904 at Madras, but the crore during the last 3 years. Earlier it was ` 15000
foundation of stable Indian cement industry was laid in 1914 crore.
when the Indian Cement Company Limited started production at v. An average annual net profit after tax of more
Porbander in Gujarat. During planning period, the cement than ` 2500 crore during the last 3 years. Earlier it
industry has recorded continuous growth. India became not only was ` 5000 crore.
self-reliant at the end of Seventh Plan, but also started export of vi. Should have significant global
cement. At present, cement is the most advanced industries in the presence/international operations.
country.
• Its first modernised industrial unit was established at Rishra in
List of Maharatnas
i. Coal India Limited (CIL)
West Bengal in 1855.
ii. Indian Oil Corporation Limited (IOCL)
Petroleum and Natural Gas iii. National Thermal Power Corporation Limited
(NTPCL)
• First successful oilwell was dug in India in 1889, at Digboi,
iv. Oil and Natural Gas Corporation Limited
Assam. At present a number of regions having oil reserves
(ONGCL)
have been identified and oil is being extracted in these regions.
v. Steel Authority of India Limited (SAIL)
For exploration purpose, Oil and Natural Gas Commission
vi. Bharat Heavy Electrical Limited (BHEL)
(ONGC) was established in 1956 at Dehradun and Uttarakhand.
vii. Gas Authority of India Limited (GAIL)
1018
viii. Bharat Petroleum Corporation Limited (BPCL)
ix. Hindustan Petroleum Corporation Limited (HPCL)
x. Power Finance Corporation Limited (PFC)
xi. Power Grid Corporation of India Limited (PGC)
Navratnas
• Navratnas was the title given originally to nine Public
Sector Enterprises or PSE identified by the Government
of India in 1997 as its crown jewels of the most
prestigious PSEs, which allowed them greater autonomy
to complete in the global market.
List of Navratnas
i. Bharat Electronics Limited (BEL)
ii. Hindustan Aeronautics Limited (HAL)
iii. Mahanagar Telephone Nigam Limited (MTNL)
iv. National Aluminium Company Limited (NALCO)
v. National Mineral Development Corporation (NMDC)
vi. Oil India Limited (OIL)
vii. Rural Electrification Corporation Limited (REC)
viii. Shipping Corporation of India Limited (SCL)
ix. Neyveli Lignite Corporation Limited (NLCL)
x. Container Corporation of India Limited (CONCOR)
xi. Engineers India Limited (EIL)
xii. National Buildings Construction Corporation Limited
(MBCCL)
xiii. Rashtriya Ispat Nigam Limited (RINL)
Mini-ratnas
In addition, the Government created another category
called Mini-ratna. It can also enter into joint ventures, set
subsidiary companies and overseas offices, but with certain
conditions.
1. Category-I Mini-ratna This designation applies to
PSEs that have made profits continuously for the last
3 years or earned a net profit of ` 30 crore or more
in one of the 3 years.
These mini-ratnas are granted certain autonomy like
incurring capital expenditure without government
approval upto ` 500 crore or equal to their networth,
whichever is lower. Currently, there are 51 mini-ratna
in category-I.
2. Category- II Mini-ratna This category include those
PSEs which have made profits for the last
3 years continuously and should have a positive
networth.
These mini-ratnas have autonomy to incurring the
capital expenditure without government approval upto
` 300 crore or upto 50% of their whichever is lower.
Currently, there are 14 mini-ratnas in category-II.
CDS Pathfinder
Companies Act, 2013
• This act introduces significant changes in the provisions
related to governance, e-management, compliance and
enforcement, disclosure norms, auditors and mergers and
acquisitions. Also, new concepts such as one-person
company, small companies, dormant company, class action
suits, registered valuers and corporate social responsibility
have been included. The Act, 2013 has introduced several
new concepts and has also tried to streamline many of the
requirements by introducing new definitions.
• Dormant Company The Act, 2013 states that a company
can be classified as dormant when it is formed and
registered under this Act, 2013 for a future project or to
hold an asset or intellectual property and has no significant
accounting transaction.
• National Financial Reporting Authority (NFRA) The
Act, 2013 requires the Constitution of NFRA, which has
been bestowed with significant powers not only in issuing
the authoritative pronouncements, but also in regulating
the audit profession.
• Serious Fraud Investigation Office (SFIO) The Act,
2013 has bestowed legal status to SFIO.
• Corporate Social Responsibility The Act, 2013 makes an
effort to introduce the culture of Corporate Social
Responsibility (CSR). In Indian corporates by requiring
companies to formulate a corporate social responsibility
policy and atleast incur a given minimum expenditure on
social activities.
Competition Commission
of India (CCI)
CCI was established in 2003 according to the provision of
the Competition Act, 2002. CCI consists of a chairperson
and 6 members appointed by the Central Government. It is
the duty of the commission to eliminate practices having
adverse effect on competition, promote and sustain
competition, protect the interests of consumers and ensure
freedom of trade in markets of India.
Industrial Policies
Industrial policy can be defined as a statement stating the
role of government in industrial development, the position of
public and private sectors in industrialisation of the country,
the comparative role of large and small industries. lt enlists
the rules and procedures that will monitor the growth and
pattern of industrial activity.
Industrial Policy Resolution, 1948
In Industrial Policy Resolution of 1948, both public and
private sectors were involved towards industrial development.
GENERAL STUDIES Indian Economy
Accordingly, the industries were divided
into four broad categories
i. Exclusive Government
Monopoly This includes
manufacture of arms and
ammunition, production and
control of atomic energy and the
ownership and management of
railway transport. These industries
were the exclusive monopoly of
the Central Government.
ii. Government Monopoly for New
Units This category included coal,
iron and steel, aircraft manufacture,
ship building, manufacture of
telephone, telegraphs and wireless
apparatus (excluding radio
receiving sets) and mineral oils.
New undertakings in this category
was to be undertaken only by the
State.
iii. Regulation This category included
industries of such basic importance
like machine tools, chemicals,
fertilizers, non-ferrous metals,
rubber manufactures, cement,
paper, newsprint, automobiles,
electric engineering etc which the
Central Government would feel
necessary to plan and regulate.
iv. Unregulated Private
Enterprise The industries in this
category were left open to the
private sector, individual as well as
cooperative.
Industrial Policy
Resolution, 1956
The Industrial Policy Resolution of 1956
classified the entire industrial sector in
three schedules, which are as follows
Schedule A ln the first category, those
industries were included whose
future development was the
exclusive responsibility of the State.
17 industries, were included in this
category.
Schedule B In this category, those
industries were included which
were progressively State-owned and
in which the private enterprises
would be expected only to
supplement the efforts of the State.
In this category, 12 industries were
included.
Schedule C All industries not listed
in Schedule A or B were
included in the third category.
These industries were left open
to the private sector.
New Industrial Policy,
1991
• The New Industrial Policy of 1991
was at the center of economic
reforms that was launched during
the early 1990s. This policy
brought comprehensive changes in
economic regulation in the
country.
• New industrial policy abolished all
industrial licensing, irrespective of
the level of investment, except for
a short list of selected industries.
Government announced its
intention to offer a part of
government shareholding in the
public sector enterprises to mutual
funds, financial institutions, general
public and the workers.
• The 1956 Resolution had reserved
17 industries for the public sector.
The 1991 industrial policy reduced
this number to 8. As of now only
3 industries are reserved for
government.
Major Schemes for
Industry
Make in India
Make in India compaign aims at
reviving the job creating
manufacturing sector, which is being
seen as the key to taking the Indian
economy on a sustainable high
growth path. It aims to attract
foreign companies to set-up factories
in India and invest in the country’s
infrastructure and transform the
economy from the services-driven
growth model to labour-intensive
manufacturing-drive growth. This is
expected to create over 10 million
new jobs annually.
Digital India
Digital India aimed at transforming
the country into digitally empowered
social and knowledge economy, as
well as to revive the State of
Governance in the country. It is an
1019
‘umbrella programme’ weaving together
many existing schemes under multiple
ministries and departments to ensure that
its services are available to citizens
electronically.
Digital Locker System aims to minimise
the usage of physical documents and
enable sharing of e-documents across
agencies. Swachh Bharat Mission (SBM)
mobile app would be used by people and
government organisations for achieving
the goals of Swachh Bharat Mission.
e-Sign framework would allow citizens to
digitally sign a document online using
Aadhaar authentication. The Online
Registration System (ORS) under the
e-Hospital application has been
introduced.
Startup India - Standup India
The Startup India – Standup India
initiative unveil the government’s actions
plans to support early stage startups.
Startup India – Standup India celebrates
the entrepreneurship spirit of country’s
youth and those that are using
technology to change the way we solve
problems in India across industries, from
medicine and sports to education and the
environment.
INDIAN BANKING
SYSTEM
Banking system is the pillar of an
economic system. India’s banking system
is a stable one, under the supervision and
regulatory framework of the Reserve
Bank of India (RBI). In more than six
decades of India’s independence, the
Indian banking sector has expanded and
developed in multifarious dimensions.
Types of Banking
There are three types of banking, which
are as follows
Core Banking
Core banking is often associated with
retail banking and many banks treat the
retail customers as their core banking
customers. Business is usually managed
via the Corporate banking division of
the institution. Core banking covers basic
deposit and lending of money.
1020
Normal core banking functions will
include transaction accounts, loans,
mortgages and payments. Banks make
these services available across multiple
channels like ATMs. It is also known as
Core Banking Solution.
Retail Banking
When a bank executes transactions
directly with consumers, rather than
corporations or other banks, then it is
called Retail Banking.
Narrow Banking
It refers to very restricted form of
banking where banks are required to
take calculated risk. It involves
mobilising large part of deposits in risk
free assets such as government securities.
Banks in India partially implement
narrow banking.
MONEY
• It plays an important role in our life.
Modern form of money includes paper
notes and coins. In India, the Reserve
Bank of India (RBI) is authorised to
issue currency notes, on behalf of the
Government of India.
• Further, there is legal sanction behind
every currency, that implies that a
rupee cannot be refused as a means of
settling transactions in India. Thus,
rupee is the universally accepted
means of exchange in India.
Types of Money
There are two types of money, which are
as follows
i. Legal Money The issuance of legal
currency always done under
legislation by the Government or
the Reserve Bank. The Reserve
Bank would undertake to pay the
holder an equal amount.
ii. Credit Money The payment is done
through cheque.
Money Stock
Measures in India
• On the recommendations of the
second working group on money
supply, RBI introduced a series of
money stock measures in India
since 1970-71, which are as
follow
• M1 ⇒ High-powered money =
Monetary base =
Money with the public +
Reserves of banks with RBI
• M1 ⇒ Money with the public
(currency notes and coins) +
Demand deposits of banks (on
current and saving bank
accounts) + Other demand
deposits with RBI.
• M2 ⇒ M1 + Saving bank deposits
with Post-Offices.
• M3 ⇒ M1 + Term deposits with
the bank.
• M4 ⇒ M3 + All deposits of
Post-Offices.
• M1 measure represents the most
liquid form of money among
four money stock measures
adopted by RBI. As we proceed
from M1 to M4, the liquidity gets
reduced. In other words, M4
possesses the lowest liquidity
among all these measures.
• M3 is the most important
component among all money
stock measures which is
generally termed as ‘Broad
Money’.
Cheap Money Policy
and Dear
Money Policy
• Cheap Money Policy is that
monetary policy in which loans
and advances are made available
on low interest rate and easy
terms to industries, businessmen
and consumers. Cheap Money
Policy increases the inflation rate
in the economy and it is generally
adopted to get rid of deflationary
tendencies in the economy.
• On the other hand, Dear Money
Policy is adopted to squeeze the
credit utilisation facilities in the
economy. Under Dear Money
Policy, interest rate is increased
which helps in controlling
inflation in the economy.
CDS Pathfinder
CURRENCY
• Rupee was first minted in India during
the reign of Sher Shah Suri. India
became a member of International
Monetary Fund (IMF) in 1947, and
exchange value of rupee came to be
fixed by IMF standards.
• The symbol of Indian rupee (`) came
into use on 15th July, 2010. The new
symbol designed by D Udaya Kumar.
This symbol is an amalgamation of
Devanagari ‘Ra’ and the Roman ‘R’
without the stem.
Devaluation of
Currency
Refers to reducing value of the Indian
rupee in comparison to the leading
currencies in the world market.
i. First Devaluation In June, 1949 (by
30.5%) (Finance Minister Dr John
Mathai).
ii. Second Devaluation In June, 1966
(by 57%) (Finance Minister Sachindra
Chaudhary).
iii. Third Devaluation On 1st July, 1991
(by 9%) (Finance Minister Dr
Manmohan Singh).
iv. Fourth Devaluation On 3rd July,
1991 (by 11%) (Finance Minister Dr
Manmohan Singh).
v. The basic objective of devaluation is
to reduce deficits in balance of trade
by making exports relatively cheap
and imports costly.
Note Issuing Authority
• RBI has had the sole authority to issue
currency notes other than ` 1 notes or
coins and coins of smaller
denominations since, its inception. ` 1
notes or coins and coins of smaller
denomination are issued by the Central
Government, but are put into
circulation through the RBI.
• RBI can issue notes against the securing
of coins or bullion, foreign securities,
rupee coins, Government of India
securities such as bills of exchange. The
Reserve Bank has adopted Minimum
Reserve System for the note issue. Since
1957, it maintains gold and foreign
exchange reserves of ` 200 crore of
which atleast ` 115 crore should be in
gold.
GENERAL STUDIES Indian Economy 1021

Printing of Securities and Minting in India • RBI provides the broad parameters within which the
banking and financial system of India functions.
Security Press Station Related by
• As the custodian of foreign reserves, RBI is responsible
Currency Notes Press Nasik Bank notes from ` 1 to
(1928) 100 for managing the investment and utilisation of the
Security Paper Hoshangabad Banks and currency
country’s foreign reserves in the best possible manner.
(Established 1967-68) notes paper • Credit control is an important tool used by RBI, a
Bank Notes Press (1974) Dewas Bank notes of major weapon of the monetary policy used to control
` 20, 50, 100 and 500 the demand and supply of money (liquidity) in the
Security Notes Printing Hyderabad Union excise duty economy.
Press (Established 1982) stamps
India Security Press
(1992)
Nasik Postal material, postal
stamps etc Methods of Credit Control
Modernised Currency Mysore (Karnataka) There are two types of methods of Credit Control
Notes Press (1995) Sarbani (West Bengal)
Coins are minted at four places viz, Mumbai, Kolkata, (i) Quantitative/General Credit Control
Hyderabad and Noida.
Quantitative credit control is used to control the volume
of credit and indirectly to control the inflationary and
Reserve Bank of India (RBI) deflationary pressures caused by expansion and
contraction of credit. The quantitative credit control
• RBI is the Central Bank of the country. It was set-up on consists of
the basis of Hilton Young Commission recommendation in
• Bank Rate It is also called the rediscount rate. It is the
April, 1935, with the enactment of RBI Act, 1934. Its first
Governor was Sir Osborne Smith. rate at which the RBI gives finance to Commercial
• The main purpose of creating RBI was to separate currency
Banks.
and credit from GOI. RBI was nationalised in 1949 and its • Cash Reserve Ratio (CRR) It is the amount of funds
first Indian Governor was CD Deshmukh. The 22nd RBI that the banks are bound to keep with the RBI as a
Governor is Urijit Patel. He was appointed in September, proportion of their net demand and time liabilities.
2016. • Statutory Liquidity Ratio (SLR) It is the ratio of
• There are 14 Directors in Central Board of Directors liquid asset, which all Commercial Banks have to keep
besides the Governor, 4 Deputy Governors and 1 in the form of cash, gold and unencumbered approved
Government official. The Headquarter of the RBI is situated securities equal to not more than 40% of their total
in Mumbai. demand and time deposits liabilities.
• Repo Rate It is the rate at which RBI lends
MONETARY POLICY COMMITTEE short-term money to the banks against securities. Repo
●
Government recently approves a six member rate injects liquidity in the market.
Monetary Policy Committee, that will set policy • Reverse Repo Rate It is the rate at which banks park
interest rates. Out of the six members, three members short-term excess liquidity with the RBI. Reverse repo
are from RBI including the governors, who would rate withdraws liquidity from the market. This is always
have a casting vote. 100 base point/ 1% less than Repo rate.
●
The other three external members in the committee • Open Market Operations (OMOs) Under OMOs,
would be appointed by the government. Besides, the when the RBI sells Government securities in the
six members, a finance ministry nominee would also
market, it withdraws money liquidity from the market
take part in the deliberations of the committee to
and thus, reduces volume of credit leading to control
convey the government’s view on policy, but he
of inflation. When it buys government securities, it
won’t have a voting right.
injects liquidity into the market and thus, increases
credit-volume leading to higher economic growth.
Role of the RBI
Following are the roles of the Reserve Bank of India
(ii) Qualitative/Selective/Direct
• RBI has the obligation to transact the banking business of
Credit Control
the union and state governments. Hence, it is banker to the Qualitative measures are used to make sure that purpose,
government. for which loan is given is not misused. It is done through
credit rationing and regulating loan to consumption etc.
1022 CDS Pathfinder

