JAIIB Paper 1

Module A Practice Set

250 Objective Questions

Comprehensive Study Material

Authored & Compiled By

Sunil Kumar
Disclaimer: While every effort has been made to ensure the accuracy of the questions and
answers in this document, banking regulations and RBI guidelines are subject to frequent
changes. The author holds no responsibility for any inadvertent errors, omissions, or
outdated data. Candidates are advised to cross-check critical information with official IIBF
materials and recent RBI circulars.
 🌟 A Note to My Fellow Bankers 🌟
Dear UPGBians,
I know firsthand how challenging it is to return home after a gruelling day at
the branch—navigating customer queries, managing targets, ensuring
compliance, and balancing operations—only to open a book and begin
studying.
Balancing a demanding career with academic preparation is no small feat. It
requires immense discipline, sacrifice, and a clear vision of your
professional growth.
I have curated this Comprehensive Practice Set for JAIIB Paper 1 (Module
A) with your busy schedules in mind. The goal of these 250 objective
questions is to simplify complex economic concepts and align your
preparation with the latest RBI guidelines and government policies. This
material is designed to be highly focused, saving you precious time while
maximizing your scoring potential.
Remember, clearing the JAIIB examination is not just about the monetary
increment or the promotion; it is a stepping stone to building a stronger,
more confident foundation in your banking career. Every hour you invest in
yourself today will compound into lifelong professional dividends.
Take it one module, one concept, and one day at a time. Trust your hard
work, stay consistent, and do not let the vastness of the syllabus overwhelm
you. You already manage a lot of tasks and clearing this exam is well within
your capabilities!
Wishing you the absolute best in your preparation and your career ahead.

Warm Regards,
Sunil Kumar
Author & Compiler

"मंज़िलें उन्हं को ममलती ्ैं, जिनके सपनों में िान ्ोती ्ै ,

पंखों से कुछ न्हं ्ोता, ्ौसलों से उडान ्ोती ्ै ।"
 JAIIB Paper 1 Module A Practice - Set 1
1. Which of the following best describes the structure of the Indian economy prior to British rule?
A) Highly industrialized and import-dependent
B) Agrarian base with globally flourishing handicrafts
C) Dominated by the tertiary (services) sector
D) A purely nomadic and pastoral economy
● Correct Answer: B
● Explanation: Pre-British India was known for its strong agricultural economy and world-renowned
artisanal goods, particularly textiles.
2. What is meant by the 'Hindu Rate of Growth' in the context of the Indian economy?
A) The rapid economic growth observed after the 1991 reforms
B) The low, stagnant annual growth rate of around 3.5% from the 1950s to the 1980s
C) The growth rate of the agricultural sector exclusively
D) The target growth rate set by NITI Aayog
● Correct Answer: B
● Explanation: Coined by Raj Krishna, it refers to the historically low and stagnant growth rate of the Indian
economy during socialist policies.
3. The primary trigger for India's comprehensive macroeconomic stabilization and structural reforms in
1991 was:
A) A massive surplus in foreign exchange reserves
B) The establishment of the World Trade Organization (WTO)
C) A severe Balance of Payments (BoP) crisis
D) The global financial crisis of 2008
● Correct Answer: C
● Explanation: India's foreign exchange reserves dropped so low that it could barely finance three weeks of
imports, forcing a bailout and reforms.
4. Which unique structural change characterizes the evolution of the Indian economy compared to the
traditional development path of Western countries?
A) Transitioning directly from industry to agriculture
B) Leapfrogging from an agrarian economy directly to a services-led economy
C) Maintaining agriculture as the highest GDP contributor indefinitely
D) Completely eliminating the primary sector
● Correct Answer: B
● Explanation: Unlike Western nations that had a prolonged manufacturing phase, India's growth jumped
from agriculture to services (IT, BPO).
5. In terms of Purchasing Power Parity (PPP), where does India currently rank among global
economies?
A) First
B) Third
C) Fifth
D) Tenth
● Correct Answer: B
● Explanation: India is the third-largest economy in the world by PPP, behind China and the USA.
6. Which of the following is a classic characteristic of a developing economy like India?
A) Low population growth and high per capita income
B) Equitable distribution of wealth and zero poverty
C) High dependence on agriculture and lower per capita income
D) Complete absence of an unorganized sector
● Correct Answer: C
● Explanation: Developing nations usually have a large agrarian workforce and lower average incomes
compared to developed nations.
7. What is the 'Demographic Dividend' that India is currently experiencing?
A) A rapid increase in the elderly population requiring pensions
B) An economic growth potential resulting from a high share of working-age population
C) A government scheme to distribute cash dividends to families with children
D) The decline in the total fertility rate below replacement levels
● Correct Answer: B
● Explanation: A demographic dividend occurs when the proportion of working people (15-64 years) is
higher than the non-working age share.
8. The British economic policies in India primarily aimed to transform India into:
A) A self-reliant, industrialized powerhouse
B) A supplier of raw materials and a market for finished British goods
C) A global hub for high-end financial services
D) An equal trading partner with the British Empire
● Correct Answer: B
● Explanation: This was the core of colonial economic exploitation, causing the deindustrialization of India.
9. Which Five-Year Plan in India was based on the Harrod-Domar model?
A) First Five-Year Plan
B) Second Five-Year Plan
C) Third Five-Year Plan
D) Eighth Five-Year Plan
● Correct Answer: A
 ● Explanation: The First Plan (1951-1956) was based on this model and focused primarily on agricultural
development.
10. Who serves as the ex-officio Chairperson of NITI Aayog?
A) The Finance Minister
B) The President of India
C) The Prime Minister of India
D) The RBI Governor
● Correct Answer: C
● Explanation: Like the Planning Commission before it, NITI Aayog is chaired by the Prime Minister.
11. The period between 1966 and 1969 in Indian economic planning is formally referred to as:
A) The Rolling Plan
B) The Plan Holiday
C) The Inclusive Plan
D) The Liberalization Period
● Correct Answer: B
● Explanation: Due to the failure of the Third Plan, wars, and drought, three annual plans were executed
during this 'holiday' period.
12. What is the core difference in the planning approach between the former Planning Commission and
NITI Aayog?
A) Planning Commission used a 'Bottom-up' approach; NITI Aayog uses a 'Top-down' approach.
B) Planning Commission used a 'Top-down' approach; NITI Aayog uses a 'Bottom-up' approach.
C) Planning Commission focused only on private sectors; NITI Aayog focuses on public sectors.
D) There is no difference in their approaches.
● Correct Answer: B
● Explanation: NITI Aayog fosters cooperative federalism, encouraging state participation from the ground
up, unlike the centralized Planning Commission.
13. Which type of economic planning involves the state setting broad economic goals and guiding the
economy, while allowing the market system to operate freely?
A) Imperative Planning
B) Indicative Planning
C) Command Planning
D) Totalitarian Planning
● Correct Answer: B
● Explanation: India adopted indicative planning post-1991, where the government acts as a facilitator
rather than a controller.
14. The Gadgil Formula in Indian economic planning is associated with:
A) Calculating the GDP growth rate
B) Determining the allocation of central plan assistance to states
C) Setting the repo rate for the RBI
D) Defining the poverty line
● Correct Answer: B
● Explanation: Formulated in 1969, it provided a transparent mathematical formula for distributing central
funds to state governments.
15. What is the full form of NITI in NITI Aayog?
A) National Institute of Technological Innovation
B) National Institution for Transforming India
C) New Initiative for Trade and Industry
D) National Investment and Trade Institution
● Correct Answer: B
● Explanation: NITI stands for National Institution for Transforming India, reflecting its goal to act as a
catalyst for national development.
16. Deficit financing was frequently used to fund Five-Year Plans in India. What does deficit financing
mean?
A) Exporting more than importing to generate funds
B) The government borrowing from the public solely through bonds
C) Printing new currency by the central bank to cover the government's budget shortfall
D) Raising direct taxes to cover all planned expenditures
● Correct Answer: C
● Explanation: Historically, it meant the RBI monetizing the government's deficit by creating new money,
which often led to inflation.
17. Which of the following activities falls exclusively under the Primary Sector of the economy?
A) Automobile manufacturing
B) Banking and Insurance
C) Mining and Quarrying
D) Software development
● Correct Answer: C
● Explanation: The primary sector involves the direct extraction and harvesting of natural resources.
18. In standard economic classification, the Quaternary Sector is characterized by:
A) High-level decision making by government executives
B) Knowledge-based activities, R&D, and information processing
C) Mass production of consumer goods
D) Basic retail and transportation services
● Correct Answer: B
● Explanation: The quaternary sector is a specialized subset of services focusing on intellectual activities
and technological innovation.
19. Which sector currently contributes the maximum share to India's Gross Domestic Product (GDP)?
A) Primary Sector
B) Secondary Sector
C) Tertiary Sector
D) Quinary Sector
● Correct Answer: C
● Explanation: The services sector dominates the Indian economy, contributing over 50% to the total GDP.
