Static Quiz 31st May 2025 (Indian Economy)
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Static Quiz 31st May 2025 (Indian Economy) For UPSC Exam
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- Question 1 of 5
1. Question
Which of the following best describes the term “twin balance sheet problem” in the Indian economy?
CorrectAnswer: (c)
Explanation:
The Twin Balance Sheet (TBS) problem refers to the simultaneous financial stress faced by:
• Corporates, which are overleveraged and unable to repay debts.
• Banks, mainly public sector banks, which face rising Non-Performing Assets (NPAs) as a result.
This leads to reduced investments and sluggish credit growth.
Thus, option (c) correctly captures the concept.IncorrectAnswer: (c)
Explanation:
The Twin Balance Sheet (TBS) problem refers to the simultaneous financial stress faced by:
• Corporates, which are overleveraged and unable to repay debts.
• Banks, mainly public sector banks, which face rising Non-Performing Assets (NPAs) as a result.
This leads to reduced investments and sluggish credit growth.
Thus, option (c) correctly captures the concept. - Question 2 of 5
2. Question
Which sector of the Indian economy is the largest employer, but contributes relatively less to GDP?
CorrectAnswer: (b)
Explanation:
• Agriculture employs over 45% of India’s workforce.
• However, its contribution to Gross Value Added (GVA) is around 18–20%.
• This mismatch indicates low productivity per worker, and is a key challenge in India’s structural transformation.
Hence, option (b) is the correct choice.IncorrectAnswer: (b)
Explanation:
• Agriculture employs over 45% of India’s workforce.
• However, its contribution to Gross Value Added (GVA) is around 18–20%.
• This mismatch indicates low productivity per worker, and is a key challenge in India’s structural transformation.
Hence, option (b) is the correct choice. - Question 3 of 5
3. Question
Which of the following actions would most likely reduce the Fiscal Deficit without directly cutting public expenditure?
CorrectAnswer: (b)
Explanation:
• Selling equity in Public Sector Enterprises (PSEs) is a form of disinvestment.
• It generates non-tax revenue for the government and helps reduce fiscal deficit.
• It does so without cutting spending or increasing taxes.
Therefore, option (b) is the most appropriate.IncorrectAnswer: (b)
Explanation:
• Selling equity in Public Sector Enterprises (PSEs) is a form of disinvestment.
• It generates non-tax revenue for the government and helps reduce fiscal deficit.
• It does so without cutting spending or increasing taxes.
Therefore, option (b) is the most appropriate. - Question 4 of 5
4. Question
With reference to India’s economic planning, which of the following pairs is correctly matched?
Initiative Description
NITI Aayog Statutory body under the Ministry of Finance
Five-Year Plans Continued till 2022
Strategy for New India @75 Vision document by NITI Aayog
Planning Commission Created through Constitutional AmendmentOptions:
CorrectAnswer: (a)
Explanation:
Let’s examine the pairs:
• NITI Aayog: It is an executive body, not statutory, and functions under the Ministry of Planning, not Finance — ❌
• Five-Year Plans: Discontinued after the 12th Plan (2012–2017) — ❌
• Strategy for New India @75: Correct — it is a policy vision document by NITI Aayog for 2022 — ✅
• Planning Commission: Created by executive resolution in 1950, not by constitutional amendment — ❌
So, only one pair is correct: option (a).IncorrectAnswer: (a)
Explanation:
Let’s examine the pairs:
• NITI Aayog: It is an executive body, not statutory, and functions under the Ministry of Planning, not Finance — ❌
• Five-Year Plans: Discontinued after the 12th Plan (2012–2017) — ❌
• Strategy for New India @75: Correct — it is a policy vision document by NITI Aayog for 2022 — ✅
• Planning Commission: Created by executive resolution in 1950, not by constitutional amendment — ❌
So, only one pair is correct: option (a). - Question 5 of 5
5. Question
In India, which of the following is not a reason for the persistent Current Account Deficit (CAD)?
CorrectAnswer: (b)
Explanation:
• Oil and gold imports add pressure to India’s Current Account, increasing the deficit.
• Trade imbalance (exports < imports) is a key driver of CAD. • However, remittances from Indians abroad are a credit item, i.e., they help reduce the CAD. Thus, option (b) is not a reason for the CAD and is the correct answer.IncorrectAnswer: (b)
Explanation:
• Oil and gold imports add pressure to India’s Current Account, increasing the deficit.
• Trade imbalance (exports < imports) is a key driver of CAD. • However, remittances from Indians abroad are a credit item, i.e., they help reduce the CAD. Thus, option (b) is not a reason for the CAD and is the correct answer.