BANKING OMBUDSMAN SCHEME Scheduled Commercial Banks

● The scheme is in operation since 1995 and works under
Commercial bank is an institution that accepts deposit,
the control and supervision of the RBI. makes business loans and offer related services. They
● The scheme is applicable to all Commercial Banks,
cater to the financial requirements of industries and
RRBs and Scheduled Primary Co-operative Banks. various sectors like agriculture, rural development etc. It
● The Banking Ombudsman currently have their offices at
includes public sector banks, private sector banks,
15 centres. foreign banks and regional rural banks.
● It is RBI’s Quasi Judicial Authority for resolving disputes
between Commercial Banks, primary co-operative and
Public Sector Banks
RRB’s and their customers. Public sector banks are those where a majority stake is
held by the government. It includes Nationalised banks,
State Bank of India, IDBI and Bharatiya Mahila Bank.
Basel Norms
It was in 1988 that the central banking bodies of the developed Nationalised Banks
economies agreed upon the provision of Capital Adequacy • From 1st February, 1969, the government imposed
Ratio (CAR), also known as the Basel Accord. The accord was social control on banks by introducing certain
agreed upon at Basel, Switzerland. It provides recommendations provisions in the Banking Regulation Act, 1949.
on banking, regulations with regard to capital risk, market risk • It imposed severe restrictions on the composition of
and operational risk. the Board of Directors and internal management and
administration of banking companies.
Basel III Guidelines, 2015 • It also introduced restrictions on advances by banking
• The Reserve Bank of India (RBI) released on 28th May, 2015, companies.
the draft guidelines on the Net Stable Funding Ratio (NSFR) • These were intended to ensure that the bank advances
under Basel III framework on liquidity standards of banks.
were not confined to large-scale industries and big
• The NSFR is defined as the amount of available stable business houses, but were also directed, in due
funding relative to the amount of required stable funding. proportion to other important sectors like agriculture,
• In draft guidelines released, the Central Bank said that banks small-scale industries and exports.
will have to maintain Net Stable Funding Ratio (NSFR) from
January, 2018. NATIONALISED BANKS IN INDIA
• Basel III norms define the capital of the banks in different 1. Bank of Baroda 7. Indian Overseas Bank
ways. It consider common equity and retained earnings as the 2. Bank of India 8. Punjab and Sind Bank
predominant component of capital, but restrict the inclusion 3. Bank of Maharashtra 9. Punjab National Bank
of items such as-deferred tax assets, mortgage service rights 4. Canara Bank 10. UCO Bank
and investments in financial institutions to not more than
5. Central Bank of India 11. Union Bank of India
15% of the common equity component.
6. Indian Bank

Scheduled and
Non-scheduled Banks State Bank of India
• State Bank of India (SBI) was previously called
• The scheduled banks are those which are enshrined in the Imperial Bank of India in 1921, which was created
second schedule of the RBI Act, 1934. These banks have a by amalgamation of 3 Presidency Banks viz, Bank of
paid up capital and reserves of an aggregate value of not less Bengal, Bank of Bombay and Bank of Madras. It was
than ` 5 lakhs. nationalised in 1955.
• Non-scheduled banks are those which are not included in the
State Bank’s Group
second schedule of the RBI Act, 1934. They are also subject
to the statutory cash reserve requirement. But they are not • State Bank of Bikaner and Jaipur
required to keep them with the RBI; they may keep these • State Bank of Hyderabad
balances with themselves. • State Bank of Mysore
Scheduled banks are further divided into two banks • State Bank of Patiala
i. Scheduled Commercial Banks • State Bank of Travancore
ii. Scheduled Co-operative Banks
GENERAL STUDIES Indian Economy
Bharatiya Mahila Bank
• The main objective of the bank is to focus on the banking
needs of women and to promote their economic
empowerment.
• The Union Government on 12th November, 2013
appointed Usha Anantha Subramanian as the first
Chairperson and Managing Director of public sector
Bharatiya Mahila Bank (BMB).
• The BMB is based on the principle of : ‘Women
empowerment is India’s empowerment’.
î The Union Cabinet, on 15th June, 2016, approved the merger
of 5 associate banks of SBI and Bharatiya Mahila Bank with • In 1976, the Parliament enacted the Regional Rural Banks
the State Bank of India. It is the first move to consolidate the
country’s struggling public sector banks.
Industrial Development Bank of India
(IDBI)
IDBI bank is an Indian government-owned financial service
company. It is headquartered in Mumbai, India. In the
group-wise classification, since 31st December, 2007, IDBI
Bank limited has been included in nationalised banks.
Private Sector Banks
All those banks where greater parts of stake or equity are
held by the private shareholders are called as private sector
banks. In India, private sector banks are known with two
names; old private sector banks and new private sector banks.
Old Private Sector Banks
The banks which were not nationalised at the time
of nationalisation of banks that took place during 1969
and 1980 are known as the old private sector banks. These
were not nationalised, because of their small size and regional
focus.
New Private Sector Banks
• The banks, which came in operation after 1991, with the
introduction of economic reforms and financial sector
reforms are known as new private sector banks. Banking
Regulation Act was then amended in 1993, which permitted
the entry of new private sector banks in the Indian banking
sector.
• IDFC Bank started its operation in 2015.
• Bandhan Bank has started its operations in India from 23rd
August, 2015.
Top Five Private Sector Banks
Top five private sector banks are as follows
• ICICI Bank, 1994 Vadodara
• HDFC Bank, 1994 Mumbai
• Axis Bank, 1994 Ahmedabad
• Kotak Mahindra Bank, 1985 Mumbai
• Yes Bank, 2004 Mumbai
1023
Foreign Banks
• Foreign Banks are allowed to operate in India through
branches and representative offices. A new Foreign Bank
desirous of opening a branch in India is required to apply
to Reserve Bank of India giving relevant information
about its shareholders, financial position and dealings with
Indian parties.
• CITI Bank, HSBC, Standard Chartered Banks are some
examples of Foreign Banks in India.
Regional Rural Banks
Act, 1976 to provide for the incorporation, regulation and
winding up of Regional Rural Banks. The Act has been
made effective from the 26th September, 1975.
• The equity of the RRBs is contributed by the Central
Government, concerned State Government and the
sponsor bank in the proportion of 50:15:35.
• The objective of the RRBs is to develop the rural
economy by providing; for the purpose of development of
agriculture, trade, commerce, industry and other
productive activities in the rural areas, credit and other
facilities, particularly to the small and marginal farmers,
agricultural labourers, artisans and small entrepreneurs and
for matters connected there with and incidental there to.
Scheduled Co-operative Banks
Co-operative banks have also played a limited, but important
role in the banking system of the country. It can be further
divided into two banks
Urban Co-operative Banks
• The UCBs are registered under the Co-operative Societies
Acts of the respective State Governments. UCBs having a
multi-state presence are registered under the Multi-state
Co-operative Societies Act and regulated by the Central
Government.
• Besides, the Reserve Bank also has regulatory and
supervisory authority for bank related operations under
certain provisions of the Banking Regulation Act, 1949 (as
applicable to Co-operative Societies).
State Co-operative Banks
• State Co-operative Bank means the Principal co-operative
society in a state, the primary object of which is the
financing of other co-operative societies in the state.
Payment Banks
RBI has issued license for establishment of 11 payment
banks. These banks are allowed to accept restricted deposits
but cannot issue loans and credit cards. Such banks operate
both current and saving accounts.
1024
Financial Institutions
Financial Institutions are an important part of the Indian
Financial System as they provide medium to long-term
finance to different sectors of the economy. Some of the
important financial institutions are as follows
• National Housing Bank set-up on 9th July, 1988, to
provide a sound, healthy, viable and cost effective housing
finance system to all segments of the population.
• National Bank of Agriculture and Rural Development
(NABARD) for facilitating credit flow for promotion and
development of agriculture, small scale industries, cottage
and village industries, handicrafts and other rural crafts.
• Industrial Finance Corporation of India Limited (IFCI)
to provide financial assistance to medium and large
industries.
• Small Industries Development Bank of India (SIDBI)
for promotion, financing and development of small scale
industries in the economy.
• Mudra Bank provide loans at low rates to small
entrepreneurs.
Financial Market
Financial market is an important part of financial sector. It
is the market, where financial transactions take place. On
the basis of short-term and long-term transactions, such
markets are classified as follows
Money Market
• The cluster of financial institutions that deal in short-term
securities and loans, gold and foreign exchange are termed
as money market.
Indian money market is broadly divided into two
categories :
i. Organised money market which includes call money
market, collateral loan market, treasury bill market,
commercial bill market, banker’s acceptance market,
certificates of deposits market, commercial paper
market.
ii. Unorganised money market includes unregulated
non-bank financial intermediaries such as money
lenders, chit funds, nidhis etc.
Capital Market
It is one of the most important segments of the Indian
financial system. It is the market available to the companies
for meeting their requirements of the long-term funds. These
are markets for buying and selling equity and debt
instruments. It includes stock market.
Stock Market
A stock market, equity market or share market is the
aggregation of buyers and sellers of stocks (also called
shares). These may include securities listed on a stock
exchange as well as those only traded privately.
CDS Pathfinder
Major Stock Exchanges in India
The major stock exchanges in India are as follows
Bombay Stock Exchange (BSE)
Bombay Stock Exchange (BSE) is one of the oldest stock
exchanges in the world (since, 1875) and the oldest of Asia.
The share sensex of BSE includes 30 listed companies. It has
indices, viz (i) BSE 200, (ii) BSE 100, (iii) BSE 500,
(iv) SENSEX, (v) MIDCAP and (vi) SMLCAP.
National Stock Exchange (NSE)
It was established in November, 1992 on the
recommendation of pherwani committee. However, it
became a full-fledged stock exchange in 1993 and
commenced operations in 1994. In October 1995, it became
the biggest stock exchange in India. NSE share sensex
includes 50 listed companies.
Approved Stock Exchanges in India
• Vadodara Stock Exchange, Vadodara
• Coimbatore Stock Exchange, Coimbatore
•
•
Bombay Stock Exchange, Mumbai
Over the Counter Exchange of India, Mumbai
• National Stock Exchange, Mumbai
• Ahmedabad Stock Exchange, Ahmedabad
• Bangalore Stock Exchange, Bengaluru
• Bhubaneshwar Stock Exchange, Bhubaneshwar
• Calcutta Stock Exchange, Kolkata
• Cochin Stock Exchange, Cochin
• Delhi Stock Exchange, Delhi
• Guwahati Stock Exchange, Guwahati
• Hyderabad Stock Exchange, Hyderabad
• Jaipur Stock Exchange, Jaipur
• Mangalore Stock Exchange, Mangalore
• Ludhiana Stock Exchange, Ludhiana
• Chennai Stock Exchange, Chennai
• Madhya Pradesh Stock Exchange, Indore
• Pune Stock Exchange, Pune
• Saurastra Kutch Stock Exchange, Rajkot
Commodity Exchange
There are six commodity exchanges in India
i. Multi Commodity Exchange of India Limited (MCX),
Mumbai
ii. National Commodity and Derivatives Exchange
Limited (NCDEX), Mumbai
iii. Indian National Multi-Commodity Exchange (NMCE),
Mumbai
iv. Commodity Exchange Limited (ICEX), Mumbai
v. ASE, Derivatives and Comodity Exchange Limited
(ASE, DCEL), Mumbai
vi. Universal Commodity Exchange (UCE), Hyderabad
GENERAL STUDIES Indian Economy 1025

Some Prominent Stock Indices of Some of the direct taxes are as follows
Famous Markets
Reforms in i. Income Tax It is the tax levied
Index Country
Insurance Sector directly on the income of the
people by the Central
Dollex, SENSEX. S&P CNX. India The reforms in the insurance sector Government.
NIFTY-FIFTY BANKEX started with the enactment of
ii. Corporate Tax It is levied on the
Dow Jones United States Insurance Regulatory and
(New York) profit of the companies or
Development Authority Act, 1999.
corporations. It is the largest source
Nikkei Japan The Act paved the way for the entry
of revenue of the Central
MID-DAX Germany of private insurance companies into
Government, covering about 18%
HANG SENG Hong Kong the insurance market and also
of the total revenue.
Constitution of Insurance Regulatory
STRAITS TIMES. SIHEX Singapore iii. Wealth Tax This tax is levied on
and Development Authority. In 1993,
KOSPI Korea Malhotra Committee was set-up to the net wealth of the individuals,
SET Thailand recommend reforms in insurance Hindu undivided family and joint
TAIEN Taiwan sector. stock companies. It is a minor
source of revenue of the
SHANGHAI COM China
Insurance Regulatory and government, primarily imposed to
NASDAQ USA reduce concentration of wealth in
Development Authority of the society.
India (IRDAI) iv. Gift Tax This tax is imposed by
INSURANCE • IRDAI was constituted on 19th the Central Government on all
Insurance has been an important part April, 2000 to protect the interest of donations and gifts over and above
of the Indian financial system. Until the holders of insurance policies and the prescribed limits to the family
recently, insurance services were to regulate, promote and ensure members. However, donation
provided by the public sector i.e. life orderly growth of the insurance given by the charitable institutions
insurance by the Life Insurance industry. The authority consists of a and companies is not covered
Corporation of India and general Chairperson, three whole-time under gift tax. This tax is basically
insurance by the General Insurance members and four part-time imposed to check the evasion of
Corporation and its four subsidiaries. members. estate duty and wealth tax.
• It provides for regulating the insurance v. Interest Tax This tax is imposed
(i) General Insurance sector, the authority has been issuing on the interest income of the
Corporation regulations covering almost the entire commercial banks on their gross
segment of insurance industry, namely; loans and advances. Presently, it is
(GIC) regulation on insurance agents, not in force in India.
Established on 1st January, 1973, It solvency margin, re-insurance,
has four subsidiary companies, which registration of insurers, obligation of
are as follows insurers to rural and social sector,
Indirect Tax
accounting procedure etc. Indirect taxes are those taxes which
i. National Insurance Company
have their primary burden or impact on
Limited, Kolkata. one person, but that person succeeds in
ii. The New India Assurance
Company Limited, Mumbai.
TAX STRUCTURE shifting his burden on to others.

iii. The Oriental and Insurance Tax is a compulsory payment by the Direct Tax Indirect Tax
Company Limited, citizens to the government to meet the Personal Income Tax Excise Duty
New Delhi. public expenditure. It is legally
Corporation Tax Custom Duty
imposed by the government on the
iv. United India Fire and General taxpayer and in no case taxpayer can Wealth Tax Sales Tax
Insurance Company Limited, deny to pay taxes to the government. Gift Tax Service Tax
Chennai.
Tax can be direct or indirect, which Land Revenue Value Added Tax

(ii) Life Insurance are as follows Profession Tax Passenger Tax

Corporation (LIC) Stamp Duty and Entertainment Tax

• Established on 1st September, 1956.