20. Despite a declining share in GDP, which sector continues to employ the largest percentage of the
Indian workforce?
A) Primary Sector (Agriculture)
B) Secondary Sector (Manufacturing)
C) Tertiary Sector (Services)
D) Quaternary Sector (IT and R&D)
● Correct Answer: A
● Explanation: Agriculture and allied activities still employ nearly half of India's labor force, highlighting a
major productivity gap.
21. What is a 'Sunrise Sector' in an economy?
A) A traditional industry that operates only during daylight hours
B) A sector that is in decline and needs government bailouts
C) A new, rapidly growing industry expected to become vital in the future
D) The agricultural sector during the harvest season
● Correct Answer: C
● Explanation: Examples in India include green energy, food processing, and biotechnology, which show
high growth potential.
22. The key distinction between the Organised and Unorganised sectors lies in:
A) The type of goods produced (manufacturing vs. agriculture)
B) The size of the physical office building
C) Compliance with labor laws, job security, and social security benefits
D) Whether the business exports goods internationally
● Correct Answer: C
● Explanation: The organized sector follows government rules (Provident Fund, regular hours), whereas
the unorganized sector often lacks these protections.
23. The 'Blue Revolution' in India is associated with the promotion and development of which sector?
A) Dairy and Milk production
B) Aquaculture and Fisheries
C) Space Exploration
D) Oilseed production
● Correct Answer: B
● Explanation: The Blue Revolution focuses on maximizing the economic and nutritional potential of inland
 and marine fisheries.
24. Which of the following is considered a part of the Quinary Sector?
A) A high school teacher
B) A call center employee
C) A top-level government policymaker or corporate CEO
D) A construction worker
● Correct Answer: C
● Explanation: The quinary sector consists of the highest levels of decision-making in society or the
economy.
25. Under the Priority Sector Lending (PSL) norms by the RBI, what is the mandatory target for
Agriculture for domestic commercial banks?
A) 10% of ANBC
B) 18% of ANBC
C) 40% of ANBC
D) 75% of ANBC
● Correct Answer: B
● Explanation: Domestic commercial banks are required to lend 18% of their Adjusted Net Bank Credit
(ANBC) to the agriculture sector.
26. According to the revised MSME classification (effective July 2020), a 'Micro' enterprise is defined
by:
A) Investment up to Rs. 25 lakh and Turnover up to Rs. 1 crore
B) Investment up to Rs. 1 crore and Turnover up to Rs. 5 crore
C) Investment up to Rs. 10 crore and Turnover up to Rs. 50 crore
D) Investment up to Rs. 50 crore and Turnover up to Rs. 250 crore
● Correct Answer: B
● Explanation: The new composite criteria use both investment in plant and machinery/equipment and
annual turnover.
27. Which major portal was launched by the government to facilitate the registration of MSMEs based
on self-declaration?
A) E-Shram Portal
B) Udyam Registration Portal
C) Make in India Portal
D) Kisan Suvidha App
● Correct Answer: B
● Explanation: Udyam is the official, paperless, and free government portal for registering an MSME.
28. What is the primary objective of the 'Atmanirbhar Bharat Abhiyan' (Self-Reliant India Mission)?
A) To isolate the Indian economy from global trade
B) To promote local manufacturing, reduce import dependence, and build resilient supply chains
C) To nationalize all private banks in India
D) To replace the Rupee with a digital currency immediately
● Correct Answer: B
● Explanation: Launched during the COVID-19 pandemic, it focuses on making India self-sufficient and a
key player in the global economy.
29. Which of the following is NOT categorized as an eligible sector under the Priority Sector Lending
(PSL) norms?
A) Education
B) Renewable Energy
C) Large-scale Corporate Real Estate Developers
D) Social Infrastructure
● Correct Answer: C
● Explanation: PSL targets vulnerable or strategically important sectors, not highly capitalized corporate
real estate.
30. Approximately what percentage of India's total exports is contributed by the MSME sector?
A) Less than 10%
B) Around 25%
C) Around 45-50%
D) Over 90%
● Correct Answer: C
● Explanation: MSMEs are vital to India's trade, accounting for nearly half of the country's total exports.
31. Under PSL, what is the specific target for lending to 'Weaker Sections' for commercial banks
(phased implementation target for FY24 onwards)?
A) 5% of ANBC
B) 10% of ANBC
C) 12% of ANBC
D) 18% of ANBC
● Correct Answer: C
● Explanation: The RBI revised the target for weaker sections upwards to 12% in a phased manner to
boost inclusion.
32. The 'Make in India' initiative, launched in 2014, aimed to increase the share of manufacturing in
India's GDP to:
A) 15%
B) 25%
C) 40%
D) 50%
● Correct Answer: B
● Explanation: A core goal was to boost manufacturing's share to 25% of GDP and create 100 million
additional jobs.
33. For Small Finance Banks (SFBs), what is the overall Priority Sector Lending (PSL) target?
A) 40% of ANBC
B) 50% of ANBC
C) 60% of ANBC
D) 100% of ANBC
● Correct Answer: C
● Explanation: SFBs are mandated to lend 60% of their ANBC to priority sectors.
34. Which of the following is considered an example of 'Social Infrastructure'?
A) National Highways
B) Power Generation Plants
C) Hospitals and Schools
D) Telecommunication towers
● Correct Answer: C
● Explanation: Social infrastructure refers to facilities that improve human capital, like healthcare and
education.
35. The 'PM Gati Shakti' master plan primarily focuses on:
A) Providing free electricity to rural households
B) Multimodal connectivity and integrated infrastructure development
C) Eradicating communicable diseases
D) Direct benefit transfers to farmers
● Correct Answer: B
● Explanation: It aims to break departmental silos and bring holistic, integrated planning for infrastructure
and logistics.
36. What is the primary objective of the UDAY (Ujwal DISCOM Assurance Yojana) scheme?
A) Distributing LED bulbs at subsidized rates
B) Financial turnaround and revival of Power Distribution Companies (DISCOMs)
C) Providing free LPG connections to poor households
D) Promoting solar water pumps for irrigation
● Correct Answer: B
● Explanation: UDAY was launched to help debt-ridden state power distribution companies improve their
financial and operational efficiency.
37. The 'Bharatmala Pariyojana' is an umbrella program related to the development of:
A) Inland Waterways
B) Ports and coastal shipping
C) Highways and road networks
D) Airport infrastructure
● Correct Answer: C
 ● Explanation: Bharatmala focuses on optimizing the efficiency of freight and passenger movement across
the country by bridging critical infrastructure gaps via roads.
38. Under the National Education Policy (NEP) 2020, what is the target Gross Enrolment Ratio (GER) in
higher education to be achieved by 2035?
A) 25%
B) 50%
C) 75%
D) 100%
● Correct Answer: B
● Explanation: NEP 2020 aims to double the higher education GER to 50% by 2035.
39. The National Infrastructure Pipeline (NIP) was launched to provide world-class infrastructure. What
was its initial projected investment outlay for the period 2019-25?
A) Rs. 10 lakh crore
B) Rs. 50 lakh crore
C) Rs. 111 lakh crore
D) Rs. 500 lakh crore
● Correct Answer: C
● Explanation: The NIP was announced with an ambitious target of Rs. 111 lakh crore to be invested over
five years.
40. Which flagship scheme provides a health cover of Rs. 5 lakhs per family per year for secondary and
tertiary care hospitalization?
A) Janani Suraksha Yojana
B) Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY)
C) National Health Mission
D) CGHS (Central Government Health Scheme)
● Correct Answer: B
● Explanation: PM-JAY is the world's largest government-funded healthcare program, providing significant
financial protection to poor families.
41. Which of the following is a primary feature of 'Globalisation'?
A) Implementing strict import quotas
B) Integration of the domestic economy with the world economy
C) Banning foreign direct investment
D) Nationalization of multinational corporations
● Correct Answer: B
● Explanation: Globalization involves free movement of goods, services, capital, and labor across
international borders.
42. In international trade, what is 'Protectionism'?
A) Protecting the environment during international shipping
B) Government actions and policies that restrict international trade to help domestic industries
C) A policy of completely free trade without any taxes
D) Protecting consumers from fake imported goods
● Correct Answer: B
● Explanation: Protectionism uses tariffs, quotas, and subsidies to shield domestic producers from foreign
competition.
43. The World Trade Organization (WTO), formed in 1995, replaced which earlier international
agreement?
A) The League of Nations
B) General Agreement on Tariffs and Trade (GATT)
C) International Monetary Fund (IMF)
D) World Bank
● Correct Answer: B
● Explanation: GATT was a provisional treaty that governed international trade from 1948 until the creation
of the permanent WTO.
44. What is the key difference between Foreign Direct Investment (FDI) and Foreign Portfolio
Investment (FPI)?
A) FDI involves buying stocks for short-term gains; FPI involves building factories.
B) FDI brings lasting interest and management control; FPI is financial investment without management
control.
C) FDI is only allowed for governments; FPI is for private citizens.
D) There is no difference; they are interchangeable terms.
● Correct Answer: B
● Explanation: FDI implies a long-term commitment and physical presence, whereas FPI is 'hot money'
invested in stock markets.
45. Which committee was set up by the RBI to lay out a roadmap for Capital Account Convertibility in
India?
A) Narasimham Committee
B) S.S. Tarapore Committee
C) Kelkar Committee
D) Urjit Patel Committee
● Correct Answer: B
● Explanation: The Tarapore Committee (1997 and 2006) laid out the preconditions and roadmap for fuller
capital account convertibility.
46. Which of the following is considered a 'Non-Tariff Barrier' to international trade?
A) An import tax of 10% on automobiles
B) A customs duty on imported steel
C) A strict environmental or sanitary standard required for imported food
D) An export subsidy paid to domestic farmers
 ● Correct Answer: C
● Explanation: Regulations, quotas, and complex standards restrict trade without directly applying a tax,
hence 'non-tariff'.
47. A 'Trade Deficit' occurs when a country's:
A) Total exports exceed its total imports
B) Government revenue is less than its expenditure
C) Value of imported goods exceeds the value of exported goods
D) Foreign exchange reserves fall to zero
● Correct Answer: C
● Explanation: When a nation buys more from the world than it sells, it runs a trade deficit.
48. What is meant by the 'Twin Deficit' problem in an economy?
A) High inflation coupled with high unemployment
B) Simultaneous occurrence of a high Fiscal Deficit and a high Current Account Deficit (CAD)
C) Trade deficit combined with a budget surplus
D) Revenue deficit and Capital deficit
● Correct Answer: B
● Explanation: A twin deficit means the government is borrowing heavily at home, while the country is
importing heavily from abroad.
49. One of the major criticisms or negative impacts of globalization on developing nations is:
A) Complete eradication of domestic poverty
B) Increased risk of exposure to global economic shocks and volatility
C) Total isolation from modern technology
D) Elimination of all multinational corporations
● Correct Answer: B
● Explanation: Because economies are interlinked, a crisis in one part of the world (like 2008) quickly
spreads to others.
50. In the context of the Indian economy, what does 'Current Account Convertibility' imply?
A) Freedom to convert the Rupee into foreign currency for all asset purchases like real estate abroad
B) Freedom to convert domestic currency into foreign currency for trade in goods, services, and remittances
C) The government fixing the exchange rate rigidly
D) Banning the use of US Dollars in India
● Correct Answer: B
● Explanation: India has full current account convertibility, allowing unrestricted foreign exchange for trade
and daily transactions.
 JAIIB Paper 1: Indian Economy & Indian Financial System (IE & IFS)
Module A: Indian Economic Architecture - Practice Set 2 (50 Questions)
Q1. The landmark 1991 Economic Reforms in India were triggered primarily by which of the following
crises?
A) Hyperinflation reaching 50%
B) A severe Balance of Payments (BoP) crisis with forex reserves enough for only about two weeks of imports
C) The collapse of the Indian stock market due to the Harshad Mehta scam
D) Massive widespread agricultural failure causing national famine
Answer: B
Explanation: The immediate trigger for the 1991 LPG (Liberalisation, Privatisation, Globalisation) reforms was
a severe Balance of Payments crisis. India's foreign exchange reserves had depleted to a level barely enough
to finance two weeks of essential imports, forcing the government to airlift gold reserves to pledge with the
Bank of England and the IMF.
Q2. As part of the financial sector reforms post-1991, the Narasimham Committee (1991) strongly
recommended the reduction of which of the following reserve ratios to free up bank funds for
productive lending?
A) Base Rate and MCLR
B) Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
C) Capital Adequacy Ratio (CAR)
D) Provisioning Coverage Ratio (PCR)
Answer: B
Explanation: Before the reforms, CRR and SLR were exceptionally high (SLR was around 38.5% and CRR
around 15%), essentially acting as tools for the government to borrow heavily from banks. The Narasimham
Committee recommended a progressive reduction in both to allow banks to lend more to the commercial
sector.
Q3. Under the real sector reforms of 1991, industrial licensing was abolished for almost all industries.
Currently, how many industries are still strictly reserved for the public sector?
A) Two
B) Five
C) Eight
D) Eighteen
Answer: A
Explanation: Post-reforms, the number of industries reserved exclusively for the public sector has been
progressively reduced. Currently, only two sectors are strictly reserved for the public sector: Atomic Energy
and specific railway operations (though even railways are seeing gradual private participation in some areas).
Q4. The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003 to
institutionalize financial discipline. What was its primary initial target regarding the revenue deficit?
A) Eliminate the revenue deficit completely
B) Cap the revenue deficit at 3% of GDP
C) Cap the revenue deficit at 5% of GDP
D) Eliminate the fiscal deficit entirely
Answer: A
Explanation: The original FRBM Act mandated the government to completely eliminate the revenue deficit
(meaning the government's day-to-day expenses should be met by its day-to-day revenues without borrowing)
and to bring down the fiscal deficit to 3% of GDP.
Q5. The introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 is considered a major
'second-generation' economic reform. What was its primary objective?
A) To criminalize all business failures
B) To consolidate and amend laws relating to the time-bound reorganization and insolvency resolution of
corporate persons, partnership firms, and individuals
C) To provide government bailouts to failing PSUs
D) To regulate the issuance of initial public offerings (IPOs)
Answer: B
Explanation: The IBC replaced a fragmented legal framework with a unified, time-bound mechanism to
resolve insolvencies, significantly improving the "Ease of Doing Business" and helping banks resolve Non-
Performing Assets (NPAs) faster and more efficiently.
Q6. Which committee's recommendations formed the bedrock of India's comprehensive tax reforms
post-1991, aiming to lower tax rates and widen the tax base?
A) Urjit Patel Committee
B) Raja J. Chelliah Committee
C) Bimal Jalan Committee
D) Nachiket Mor Committee
Answer: B
Explanation: The Tax Reforms Committee headed by Prof. Raja J. Chelliah (1991-93) laid out the roadmap
for reducing complex, exorbitantly high direct and indirect tax rates to improve compliance and widen the tax
base.
Q7. What major structural reform in indirect taxation was implemented in India on July 1, 2017,
effectively unifying the domestic market?
A) Value Added Tax (VAT)
B) Goods and Services Tax (GST)
C) Central Excise Act amendment
D) Direct Tax Code (DTC)
Answer: B
Explanation: The introduction of the GST subsumed a complex web of multiple indirect taxes (like excise duty,
VAT, service tax, octroi) into a single, comprehensive, destination-based tax system, embodying the idea of
"One Nation, One Tax."
Q8. The Rupee was made fully convertible on which account as part of the integration of the Indian
economy with the global economy in the 1990s?
A) Capital Account
B) Current Account
C) Both Current and Capital Accounts
D) Neither; the Rupee is strictly pegged to the US Dollar
Answer: B
Explanation: India adopted full convertibility of the Rupee on the Current Account (for trade in goods,
services, and remittances) in 1994 under Article VIII of the IMF. Capital account convertibility remains partial
and regulated by FEMA to prevent volatile "hot money" outflows.
Q9. "Disinvestment" was a key feature of the privatization reform strategy. Which government body is
currently responsible for managing the central government’s equity stakes and strategic sales in
PSUs?
A) Reserve Bank of India (RBI)
B) Securities and Exchange Board of India (SEBI)
C) Department of Investment and Public Asset Management (DIPAM)
D) Finance Commission
Answer: C
Explanation: DIPAM, operating under the Ministry of Finance, deals with all matters relating to the
management of Central Government investments in equity, including disinvestment and strategic privatization
of Central Public Sector Enterprises (CPSEs).
Q10. As a major recent reform to boost digital financial infrastructure and formalize the economy,
which system developed by NPCI processes the highest volume of retail digital payments in India?
A) RTGS (Real Time Gross Settlement)
B) NEFT (National Electronic Funds Transfer)
C) UPI (Unified Payments Interface)
D) Cheque Truncation System (CTS)
Answer: C
Explanation: UPI, launched by the National Payments Corporation of India (NPCI) in 2016, has revolutionized
the Indian economy's real-time digital payment landscape, promoting financial inclusion and formalizing
millions of micro-transactions previously done in cash.
Topic 2: Foreign Trade & Investments (Policies, FDI/FII, Trends)
Q11. Economic Growth is often distinguished from Economic Development. Which of the following
statements best captures this difference?
A) Economic growth is qualitative; economic development is quantitative.
B) Economic growth refers only to an increase in a country's real GDP, while economic development involves
qualitative improvements in the standard of living, health, and education.
C) Economic growth applies to developing nations; economic development applies to developed nations.
D) There is no difference; they are synonymous terms in macroeconomics.
Answer: B
Explanation: Economic growth is a narrow, quantitative measure (increase in national income/GDP).
Economic development is broader and qualitative, encompassing economic growth alongside improvements in
human capital, reduced poverty, and better institutional structures (measured by indices like HDI).
Q12. What is the fundamental difference between Foreign Direct Investment (FDI) and Foreign Portfolio
Investment (FPI) in India?