Direct Tax Registration Charges
Securities Electricity Duty
A direct tax is that tax, which is borne Transaction Tax
• Head office Mumbai, Zonal offices 7 by the person on whom it is levied. A Banking Cash Motor Vehicles Tax
(Mumbai, Kolkata, Delhi, Chennai, direct tax cannot be shifted to other Transaction Tax
Kanpur, Hyderabad and Bhopal). person.
1026
Goods and Services
Tax (GST)
Goods and Services Tax is a
comprehensive indirect tax on
manufacture, sale and consumption of
goods and services throughout India,
to replace taxes levied by the Central
and State Governments. Goods and
services tax would be levied and
collected at each stage of sale or
purchase of goods or services based
on the input tax credit method.
• Central Taxes Replaced by GST
Central Excise Duty, Additional
Duties of Excise and Customs,
Special Additional Duty of customs
(SAD), Service Tax and Cesses and
Surcharges on Supply of Goods and
Services.
• State Taxes Subsumed in the GST
VAT, Central Sales Tax, Purchase
Tax, Luxury Tax, Entry Tax,
Entertainment Tax, Taxes on
Advertisements, Lotteries, Betting,
Gambling and State Cesses and
Surcharges.
Financial Relations
Between
Centre and States
• Article 264 and Article 293 explain
the financial relations between the
Union and State Governments.
Although states have been assigned
certain taxes, which are levied and
collected by them, they also have a
share in the revenue of certain
union taxes and there are certain
other taxes, which are levied and
collected by the Central
Government, but whole proceeds
are transferred to the states.
• The Constitution provides
residuary powers to the centre. It
makes a clear division of fiscal
powers between the Central and
the State Governments.
A. List I of 7th Schedule of the
Constitution enlists the Union
Taxes.
B. List II of 7th Schedule enlists
the taxes, which are within the
jurisdiction of the states
C. Apart from taxes levied and
collected by the state the
Constitution has provided for
the revenues for certain taxes
on the Union List to be
allotted, partly or wholly to
the states.
Finance Commission
Finance Commission is constituted to
define financial relations between the
Centre and the States. Under the
provision of Article 280 of the
Constitution, the President appoints a
Finance Commission for the specific
purpose of devolution of non-plan
revenue resources. KC Niyogi was the
chairman of first finance commission.
The 14th Finance Commission was
headed by YV Reddy.
Recommendations of 14th
Finance Commission
• Devolution of Taxes to States The
share of taxes of the centre to states
is recommended to be increased
from 32% to 42%.
• Fiscal Deficit Fiscal deficit of states
should be aimed at 3% of the Gross
State Domestic Product (GSDP)
during the period 2015 to 2020.
• Compensation to States for GST
An autonomous and independent
Goods and Services Tax (GST)
compensation fund is to be set-up in
order to facilitate compensation to
states. Revenue compensation to
states for the GST should be for
5 years.
• Amendments to FRBM Act The
FRBM Act, 2003 should be
amended, to remove the definition of
effective revenue.
UNION BUDGET
• The budget is an extension account
of the governments finances, in
which revenues from all sources and
expenses of all activities undertaken
are aggregated.
• The Finance Minister presents the
Union Budget every year in the
Parliament that contains the
Government of India’s revenue and
expenditure for one fiscal year,
CDS Pathfinder
which runs from 1st April to
31st March.
• In the Constitution of India the term
Budget is nowhere used. It is rather
mentioned as Annual Financial
statement under Article 112
comprising the revenue capital
budget and also the estimates for the
next fiscal year called Budget
Estimates.
FRBM Act, 2003
The Fiscal Responsibility and Budget
Management Act (FRBM), 2003 is an
act of the Parliament of India to
institutionalise financial discipline,
reduce India’s fiscal deficit, improve
macro-economic management and the
overall management of the public
funds by moving towards a balanced
budget.
Objectives
The main objectives of the act are as
follows
1. To introduce transparent fiscal
management systems in the
country.
2. To introduce a more equitable
and manageable distribution of
the country’s debts over the
years.
3. To aim for fiscal stability for
India in the long run.
INFLATION
It is that state in which the prices of
goods and services rise on the one hand
and value of money falls on the other.
When money circulation exceeds the
production of goods and services, the
state of inflation takes place in the
economy.
Types of Inflation
Four types of inflation are as follows
i. Demand Pull Inflation Inflation
created and sustained by excess of
aggregate demand for goods and
services over the aggregate
supply. In other words, demand
pull inflation takes place when
increase in production lags behind
the increase in money supply.
GENERAL STUDIES Indian Economy
ii. Cost Push Inflation Inflation which
is created and sustained by increase in
cost of production which is
independent of the state of demand
(e.g. trade unions can bargain for
higher wages and hence, contribute to
inflation).
iii. Stagflation In this type, there is
fall in the output and employment
levels. Due to various pressures, the
entrepreneurs have to raise the price
to maintain their margin of profit.
But as they only partially succeed in
raising the prices, they are faced
with a situation of declining output
and investment. Thus, on one side
there is a rise in the general price
level and on the other side, there is
a fall in the output and employment.
iv. Hyper Inflation It is very rapid
growth in the rate of inflation in
which money loses its value to the
point where alternative mediums of
exchanges-such as barter or foreign
currency are commonly used. Also
called Galloping Inflation.
Measurement of Inflation
• Inflation is measured by general price
index. General price index measures
the changes in average prices of goods
and services. A base year is selected
and its index is assumed as 100 and on
this basis price index for the current
year is calculated.
• If the index of the current year is
below 100, it indicates the state of
deflation and on the contrary, if index
of the current year is above 100 it
indicates the state of inflation.
WHOLESALE PRICE INDEX
(WPI)
●
It measures the change in
wholesale prices on weekly basis.
On the basis of weekly indices
average annual WPI is worked
out.
●
Average annual wholesale prices
of the base year (assumed as 100).
Consumer Price Index (CPI)
It measures changes in price level of
goods and services purchased by
households. The base year for calculation
of CPI after 2015 revision has been
changed to 2012. CSO compile CPI
for urban and rural population
separately. It also publish combined
CPI (Urban+Rural).
DEFLATION
It is that state in which the value of
money rises and the price of goods
and services falls.
The state of deflation may appear in
the economy due to the following
reasons
• When the government withdraws
money from circulation.
• When government imposes heavy
direct taxes or takes heavy loans
from the public (voluntary or
compulsory or both).
• When the Central Bank sells the
securities in open market (which
reduces the quantity of money in
circulation).
• When the Central Bank increases
the bank rate (which curtails the
quantity of credit in the economy).
Measures to Check
Deflation
• To increase money supply.
• To promote credit creation by the
banks.
• Curtailment in taxes so as to
increase the purchasing power of
people.
• To increase the public expenditure
and to increase the employment
opportunities in the economy.
• To increase the money supply in
circulation by repayment of old
public debts.
• To provide economic subsidy by
the government to the industrial
sector of the economy.
Foreign Trade
Foreign Trade is a characteristic
feature of all modern economies.
India, since ages, has experienced a
thriving international trade.
However, with the rapid economic
progress in recent years, these has
been a shift from the traditional
areas and destinations of
export/import.
1027
Balance of Trade (BoT)
The difference between a nation’s
imports of goods and services and its
exports of them is known as Balance of
Trade.
• It is the most important element of
the Balance of Payments.
• There are three possibilities in the
Balance of Trade (BoT), which are as
follow
– Balanced BoT i.e. Exports
= Imports
– Adverse BoT i.e. Exports
< Imports
– Favourable BoT i.e. Exports
> Imports
Balance of Payment
(BoP)
The Balance of Payment (BoP) of
country is the record of all economic
transactions between the residents of a
country and the rest of the world in
particular period (over a quarter of a year
or more commonly over a year). These
transactions are made by individuals,
firms and government bodies.
It is divided into the following two
accounts :
Current Account
Current account of Balance of Payment
consist of all transactions relating to
goods, services and income. It is
functionally classified into merchandise
or visible and invisibles. Current
account deficit is the situation where
payments on the current account, out of
the country are more than the payments
into the country. In current account
surplus there is a net inward payment
into the country on the current account.
Capital Account
Capital account is that acount which
records all such transactions between
residents of a country and rest of the
world, which causes a change in the
asset or liability status of the residents
of a country or its government.
Investments (FDI and FII) and
Borrowings, External Commercial
Borrowings (ECB) are part of the
capital account.
1028
Foreign Direct Investment (FDI)
• It is an investment in a foreign country through the
acquisition of a local company or the establishment of an
operation on a new greenfield site.
• Brownfield investment is when a company or government
entity purchase or leases existing production facilities to
launch a new production activity.
• Since, 1st April, 2010 in India, Foreign Direct Investment
(FDI) has been regulated by the consolidated FDI policy
issued by the Department of Industrial Policy and
Promotion (DIPP).
• This consolidation is expected to clarify India’s FDI policy
and provide for a better understanding and predictability
of the foreign investment rules among foreign investors
and sectoral regulators.
Foreign Institutional
Investment (FII)
• A foreign institutional investor is one which is registered in
a country outside of the one in which it is investing. In
India, it is used to refer to companies which invest in the
country’s financial markets.
• In 2013, India accepted the internationally laid down
definition of FII to remove the ambiguity between FII and
FDI. Now, when an investor has a stake of less than 10%
in a company, it will be treated as FII and where and
investor has a stake of more than 10%, it will be treated as
FDI.
• FIIs may invest in securities in both the primary and
secondary market in shares, debentures and warrants of
listed or unlisted companies.
Participatory Notes
These refers to instruments issued by registered foreign
institutional investors to overseas investors who are not
registered with SEBI but wish to invest in Indian stock
markets.
Foreign Trade Policy (FTP),
2015-20
• The new five years Foreign Trade Policy, 2015-20 provides
a framework for increasing exports of goods and services
as well as generation of employment and increasing value
addition in the country in keeping with the ‘Make in India’
vision. The focus of the new policy is to support both the
manufacturing and services sectors, with special emphasis
on improving case of doing business.
• The government is pitching India as a friendly destination
for manufacturing and exporting goods.
CDS Pathfinder
Some key features of the new foreign trade policy are as
follows
– India to be made a significant participant in world
trade by 2020.
– Merchandise Exports from India Scheme (MEIS) to
promote specific services for specific markets foreign
trade policy.
– FTP would reduce export obligation by 25% and
given boost to domestic manufacturing.
– Industrial products to be supported in major markets
rates ranging from 2% to 3%.
– Branding companies planned to promote exports in
sectors where India has traditional strength.
INTERNATIONAL
ORGANISATIONS
An International Organisation has been defined as a
forum of co-operation of Sovereign States based on
multilateral international agreement and comprising of a
relatively stable range of participants.
Bretton Woods Conference
The Bretton Woods Conference, officially known as the
United Nations Monetary and Financial Conference, was
a gathering of delegates from 44 nations that met from 1st
to 22nd July, 1944, in Bretton Woods, New Hampshire, to
agree upon a series of new rules for the post World War II
International Monetary System.
The two major accomplishments of the conference were
the creation of the International Monetary Fund (IMF) and
the International Bank for Reconstruction and
Development (IBRD) also known as World Bank.
World Bank
Since, its inception in 1944, the World Bank has expanded
from a single institution to a closely associated group of
five development institutions. On 1st July, 2012, Jim Yong
Kim became the 12th President of the World Bank Group.
He has been appointed as a head of World Bank in 2016
for second-term.
The world bank is a vital source of financial and technical
assistance to developing countries around the world. It
aims to end extreme poverty and at the same time promote
shared prosperity.
International Monetary Fund (IMF)
The IMF came into formal existence in December, 1945,
when its first 29 member countries signed its Article of
Agreement. It began operations on 1st March, 1947. At
present, 189 nations are Members of IMF.
GENERAL STUDIES Indian Economy
India is a founder Member of the IMF.
Finance Minister of India is the
ex-officio Governor on the Board of
Governors of the IMF, which is the
highest decision making body of the
IMF. RBI Governor is the alternate
Governor at the IMF. The IMF’s
primary purpose is to ensure the
stability of the International Monetary
System—the system of exchange rates
and international payments that enables
countries (and their citizens) to transact
with one another.
World Trade Organisation
(W TO)
The WTO commenced under the
Marrakesh Agreement in 1995 and
replaced GATT. It deals with the
global rules of trade between nations,
helps producers of goods and services,
exporters and importers conduct their
business. The WTO’s agreement on
Trade Related Aspects of Intellectual
Property Right (TRIPS), was negotiated in
1986-94 Uruguay round. Rules related to
trade, tariff, patent and intellecutual
property right are framed by the WTO.
The members of the World Trade
Organisation (WTO) agree to accord
MFN status to each other.
TRIPS (TRADE RELATED
ASPECTS OF INTELLECTUAL
PROPERTY RIGHTS)
●
The 1995 TRIPS Agreement
provided for both product
patents and process patents.
Product patents are meant to
protect the individual product,
while process patent protect the
process used to create the
product.
●
The agreement gave developing
countries 10 years to enact laws
to protect intellectual property.
Thus, India enacted its Patents
(Amendment) Act in 2005 to
confirm to the agreement.
●
Developed countries on the
other hand had to enact laws in
1995 itself. Under the
agreement, protection to patents
had to be provided for
20 years. TRIPS agreement is
administered by WTO.
International Labour
Organisation (ILO)
The International Labour Organisation
emerged with the League of Nations
from the Treaty of Versailles in 1919.
It was founded to give expression to
the growing concern for social reform
after World War I and the conviction
that any reform had to be conducted at
an international level.
The ILO has generated such hallmarks
of industrial society as the eight-hour
working day, maternity protection,
child labour laws and a range of
policies, which promote workplace
safety and peaceful industrial relations.
Established on 11th April, 1919
Associated with UNO 14th December,
1946
Headquarters Geneva
Membership 187
Director-General Guy Ryder (2012-17)
Noble Peace Prize 1969
Asian Development Bank
(ADB)
The Asian Development Bank was
established following the
recommendations of the United Nations
Economic and Social Commission for
Asia and the Pacific. It was formed to
foster economic growth and co-operation
in the region of Asia and the Pacific and
to contribute to the acceleration of
economic development of the developing
countries of the region.
The Asian Development Bank (ADB),
an International Partnership of 67
member countries, was established in
1966 with its headquarters at Manila,
Philippines. India is a founder member.
Asia-Pacific Economic
Cooperation (APEC)
Asia-Pacific Economic Cooperation or
APEC, is the premier forum for
facilitating economic growth,
cooperation, trade and investment in
the Asia-Pacific region. APEC is the
only Inter-governmental grouping in
the world operating on the basis of
non-binding commitments, open
dialogue and equal respect for the views
of all participants.
1029
Organisation of the
Petroleum Exporting
Countries (OPECs)
The headquarter of OPECs is located in
Vienna and it has
12 members and it was established in
1960. OPEC nations account for
two-third of the world’s oil reserves
and 33.3% of the world’s oil
production.
The main objective is determination of
the best means for safeguarding the
organisation’s interests, individually and
collectively. It pursues ways and means
of ensuring the stabilisation of prices in
international oil markets with a view to
eliminate harmful and unnecessary
fluctuations.
BRICS
In economics, BRICS (Brazil, Russia,
India, China,
South Africa) is an acronym that refer to
countries Brazil, Russia, India, China
and South Africa which are all deemed
to be at similar stage of newly advanced
economic development.
New Development Bank
(NDB)
The New Development Bank, formerly
referred to as the BRICS Development
Bank, is a multilateral development
bank established by the BRICS states.
According to the agreement on the
NDB, “the bank shall support public or
private projects through loans,
guarantees, equity participation and
other financial instruments.” The bank
is headquarter in Shanghai, China. KV
Kamath, from India, is the first elected
President of the NDB.
SAARC
South Asian Association for Regional
Cooperation (SAARC) is an
organisation of South Asian nations,
founded in December, 1985 and
dedicated to economic, technological,
social and cultural development
emphasising collective self-reliance. Its
members are Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan, Sri Lanka
and Afghanistan.
1030
The SAARC Secretariat is based in Kathmandu, Nepal. It
co-ordinates and monitors implementation of activities,
prepares for services meetings and serves as a channel of
communication between the association and its member
states as well as other regional organisations.
SAFTA
The South Asian Free Trade Area or South Asian
Preferential Trading Arrangement is an agreement reached
on 6th January, 2004 at the 12th SAARC Summit in
Islamabad, Pakistan. It created a free trade area of 1.6
billion people in Bangladesh, Bhutan, India, Maldives,
Nepal, Pakistan and Sri Lanka.
ASEAN
Association of South-East Asian Nations (ASEAN) was
established on 8th August, 1967, in Bangkok, Thailand,
with the signing of the ASEAN Declaration (Bangkok
Declaration) by the Founding Fathers of ASEAN, namely;
Indonesia, Malaysia, Philippines, Singapore and Thailand.
Later on Brunei Darussalam, Vietnam, Lao PDR and
Myanmar and Cambodia joined the organisation making it
10 members group. The main aim of the organisation is to
accelerate economic growth, social progress and cultural
development in the region.
European Union
The European Union (EU) is an economic and political
union of 28 member states that are located primarily in
Europe. The European Union received the 2012 Nobel
Peace Prize for having ‘‘contributed to the advancement of
peace and reconciliation, democracy, and human rights in
Europe.’’ On 1st July, 2013, Croatia became the 28th EU
member. In 2016, UK decided to exit from EU.
India, Brazil, South Africa (IBSA)
The members of IBSA are India, Brazil, South Africa and it
was established in 2003. The main objective of IBSA is to
promote South-South Cooperation. It aims at increasing
the trade opportunities among the three countries and
facilitating the trilateral exchange of information,
technologies and skills to complement each other strength.
Indian Ocean Rim Association for
Regional Cooperation (IOR-ARC)
The headquarter of IOR-ARC is located in Mauritius and
it has 20 members. The main objective is to promote
balanced growth and sustainable development of the region
and member states, to focus on those areas of economic
cooperation, which provide maximum opportunities for
development, shared interests and mutual benefits.
CDS Pathfinder
Shanghai Cooperation Organisation (SCO)
The headquarter of SCO is located in Beijing, China and it
has 6 members. It is an inter-governmental mutual-security
organisation, which was founded in 2001, in Shanghai by the
leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan
and Uzbekistan.
Except for Uzbekistan, the other countries had been members
of the Shanghai Five, founded in 1996, after the inclusion of
Uzbekistan in 2001, the members renamed the organisation.
India has signed memorandum on accession in 2016. It is
expected to become full member in 2017.
BIMSTEC
The headquarter of BIMSTEC (Bay of Bengal Initiative for
Multi-Sectoral Technical and Economic Cooperation) is
located in Dhaka, Bangladesh and it has 7 members
Bangladesh, India, Myanmar, Bhutan, Sri Lanka, Thailand
and Nepal and it was established in 1997. The main objective
is to promote multi-sectoral cooperation for economic and
social progress of the Bay of Bengal region. The member
countries agreed to create the BIMSTEC free trade area
framework agreement in order to promote international trade
and investment in the region.
G-8
The member of G-8 are Canada, France, Germany, Italy, Japan
UK, USA and the Russia. On 24th March, 2014, the original
G-7 nations voted to effectively suspend Russia in response to
latter’s annexation of Crimea. However, they decided that
Russia might restore its membership in G-8 depending on its
action. The main objective of G-8 aims at discussing and
evolving strategies to deal with the major economic and
political international issues. There is no formal institutional
structure or permanent secretariat. Heads of state of member
nations and EU representatives hold meetings annually.
Multilateral Summits G-20
It was established on 26th September, 1999, when the
Finance Ministers of the G-7 announced the formation of the
G-20 in Washington DC to establish an informal mechanism
for dialogue among systematically important countries,
including the industrialised countries and the big emerging
markets within the framework of the Bretton Woods
Institutional System.
India is member of G-20. The main objective of G-20 is
promoting discussion on and study and review of policy
issues among industrialised countries and big emerging
markets with a view to enhancing international financial
stability. The G-20 does not have a permanent secretariat.
The chair rotates between the members selected from
different five regional grouping of countries each year.
GENERAL STUDIES Indian Economy
PRACTICE EXERCISE
1. Which are the incorrect functions
of the RBI, out of the given
statements?
1. Issuing and disbursing agency
for all currency notes and
coins in India.
2. Stabilising exchange rate of
rupee.
3. Forwarding short-term and
long-term loans to the
Government of India.
Select the correct answer using
the codes give below.
(a) Only 1 (b) 2 and 3
(c) Only 3 (d) 1 and 3
2. Which of the following does not
come under ‘Plan expenditure’?
1. Supports to the state plans
and ‘grants-in-aid’ given to
them by the Government of
India.
2. Maintenance of assets created
under plan expenditure.
3. Recapitalisation funds for
public sector banks.
Select the correct answer using
the codes given below.
(a) 1 and 2 (b) 2 and 3
(c) 1 and 3 (d) All of these
3. Consider the following statements
1. Government of India has not
set-up any new PSU in last
3 years.
2. Government now concentrates
on social sector and lets the
private sector to take care of
industrial sector.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
4. Consider the following statements
regarding ‘plan’ and ‘non-plan
expenditure’.
1. Plan expenditure goes towards
fulfilling the Five Year Plan.
2. Assets created under plan
expenditure get their
maintenance funds also under
plan expenditure.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
5. Which of the following was
launched by the government on
the advice of the World Bank?
1. New Agricultural Strategy
2. Food Corporation of India
3. Public Distribution System
4. Agriculture Prices Commission
Select the correct answer using
the codes given below.
(a) 1 and 2 (b) 2, 3 and 4
(c) 1 and 4 (d) All of these
6. Aadhar has huge potential for
improving operations and delivery
of service. Its potential application
in various significant public
services delivery and social sector
programme is immense. In this
context, consider the following
statements.
1. The UID database can be used
for the authentication of
beneficiaries under the Public
Distribution System.
2. It will help in enhancing the
efficiency of social audit of
programmes.
3. It will enable greater
commitment towards
government financing of public
health and primary healthcare.
Which of the statements given
above are correct?
(a) 1 and 2 (b) 1 and 3
(c) 2 and 3 (d) All of these
7. Which of the following
statements, related to World
Bank Organisations, IBRD and
IDA?
1. India use IDA funds on social
sector.
2. India use IBRD funds on
infrastructure development.
3. IBRD loans are cheaper than
IDA loans.
Select the correct answer using
the codes given below.
(a) Only 1 (b) 1 and 3
(c) 1 and 2 (d) 2 and 3
8. The SEZ Act 2005, has certain
objectives. In this context,
consider the following.
1. Development of infrastructure
facilities.
1031
2. Promotion of investment from
foreign sources.
3. Promotion of export of services
only.
Which of the objectives(s) given above
is/are of this act?
(a) Only 2 (b) 1 and 2
(c) 2 and 3 (d) All of these
9. Consider the following statement(s)
1. In Third Five Year Plan growth
rate of agriculture products was
negative.
2. In Third Five Year Plan Indian
economy took the first step to
devaluate the Indian rupee after
independence.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
10. What is an ECO-MARK?
(a) A scheme for labelling pollution-free
industrial unit
(b) A scheme for labelling environment
friendly consumer product
(c) A cost effective production technique
(d) An international certification of
Eco-friendly building
11. The Mahatma Gandhi National
Rural Employment Guarantee Act
(MGNREGA) is an Indian job
guarantee scheme enacted by
legislation on 25th August, 2005.
Which among the following
statements is not correct regarding
MGNREGA?
1. The scheme provides a legal
guarantee for at least one
hundred days of employment in
every financial year to adult
member of any rural household
willing to do work.
2. This act was introduced with an
aim of improving the purchasing
power of the rural people.
3. The law was initially called the
National Rural Employment
Guarantee Act (NREGA) but was
renamed on 2nd October, 2009.
Select the correct answer using the
codes given below.
(a) Only 1 (b) Only 2
(c) All of these (d) None of these
1032
12. With reference to BRIC countries,
consider the following statement(s)
1. At present China’s GDP is
more than the combined GDP
of all the three other countries.
2. China’s population is more
than the combined population
of any two other countries.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
13. Which one of the following
statements is not correct?
(a) Commercial Bank reserves held by
RBI are an asset of Commercial
Banks
(b) Commercial Banks decrease the
supply of money, when they
purchase government bonds from
householders or businesses
(c) Actual reserves don’t necessarily
exceed required reserves
(d) The supply of money increases,
when the RBI buys government
securities from households or
businesses
14. Why is Reserve Bank of India
(RBI) also known as Bankers’
Bank and lender of last resort?
(a) Reserve Bank of India maintains
the security of the Commercial
Banks and appointment of its
officials.
(b) Commercial Banks need to keep
some amount in the custody of the
RBI and can borrow from the RBI
at the times of need and urgency
(c) RBI acts as an agent of the
government to regulate the day-to-day
functions of the Commercial Banks
and maintains the liquidity of the
banks
(d) Both ‘a’ and ‘c’
15. With reference to the Indian
economy, consider the following
statements
1. Agriculture, forestry and
fishing.
2. Manufacturing.
3. Trade, hotels, transport and
communication.
4. Financing, Insurance, real
estate and business services.
The decreasing order of the
contribution of these sectors to the
Gross Domestic Product (GDP) at
factor cost at constant prices
(2013-14) is
(a) 3, 1, 2, 4 (b) 3, 4, 1, 2
(c) 4, 3, 1, 2 (d) 1, 3, 2, 4
16. The largest of Gross Domestic
Product (GDP) in India comes
from
(a) agriculture and allied sectors
(b) manufacturing construction,
electricity and gas
(c) service sector
(d) defence and public administration
17. Consider the following
statement(s) about the Navratna
Status Industries.
1. Navratna was originally
assigned to nine Public Sector
Enterprises in 1997.
2. The number of PSEs having
Navratna status is now 17
industries.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
18. Consider the following
statement(s).
1. In the last 5 years, the
revenue from the direct taxes
constitute more than the half
of revenue receipt in India.
2. The corporate tax constitute
more than 50% of direct tax
revenue source of the Central
Government.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
19. Consider the following Public
Sector Enterprises (PSEs)
1. Steel Authority of India
Limited
2. Indian Oil Corporation Limited
3. Oil and Natural Gas
Corporation
4. Hindustan Aeronautics Limited
Which of the PSEs given above
are Maharatna industries in
India?
(a) 2 and 4 (b) 1, 2 and 3
(c) 2 and 3 (d) All of these
20. Value added tax is
(a) an advolerum tax on domestic
final consumption collected at all
stages between production and
point of final sale
(b) an advolerum tax on final
consumption collected at the
manufacturing level
CDS Pathfinder
(c) tax on final consumption collected at
the consumption rate
(d) a special tax levied by the states on
products from other states
21. Which one of the following is correct
about Twelfth Five Year Plan?
(a) Twelfth Five Year Plan of Indian
economy is from 2011-2016
(b) Twelfth Five Year Plan aims to grow
GDP at the rate of 10%
(c) Twelfth Five Year Plan aims to sustain
inclusive growth, which started in
Eleventh Plan
(d) Both ‘a’ and ‘b’
22. Consider the following statement(s)
1. NABARD is an apex institution
handling matters concerning
policy, planning and operating the
field of credit for agriculture and
other developmental activities in
rural India.
2. NABARD operates through its
headquarter at Mumbai.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
23. Which one of the following is the
objective of the Twelfth Five Year
Plan of India?
(a) Faster and inclusive growth
(b) Faster, quick and reliable inclusive
growth
(c) Faster, reliable and more inclusive
growth
(d) Faster, sustainable and more inclusive
growth
24. In India, which of the following have
the highest share in the
disbursement of credit to agriculture
and allied activities?
(a) Commercial Bank
(b) Cooperative Bank
(c) Regional Rural Bank
(d) Micro Finance Institutions
25. Match the following
List I List II
(Five Year Plans) (Objectives)
A. First Plan 1. Growth with social
justice
B. Third Plan 2. Sustainable inclusive
growth
C. Fifth Plan 3. Self-reliant and
self-generating economy
D. Twelfth Plan 4. Agriculture, irrigation
and power projects
Codes
A B C D A B C D
(a) 2 4 3 1 (b) 2 3 4 1
(c) 4 3 1 2 (d) 1 3 2 4
GENERAL STUDIES Indian Economy
26. Consider the following statement(s)
1. General Agreement on Trade
in Services is a treaty of the
World Trade Organisation
(WTO) that entered into force
in January, 1995.
2. All members of the WTO are
signatories to the General
Agreement on Trade in
Services.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
27. The banks are required to
maintain a certain ratio between
their cash in the hand and total
assets. This is called
(a) Statutory Bank Ratio (SBR)
(b) Statutory Liquid Ratio (SLR)
(c) Central Bank Reserve (CBR)
(d) Central Liquid Reserve (CLR)
28. Consider the following norms of
the Mid-day Meal Scheme.
1. To provide a minimum of 450
calories of food.
2. To provide a minimum 12 gm
of protein.
3. To provide adequate quantities
of micro-nutrients like iron,
folic acid, Vitamin-A.
4. To provide adequate quantities
of essential fatty acids and
medicine for the common cold
and diarrhoea.
Which of the norms given above
are correct?
(a) 1, 3 and 4 (b) 1, 2 and 3
(c) 1, 2 and 4 (d) All of these
29. Which one of the following factors
is taken account to calculate the
Balance of Payment (BoP) of a
country?
(a) Current account
(b) Changes in the Foreign Exchange
Reserves
(c) Errors and omissions
(d) All of the above
30. Which one of the following
unemployment is also known as
search unemployment which
occurs at the time period between
jobs when a worker is searching
for or transitioning from one job
to another?
(a) Seasonal unemployment
(b) Frictional unemployment
(c) Classical unemployment
(d) None of the above
1033
31. Foreign Direct Investment (FDI) 3. Companies exclusively financed by
is investment directly into foreign companies.
production in a country by a 4. Portfolio investment.
company located in another Select the correct answer using the
country, then which one of the codes given below.
following modes is correct about (a) 2 and 4 (b) 1 and 3
the FDI? (c) 1, 2 and 3 (d) All of these
(a) Buying a company in the target
36. The sum total of incomes received for
country
the services of labour, land or capital
(b) Expanding operations of an
in a country is called
existing business in that country
(a) Gross Domestic Product
(c) Investing in the shares and stocks
of a company in the target country (b) National Income
(d) Both ‘a’ and ‘b’ (c) Gross Domestic Income
(d) Gross National Income
32. Consider the following
statement(s) 37. Mixed economy means an economy
where
1. Bay of Bengal Initiative for
Multi-Sectoral Technical and (a) both agriculture and industry are
equally promoted by the state
Economic Cooperation
(BIMSTEC) is visualised as a (b) there is co-existence of public sector
along with private sector
bridging link between ASEAN
and SAARC. (c) there is importance of small-scale
industries along with heavy industries
2. It was formerly known as the
(d) economy is controlled by military as
Bangkok Agreement.
well as civilian rules
Which of the statement(s) given
38. Which of the following bodies
above is/are correct?
(a) Only 1 (b) Only 2 finalises the Five Year Plan
(c) Both 1 and 2 (d) Neither 1 nor 2 proposals?
(a) Planning Commission
33. Devaluation of currency by a (b) Union Cabinet
country is meant to lead to (c) National Development Council
1. expansion of import trade. (d) Ministry of Planning
2. promotion of import
substitution. 39. Economic survey is published by
(a) Ministry of Finance
3. expansion of export trade.
(b) Planning Commission
Select the correct answer using (c) Government of India
the codes given below. (d) Indian Statistical Institute
(a) Only 1 (b) 2 and 3
(c) 1 and 2 (d) 1 and 4 40. The Planning Commission of India
1. was set-up in 1950.
34. Consider the following action(s)
2. was a constitutional body.
which the government can take.
3. was an advisory body.
1. Devaluating the domestic
4. was a government department.
currency.
2. Reduction in the export Select the correct answer using the
subsidy. codes given below.
3. Adopting suitable policies (a) Only 3 (b) 2 and 3
which attract greater FDI and (c) 1 and 3 (d) 1 and 2
more funds from FIIs. 41. Match the following
Which of the above action can
help in reducing the current List I List II
account deficit? A. First Plan 1. Rapid Industrialisation
(a) 1 and 2 (b) 2 and 3 B. Second Plan 2. Community
(c) Only 3 (d) 1 and 3 Development
Programme
35. Which of the following would C. Third Plan 3. Expansion of Basic
include Foreign Direct Industries
Investment in India? D. Fourth Plan 4. Minimum Needs
Programme
1. Subsidiaries of companies in
E. Fifth Plan 5. Achievement of
India. Self-Reliance and
2. Majority foreign equity holding Growth with Stability
in Indian companies.
1034 CDS Pathfinder