A) FDI is only for public sector projects; FPI is for private sector.
B) FDI involves establishing a lasting interest and control/management in a domestic enterprise, whereas FPI
is short-term investment in financial assets like stocks and bonds without management control.
C) FPI is strictly regulated by RBI, while FDI is unregulated.
D) FDI requires physical gold deposits; FPI is purely digital.
Answer: B
Explanation: FDI implies a long-term commitment and strategic interest (usually >10% equity stake), bringing
technology and management expertise. FPI (often called "hot money") is a passive investment in securities
purely for financial returns and can be withdrawn quickly.
Q13. In a significant recent update to the FDI policy, the Government of India has amended the limits
for the Space Sector. What is the maximum FDI allowed under the automatic route for manufacturing
components and systems/sub-systems for satellites?
A) 49%
B) 74%
C) 100%
D) FDI is prohibited in the space sector
Answer: C
Explanation: In early 2024, to boost domestic space capabilities, the government liberalized FDI in the Space
Sector. Up to 100% FDI under the automatic route is now permitted for manufacturing components, systems,
and sub-systems for satellites. (Limits vary for satellite manufacturing/operation and launch vehicles).
Q14. The balance of a country's exports and imports of goods (tangible items) only is officially referred
to as the:
A) Balance of Payments
B) Current Account Deficit
C) Balance of Trade (Trade Balance)
D) Capital Account Balance
Answer: C
Explanation: The Balance of Trade (BoT) specifically tracks the import and export of physical goods
(merchandise). If imports of goods exceed exports, it results in a trade deficit. The Current Account goes
further by including trade in services and unilateral transfers (remittances).
Q15. India has consistently been a global leader in receiving foreign remittances. Under the Balance of
Payments (BoP) accounting, where are inward remittances recorded?
A) Capital Account
B) Current Account (under unilateral transfers)
C) Financial Account
D) Errors and Omissions
Answer: B
Explanation: Remittances are considered "unilateral current transfers" (gifts/money sent home by workers
abroad without any expected return of goods/services). Therefore, they are recorded as positive entries in the
Current Account of the BoP.
Q16. The Foreign Trade Policy (FTP) 2023 shifted the government's approach to export promotion from
an 'incentive-based' regime to a regime based on:
A) Heavy export taxation
B) Import substitution only
C) Remission of taxes and entitlement-based frameworks
D) Direct cash subsidies for every product exported
Answer: C
Explanation: Due to WTO regulations against direct export subsidies, FTP 2023 solidifies the shift from
incentives (like the discontinued MEIS) to the remission of embedded taxes and duties (via schemes like
RoDTEP and RoSCTL) to ensure a WTO-compliant, entitlement-based ecosystem.
Q17. Which of the following is a key objective of establishing Special Economic Zones (SEZs) in India?
A) To isolate foreign workers from the domestic population
B) To generate additional economic activity, promote exports of goods/services, and attract domestic and
foreign investment
C) To bypass all environmental and labor laws of the country
D) To strictly promote agricultural farming exclusively
Answer: B
Explanation: SEZs are specific duty-free enclaves designated for export promotion, investment attraction, and
employment generation. They offer tax holidays and simplified compliance procedures to boost India's share in
global exports.
Q18. "National Treatment" is a foundational principle of international trade under the WTO. What does
it mean?
A) A country must prioritize its own domestic industries over foreign ones.
B) Imported goods and domestically-produced goods should be treated equally once the imported goods have
entered the market.
C) All nations in the world must have the exact same tariff rates.
D) Foreign investors must adopt the nationality of the host country.
Answer: B
Explanation: The National Treatment principle dictates that once foreign goods, services, or intellectual
property have entered a domestic market (after crossing the border and paying relevant customs), they must
be treated no less favorably than the equivalent domestically-produced items.
Q19. Under the WTO framework, the Agreement on Agriculture (AoA) aims to reform agricultural trade.
The Minimum Support Price (MSP) provided to farmers in India generally falls under which WTO
subsidy classification?
A) Green Box
B) Blue Box
C) Amber Box
D) Red Box
Answer: C
Explanation: MSP is considered a price-distorting, production-linked subsidy. Under the WTO's AoA, such
trade-distorting domestic support measures are classified in the "Amber Box" and are subject to reduction
commitments (De Minimis limits).
Q20. In the context of FDI in India, what does the "Automatic Route" signify?
A) The RBI automatically guarantees the returns on the investment.
B) The foreign investor requires prior approval from the respective Ministry/Department of the Government of
India.
C) The foreign investor or the Indian company does not require prior approval from the RBI or Government of
India to make the investment.
D) The investment is automatically converted into a government bond after 5 years.
Answer: C
Explanation: Under the Automatic Route, the non-resident investor or Indian company does not require any
prior approval from the Government of India. They only need to notify the RBI within a stipulated timeframe
after the investment is made.
Topic 3: International Organisations (WB, IMF, WTO, Regional Groups)
Q21. The World Bank Group is composed of five institutions. Which institution's primary mandate is to
provide zero-interest loans (credits) and grants specifically to the poorest, least developed nations?
A) International Bank for Reconstruction and Development (IBRD)
B) International Finance Corporation (IFC)
C) Multilateral Investment Guarantee Agency (MIGA)
D) International Development Association (IDA)
Answer: D
Explanation: The IDA focuses exclusively on the world's poorest countries. It offers highly concessional
financing (zero or very low-interest loans) with long repayment periods to help boost economic growth and
reduce inequalities.
Q22. The International Monetary Fund (IMF) allocates "Quotas" to its member countries. What is the
primary function of these quotas?
A) To dictate how many immigrants a country must accept annually.
B) To determine a member's maximum financial commitment, voting power, and access to IMF financing.
C) To limit the amount of goods a country can export.
D) To fix the exchange rate of the member's currency against the US Dollar.
Answer: B
Explanation: Upon joining the IMF, a country is assigned a quota based broadly on its relative position in the
world economy. Quotas are denominated in SDRs and determine the maximum amount of financial resources
a member must contribute, its voting power, and the amount of financing it can obtain.
Q23. Which organization acts as the global watchdog for combating money laundering and terrorist
financing?
A) Bank for International Settlements (BIS)
B) Financial Action Task Force (FATF)
C) Interpol
D) United Nations Security Council
Answer: B
Explanation: The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by
the G7. It sets international standards to prevent money laundering and terrorist financing, famously
maintaining "Grey" and "Black" lists of non-compliant jurisdictions.
Q24. In the event a member nation faces a severe Balance of Payments (BoP) crisis and depleting forex
reserves, which international organization serves as the "lender of last resort"?
A) The World Bank
B) The World Trade Organization (WTO)
C) The International Monetary Fund (IMF)
D) The Asian Development Bank (ADB)
Answer: C
Explanation: While the World Bank focuses on long-term developmental projects, the IMF's core mandate is
to ensure the stability of the international monetary system. It acts as a lender of last resort to countries facing
acute balance of payments problems, usually attached with macroeconomic conditionality.
Q25. Which regional intergovernmental organization comprises Bangladesh, Bhutan, India, Myanmar,
Nepal, Sri Lanka, and Thailand, focusing heavily on regional cooperation in the Bay of Bengal region?
A) SAARC
B) ASEAN
C) BIMSTEC
D) BRICS
Answer: C
Explanation: BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation)
connects South Asian and Southeast Asian countries geographically situated around the Bay of Bengal. It has
gained prominence in India's foreign policy ("Act East" and "Neighborhood First") as SAARC has largely
stalled.
Q26. GATS is a critical treaty under the World Trade Organization (WTO). What does GATS stand for?
A) General Agreement on Tariffs and Subsidies
B) General Agreement on Trade in Services
C) Global Alliance for Technological Standardization
D) General Association of Trade Systems
Answer: B
Explanation: The General Agreement on Trade in Services (GATS) is a WTO treaty that extends the
multilateral trading system to the service sector (like banking, telecommunications, tourism), just as GATT
does for trade in physical goods.
Q27. The New Development Bank (NDB), established to mobilize resources for infrastructure and
sustainable development projects, is a multilateral bank founded by which group of countries?
A) The G7
B) The European Union
C) BRICS (Brazil, Russia, India, China, South Africa)
D) ASEAN
Answer: C
Explanation: The NDB, headquartered in Shanghai, was established by the BRICS states in 2014. It aims to
finance infrastructure and sustainable development projects in BRICS and other emerging economies, offering
an alternative to the Western-dominated World Bank and IMF.
Q28. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement under the WTO
covers which of the following areas?
A) Copyrights, Trademarks, and Patents
B) Import quotas and Tariffs
C) Customs valuation and pre-shipment inspections
D) Phytosanitary measures for food safety
Answer: A
Explanation: The TRIPS agreement sets minimum standards of protection for intellectual property rights,
including copyrights, trademarks, geographical indications, industrial designs, patents, and layout designs of
integrated circuits among WTO members.
Q29. What is the fundamental difference between the roles of the Bank for International Settlements
(BIS) and the World Bank?
A) BIS lends to private corporations; the World Bank lends to central banks.
B) BIS serves as a "bank for central banks" fostering global monetary/financial stability; the World Bank
focuses on long-term economic development and poverty reduction.
C) BIS regulates international trade; the World Bank regulates currency exchange rates.
D) There is no difference; BIS is a subsidiary of the World Bank.
Answer: B
Explanation: The Basel-based BIS facilitates cooperation among central banks (creating banking standards
like the Basel Accords). The Washington-based World Bank is a developmental institution providing loans and
grants to governments of poorer countries for infrastructure and social projects.
Q30. In WTO terminology, what is a "Tariff Binding"?
A) A commitment not to increase a rate of duty beyond an agreed maximum level.
B) A physical tape used by customs to bind imported goods.
C) The absolute abolition of all tariffs between two specific countries.
D) A tax placed exclusively on bound books and printed media.
Answer: A
Explanation: When a WTO member agrees to legally bind a tariff rate, it commits not to raise the tariff on that
product above that specific rate. These "bound rates" provide security and predictability for traders.
Topic 4: Climate Change & SDGs (Sustainable Dev, Progress, CSR)
Q31. The Reserve Bank of India (RBI) recently issued a framework for "Green Deposits". What is the
primary purpose of a Green Deposit?
A) A deposit account that does not issue paper statements.
B) An interest-free deposit accepted by banks strictly for the agricultural sector.
C) An interest-bearing deposit received by regulated entities where the proceeds are earmarked for allocation
towards green finance and eco-friendly projects.
D) A deposit scheme exclusively for purchasing agricultural land.
Answer: C
Explanation: To foster green finance, the RBI's framework ensures that funds raised through "Green
Deposits" are transparently utilized by banks and NBFCs only for eligible green activities (like renewable
energy, clean transportation, green buildings) to combat climate change.
Q32. In the corporate sector, ESG has become a critical metric for sustainability. What does
"Governance" refer to in the ESG framework?
A) The company's carbon footprint and waste management.
B) The company's relationship with its employees and local communities.
C) The system of rules, practices, and processes by which a firm is directed and controlled, including board
diversity, executive pay, and anti-corruption measures.
D) The government regulations imposed on the company.
Answer: C
Explanation: ESG stands for Environmental, Social, and Governance. "Governance" assesses how a
company is managed from the top, focusing on board composition, shareholder rights, transparency, auditing,
and business ethics.
Q33. NITI Aayog releases the "SDG India Index" to track the progress of States and UTs. This index is
aligned with the global Agenda 2030 consisting of how many Sustainable Development Goals?
A) 8
B) 10
C) 15
D) 17
Answer: D
Explanation: The United Nations Agenda 2030 comprises 17 Sustainable Development Goals (SDGs). NITI
Aayog's SDG India Index tracks the progress of Indian States and Union Territories across these 17 goals,
fostering competitive federalism to achieve them.
Q34. India, along with France, launched the International Solar Alliance (ISA) during COP21 in Paris.
Where is the headquarters (Secretariat) of the ISA located?
A) Paris, France
B) New Delhi, India
C) Gurugram, India
D) Geneva, Switzerland
Answer: C
Explanation: The International Solar Alliance (ISA) is a treaty-based intergovernmental organization aiming to
mobilize investments for solar energy solutions. Its headquarters is located at the National Institute of Solar
Energy campus in Gurugram, Haryana, India.
Q35. SDG 8 is highly relevant to India's macroeconomic challenges. What does SDG 8 primarily
advocate?
A) Zero Hunger
B) Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent
work for all
C) Take urgent action to combat climate change and its impacts
D) Achieve gender equality and empower all women and girls
Answer: B
Explanation: SDG 8 explicitly focuses on decent work and economic growth. For a populous country like India
experiencing shifts in labor forces, addressing jobless growth and providing decent employment is central to
achieving SDG 8.
Q36. The Ministry of Power recently established the framework for the Carbon Credit Trading Scheme
(CCTS) in India. What is the fundamental mechanism of this scheme?
A) Taxing individuals based on their personal vehicle usage.
B) Banning the emission of all greenhouse gases immediately.
C) Creating a domestic market where entities can buy and sell carbon credit certificates to meet their emission
reduction targets efficiently.
D) Issuing free coal to rural areas to offset their carbon footprint.
Answer: C
Explanation: The CCTS aims to develop the Indian Carbon Market (ICM). Obligated entities must achieve set
GHG emission targets. Those who reduce emissions below their target earn Carbon Credit Certificates
(CCCs), which they can sell in the market to entities that fail to meet their targets.
Q37. Which of the following is NOT one of the eight original national missions under India's National
Action Plan on Climate Change (NAPCC)?
A) National Solar Mission
B) National Mission for Enhanced Energy Efficiency
C) National Mission for a Green India
D) National Mission for Deep Ocean Mining
Answer: D
Explanation: The Deep Ocean Mission is a separate initiative. The 8 original NAPCC missions focus on Solar
Energy, Enhanced Energy Efficiency, Sustainable Habitat, Water, Sustaining the Himalayan Ecosystem, Green
India, Sustainable Agriculture, and Strategic Knowledge for Climate Change.
Q38. Under the Sovereign Green Bonds framework, the Government of India issues bonds to fund
green projects. Who primarily manages the issuance and secondary market operations of these
bonds?
A) Ministry of Environment, Forest and Climate Change
B) SEBI
C) Reserve Bank of India (RBI)
D) NITI Aayog
Answer: C
Explanation: Sovereign Green Bonds are part of the government's overall market borrowings. As the debt
manager to the government, the Reserve Bank of India (RBI) manages the auction, issuance, and secondary
market trading framework for these bonds.
Q39. According to Section 135 of the Companies Act 2013, if a company fails to spend its mandated 2%
CSR fund in a financial year on an ongoing project, what must it do with the unspent amount?
A) Retain it in the company's general profit account for the next year.
B) Distribute it as a bonus to employees.
C) Transfer it to a special "Unspent CSR Account" within 30 days of the end of the financial year and spend it
within the next three financial years.
D) Return the money to the shareholders as a dividend.
Answer: C
Explanation: Recent amendments to CSR rules ensure accountability. Unspent funds relating to an ongoing
project must be moved to a scheduled bank "Unspent CSR Account" and utilized within three years. If not tied
to an ongoing project, it must be transferred to a government fund (like PM CARES or Clean Ganga Fund)
within 6 months.
Q40. The concept of "Greenwashing" is a significant risk in sustainable finance. What does it mean?
A) Cleaning physical currency notes with eco-friendly chemicals.
B) A deceptive marketing practice where a company or financial product is falsely claimed to be
environmentally friendly or sustainable.
C) The process of planting trees around a factory to absorb smoke.
D) Funding only agricultural projects in rural areas.
Answer: B
Explanation: Greenwashing refers to misleading practices by institutions to present an environmentally
responsible public image or falsely label financial products (like mutual funds or bonds) as "green" without
actually adhering to substantive sustainability standards.
Topic 5: Macro-Issues (Poverty, Inequality, Jobless Growth, Pandemic Impacts)
Q41. A macroeconomic phenomenon where an economy experiences robust GDP growth, but this
growth fails to generate a proportional number of new employment opportunities, is known as:
A) Stagflation
B) Disguised Unemployment
C) Jobless Growth
D) Demographic Trap
Answer: C
Explanation: Jobless growth is a major concern in modern economies like India. It occurs when economic
expansion is driven by capital-intensive industries or highly automated sectors (like IT and high-end services),
increasing overall GDP without absorbing the expanding labor force.
Q42. The Periodic Labour Force Survey (PLFS) is conducted by the National Statistical Office (NSO).
Which metric from the PLFS represents the percentage of the population that is either working or
actively seeking work?
A) Unemployment Rate (UR)
B) Worker Population Ratio (WPR)
C) Labour Force Participation Rate (LFPR)
D) Disguised Employment Ratio (DER)
Answer: C
Explanation: LFPR (Labour Force Participation Rate) measures the active workforce. It is defined as the
percentage of persons in the labor force (i.e., those who are working + those who are seeking/available for
work) in the total population.
Q43. Which of the following visual tools is used in economics to graphically represent the distribution
of income or wealth within an economy, illustrating the degree of inequality?
A) Phillips Curve
B) Lorenz Curve
C) Laffer Curve
D) Kuznets Curve
Answer: B
Explanation: The Lorenz Curve is a graphical representation of income/wealth distribution. The further the
curve sags away from the straight diagonal line of "perfect equality," the greater the degree of inequality in the
society. The Gini coefficient is mathematically derived from the Lorenz Curve.
Q44. The global Multidimensional Poverty Index (MPI) assesses poverty beyond just income. Which of
the following are the three core dimensions measured by the MPI?