Codes (c) making rupee dearer in comparison (c) the Government of India lends to the
A B C D E to some foreign currency other countries
(a) 1 2 3 4 5 (d) None of the above (d) the Reserve Bank of India gives credit
(b) 2 1 3 5 4 to commercial banks
49. Hard Currency is defined as
(c) 2 1 3 4 5 currency 57. Participatory Notes (PNs) are
(d) 2 1 4 5 3 (a) which can hardly be used for associated with which one of the
42. Match the following international transactions following?
(b) which is used in times of war (a) Consolidated Fund of India
List I List II
(c) which loses its value very fast (b) Foreign Institutional Investors
A. Year of the Great Divide 1. 1950 (d) traded in foreign exchange market (c) United Nations Development
B. Industrial Policy Resolution 2. 1921 for which demand is persistently Programme
C. Setting up of Planning 3. 1969 relative to the supply (d) Kyoto Protocol
Commission
D. Nationalisation of 14 4. 1956 50. The first bank established in 58. ‘Repo Rate’ is the rate at which
Commercial Banks India was (a) the Reserve Bank of India lends to
(a) Punjab National Bank State Government
Codes
(b) Traders Bank (b) the Intrenational aid agencies lend to
A B C D A B C D Reserve Bank of India
(c) State Bank of India
(a) 2 4 1 3 (b) 4 3 1 2 (c) the Reserve Bank of India lends to
(d) Bank of Hindustan
(c) 2 1 3 4 (d) 1 3 4 2 banks
51. For regulation of the Insurance (d) the banks lend to Reserve Bank of
43. Rolling plan was designed for the
Trade in the country the India
period
(a) 1978-83 (b) 1980-85
Government has formed
(a) SEBI 59. In India, the bank NABARD does not
(c) 1985-90 (d) 1974-97 provide refinance to
(b) Reserve Bank of India
44. Which Committee’s (c) Insurance Regulatory and (a) Scheduled Commercial Banks
recommendations are being Development Authority (b) Regional Rural Banks
followed for estimating Poverty (d) General Insurance Corporation (c) Export-Import Banks
Line in India? (d) State Land Development Banks
(a) Dutt Committee
52. Which of the following is not true
about the Reserve Bank of India? 60. Open market operations of a Central
(b) Chelliah Committee
(a) It regulates the currency and credit Bank are sale and purchase of
(c) Chakravorty Committee
system of India (a) foreign currencies
(d) Lakdawala Committee
(b) It maintains the exchange value of (b) corporate securities
45. Unemployment which occurs the rupee (c) trade bills
when workers move from one job (c) Foreign exchange reserves are (d) government securities
to another job is known as kept by RBI
61. The place where bankers meet and
(a) seasonal unemployment (d) One rupee notes and coins are
issued by RBI
settle their mutual claims and
(b) frictional unemployment
accounts is known as
(c) cyclical unemployment 53. When was the Reserve Bank of (a) treasury (b) clearing house
(d) technological unemployment India taken over by the (c) collection centre (d) dumping ground
46. The type of unemployment mostly Government?
(a) 1945 (b) 1948
62. Consider the following statement(s)
found in India can be characterised 1. Scheduled Banks are those Banks
as (c) 1952 (d) 1956
which are included in the second
(a) structural (b) frictional 54. What are gilt-edged securities? schedule of the RBI Act, 1934.
(c) cyclical (d) disguised (a) Securities issued by multinationals 2. There are 15 non-scheduled
47. Which of the following group of (b) Securities issued by the commercial banks operating in the
states has the largest government
country.
concentration of rural poor and (c) Securities issued by the private
sectors 3. Cooperative banks are organised
people living below the poverty and managed on the principle
line? (d) Securities issued by the joint
venture companies self help and mutual help.
(a) Karnataka, Maharashtra, Goa
Which of the statement(s) given
(b) Goa, Andhra Pradesh, Maharashtra 55. Among the following, which one is
above is/are correct?
(c) Tamil Nadu, Kerala, Goa not a credit rating agency
(a) Only 1 (b) 1 and 2
(d) Andhra Pradesh, Karnataka, Tamil operating in India? (c) 1 and 3 (d) All of these
Nadu (a) CRISIL (b) ICRA
(c) Dow Jones (d) CARE 63. If the Cash Reserve Ratio is lowered
48. ‘Devaluation’ means
by the Central Bank, what will be its
(a) converting rupee into gold 56. Bank rate is the rate at which
effect on credit creation?
(b) lowering of the value of one (a) a bank lends of the public
(a) Decrease (b) Increase
currency in comparison of some (b) the Reserve Bank of India lends to
(c) No change (d) None of these
foreign currency the public
GENERAL STUDIES Indian Economy
64. The main function of the Exim
Bank is
(a) to help RBI in the regulation of
foreign exchange
(b) to prevent unlicensed transaction
(c) to promote exports and curtail
imports
(d) to conserve foreign exchange
65. Which of the following are the
functions of the Central Bank of
India?
1. Regulation of currency and
flow of credit system.
2. Maintaining exchange value of
rupee.
3. Formulating monetary policy of
India.
4. Supervisory powers over the
indigenous bankers and leasing
companies.
Select the correct answer using
the codes given below.
(a) 1 and 3 (b) 1, 2 and 3
(c) 1, 2 and 4 (d) All of these
66. Consider the following
statement(s)
1. Pump-priming refers to deficit
financing and spending by a
government on public works in
an attempt to revive economy
during recession counter
cyclical measures.
2. The example of demerit goods
include tobacco, alcohol etc.
3. Thirteenth Finance
Commission called the demerit
goods as sin goods and wants
them to be harshly taxed.
Which of the statement(s) given
above is/are correct?
(a) Only 3 (b) 2 and 3
(c) All of these (d) None of these
67. Which bank gives long-term loans
of farmers?
(a) NABARD
(b) Land Development Bank
(c) SBI
(d) Rural banks
68. Consider the following statements
1. Life Insurance Corporation of
India is the oldest insurance
company in India.
2. National Insurance Company
Limited was nationalised in
the year 1972 and made a
subsidiary of General
Insurance Corporation of India.
3. Headquarters of United India
Insurance Company Limited
are located at Chennai.
Which of the statements given
are correct?
(a) 1 and 3 (b) 1 and 2
(c) 2 and 3 (d) All of these
69. The standard of living in a
country is represented by its
(a) National Income
(b) Per Capita Income
(c) Poverty Ratio
(d) Unemployment Rate
70. Which is the best measure of
economic growth of a country?
(a) GNP (b) GDP
(c) Net revenue (d) None of these
71. Consider the following statements
with regard to Statutory
Liquidity Ratio (SLR)
1. To meet SLR, commercial
banks can use cash only.
2. SLR is maintained by the
banks with themselves.
3. SLR restricts the banks
leverage in pumping more
money into the economy.
Which of the statements given
above are correct?
(a) 1 and 2 (b) 1 and 3
(c) 3 and 2 (d) All of these
72. Which of the following is not true
about ‘vote-on Account’?
(a) It is a budget presented in the
Parliament to cover the deficit left
by the last budget
(b) It does not allow the government to
set for the economic policies of the
new plan which starts from 1st April
(c) It prevents the government from
imposing fresh taxes or
withdrawing old one
(d) This allows the government to
withdraw an amount for a period
with the consent of Parliament
73. Which one of the following
statements is correct?
Fiscal Responsibility and Budget
Management Act (FRBMA)
concerns
(a) fiscal deficit
(b) revenue deficit
(c) Both fiscal and revenue deficit
(d) Neither fiscal deficit nor revenue
deficit
74. Who among the following Indian
freedom fighters made an
attempt to estimate the per
capita income of India?
(a) Gopal Krishna Gokhale
(b) Feroze Shah Mehta
(c) Surendranath Banerjee
(d) Dadabhai Naoroji
1035
75. Which among the following
formulates Fiscal Policy?
(a) RBI
(b) Finance Ministry
(c) SEBI
(d) Planning Commission
76. What is ‘recession’?
(a) Rise is the cost of production,
especially because of wage increase
(b) increase in money supply without a
matching increase in production
(c) Reduction in production and
employment for want of sufficient
demand for goods
(d) None of the above
77. Match the following
List I List II
A. Depression 1. Co-existence of inflation
and stagnation
B. Recession 2. Recovery from depression
C. Reflation 3. Reduction in production
over a short period
D. Stagflation 4. Insufficient demand
leading to idle men
machinery over a long time
5. Reduction is level of
economy due to falling
prices
Codes
A B C D A B C D
(a) 1 2 3 5 (b) 4 3 2 5
(c) 4 3 2 1 (d) 3 4 2 1
78. Which committee was constituted for
reforms in tax structure?
(a) Narsimham Committee
(b) Chelliah Committee
(c) Gadgil Committee
(d) Kelkar Committee
79. The area under the Special Export
Zones (SEZs) has been declared
‘Foreign Teritory’. This means that
(a) goods cannot be brought into the
domestic tariff area
(b) SEZ goods cannot be sold in the
domestic tariff area
(c) goods brought from the SEZ to the
domestic tariff area are to be treated
as ‘imported’ goods
(d) SEZ goods are free of excise duty
80. Under the Sick Industrial Companies
(Special Provisions) Act, an
industrial unit is considered sick, if
1. its net worth is entirely eroded.
2. it has eroded 50% of its peak net
worth during any one of five
consequent years.
3. its accumulated losses exceed its
net worth and it has suffered
cash losses for the current and
preceding years.
1036
4. It has eroded its net worth in
the course of the preceding
three financial years.
Select the correct answer using
the codes given below
(a) 1 and 2 (b) 3 and 4
(c) 1 and 3 (d) 2 and 4
81. The core sector includes
1. coal
2. power
3. petroleum
4. soaps and detergent
Select the correct answer using
the codes given below.
(a) 1 and 2 (b) 1, 2 and 3
(c) 1 and 4 (d) 2 and 3
82. Which of the following sectors
does not come under tertiary
sector?
(a) Transport
(b) Trade
(c) Business services
(d) Electricity
83. Which of the following committes
was assigned to recommend
reforms in the insurance sector?
(a) Rekhi Committee
(b) Nadkarni Committee
(c) Malhotra Committee
(d) Chelliah Committee
84. The headquarters of
International Monetary Fund and
World Bank are located at
(a) Geneva and Montreal
(b) Geneva and Vienna
(c) New York and Geneva
(d) Washington DC
85. Which one of the following is not
a member of Organisation of the
Petroleum Exporting Countries
(OPEC)?
(a) Algeria (b) Brazil
(c) Ecuador (d) Nigeria
86. According to the provisions of the
Fiscal Responsibility and Budget
Management (FRBM) Act, 2003
and FRBM Rules, 2004, the
Government is under obligation
to present three statements
before the Parliament along with
the Annual Budget. Which one of
the following is not one of them?
(a) Macro-economic Framework
Statement
(b) Fiscal Policy Strategy Statement
(c) Medium-term Fiscal Policy
Statement
(d) Statement showing Short-term
Fiscal Policy
CDS Pathfinder
87. Which tax is collected by Codes
Panchayat? (a) Both the statements are individually
(a) Sales Tax true and Statement II is the correct
(b) Custom Duty explanation of Statement I
(c) Land Revenue (b) Both the statements are individually
(d) Tax on Local fairs true, but Statement II is not the
correct explanation of Statement I
88. Which one of the following (c) Statement I is true, but Statement II is
countries is not a founder false
member of OPEC? (d) Statement I is false, but Statement II is
(a) Bahrain (b) Kuwait true
(c) Iraq (d) Iran
93. Match the following
89. Which one among the following
List I List II
statements about United Nations
(Five Year Plans) (Emphasises)
organs is correct?
(a) Decisions of the General Assembly A. First 1. Food security and
women empowerment
are binding on all members
B. Second 2. Heavy industries
(b) The term of the non-permanent
members of the Security Council is
C. Fifth 3. Agriculture and
community
for three years development
(c) International Court of Justice has D. Ninth 4. Removal of poverty
20 judges elected for a period of
five years Codes
(d) The Trusteeship Council has been A B C D A B C D
suspended since 1st November, (a) 1 2 4 3 (b) 1 4 2 3
1994 (c) 3 2 4 1 (d) 3 4 2 1
90. Which one among the following 94. Consider the following statement(s)
statements about South Asia is about Sinking Fund
not correct? 1. It is a method of repayment of
(a) All the countries in South Asia are public debt.
currently democracies 2. It is created by the government
(b) SAFTA was signed at the 12th out of budgetary revenues every
SAARC Summit in Islamabad year.
(c) The US and China play an Which of the statement(s) given
influential role in the politics of above is/are correct?
some South Asian States (a) Only 1 (b) Only 2
(d) Bangladesh and India have (c) Both 1 and 2 (d) Neither 1 nor 2
agreements on riverwater sharing
95. Which of the following statements
and boundary disputes
are correct?
91. Which among the following 1. The global economy relied on oil
statements about European for much of the 20th century as a
Union (EU) are correct? portable and indispensable fuel.
1. The EU is the world’s largest 2. The immense wealth associated
economy. with oil generates political
2. The EU has its own flag, struggles to control it.
anthem and currency. 3. History of petroleum is also the
3. The EU’s combined armed history of war and struggle.
forces are the second largest 4. Nowhere is this more obviously
in the world. the case of war and struggle than
4. The EU has its own in West Asia and Central
Constitution. America.
Select the correct answer using Select the correct answer using the
the codes given below. codes given below.
(a) 1, 2 and 3 (b) 1 and 4 (a) 1, 2 and 3 (b) 2 and 4
(c) 2 and 3 (d) 3 and 4 (c) 1 and 3 (d) All of these
92. Statement I Deficit financing 96. India’s market regulator SEBI is on
does not lead to inflation if course to relax investment norms for
adopted in small doses. sovereign wealth funds, the
investment vehicles which are
Statement II Deficit financing directly controlled by the
is an often used tool for financing government of a country. The main
budgetary deficits. reason behind this move is
GENERAL STUDIES Indian Economy 1037