A) Income, Savings, and Investment
B) Health, Education, and Standard of Living
C) Food Security, Employment, and Housing
D) Agriculture, Manufacturing, and Services
Answer: B
Explanation: The MPI (published by UNDP and OPHI, and adapted by NITI Aayog for India) views poverty as
multidimensional. It uses 10 (or 12 in India's case) indicators equally weighted across three broad dimensions:
Health (nutrition, mortality), Education (years of schooling, attendance), and Standard of Living (cooking fuel,
sanitation, drinking water, electricity, housing, assets).
Q45. Following the massive reverse migration during the COVID-19 pandemic, the Government of India
relied heavily on which scheme to provide an immediate safety net and wage employment in rural
areas?
A) PM SVANidhi
B) Make in India
C) MGNREGA
D) PM KISAN
Answer: C
Explanation: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) acted as a
crucial shock absorber during the pandemic. The government significantly increased its budgetary allocation to
provide 100 days of guaranteed wage employment to the millions of migrant workers who returned to their
villages.
Q46. The economic recovery from the COVID-19 pandemic in India and globally has often been
described as "K-shaped". What does a K-shaped recovery imply?
A) A rapid drop followed by an equally rapid overall recovery.
B) An uneven recovery where certain sectors or wealth groups bounce back rapidly and grow, while others
continue to stagnate or decline.
C) A prolonged period of stagnation at the bottom before any recovery begins.
D) A double-dip recession.
Answer: B
Explanation: In a K-shaped recovery, the paths of different parts of the economy diverge (like the arms of a
"K"). For example, large corporations, technology sectors, and high-income earners may recover quickly, while
MSMEs, the unorganized sector, and low-income workers continue to face severe financial distress.
Q47. Migration of labor is largely driven by "Push" and "Pull" factors. Which of the following is an
example of a "Push" factor?
A) Availability of better healthcare in cities
B) Higher wages in urban industrial hubs
C) Severe drought and lack of employment in a rural village
D) Improved educational institutions in metropolises
Answer: C
Explanation: Push factors are negative conditions at the place of origin that force people to leave (e.g.,
poverty, drought, lack of jobs, conflict). Pull factors are positive conditions at the destination that attract people
(e.g., better wages, education, healthcare).
Q48. To combat food insecurity exacerbated by the pandemic, the Government of India launched the
PM Garib Kalyan Anna Yojana (PMGKAY). What is the primary benefit provided under this scheme?
A) Direct cash transfer of Rs. 6000 per year to farmers.
B) Provision of 5 kg of free foodgrains per person per month to eligible ration card holders.
C) Subsidized cooking gas cylinders.
D) Free agricultural seeds to BPL families.
Answer: B
Explanation: Under PMGKAY, initially launched during the COVID-19 crisis and recently extended for another
5 years (from Jan 2024), the government provides 5 kg of free foodgrains (rice/wheat) per person per month to
over 80 crore beneficiaries covered under the National Food Security Act (NFSA).
Q49. "Financial Inclusion" is considered a structural remedy for poverty and inequality. The
government's "JAM Trinity" has been pivotal in this. What does JAM stand for?
A) Jan-Dhan, Aadhaar, Mobile
B) Justice, Agriculture, Manufacturing
C) Joint Accounts for Minorities
D) Job Allocation Mechanism
Answer: A
Explanation: The JAM Trinity refers to the integration of Jan-Dhan Bank Accounts, Aadhaar identity numbers,
and Mobile numbers. This architecture allows the government to directly transfer subsidies and benefits (DBT)
to the poor, plugging massive leakages and eliminating middlemen.
Q50. The Gini Coefficient is a value between 0 and 1 used to measure inequality. If an economy's Gini
Coefficient is exactly 0, it signifies:?
A) Absolute poverty across the entire population.
B) Perfect income equality, where everyone has the exact same income.
C) Perfect inequality, where one person holds all the income.
D) That the economy is in a state of stagflation.
Answer: B
Explanation: A Gini coefficient of 0 represents perfect equality, meaning every individual in the society earns
exactly the same income. A coefficient of 1 (or 100%) represents perfect inequality, where one single individual
holds all the wealth/income, and everyone else has zero.
 JAIIB Paper 1: Indian Economy & Indian Financial System (IE & IFS)
Module A: Indian Economic Architecture - Practice Set 3 (50 Questions)
Q1. According to the structural classification of the Indian Economy, which of the following falls
strictly under the "Quinary Sector"?
A) Software development and IT consulting
B) High-level decision-making by top corporate executives and government officials
C) Manufacturing of automobiles
D) Healthcare services provided by hospitals
Answer: B
Explanation: The Quinary sector represents the highest level of decision-making in an economy. It includes
top executives or officials in government, science, universities, non-profit organizations, healthcare, and the
media. The Quaternary sector (Option A) involves knowledge-based activities like IT and R&D.
Q2. Which Five-Year Plan in India is primarily associated with the explicit objective of "Garibi Hatao"
(Poverty Alleviation) and attaining self-reliance?
A) Third Five-Year Plan
B) Fourth Five-Year Plan
C) Fifth Five-Year Plan
D) Sixth Five-Year Plan
Answer: C
Explanation: The Fifth Five-Year Plan (1974-1978), drafted by D.P. Dhar, laid major stress on "Garibi Hatao"
(removal of poverty) and attaining self-reliance. It was later terminated by the Janata Party government in
1978.
Q3. NITI Aayog operates through various specialized hubs. Which hub is responsible for sharing best
practices and facilitating the exchange of knowledge between the Center and States?
A) Team India Hub
B) Knowledge and Innovation Hub
C) Cooperative Federalism Hub
D) Strategic Planning Hub
Answer: B
Explanation: NITI Aayog functions primarily through two core hubs: The 'Team India Hub', which leads the
engagement of states with the Central government, and the 'Knowledge and Innovation Hub', which builds
NITI's think-tank capabilities and shares best practices.
Q4. The PM Vishwakarma scheme was recently launched to support traditional artisans and
craftspeople. What is the concessional interest rate on collateral-free enterprise development loans
provided under this scheme?
A) 4%
B) 5%
C) 7%
D) 9%
Answer: B
Explanation: Under the PM Vishwakarma scheme (launched in 2023), traditional artisans are provided
collateral-free enterprise development loans up to Rs. 3 lakhs in two tranches. These loans are offered at a
highly concessional interest rate of 5%, with the Ministry of MSME providing an interest subvention of 8%.
Q5. The Trade Receivables Discounting System (TReDS) is an institutional mechanism set up to
facilitate the financing of trade receivables of MSMEs. Who regulates the TReDS platform?
A) Ministry of MSME
B) SIDBI
C) Reserve Bank of India (RBI)
D) SEBI
Answer: C
Explanation: TReDS is regulated by the Reserve Bank of India (RBI) under the Payment and Settlement
Systems Act, 2007. It provides a platform for MSMEs to auction their trade receivables to multiple financiers,
thereby addressing their working capital issues.
Q6. What is the revised maximum loan amount permissible under the PM SVANidhi scheme for street
vendors in their third tranche, assuming timely repayment of earlier tranches?
A) Rs. 10,000
B) Rs. 20,000
C) Rs. 50,000
D) Rs. 1,00,000
Answer: C
Explanation: PM SVANidhi provides micro-credit to street vendors. It starts with an initial working capital loan
of up to Rs. 10,000. Upon timely repayment, vendors can access a second tranche of Rs. 20,000, and
eventually a third tranche of up to Rs. 50,000.
Q7. For the purpose of Priority Sector Lending (PSL), what is the target set for "Micro Enterprises" for
all domestic Scheduled Commercial Banks (SCBs) and foreign banks with 20 or more branches?
A) 5% of ANBC
B) 7.5% of ANBC
C) 10% of ANBC
D) 12% of ANBC
Answer: B
Explanation: Out of the overall PSL targets, domestic SCBs and foreign banks with 20 or more branches have
a specific sub-target to lend at least 7.5% of their Adjusted Net Bank Credit (ANBC) to Micro Enterprises.
Q8. Under the revised Priority Sector Lending (PSL) guidelines, lending to Start-ups (as defined by the
Ministry of Commerce and Industry) is eligible for classification under the priority sector up to a limit
of:
A) Rs. 10 crore
B) Rs. 25 crore
C) Rs. 50 crore
D) Rs. 100 crore
Answer: C
Explanation: To boost the start-up ecosystem, the RBI included loans to start-ups under the PSL umbrella.
Bank loans up to Rs. 50 crore to eligible start-ups (that are not engaged in agriculture or MSME directly, as
they have separate limits) qualify as Priority Sector Lending.
Q9. Which of the following portals replaced the earlier Udyog Aadhaar Memorandum (UAM) for the
official registration of MSMEs in India?
A) CHAMPIONS Portal
B) MSME Samadhaan
C) Udyam Registration Portal
D) e-Shram Portal
Answer: C
Explanation: Effective July 1, 2020, the Udyam Registration Portal replaced the UAM. It is a paperless, zero-
cost portal based solely on Aadhaar, which automatically pulls investment and export data linked to the PAN
and GSTIN from government databases.
Q10. Export credit extended by domestic scheduled commercial banks is eligible for Priority Sector
Lending (PSL) classification subject to a maximum of what percentage of ANBC?
A) 2%
B) 5%
C) 10%
D) 15%
Answer: A
Explanation: For domestic banks and foreign banks with 20 or more branches, export credit is eligible for PSL
classification up to 2% of ANBC. (For foreign banks with less than 20 branches, export credit can be up to 32%
of ANBC).
Q11. The National Bank for Financing Infrastructure and Development (NaBFID) was established as a
Development Financial Institution (DFI) to support infrastructure funding. It was set up with an initial
authorized share capital of:
A) Rs. 10,000 Crore
B) Rs. 20,000 Crore
C) Rs. 50,000 Crore
D) Rs. 1,00,000 Crore
Answer: D
Explanation: NaBFID was set up in 2021 as a principal DFI for infrastructure financing with an authorized
share capital of Rs. 1 lakh crore. Its goal is to provide long-term patient capital for infrastructure projects,
especially under the National Infrastructure Pipeline (NIP).
Q12. The PM Gati Shakti National Master Plan is driven by how many "engines" or modes of transport?
A) Four
B) Five
C) Seven
D) Nine
Answer: C
Explanation: The PM Gati Shakti Master Plan is driven by 7 engines: Roads, Railways, Airports, Ports, Mass
Transport, Waterways, and Logistics Infrastructure.
Q13. In India, a Real Estate Investment Trust (REIT) requires a minimum of what percentage of its value
to be invested in completed, rent-generating properties?
A) 50%
B) 60%
C) 80%
D) 90%
Answer: C
Explanation: To protect investors and ensure steady dividend income, SEBI mandates that REITs must invest
a minimum of 80% of their total asset value in completed, rent/income-generating properties. Only up to 20%
can be invested in under-construction projects, equity, or debt.
Q14. The "Ayushman Bharat" scheme, a major pillar of India's social infrastructure, comprises two
inter-related components: Health and Wellness Centres (HWCs) and:
A) Pradhan Mantri Suraksha Bima Yojana (PMSBY)
B) Pradhan Mantri Jan Arogya Yojana (PM-JAY)
C) Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
D) Pradhan Mantri Vaya Vandana Yojana (PMVVY)
Answer: B
Explanation: Ayushman Bharat has two core components: 1) Creating 1.5 lakh Health and Wellness Centres
(now renamed Ayushman Arogya Mandirs) for primary care, and 2) PM-JAY, which provides health insurance
cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization.
Q15. Foreign Direct Investment (FDI) from countries that share a land border with India is permitted
only through:
A) The Automatic Route
B) The Government Approval Route
C) Special Economic Zones (SEZs)
D) Foreign Institutional Investors (FIIs)
Answer: B
Explanation: In a major policy shift (Press Note 3 of 2020), the Indian government mandated that any FDI
from countries sharing a land border with India (e.g., China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan)
must require prior Government approval to curb opportunistic takeovers of domestic firms.
Q16. Under the Foreign Trade Policy (FTP) 2023, the 'Towns of Export Excellence' (TEE) initiative
provides targeted support. How many new towns were added to the TEE list in FTP 2023?
A) Two
B) Four
C) Seven
D) Ten
Answer: B
Explanation: FTP 2023 added four new towns of export excellence: Faridabad (Apparel), Moradabad
(Handicrafts), Mirzapur (Handmade Carpets), and Varanasi (Handloom & Handicrafts), bringing the total
number of TEEs to 43.
Q17. Which of the following schemes allows duty-free import of capital goods required for the
production of export products?
A) Remission of Duties and Taxes on Exported Products (RoDTEP)
B) Export Promotion Capital Goods (EPCG) Scheme
C) Advance Authorisation Scheme
D) Service Exports from India Scheme (SEIS)
Answer: B
Explanation: The EPCG scheme allows the import of capital goods (machinery, equipment) at zero customs
duty, subject to an export obligation equivalent to 6 times the duty saved, to be fulfilled within 6 years from the
authorization date.
Q18. The "RoDTEP" scheme, introduced to boost Indian exports, replaced which earlier scheme that
was found to be non-compliant with WTO norms?
A) Advance Authorisation
B) Merchandise Exports from India Scheme (MEIS)
C) EPCG
D) Special Economic Zone exemptions
Answer: B
Explanation: The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme replaced MEIS.
RoDTEP is designed to be WTO-compliant by strictly reimbursing embedded un-refunded central, state, and
local taxes/duties, rather than providing direct export subsidies.
Q19. Under the latest FTP 2023, what is the value limit per consignment for exports made through
courier/e-commerce platforms?
A) Rs. 1 Lakh
B) Rs. 5 Lakh
C) Rs. 10 Lakh
D) Rs. 20 Lakh
Answer: C
Explanation: Recognizing the massive potential of cross-border e-commerce, the FTP 2023 increased the
value limit for exports through courier and postal services from Rs. 5 Lakh to Rs. 10 Lakh per consignment.
Q20. When an Indian company borrows funds in foreign currency from non-resident entities for
commercial purposes, it is termed as:
A) Foreign Direct Investment (FDI)
B) External Commercial Borrowings (ECB)
C) American Depository Receipts (ADR)
D) Foreign Portfolio Investment (FPI)
Answer: B
Explanation: External Commercial Borrowings (ECBs) are commercial loans raised by eligible resident
entities from recognized non-resident entities. They must conform to parameters such as minimum maturity,
permitted and non-permitted end-uses, and maximum all-in-cost ceilings prescribed by the RBI.
Q21. The Special Drawing Rights (SDR) basket of the International Monetary Fund (IMF) consists of
how many major international currencies?
A) Three
B) Four
C) Five
D) Six
Answer: C
Explanation: The SDR basket currently consists of five major currencies: the US Dollar, the Euro, the Chinese
Renminbi (Yuan), the Japanese Yen, and the British Pound Sterling.
Q22. In the context of WTO's agricultural agreement, subsidies that do not distort trade (or cause
minimal distortion), such as pest control, research, and environmental protection programs, are
classified under the:
A) Amber Box
B) Blue Box
C) Green Box
D) Red Box
Answer: C
Explanation: The WTO categorizes agricultural subsidies into "boxes." Green Box subsidies are considered
non-trade distorting and are allowed without limits. Amber Box subsidies distort trade (like MSP) and are
subject to reduction limits. Blue Box is the "amber box with conditions" (production-limiting subsidies).
Q23. Which organization is responsible for settling investment disputes between international
investors and host states, though India is NOT a member of it?
A) International Court of Justice (ICJ)
B) Multilateral Investment Guarantee Agency (MIGA)
C) International Centre for Settlement of Investment Disputes (ICSID)
D) World Trade Organization (WTO)
Answer: C
Explanation: ICSID is the arm of the World Bank Group that arbitrates international investment disputes. India
has notably chosen not to join ICSID, arguing that its convention is biased towards developed nations and
international investors.
Q24. India’s Sovereign Green Bonds Framework requires that the proceeds of the bonds must be used
only for 'eligible green expenditures'. Which of the following would NOT qualify as an eligible green
expenditure?
A) Building a mega solar power plant
B) Afforestation and biodiversity conservation projects
C) Extracting clean coal for power generation
D) Establishing electric vehicle (EV) public charging infrastructure
Answer: C
Explanation: The Sovereign Green Bonds Framework explicitly lists "Exclusions." Fossil fuels, including
"clean coal," nuclear power generation, and alcohol/tobacco related sectors are entirely excluded from
receiving green bond funding.
Q25. Sustainable Development Goal (SDG) 13 is dedicated to:
A) Decent Work and Economic Growth
B) Climate Action
C) Life Below Water
D) Peace, Justice and Strong Institutions
Answer: B
Explanation: SDG 13 is "Climate Action," which urges member states to take urgent action to combat climate
change and its impacts by regulating emissions and promoting developments in renewable energy.
Q26. Which of the following best defines a "Brownfield" Foreign Direct Investment?
A) Establishing a completely new manufacturing plant on agricultural land.
B) Investing exclusively in eco-friendly agricultural technologies.
C) Purchasing or leasing an existing production facility to launch a new production activity.
D) Raising money via the issuance of sovereign wealth funds.
Answer: C
Explanation: Brownfield FDI involves a company or government entity purchasing or leasing existing
production facilities in a foreign country (e.g., acquiring an existing factory). Greenfield FDI is building new
facilities from the ground up.
Q27. During the pre-1991 era, what was the primary feature of the "Licence Raj" in the Indian Economic
Architecture?
A) Free trade agreements with Western nations
B) The requirement of elaborate government licenses and red tape to set up and run businesses
C) Complete privatization of the banking sector
D) Universal basic income for all citizens
Answer: B
Explanation: The "Licence Raj" refers to the highly bureaucratic system of rules, regulations, and quotas that
existed in India before 1991. Businesses needed dozens of approvals and licenses from the government to
operate, expand, or even produce specific quantities of goods.
Q28. In 2017, the Government of India merged the Railway Budget with the General Budget. For how
many years were these budgets presented separately prior to this merger?