(a) the desire of the government of 100. Consider the following 104. Consider the following statements
India to attract more foreign statement(s) regarding India’s about Tata Steel
investment advocacy for a permanent seat 1. It is Asia’s first privately owned
(b) pressure by foreign governments in the United Nations Security integrated iron and steel plant.
on India to execute specific mutual
Council 2. It is the first company outside
agreements on financial services
1. India is the largest democracy Japan to get the Deming
(c) SEBI’s desire to create a more Application Prize in 2008, for
level playing field for foreign in the world.
excellence in total quality
investors 2. India is among the top five management.
(d) RBI’s relevant directives to SEBI largest growing economies in
the world. 3. Immediately after the enactment
97. Consider the following statement(s) of Provident Fund Law in India,
3. India has been the largest Tata Steel introduced provident
1. The five permanent members of contributor to the United fund for its employees.
the Security Council are the Nations Peace Keeping Forces.
4. It is the first company in the
only countries recognised as 4. India is one of the top ten
world to get Social Accountability
nuclear-weapon states under the contributors of the United
Nations Budget. 8000 certification from Social
Nuclear Non-Proliferation Accountability International, USA.
Treaty. Which of the statement(s) given
above is/are correct? Which of the statements given above
2. The term of non-permanent are correct?
members of the council is 5 (a) 1, 3 and 4 (b) 1 and 2
(c) Only 2 (d) All of these (a) 1 and 2 (b) 2 and 3
years. (c) 1 and 4 (d) All of these
Which of the statement(s) given 101. Brent index is associated with
above is/are correct? (a) crude oil prices 105. Which one of the following crops
(a) Only 1 (b) Only 2 (b) copper future prices production has been exceeding target
(c) Both 1 and 2 (d) Neither 1 nor 2 (c) gold future prices since 2004-2005 in India, but its
(d) shipping rate index growers have been committing
98. A recent survey (by Bloomberg) suicide in large numbers in many
shows that the USA has fallen 102. Consider the following parts of the country every year?
behind emerging markets in statement(s) relating to (a) Pulse (b) Cotton
Brazil, China and India as the estimation of National Income. (c) Oilseeds (d) Wheat
preferred place to invest. Why is 1. Foreigners working in India
it so? Embassies are normal 106. Consider the following statement(s)
residents of India. with regard to Statutory Liquidity
1. Unstable economic situation of
the USA which the global 2. Foreigners working in the Ratio (SLR)
investors feel not likely to office of WHO, World Bank, 1. To meet SLR, Commercial banks
UNO etc. located in India are can use cash only.
improve in the near future.
not normal residents of India. 2. SLR is maintained by the banks
2. Global investors are finding
3. Indians working in foreign with themselves.
Brazil, China and India to be embassies in India are not
actually more amenable to normal residents of India. 3. SLR restricts the banks leverage
foreign investment. in pumping more money into the
Which of the statement(s) given economy.
Select the correct answer using above is/are correct?
the codes given below. (a) Only 1 (b) 1 and 2
Which of the statement(s) given
(a) Only 1 (b) Only 2 (c) Only 3 (d) All of these above is/are correct?
(c) Both 1 and 2 (d) Neither 1 nor 2 (a) Only 2 (b) 1 and 3
103. Match the following (c) 2 and 3 (d) All of these
99. Match the following
List I List II 107. Which one of the following Public
List I (Industrial Policies) (Salient Features) Sector Bank’s emblem, figures a
(Phases of List II
A. The Industrial 1. Began the dog and the words ‘faithful
Industrial (Features) Policy, 1948 process of
Revolution) friendly’, in it?
state-centric
(a) Punjab National Bank
A. First Phase 1. Rise of steel, economy
(b) Syndicate Bank
chemicals, B. The Industrial 2. Reaffirmed faith in
electricity industries Policy, 1956 mixed economy (c) Oriental Bank of Commerce
B. Second Phase 2. Rise of cotton mill C. The Industrial 3. Initiated (d) State Bank of India
Policy, 1980 public-private
C. Third Phase 3. Rise of steam
partnership
108. Consider the following statement(s)
engine
D. The Industrial 4. Ushered in mixed 1. The current global economic
D. Fourth Phase 4. Rise of
petrochemicals, jet Policy, 1991 economy crisis owes its genesis to the
aircraft, computers sub-prime crisis in the United
Codes States.
Codes A B C D A B C D 2. The Indian economy is showing a
A B C D A B C D (a) 4 1 2 3 (b) 4 2 1 3 faster recovery from the economic
(a) 2 3 1 4 (b) 2 1 3 4 (c) 3 1 2 4 (d) 3 2 1 4 crisis than its Western
(c) 4 1 3 2 (d) 4 3 1 2 counterparts.
1038 CDS Pathfinder

Which of the statement(s) given 115. Match the following Which of the statement(s) given
is/are correct? List I List II is/are correct?
(a) Only 1 (Persons) (Organisations) (a) Only 1 (b) Only 2
(b) Only 2 (c) Both 1 and 2 (d) Neither 1 nor 2
A. Juan Somavia 1. IAEA
(c) Both 1 and 2
(d) Neither 1 nor 2 B. Margaret Chan 2. ILO 120. The acronym SRO, being used in
C. Kemal Dervis 3. WHO the capital market for various
109. In which one of the following D. Mohamed ElBaradei 4. UNDP market participants, stands for
places was Asia’s first Export which one of the following?
Codes (a) Self Regulatory Organisations
Processing Zone (EPZ) set-up?
(a) Santa Cruz (b) Kandla A B C D A B C D (b) Small Revenue Operators
(c) Cochin (d) Surat (a) 1 2 3 4 (b) 2 3 4 1 (c) Securities Roll-back Operators
(c) 2 4 3 1 (d) 1 3 2 4 (d) Securities Regulatory Organisations
110. Which one among the following
states has the highest gender 116. The Eleventh Five Year Plan 121. Who among the following was the
strategy to raise agricultural first Chairman of the Planning
disparity?
(a) Odisha (b) Uttar Pradesh
output envisages which of the Commission?
(c) Haryana (d) Maharashtra following? (a) Dr Rajendra Prasad
1. Greater attention to land (b) Pt Jawaharlal Nehru
111. In which of the following years reforms. (c) Sardar Vallabhbhai Patel
was General Agreement on 2. Double the rate of growth of (d) JB Kripalani
Tariffs and Trade (GATT) irrigated area. 122. Which one of the following
absorbed into the World Trade 3. Promote animal husbandry countries is not a member of
Organisation (WTO)? and fishery. ASEAN?
(a) 1991 (b) 1995 4. Interest free credit to the (a) Brunei Darussalam
(c) 2000 (d) 2005 farmers. (b) Cambodia
112. Consider the following Select the correct answer using (c) Vietnam
statement(s) about IAEA the codes given below. (d) India
1. It was set-up as the World’s (a) 1 and 3 (b) 2 and 3 123. In which of the following
Atoms for Peace organisation (c) 1, 2 and 3 (d) 2 and 4
International Organisations is
in 1957. 117. By which one of the following India a member?
2. The IAEA Secretariat is years does the Eleventh Five 1. Indian Ocean Rim Association for
headquartered at the Vienna Year Plan aim at achieving 10% Regional Cooperation.
international centre in rural tele-density in India from 2. Organisation for Economic
Vienna, Austria. Cooperation and Development.
the present 1.9%?
3. In terms of its statute, the (a) 2009 (b) 2010 Select the correct answer using the
IAEA reports annually to the (c) 2011 (d) 2012 codes given below.
UN General Assembly. (a) Only 1 (b) Only 2
Which of the statement(s) given 118. Which one of the following (c) Both 1 and 2 (d) Neither 1 nor 2
above is/are correct? statements regarding
(a) Only 3 (b) Only 1 Monitorable Socio-Economic 124. Consider the following statement(s)
(c) 2 and 3 (d) All of these target of the Eleventh Five Year 1. The USSR assisted in the
Plan, under the head building of the Bhilai Steel
113. International Bank for Plant.
Reconstruction and environment, is not correct?
(a) Treat all urban waste water by
2. The British assisted in the
Development is also known as building of the Bokaro Steel
(a) Credit Bank (b) Exim Bank 2011-2012 to clear river waters
Plant.
(c) World Bank (d) Asian Bank (b) Increase energy efficiency by
20 percentage points by
Which of the statement(s) given
114. Which one of the following pairs 2016-1017 above is/are correct?
is not correctly matched? (a) Only 1 (b) Only 2
(c) Attain WHO standards of air
(c) Both 1 and 2 (d) Neither 1 nor 2
Organisation Headquarter quality in all major cities by
2011-2012 125. The World Economic Forum (WEF)
(a) International : Geneva
Labour (d) Increase forest and tree cover by India Economic Summit will be
Organisation 15 percentage points hosted by which city of India?
(b) International : London (a) New Delhi (b) Chennai
119. Consider the following (c) Kolkata (d) Mumbai
Maritime
Organisation statement(s)
(c) International : Washington DC 1. Food for Work Programme
126. Which portal has been launched by
Monetary Fund was launched in India during the Reserve Bank of India (RBI) to
(d) International : New York the Tenth Five Year Plan. curb illegal money pooling by firms?
Atomic Energy (a) Tez (b) Savdhan
Agency 2. The Planning commission in (c) Chetavani (d) Sachet
India is a constitutional body.
GENERAL STUDIES Indian Economy
127. Which Indian company has
become the first-ever Indian
quasi-sovereign to issue a Masala
bond on London Stock Exchange
(LSE)?
(a) Neyveli Lignite Corporation Limited
(NLC)
(b) Nuclear Power Corporation of India
Limited (NPCIL)
(c) National Thermal Power Corporation
Limited (NTPC)
(d) Bharat Heavy Electricals Limited
(BHEL)
128. India’s first facility to produce
nickel metal has been launched in
which of the following states?
(a) Odisha (b) Chhattisgarh
(c) Uttar Pradesh (d) Jharkhand
129. What is the India’s rank in the
technology-driven start-ups, as
per the latest report by
Assocham?
(a) 4th (b) 3rd
(c) 2nd (d) 5th
130. “NIDHI” has launched by the
Union Government for nurturing
ideas and innovation into start
ups. What does “NIDHI” stands
for?
(a) National Imitation for Developing
and Harnessing Innovations
(b) National Immigration for Developing
and Harnessing Innovations
(c) National Initiative for Developing
and Harnessing Innovations
(d) National Implementation for
Developing and Harnessing
Innovations
131. The portfolio investment by
foreign institutional investors is
called
(a) FDI
(b) FII
(c) Balance of Payment
(d) SDR
132. The Government of India, in
consultation with the Reserve
Bank of India (RBI), has
decided to issue
(a) 2nd Tranche of Sovereign Gold
Bonds
(b) 3rd Tranche of Sovereign Gold
Bonds
(c) 4th Tranche of Sovereign Gold
Bonds
(d) 5th Tranche of Sovereign Gold
Bonds
133. Which of the following scheme
provide the insurance coverage
and financial support to the
farmers in the event of failure
of crops and subsequent low
crop yield?
(a) NNAIS (b) MNAIS
(c) GIC (d) LNAIS
134. Which of the following
programme launched an aim to
make all national highways
free of railway crossings by
2019?
(a) SBP
(b) UY
(c) NUHM
(d) NRHM
135. IRDAI is an autonomous apex
statutory body, which
regulates and develops the
insurance industry in India.
IRDAI is headquartered at
(a) Bengaluru
(b) Mumbai
(c) New Delhi
(d) Hyderabad
136. Which of the following is a part
of capital account?
(a) Private capital
(b) Banking capital
(c) Official capital
(d) All of the above
1039
137. In terms of BASEL what does LFR
refer to?
(a) Logistic Channel Report
(b) Least Cost Routing
(c) Looking for Raid
(d) Loan to Funding Ratio
138. Real time gross settlement benefits
(a) the customers
(b) the banks
(c) Reserve Bank of India
(d) Both ‘a’ and ‘b’
139. The Ministry of Finance is an
important ministry within the
Government of India. It concerns
itself with
(a) taxation
(b) financial legislation
(c) financial institutions
(d) All of the above
140. Consider the following statement(s)
regarding the Office of Economic
Advisor (OEA)
1. It is attached to the Ministry of
Finance.
2. The weekly compilation and
publication of Wholesale Price
Indices (WPI) is done by the
office of economic advisor.
Which of the statement(s) given
above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
141. The concept of ‘universal banking’
was implemented in India on the
recommendations of
(a) Abid Hussain Committee
(b) RH Khan Committee
(c) S Padmanabhan Committee
(d) YH Malegam Committee
1040 CDS Pathfinder

QUESTIONS FROM
CDS EXAM (2012-2016)
2012 (I) 7. Which one among the following 12. In the parlance of financial
is not a clause of World Trade investment, the term bear denotes
1. Which of the following measures
should be taken when an economy Organisation? (a) an investor, who feels that the price
(a) Most favoured nation treatment of a particular security is going to fall
is going through in inflationary
pressures? (b) Lowering trade barriers with (b) an investor, who expects the price of
negotiations a particular share to rise
1. The direct taxes should be
increased. (c) Providing financial support to the (c) a shareholder, who has an interest in
countries having deficit balance a company, financially or otherwise
2. The interest rate should be
of payments (d) any lender, whether by making a loan
reduced.
(d) Discouraging unfair trade or buying a bond
3. The public spending should be
practices such as antidumping
increased.
and export subsidies
13. Consider the following statement(s)
Select the correct answer using the 1. Rural forestry aims to raise the
codes given below. 8. The basis of European Union trees on community land and on
(a) Only 1 (b) Only 2 began with the signing of privately owned land.
(c) 2 and 3 (d) 1 and 2 (a) Maastricht Treaty
(b) Treaty of Paris 2. Farm forestry encourages
2. Which of the following statement(s) (c) Treaty of Rome individual farmers to plant trees
is/are correct? (d) Treaty of Lisbon on their own farmland to meet
1. NIFTY is based upon 50 firms in the domestic need of the family.
India. 9. Which of the following
2. NIFTY is governed and regulated statement(s) is/are correct? Which of the statement(s) given
by the Reserve Bank of India. 1. If a country is experiencing above is/are correct?
3. NIFTY does not trade in mutual increase in its per capita (a) Only 1
funds. GDP, its GDP must (b) Only 2
necessarily be growing. (c) Both 1 and 2
Select the correct answer using the
(d) Neither 1 nor 2
codes given below. 2. If a country is experiencing
(a) Only 1 (b) Only 2 negative inflation its GDP 14. Which of the following are
(c) Only 3 (d) 1 and 3 must be decreasing. responsible for the decrease of per
3. Which one among the following is not a Select the correct answer using capita holding of cultivated land in
Millennium Development Goal of the the codes given below. India?
United Nations? (a) Only 1 (b) Only 2
1. Low per capita income.
(a) Eradicate extreme poverty (c) Both 1 and 2 (c) Neither 1 nor 2
2. Rapid rate of increase of
(b) Reduce birth rate and death rate 10. Fiscal Policy in India is population.
(c) Improve maternal health formulated by 3. Practice of dividing land equally
(d) Promote gender equality (a) the Reserve Bank of India among the heirs.
(b) the Planning Commission 4. Use of traditional techniques of
4. Special Drawing Rights (SDRs)
relate to (c) the Finance Ministry ploughing.
(a) the World Bank (d) the Securities and Exchange Select the correct answer using the
Board of India
(b) the Reserve Bank of India codes given below.
(c) the World Trade Organisation (a) 1 and 2
(d) the International Monetary Fund 2012 (II) (b) 2 and 3
(c) 1 and 4
5. When the productive capacity of the 11. Which one among the following is (d) 2, 3 and 4
economic systems of a state is an appropriate description of
inadequate to create sufficient deflation? 15. Consider the following statement(s)
number of jobs, it is called (a) It is a sudden fall in the value of 1. High growth will led to inflation.
(a) seasonal unemployment a currency against other 2. High growth will lead to
(b) structural unemployment currencies deflation.
(c) disguised unemployment (b) It is a persistent recession in the
Which of the statement(s) given
(d) cyclical unemployment economy
(c) It is a persistent fall in the
above is/are correct?
6. National income ignores general price level of goods and (a) Only 1
(a) sales of a firm services (b) Only 2
(b) salary of employees (c) Both 1 and 2
(d) It is fall in the rate of inflation
(c) exports of the IT sector over a period of time (d) Neither 1 nor 2
(d) sale of land
GENERAL STUDIES Indian Economy
2013 (I) 20. Which of the following are
included in the category of
16. Which one among the following is direct tax in India?
not a salient feature of the 1. Corporation tax
Companies Bill as amended in 2. Tax on income
the year 2012? 3. Wealth tax
(a) For spending the amount 4. Customs duty
earmarked for corporate social 5. Excise duty
responsibility, the company shall
Select the correct answer using
give preferences to local areas
the codes given below.
where it operates
(a) 1, 2 and 3 (b) 1, 2, 4 and 5
(b) Punishment for falsely inducing a
(c) 2 and 3 (d) 1, 3, 4 and 5
person to enter into an agreement
with bank or financial institution 21. Which one among the following
with a view to obtaining credit is a fixed cost to a
facilities
manufacturing firm in the
(c) There is no limit in respect of
short run?
companies in which a person may
(a) Insurance on buildings
be appointed as auditor
(b) Overtime payment to worker
(d) ‘Independent directors’ shall be
(c) Cost of energy
excluded for the purpose of
(d) Cost of raw materials
computing ‘one-third of retiring
directors’ 22. The government can influence
private sector expenditure by
17. Which of the following 1. taxation
institution(s) was/were asked by 2. subsidies
the Government of India to 3. macro-economic policies
provide official estimates of black 4. grants
(unaccounted) money held by
Select the correct answer using
Indians, both in India and the codes given below.
abroad?
(a) 3 and 4 (b) 1, 2 and 4
1. National Institute of Public (c) 1, 2 and 3 (d) All of these
Finance and Policy.
23. Which of the following
2. National Council of Applied
Economic Research. occupations are included under
secondary sector as per the
3. National Institute of Financial
Management. national income accounts?
1. Manufacturing
Select the correct answer using
2. Construction
the codes given below.
(a) Only 1 (b) 1 and 2 3. Gas and water supply
(c) 2 and 3 (d) All of these 4. Mining and quarrying
Select the correct answer using
18. The concept which tries to
the codes given below.
ascertain the actual deficit in the (a) 3 and 4 (b) 1, 2 and 4
revenue account after adjusting (c) 1, 2 and 3 (d) All of these
for expenditure of capital nature
24. The sharp depreciation of
is termed as
(a) revenue deficit rupee in the Forex market in
(b) effective revenue deficit the year 2011 was due to
(c) fiscal deficit 1. flight to safety by foreign
(d) primary deficit investors.
2. meltdown in European
19. Which one among the following
markets.
programmes has now been
restructured as the National 3. inflation in emerging market
economies.
Rural Livelihood Mission?
(a) Swarna Jayanti Shahari Rozgar 4. lag effect of monetary policy
Yojana tightening.
Select the correct answer using
(b) Swarna Jayanti Gram Swarozgar
the codes given below.
Yojana
(a) 1, 2 and 3 (b) 1, 2 and 4
(c) Janshree Bima Yojana
(d) Rashtriya Swasthya Bima Yojana (c) 3 and 4 (d) All of these
1041
25. Human Poverty Index (HPI) developed
by UNDP is based on which of the
following deprivations?
1. Income deprivation
2. Literacy deprivation
3. Social services deprivation
4. Employment deprivation
Select the correct answer using the codes
given below.
(a) 2 and 4 (b) 1, 2 and 3
(c) 1, 3 and 4 (d) All of these
2013 (II)
26. The Government of India and Reserve
Bank of India have decided to introduce
1 billion pieces of ` 10 notes in
polymer/plastic on a field trial basis.
Which of the following is/are the
objectives behind this move?
1. Increase of the lifetime of the notes.
2. Combating counterfeiting.
3. Reducing the cost of minting of
currency.
Select the correct answer using the
codes given below.
(a) 1 and 2 (b) Only 2
(c) Only 3 (d) All of these
27. Which bank is limited to the needs of
agriculture and rural finance?
(a) SBI (b) NABARD
(c) IFC (d) RBI
28. The effect of a government surplus
upon the equilibrium level of NNP (Net
National Product) is substantially the
same as
(a) an increase in investment
(b) an increase in consumption
(c) an increase in saving
(d) a decrease in saving
29. The value of money varies
(a) directly with the, interest rate
(b) directly with the price level
(c) directly with the volume of employment
(d) inversely with the price level
30. Corporation tax is imposed by
(a) State Government
(b) Central Government
(c) Local Government
(d) State as well as Central Government
31. Statement I The economy of India in
the 19th century came to a state of ruin
under English East India Company.
Statement II English East India
Company’s acquisition of Diwani right
led to the miseries of the peasants and
those associated with the traditional
handicrafts industry of India.
1042
Codes
(a) Both the statements are
individually true and Statement II
is the correct explanation of
Statement I
(b) Both the statements are
individually true, but Statement II
is not the correct explanation of
Statement I
(c) Statement I is true, but Statement
II is false
(d) Statement I is false, but
Statement II is true
32. The production function of a
firm will change whenever
(a) input price changes
(b) the firm employs more of any input
(c) the firm increases its level of output
(d) the relevant technology changes
33. If the average total cost is
declining then
(a) the marginal cost must be less
than the average total cost
(b) total cost must be constant
(c) the average fixed cost curve must
be above the average variable
cost curve
(d) the marginal cost must be greater
than the average total cost
34. In a perfectly competitive
economy production and
consumption will both be pareto
optimal, if the economy operates
at a point where
(a) there is general equilibrium
(b) output levels are below equilibrium
(c) output levels are above equilibrium
(d) consumption is less than output
35. The average fixed cost curve will
always be
(a) a rectangular hyperbola
(b) a downward sloping convex to
the origin curve
(c) a downward sloping straight line
(d) a U-shaped curve
36. The income elasticity of demand
for inferior goods is
(a) less than one (b) less than zero
(c) equal to one (d) greater than one
37. Consider the following
statement(s)
1. The recent decision of
Government of India to
partially decontrol the sugar
industry gives the millers the
freedom to sell sugar in open
market and removes their
obligation to supply sugar at
subsidised rates to ration
shops.
2. C Rangarajan panel also
suggested decontrolling of
sugar industry in India.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
38. The main functioning of the
banking system is to
(a) accept deposits and provide credit
(b) accept deposits and subsidies
(c) provide credit and subsidies
(d) accept deposits, provide credit and
subsidies
39. In India, the price of petroleum
products has been deregulated
mainly to
(a) reduce the burden of subsidies
given to the oil companies
(b) discourage the exploration of oil
reserves in the country
(c) discourage the demand for private
vehicles
(d) curb the use of black money in the
economy
40. Which of the following factors was
not a reason behind the occurrence
of the Industrial Revolution in
England first?
(a) No part of the country was far from
the sea
(b) Navigable rivers made inland
transport easier
(c) In England machines could be
operated by wind or water power
due to favourable climate condition
(d) England had coal, iron and other
necessary mineral resources
2014 (I)
41. According to the Companies Act,
2013, ‘nominal capital’ implies
(a) such part of capital, which has been
called for payment
(b) the maximum amount of share
capital of a company
(c) such part of capital, which has been
received by a company from its
shareholders
(d) such capital as the company issues
from time to time for subscription
42. Which of the following is/are the
objective(s) of ‘Mahatma Gandhi
Pravasi Suraksha Yojana’?
To encourage and enable the
overseas Indian workers by giving
government contribution to
1. save for their return and
resettlement.
2. save for their old age.
3. obtain a life insurance cover
against natural death for the
entire life of the worker.
CDS Pathfinder
Select the correct answer using the
codes given below.
(a) 2 and 3 (b) 1 and 2
(c) Only 1 (d) All of these
43. ‘Inclusive growth’ is a phrase used in
India’s
1. 9th Plan 2. 10th Plan
3. 11th Plan 4. 12th Plan
Select the correct answer using the
codes given below:
(a) 1, 2 and 3 (b) 2 and 4
(c) 3 and 4 (d) Only 4
44. Corporation tax in India is levied on
income of a company. Which one of
the following does not include
Corporation tax?
(a) Profit from business
(b) Capital gain
(c) Interest on securities
(d) Sale proceed of assets
45. In India, contribution of food
inflation to overall inflation is
1 2
around rd to th. Within food
3 5
inflation, contribution of food articles
is higher because price rise in food
articles is
(a) higher and their weight is also higher
compared to food products
(b) higher but their weight is lower
compared to food products
(c) lower but their weight is higher
compared to food products
(d) lower and their weight is also lower
compared to food products
46. In India, mergers and acquisition of
firms are regulated by
(a) National Manufacturing Competitiveness
Council
(b) Competition Commission of India
(c) Security and Exchange Board of India
(d) Department of Industrial Policy and
Promotion
47. Which of the following statements
about India’s unorganised sector are
true?
1. Labour is more in number than
that in the organised sector.
2. Job security and work regulation
are better in unorganised sector.
3. They are usually not organised into
trade unions.
4. Workers are usually employed for
a limited number of days.
Select the correct answer using the
codes given below.
(a) 1, 2 and 4 (b) 1, 3 and 4
(c) 3 and 4 (d) 1 and 3
GENERAL STUDIES Indian Economy
48. Classification of an enterprise
into public or private sector is
based on
(a) number of employees in the
enterprise
(b) ownership of assets of the
enterprise
(c) employment conditions for workers
in the enterprise
(d) nature of products manufactured
by the enterprise
49. Share of food in total
consumption expenditure has
been coming down as Per Capita
Income grew over time in last
sixty years because
(a) people have been purchasing less
food
(b) people have been preferring
non-cereal items in their food
basket
(c) growth in food expenditure has
been lower than growth in per
capita income
(d) percentage of the poor in
population has increased over
time
2014 (II)
50. Consider the following
statements relating to the World
Trade Organisation (WTO)
1. The WTO deals with the
global rules of trade between
nations.
2. The goal of the WTO is to
help producers of goods and
services, exporters and
importers conduct their
business.
3. The WTO, which is a
successor body of the General
Agreement on Tariffs and
Trade, came into being
following the Uruguay Round
of Negotiations.
4. The WTO distances itself in
framing of rules on trade in
intellectual property rights.
Which of the statements given
above are correct?
(a) 1, 2 and 3 (b) 2, 3 and 4
(c) 1, 2 and 4 (d) 1 and 3
51. Consider the following
statements relating to the World
Bank
1. The World Bank was
established in 1946, which is
headquartered in New York.
2. The World Bank Group has set
for itself the goal to end
extreme poverty from the world
by 2030.
3. The World Bank is a vital
source of financial and
technical assistance to
developing countries around
the world. It is not a bank in
the ordinary sense but a
unique partnership to reduce
poverty and support
development.
4. The World Bank Group
comprises five institutions
managed by their member
countries in order to promote
shared prosperity by fostering
the income growth of the
bottom 40% for every country.
Which of the statements given
above are correct?
(a) 1, 2 and 3 (b) 2, 3 and 4
(c) 1, 3 and 4 (d) 2 and 4
52. Which of the following statements
about International Monetary
Fund (IMF) are correct?
1. The IMF is a United Nations
specialised agency.
2. The IMF was founded at the
Bretton Woods Conference in
1944 to secure international
monetary cooperation.
3. The objective of the IMF is to
stabilise currency exchange
rates and to expand
international liquidity (access to
hard currencies).
Select the correct answer using
the codes given below.
(a) 1 and 3 (b) 2 and 3
(c) 1 and 2 (d) All of these
53. Union Government in June, 2014
granted Navaratna status to
1. Engineers India Limited
2. Coal India Limited
3. India Trade Promotion
Organisation
4. National Buildings
Construction Corporation
Limited
Select the correct answer using
the codes given below.
(a) 1, 2 and 3 (b) 2 and 3
(c) 1 and 4 (a) All of these
54. World Bank in June, 2014
released a study report on India’s
Power Sector titled ‘More Power
to India : The Challenge of
Electricity Distribution’. Which of
the following is/are the key
recommendation(s) of the report?
1. Ensure regulatory autonomy,
effectiveness and accountability
for utilities and regulators.
1043
2. Insulate utilities from State
Governments to prevent
interference with internal
operations.
3. Scrap the Electricity Act, 2003 in
order to improve the revenue
generation of the power
distribution companies.
Select the correct answer using the
codes given below.
(a) 1 and 3 (b) 1 and 2
(c) Only 2 (d) All of these
55. Which of the following is not the
recommendation of the Arvind
Mayaram Committee on rationalising
the FDI/FPI definition (June, 2014)?
(a) Foreign investment of 10% or more in
a listed company will be treated as
Foreign Direct Investment (FDI).
(b) In a particular company, an investor
can hold the investments either under
the Foreign Portfolio Investment (FPI)
route or under the FDI route, but not
both.
(c) Any investment by way of equity
shares, compulsorily convertible
preference shares/debentures which is
less than 10% of the post-issue paid
up equity capital of a company shall
be treated as FPI.
(d) On NRI Investors, the Committee
recommended treating non-repatriable
investment as FDI.
56. Which one among the following pairs
is not correctly matched?
(a) When total product : Marginal product
increases at an increases
increasing rate
(b) When total product : Marginal product
increases at a declines
diminishing rate
(c) When total product : Marginal product
reaches its maximum becomes zero
(d) When total product : Marginal product
begins to decline becomes positive
57. The way total output changes due to
change in all inputs in same
proportion is known as law of
(a) returns to scale
(b) diminishing returns
(c) increasing returns
(d) constant returns
58. Which of the following statements are
correct?
1. When marginal revenue is
positive, total revenue increases
with increase in output.
2. When marginal revenue is zero,
total revenue is maximum.
3. When marginal revenue becomes
negative, total revenue falls with
increase in output.
1044
Select the correct answer
using the codes given below.
(a) 1 and 2 (b) 2 and 3
(c) 1 and 3 (d) 1, 2 and 3
59. Which of the following
statement(s) is/are true?
1. If increase in demand and
supply are of equal
magnitude, the price will
remain unchanged, but the
equilibrium quantity will
increase.
2. If increase in demand is of
greater magnitude than
increase in supply, both
equilibrium price and
equilibrium quantity will
increase.
3. If increase in supply is of
greater magnitude than
increase in demand,
equilibrium price will fall
but equilibrium quantity
will increase.
Select the correct answer
using the codes given below.
(a) Only 1 (b) 1 and 2
(c) 2 and 3 (d) 1, 2 and 3
60. A market in which there are
large numbers of sellers of a
particular product, but each
seller sells somewhat
differentiated but close
products is termed as
(a) perfect competition
(b) monopoly
(c) monopolistic competition
(d) oligopoly
61. The value of all final goods
and services produced by the
normal residents of a country
and their property, whether
operating within the domestic
territory of the country or
outside in an year is termed
as
(a) Gross National Income
(b) Net National Income
(c) Gross Domestic Product
(d) Net Domestic Product
62. National product at factor cost
is equal to
(a) Domestic product + Net factor
income from abroad
(b) National product at market
prices − Indirect taxes +
Subsidies
(c) Gross domestic product −
Depreciation
(d) National product at market
prices + Indirect taxes +
Subsidies
63. Which of the following theories form
the basis of international trade?
1. Absolute cost difference
2. Comparative cost difference
3. Opportunity cost
Select the correct answer using the
codes given below.
(a) Only 1 (b) Only 2
(c) 1 and 2 (d) All of these
64. Which one among the following is
not a source of tax revenue for the
Central Government in India?
(a) Income tax (b) Customs duties
(c) Service tax (d) Motor vehicle tax
65. Which of the following does not
form part of current account of
Balance of Payments?
(a) Export and import of goods
(b) Export and import of services
(c) Income receipts and payments
(d) Capital receipts and payments
66. Consider the following statement(s)
1. Government of India has
upgraded the National
Industrial Classification from
NIC-1987 to NIC-2008.
2. NIC is an essential statistical
standard for developing and
maintaining comparable
database according to economic
activities.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
67. Under the forceful thrust of British
rule, a rapid transformation of the
Indian economy took place. In this
context, which of the following
statement(s) is/are correct?
1. Indian economy was
transformed into a colonial
economy in the 19th century
whose structure was determined
by Britain’s fast developing
industrial economy.
2. The influx of cheap Indian
products into England gave a
great blow to English textile
industries.
3. The 19th century saw the
collapse of the traditional
Indian village economy and
fresh economic alignment along
commercial lines.
Select the correct answer using the
codes given below.
(a) 1 and 3 (b) Only 1
(c) Only 2 (d) 1 and 2
CDS Pathfinder
68. In May, 2014, an agreement for credit
of $ 24 million (equivalent) from World
Bank for additional financing for
Uttarakhand Rural Water Supply and
Sanitation Project was signed. The
objective/objectives of the agreement
was/were
1. to improve the effectiveness of Rural
Water Supply and Sanitation
(RWSS) services through
decentralisation.
2. to restore services of damaged
schemes in the disaster affected
areas in the State of Uttarakhand.
Select the correct answer using the
codes given below.
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
69. Consider the following statements
relating to the Non-Alignment
Movement
1. The Non-Aligned Movement (NAM)
was created and founded during the
collapse of the colonial system and
the independence struggles of the
people of Africa, Asia, Latin America
and other regions of the world and
at the height of the Cold War.
2. The First Summit of the Movement
of Non-Aligned countries was
convened by the leaders of India,
Indonesia, Egypt, Syria and
Yugoslavia at Belgrade on 1st to 6th
September, 1961.
3. During the early days of the
Movement, its actions were a key
factor in the decolonisation process,
which led later to the attainment of
freedom by many countries and to
the founding of several new
sovereign States.
4. The fundamental principle of the
movement is to maintain equal
distance from both the super powers
by joining the military alliances of
both the blocs.
Which of the statements given above
are correct?
(a) 1, 2 and 3 (b) 2 and 3
(c) 1, 3 and 4 (d) 1 and 2
70. Which of the following is not correct
regarding the 2014 FIFA Football
World Cup?
(a) ‘We Are One’ is the official song
(b) ‘Dar um, Jeito’ (We Will Find A Way)’ is
the official anthem
(c) Brazil is the first country to host a World
Cup for the second time
(d) For the first time two consecutive World
Cups are not hosted in Europe
GENERAL STUDIES Indian Economy
71. Which of the following
statement(s) about Marrakesh
Treaty is/are correct?
1. The main goal of the treaty is
to create a set of mandatory
limitations and exceptions for
the benefits of the blind and
visually impaired.
2. India has ratified the treaty.
3. The treaty has come into force
from July, 2014.
Select the correct answer using
the codes given below.
(a) Only 1 (b) 1 and 2
(c) Only 2 (d) All of these
72. Consider the following statements
about SAARC
1. The SAARC Secretariat is
located at Kathmandu.
2. The Secretariat is headed by the
Secretary General, who is
appointed by the Council of
Ministers from Member States
in alphabetical order for a three
year term.
3. The Secretary General is
assisted by eight Directors on
deputation from the Member
States.
Select the correct answer using
the codes given below.
(a) Only 1 (b) 2 and 3
(c) All of these (d) 1 and 3
73. Match the following
List I List II
(Training Institutes) (Locations)
A. National Academy of 1. Hyderabad
Direct Taxes
B. Rafi Ahmed Kidwai 2. Nagpur
National Postal Academy
C. Sardar Vallabhbhai Patel 3. Dehradun
National Police Academy
D. Indira Gandhi National 4. Ghaziabad
Forest Academy
Codes
A B C D A B C D
(a) 2 4 1 3 (b) 2 1 4 3
(c) 3 4 1 2 (d) 3 1 4 2
74. Consider the following
statement(s) on SAFTA
1. SAFTA is a trade liberalisation
programme among the
South-Eastern countries of
Asia.
2. According to SAFTA, the
Ministerial Council shall meet
at least once every year or
more often as and when
considered necessary by the
Contracting States.
1045
Select the correct answer using 79. Rise in the price of a commodity
the codes given below. means
(a) Only 1 (b) Only 2 (a) rise in the value of currency only
(c) Both 1 and 2 (d) Neither 1 nor 2 (b) fall in the value of currency only
(c) rise in the value of commodity only
75. Consider the following (d) fall in the value of currency and rise in
statement(s) on Bay of Bengal the value of commodity
Initiative for Multi-Sectoral
80. Which of the following statement(s)
Technical and Economic
Cooperation (BIMSTEC) with regard to the proposed Asian
1. BIMSTEC has seven members Infrastructure Investment Bank
Bangladesh, Bhutan, India, is/are correct?
Myanmar, Nepal, Sri Lanka 1. India is one of the founding
and Thailand. members of the bank.
2. The bank is to be headquartered
2. BIMSTEC provides a link
in Shanghai.
between South Asia and
South-East Asia by way of Select the correct answer using the
codes given below.
economic cooperation and
(a) Only 1 (b) Only 2
linkages in identified areas of
(c) Both 1 and 2 (d) Neither 1 nor 2
cooperation.
3. BIMSTEC was rechristened as 81. Which of the following statements
BISTEC in the year 2014. is/are true with regard to the newly
Select the correct answer using launched Vanbandhu Kalyan
codes given below. Yojana?
(a) Only 1 (b) Only 2 1. Under the scheme, Centre will
(c) 1 and 2 (d) All of these provide ` 10 crore each for every
State and Union Territory of the
country for the development of
2015 (I) various facilities for the tribals.
2. The scheme mainly focuses on
76. When two goods are completely bridging infrastructural gaps and
inter-changeable, they are gap in human development indices
(a) perfect substitutes between Schedules Tribes and
(b) perfect complements other Social Groups.
(c) Giffen goods
Select the correct answer using the
(d) Veblen goods
codes given below.
(a) Only 1 (b) Only 2
77. Match the following
(c) Both 1 and 2 (d) Neither 1 nor 2
List I List II
82. Which of the following statements is
(Industries) (Locations)
A. Railway equipment 1. Kochi
not true?
(a) The General Agreement on Tariffs and
B. Automobile 2. Ludhiana Trade (GATT) had regulated global
C. Ship-building 3. Bhilai trade since, 1947
D. Bicycle 4. Jabalpur (b) GATT was replaced by the World
Trade Organisation (WTO) in 1995
Codes (c) The Most Favoured Nation principle
A B C D A B C D under GATT provided that preferential
(a) 3 4 1 2 (b) 3 1 4 2 trading agreements reached with one
(c) 2 1 4 3 (d) 2 4 1 3 country should be extended to other
countries
78. Consider the following (d) The WTO has been able to cover in
statement(s) with regard to the an agreements the agriculture and
First Renewable Energy Global textile sectors which are the principal
concerned for the Least Developed
Investors Meet and Expo (2015)
Countries (LDCs)
1. This is a follow-up to the
‘Make in India’ initiative. 83. Which of the following is not a part
2. The central theme of the meet of contemporary Indian foreign
is to attract large scale policy in relationships with its
investments in the renewable neighbours?
energy sector in India. (a) Look East Policy for linking up with
Which of the statement(s) given South-East Asia via Myanmar
above is/are correct? (b) Panchsheel
(a) Only 1 (b) Only 2 (c) Non-alignment
(c) Both 1 and 2 (d) Neither 1 nor 2 (d) SAARC
1046
84. Consider the following
statement(s)
1. The Nirmal Bharat Abhiyan is
restructured into the Swachh
Bharat Mission.
2. The Swachh Bharat Mission
has two sub-missions —
Union Territories and States.
Which of the statement(s) given
above is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
85. Which of the following is/are the
objective(s) of National AYUSH
Mission, approved by the Union
Cabinet recently?
1. Improvement of AYUSH
educations through
enhancement in the number of
upgraded educational
institutions.
2. Better access to AYUSH
services through increase in
the AYUSH hospitals and
dispensaries, availability of
drugs and manpower.
3. Providing sustained
availability of quality raw
material for AYUSH systems
of medicine.
Select the correct answer using
the codes given below.
(a) Only 1 (b) 2 and 3
(c) 1 and 2 (d) All of these
86. In recent plans, certain
words/phrases were used in the
title of the plan along with
‘growth’. They are
1. inclusive 2. faster
3. more inclusive 4. sustainable
5. more sustainable
Which combination is true of the
12th Five Year Plan (2012-17)?
(a) 1, 2 and 3 (b) 1, 4 and 5
(c) 2, 3 and 4 (d) 1, 2 and 4
87. Demand for a commodity refers to
(a) desire for that commodity
(b) need for that commodity
(c) quantity demanded of that
commodity
(d) quantity demanded at certain price
during any particular period of
time
88. An exceptional demand curve is
one that slopes
(a) downward to the right
(b) upward to the right
(c) horizontally
(d) upward to the left
89. Which of the following is not a
central tenet of Socialism?
(a) Historical Materialism
(b) Dialectical Materialism
(c) Alienation and Class Struggle
(d) Individual Freedom
90. Which of the following is not true
for South Asian Free Trade Area
(SAFTA)?
(a) It is a step towards a South Asian
customs union and common market
(b) The agreement came into effect in
2006
(c) The SAFTA is a trade liberalisation
regime
(d) The SAFTA agreement takes
precedence over any other
agreement a member country may
have with States outside SAFTA
91. The 3rd Meeting of the SAARC
Culture Ministers, convened in
New Delhi on 25th September,
2014, unanimously resolved
1. to declare 2015-16 as the
SAARC Year of Cultural
Heritage.
2. that Bamiyan will be the
SAARC cultural capital for
2015-16.
3. to promote SAARC culture
online by launching a dedicated
SAARC website on culture, with
emphasis on digitisation of rare
manuscripts, rare books and other
articles of intangible cultural value.
Select the correct answer using the
codes given below.
(a) Only 2 (b) 1 and 3
(c) 2 and 3 (d) All of these
92. Inclusion strategy does not focus on
(a) reduction of inequality
(b) reduction of poverty
(c) diversifying livelihood for tribal
population
(d) getting poorer countries closer
93. Which among the following is not
an aspect of Gender Mainstreaming
(GM)?
(a) GM was established as a global
strategy for achieving gender
equality by the United Nations
(b) It was adopted in 1995 in the
Beijing Platform of Action
(c) It requires a review of government
policy in all sectors for eliminating
gender disparity
(d) GM was followed by the Convention
on the Elimination of all forms of
Discrimination Against Women
(CEDAW)
CDS Pathfinder
2015 (II)
94. Under flexible exchange rate system,
the exchange rate is determined
(a) predominantly by market mechanism
(b) by the Central Bank
(c) as a weighted index of a group of
currencies
(d) by the World Trade Organisation
95. A Bill is deemed to be a ‘Money Bill’
if it has any provision dealing with
1. imposition, abolition, remission,
alteration or regulation of any tax.
2. appropriation of money from the
Consolidated Fund of India.
3. imposition of fines or other
pecuniary penalties.
4. payment of fee for licences or fee
for service rendered.
Select the correct answer using the
codes given below.
(a) 1 and 2 (b) 1, 3 and 4
(c) 1, 2 and 3 (d) Only 2
96. Which one of the following is not a
part of service sector in India?
(a) Transport
(b) Construction
(c) Hotels and restaurants
(d) Insurance
97. Which one of the following is not
correct in the context of industrial
clusters development in India?
(a) Industrial clusters play an important role
for the MSME participants in their
inclusiveness, technology absorption and
efficiency improvement
(b) Industrial clusters are visible in
traditional handloom, handicrafts and
modern SMC
(c) Industrial cluster programmes in India
are administered by various ministries
(d) Industrial clusters lead to promotion of
monopoly in the market
98. Private investment in Indian
agriculture is mostly on labour
saving mechanisation. This could be
a response to
(a) rising productivity of agricultural sector
(b) rising inequality in agriculture
(c) rising wages and tighter labour market
(d) debt write-off by the government
99. Which one of the following is not a
recommendation of the 14th Finance
Commission?
(a) Share of states in Central Divisible
Pool is increased from 32%-42%
(b) Area under forest cover is an
important variable in distribution of
states’ share among states
GENERAL STUDIES Indian Economy
(c) Fiscal discipline is dropped as a
variable in distribution of states’ share
among states
(d) Sector-specific grant is recommended
as in the previous Finance
Commissions
100. Which of the following statements
with regard to New Development
Bank (NDB), formerly referred to
as the BRICS Development Bank
is/are correct?
1. The headquarters of the bank is
situated at Moscow, Russia.
2. KV Kamath is the first President
of the bank.
Select the correct answer using the
codes given below.
(a) Only 1 (b) Only 2
(c) Both 1 and 2 (d) Neither 1 nor 2
101. Which of the following factors led to
a decline in inflation rate in India
during 2014-15?
1. Persistent decline in crude oil
prices.
2. Softness in global prices of
tradables such as edible oils and
coal.
3. Tight monetary policy pursued by
the Reserve Bank of India.
Select the correct answer using the
codes given below.
(a) Only 1 (b) 1 and 2
(c) 2 and 3 (d) All of these
102. Which one of the following
statements about the Companies
Act, 2013 is not correct?
(a) The Act regulates the corporate
sector to make it accountable
(b) It provides for Corporate Social
Responsibility (CSR)
(c) It provides more opportunities for
new entrepreneurs
(d) It enables wide application of
information technology
103. Which one of the following is an
example of a ‘natural monopoly’?
(a) Indian Airlines
(b) Delhi Jal Board
(c) Delhi Transport Corporation
(d) Steel Authority of India Limited
104. What is meant by ‘Price
discrimination’?
(a) Increase in price of a commodity
over time
(b) A situation where the same product
is sold to different consumers for
different prices
(c) Subsidisation of a product by the
government to sell it at a lower price
(d) General decrease in price of a
commodity over time
105. What is meant by ‘Public
Good’?
(a) A commodity produced by
government
(b) A commodity whose benefits
are indivisibly spread among
the entire community
(c) A government scheme that
benefits the poor households
(d) Any commodity that is very
popular among general public
106. Which one of the following
statements with regard to
India’s economy between
1814-1860 is not correct?
(a) Between 1814 and 1850, four
commodities dominated India’s
exports— raw silk, opium,
cotton and indigo
(b) Between 1814 and 1860, five
commodities dominated India’s
exports— raw silk, opium,
cotton, indigo and jute
(c) Indigo and raw silk required
processing techniques
(d) Indigo and raw silk were
financed by foreign capital
107. In view of the fact that
kerosene is an inferior good
in India, what is/are its
implication(s)?
1. As households get richer,
they consume less
kerosene.
2. Over time there is a
decline in quality of
kerosene.
3. Government needs to stop
subsidies on kerosene.
Select the correct answer
using the codes given below.
(a) Only 1 (b) 1 and 2
(c) 2 and 3 (d) 1, 2 and 3
108. Which one of the following is
the major source of Gross Tax
Revenue (GTR) for the
Government of India?
(a) Income tax
(b) Corporation tax
(c) Customs duty
(d) Service tax
109. Which one of the following
represents a progressive tax
structure?
(a) Tax rate is the same across all
incomes
(b) Tax rate increases as income
increases
(c) Tax rate decreases as income
increases
(d) Each household pays equal
amount of tax
1047
110. ‘Weibo’ is a social media platform,
popularly used in
(a) South Korea (b) China
(c) Thailand (d) Japan
111. Which one of the following is not
provided regular budgetary support
by the Ministry of Defence?
(a) Himalayan Mountaineering Institute,
Darjeeling
(b) Institute for Defence Studies and
Analysis, New Delhi
(c) Armed Forces Tribunal
(d) United Service Institution of India,
New Delhi
112. In April 2015, India and France
agreed to conclude an
inter-governmental agreement in
respect of which one of the
following platforms?
(a) Rafale medium multirole combat
aircraft
(b) Scorpene submarines
(c) Infantry mobility vehicles
(d) Precision guided munitions system
113. Where was the 14th Asia Security
Summit (Shangri-La Dialogue)
held in May 2015?
(a) Beijing (b) Bangkok
(c) Jakarta (d) Singapore
114. Which of the following are
members of BRICS?
(a) Bhutan, Russia, India, China and Sri
Lanka
(b) Brazil, Russia, India, China and
South Africa
(c) Brazil, Russia, Indonesia, China and
Singapore
(d) Bangladesh, Republic of Korea,
Indonesia, Canada and Sri Lanka
115. The ‘Panchsheel Agreement’ for
peaceful co-existence was signed
between
(a) India and Bhutan
(b) India and Nepal
(c) India and China
(d) India and Pakistan
116. Which one of the following is not a
member of MERCOSUR (Southern
Common Market)?
(a) Argentina (b) Paraguay
(c) Uruguay (d) Chile
2016 (I)
117. Which one of the Five Year Plans
had a high priority to bring
inflation under control and to
achieve stability in the economic
situation?
(a) Fourth Plan (1969-74)
(b) Fifth Plan (1974-79)
(c) Sixth Plan (1980-85)
(d) Seventh Plan (1985-90)
1048
118. Which of the following
statement(s) is/are true with
respect to Phillips Curve?
1. It shows the trade-off
between unemployment and
inflation.
2. The downward sloping curve of
Phillips Curve is generally held
to be valid only in the short
run.
3. In the long run, Phillips
Curve is usually thought to
be horizontal at the
Non-Accelerating Inflation
Rate of Unemployment
(NAIRU).
Select the correct answer using
the codes given below.
(a) Only 1 (b) 2 and 3
(c) 1 and 2 (d) All of these
119. Which one of the following
nations is not a member of the
Eurasian Economic Union?
(a) Belarus (b) Russia
(c) Kazakhstan (d) Uzbekistan
120. BRICS leaders signed the
agreement to establish a New
Development Bank at the
summit held in
(a) New Delhi, India (2012)
(b) Durban, South Africa (2013)
(c) Fortaleza, Brazil (2014)
(d) Ufa, Russia (2015)
121. Shishu, Kishor and Tarun are
the schemes of
(a) Regional Rural Banks
(b) Micro Units Development and
Refinance Agency Limited
(MUDRA)
(c) Small Industries Development
Bank of India
(d) Industrial Development Bank of
India
122. Which of the following
statements are true with
respect to the concept of
EFFICIENCY as used in
mainstream economics?
1. Efficiency occurs when no
possible reorganisation of
production can make anyone
better off without making
someone else worse off.
2. An economy is clearly
inefficient if it is inside the
Production Possibility
Frontier (PPF).
3. At a minimum, an efficient
economy is on its Production
Possibility Frontier (PPF).
4. The terms such as ‘Pareto
Efficiency’, ‘Pareto Optimality’
and ‘Allocative Efficiency’ are
all essentially one and the
same which denote ‘efficiency
in resource allocation’.
Select the correct answer using
the codes given below.
(a) 1 and 4 (b) 1 and 3
(c) 2 and 3 (d) All of these
123. Which one of the following
nations has faced severe
economic crisis in the year 2015
resulting in default in repayment
of IMF loan?
(a) China (b) Greece
(c) Ireland (d) Belgium
124. Which of the following is not a
‘Public Good’?
(a) Electricity (b) National Defence
(c) Light House (d) Public Parks
125. Which one of the following is not
among the aims of the Second
Five Year Plan (1956-57 to
1960-61)?
(a) Rapid industrialisation with
particular emphasis on the
development of basic and heavy
industries
(b) Large expansion of employment
opportunities
(c) Achieve self-sufficiency in
foodgrains and increase agricultural
production to meet the
requirements of industry and
exports
(d) Reduction of inequalities in income
and wealth and a more even
distribution of economic power
126. Which of the following is/are the
example(s) of Transfer
Payment(s)?
1. Unemployment allowance
2. Payment of salary
3. Social security payments
4. Old age pension
Select the correct answer using
the codes given below.
(a) 1 and 3 (b) 1, 2 and 3
(c) 1, 3 and 4 (d) None of these
127. Which of the following
statements with regard to
UID/Aadhar Card are correct?
1. It is a 12-digit unique form of
identification for all residents
of India.
2. It is an identity number along
with the biometric information
of the individuals.
CDS Pathfinder
3. It is a national identity and
citizenship card.
Select the correct answer using the
codes given below.
(a) 2 and 3 (b) 1 and 2
(c) 1 and 3 (d) All of these
128. Human Development Report for
each year at global level is
published by
(a) WTO (b) World Bank
(c) UNDP (d) IMF
129. Which one of the following is not a
monitorable target of the Beti
Bachao Beti Padhao Abhiyan?
(a) Provide girls’ toilet in every school in
100 Child Sex Ratio (CSR) districts
by the year 2017
(b) 100% girls’ enrolment in secondary
education by the year 2020
(c) Promote a protective environment for
girl children through implementation
of Protection of Children from Sexual
Offences (POCSO) Act 2012
(d) Train Elected Representatives/
Grassroot functionaries as Community
Champions to mobilise communities
to improve CSR and promote girls’
education
130. The National Policy for Children
2013 recognises every person as a
child below the age of
(a) 12 years (b) 14 years
(c) 16 years (d) 18 years
131. Which of the following is not an
objective of the Rashtriya
Uchchatar Shiksha Abhiyan
(RUSA)?
(a) Improve the overall quality of private
educational institutions
(b) Ensure reforms in the affiliation,
academic and examination systems
(c) Correct regional imbalances in access
to higher education
(d) Create an enabling atmosphere in the
higher education institutions to devote
themselves to research and
innovations
132. Which of the following is/are
example(s) of ‘Near Money’?
1. Treasury Bill
2. Credit Card
3. Savings accounts and small time
deposits.
4. Retail money market mutual
funds.
Select the correct answer using the
codes given below.
(a) Only 1 (b) Only 2
(c) 1, 2 and 3 (d) 1, 3 and 4
GENERAL STUDIES Indian Economy 1049

133. Which one of the following terms
is used in Economics to denote a
technique for avoiding a risk by
making a counteracting
transaction?
(a) Dumping (b) Hedging
(c) Discounting (d) Deflating
134. Which of the following
statements are correct?
1. Ability to pay principle of
taxation holds that the
amount of taxes people pay
should relate to their income
or wealth.
2. The Benefit Principle of
taxation States that
individuals should be taxed in
proportion to the benefit they
receive from government
programmes.
3. A progressive tax takes a
larger share of tax from poor
families than it does from 3. Second National Commission on
rich families. Labour has recommended against the
4. Indirect taxes have the utility of wage boards.
advantage of being Select the correct answer using the
cheaper and easier to codes given below.
collect. (a) Only 1
Select the correct answer (b) Only 2
(c) 1 and 2
using the codes given below. (d) All of these
(a) 1 and 3 (b) 2 and 4
(c) 1, 2 and 4 (d) All of these 136. Norman Borlaug won Nobel Peace Prize
for his contributions in
135. Which of the following 1. development of high-yielding crops.
statement(s) is/are false?
2. modernisation of irrigation
1. Wage Boards are infrastructure.
tripartite in nature, with 3. introduction of synthetic fertilizers
representatives from and pesticides.
workers, employers and
independent members. Select the correct answer using the codes
given below
2. Except for the Wage (a) Only 1
Boards for Journalists (b) Only 2
and Non-Journalists, all (c) 2 and 3
the other wage boards are (d) All of these
statutory in nature.

ANSWERS
Practice Exercise
1 c 2 d 3 b 4 c 5 d 6 d 7 c 8 b 9 c 10 b
11 b 12 b 13 b 14 b 15 c 16 c 17 c 18 c 19 b 20 a
21 c 22 c 23 d 24 a 25 c 26 c 27 b 28 b 29 c 30 b
31 d 32 a 33 b 34 d 35 b 36 b 37 b 38 c 39 a 40 c
41 b 42 a 43 a 44 d 45 b 46 d 47 d 48 b 49 d 50 d
51 c 52 d 53 b 54 b 55 c 56 d 57 b 58 d 59 c 60 d
61 b 62 c 63 b 64 c 65 d 66 a 67 b 68 c 69 b 70 a
71 d 72 a 73 a 74 d 75 b 76 c 77 c 78 b 79 c 80 c
81 b 82 d 83 c 84 d 85 b 86 d 87 d 88 a 89 d 90 d
91 b 92 b 93 c 94 a 95 d 96 a 97 a 98 c 99 a 100 d
101 a 102 a 103 a 104 d 105 b 106 c 107 b 108 c 109 b 110 c
111 b 112 d 113 c 114 d 115 b 116 c 117 b 118 d 119 a 120 a
121 b 122 d 123 a 124 a 125 a 126 d 127 c 128 d 129 b 130 c
131 b 132 d 133 b 134 a 135 d 136 d 137 d 138 d 139 d 140 b
141 b

Questions From CDS Exam (2012-2016)

1 a 2 d 3 b 4 d 5 d 6 d 7 c 8 a 9 a 10 c
11 c 12 a 13 c 14 b 15 a 16 c 17 d 18 b 19 b 20 a
21 a 22 d 23 c 24 d 25 d 26 a 27 b 28 c 29 d 30 b
31 a 32 d 33 a 34 a 35 a 36 b 37 c 38 a 39 a 40 c
41 b 42 b 43 c 44 d 45 a 46 b 47 b 48 b 49 c 50 a
51 b 52 d 53 c 54 b 55 d 56 d 57 a 58 d 59 d 60 c
61 a 62 b 63 d 64 d 65 d 66 c 67 a 68 c 69 a 70 c
71 b 72 c 73 a 74 c 75 c 76 a 77 a 78 c 79 d 80 d
81 b 82 d 83 c 84 a 85 d 86 c 87 d 88 b 89 d 90 d
91 c 92 d 93 d 94 a 95 a 96 b 97 d 98 c 99 d 100 b
101 d 102 c 103 b 104 b 105 b 106 b 107 a 108 b 109 b 110 b
111 d 112 a 113 d 114 b 115 c 116 d 117 a 118 c 119 d 120 c
121 b 122 d 123 b 124 a 125 c 126 c 127 b 128 c 129 b 130 d
131 a 132 d 133 b 134 c 135 b 136 a