A) 50 years
B) 75 years
C) 92 years
D) 105 years
Answer: C
Explanation: The Railway Budget was separated from the General Budget in 1924 on the recommendation of
the Acworth Committee. This practice lasted for 92 years until it was scrapped in 2017 to provide a holistic
view of the government's financial position.
Q29. Which index is used by the Reserve Bank of India (RBI) as the primary anchor to monitor and
target inflation?
A) Wholesale Price Index (WPI)
B) Consumer Price Index (CPI) - Combined
C) Index of Industrial Production (IIP)
D) Producer Price Index (PPI)
Answer: B
Explanation: In 2014, based on the Urjit Patel Committee recommendations, the RBI adopted the Consumer
Price Index (CPI - Combined) as the key measure of inflation for formulating its monetary policy, shifting away
from the previously used WPI.
Q30. Under the current monetary policy framework, what is the flexible inflation target set by the
Government of India for the RBI?
A) 2% with a tolerance band of +/- 1%
B) 4% with a tolerance band of +/- 2%
C) 5% with a tolerance band of +/- 1%
D) 6% with a tolerance band of +/- 2%
Answer: B
Explanation: Under Section 45ZA of the RBI Act, 1934, the Central Government, in consultation with the RBI,
sets the inflation target. Currently, it is set at 4% with an upper tolerance limit of 6% and a lower tolerance limit
of 2%.
Q31. India’s demographic dividend refers to:
A) The extra dividends paid by Indian PSUs to the government.
B) The economic growth potential resulting from a high proportion of working-age population relative to
dependents.
C) The increase in the elderly population requiring higher social security.
D) The financial bonus provided to families with a single female child.
Answer: B
Explanation: Demographic dividend is the economic growth potential that can result from shifts in a
population's age structure, specifically when the share of the working-age population (15 to 64 years) is larger
than the non-working-age (dependent) population.
Q32. In the banking sector, what does "Financial Inclusion" primarily aim to achieve?
A) Eliminating cash transactions entirely from the economy.
B) Providing high-net-worth individuals with tailored global investment products.
C) Ensuring access to useful and affordable financial products and services for vulnerable and low-income
groups.
D) Merging all regional rural banks into a single national bank.
Answer: C
Explanation: Financial inclusion is the delivery of banking services at an affordable cost to the vast sections of
disadvantaged and low-income groups (e.g., via PMJDY, basic savings bank deposit accounts, and micro-
insurance).
Q33. Which phase of the demographic transition model is India currently traversing?
A) First stage: High birth rate, high death rate
B) Second stage: High birth rate, falling death rate
C) Third stage: Declining birth rate, low death rate
D) Fourth stage: Low birth rate, low death rate (aging population)
Answer: C
Explanation: India is currently in the third stage of demographic transition. Health and medical facilities have
drastically lowered the death rate, while birth rates are also steadily declining, leading to a bulge in the
working-age population (the demographic dividend).
Q34. The concept of "Fiscal Deficit" in the Indian economic architecture implies:
A) The difference between the country’s total exports and total imports.
B) The total borrowings required by the government to bridge the gap between its total expenditure and total
non-debt creating receipts.
C) The loss incurred by all Public Sector Undertakings combined.
D) The shortfall in foreign exchange reserves.
Answer: B
Explanation: Fiscal deficit is a critical indicator of the government's financial health. It represents the total
amount of borrowings the government needs to meet its expenditures after factoring in its revenue receipts and
non-debt capital receipts (like loan recoveries).
Q35. Under the Companies Act 2013, the CSR provisions mandate that companies with a minimum net
worth of ________ must constitute a CSR committee.
A) Rs. 100 Crore
B) Rs. 500 Crore
C) Rs. 1000 Crore
D) Rs. 5000 Crore
Answer: B
Explanation: Section 135 applies to companies with a Net Worth of Rs. 500 crore or more, OR a Turnover of
Rs. 1000 crore or more, OR a Net Profit of Rs. 5 crore or more during the immediately preceding financial year.
Q36. The RBI permits invoicing and payments for international trade in the Indian Rupee (INR). To
facilitate this, foreign banks must open which specific type of account with authorized dealer banks in
India?
A) Nostro Account
B) Loro Account
C) Special Vostro Rupee Account (SVRA)
D) Foreign Currency Non-Resident (FCNR) Account
Answer: C
Explanation: To promote the growth of global trade with emphasis on exports from India and to support the
increasing interest of the global trading community in INR, the RBI introduced a mechanism allowing trade
settlement in Rupees via Special Vostro Rupee Accounts (SVRA).
Q37. Which sector is the largest consumer of fresh water in the Indian Economy?
A) Domestic consumption (Drinking/Sanitation)
B) Industrial manufacturing
C) Agriculture
D) Power generation
Answer: C
Explanation: Agriculture is by far the largest consumer of fresh water in India, accounting for nearly 85-90% of
total water usage, primarily due to the heavy reliance on irrigation for water-intensive crops.
Q38. "Disinvestment" in the context of Indian economic policy refers to:
A) The RBI selling government securities in the open market to absorb liquidity.
B) The government selling its equity stake in Public Sector Undertakings (PSUs) to private entities or the
public.
C) Foreign investors withdrawing their capital from the Indian stock market.
D) Banks writing off non-performing assets (NPAs).
Answer: B
Explanation: Disinvestment is a policy tool used by the government to liquidate its assets, specifically by
selling its shares/equity in Central Public Sector Enterprises (CPSEs). When disinvestment transfers majority
ownership and management control to a private entity, it is called privatization.
Q39. What is the primary function of the "Finance Commission" constituted every five years by the
President of India?
A) To finalize the Five-Year economic plans.
B) To recommend the distribution of the net proceeds of taxes between the Center and the States.
C) To determine the Repo Rate and monetary policy stance.
D) To audit the accounts of the Central Government.
Answer: B
Explanation: Under Article 280 of the Constitution, the Finance Commission's core duty is to evaluate the
state of finances and recommend the vertical and horizontal sharing of central taxes between the Union and
the States.
Q40. "Tax Terrorism" is a term often used in Indian economic discourse. What does it generally refer
to?
A) Terrorist organizations funding their operations through tax evasion.
B) A highly aggressive and adversarial approach by tax authorities to maximize revenue collection, often
involving retrospective taxation.
C) A public boycott of paying income tax.
D) The levying of tax on essential life-saving drugs.
Answer: B
Explanation: Tax terrorism refers to excessive regulatory overreach, harassment, and aggressive
interpretation of tax laws (such as the infamous retrospective taxation cases) by tax officials, which creates an
uncertain and hostile environment for businesses and investors.
Q41. Which of the following committees recommended the abolition of the licensing regime for most
industries in 1991?
A) Narasimham Committee
B) Rangarajan Committee
C) Chelliah Committee
D) The Industrial Policy statement of 1991 itself explicitly enacted this, driven by the PV Narasimha Rao
government.
Answer: D
Explanation: While various committees worked on specific sectors (Chelliah on tax, Narasimham on banking),
the massive stroke of abolishing the industrial licensing regime (Licence Raj) for all but 18 (now reduced to 5)
industries was directly enacted via the New Industrial Policy Statement of July 1991.
Q42. In India, foreign investment in a company is classified as Foreign Direct Investment (FDI) rather
than Foreign Portfolio Investment (FPI) if the investor holds:
A) 10% or more of the post-issue paid-up equity capital on a fully diluted basis.
B) Less than 10% of the equity capital.
C) Only corporate debt instruments.
D) Only government securities.
Answer: A
Explanation: As per the Arvind Mayaram Committee recommendations adopted by SEBI/RBI, any foreign
investment of 10% or more in a listed Indian company is treated as FDI, representing a lasting interest and
control. Investment below 10% is classified as FPI.
Q43. Which of the following statements is TRUE regarding "Core Inflation"?
A) It measures inflation excluding highly volatile components like food and energy prices.
B) It only measures the inflation of the eight core industries.
C) It is always higher than headline inflation.
D) It includes all items in the Consumer Price Index basket.
Answer: A
Explanation: Headline inflation includes all items in a price index. Core inflation strips out the prices of highly
volatile items, specifically food and fuel/energy, to provide a clearer picture of the underlying, long-term
inflation trends in the economy.
Q44. The Ministry of Corporate Affairs (MCA) launched "MCA21". What is it?
A) A scheme providing 21% subsidy to rural entrepreneurs.
B) An e-Governance initiative for secure and paperless corporate compliance and services.
C) A tax holiday scheme for the first 21 months of a startup's life.
D) An initiative to list 21 major PSUs on foreign stock exchanges.
Answer: B
Explanation: MCA21 is a flagship e-governance project of the Ministry of Corporate Affairs. It was launched to
fully automate all processes related to the enforcement and compliance of the legal requirements under the
Companies Act, making it paperless and efficient.
Q45. The "Hindu Rate of Growth" observed in India prior to the 1990s averaged around:
A) 1% to 2%
B) 3.5%
C) 6% to 7%
D) 9%
Answer: B
Explanation: As defined by economist Raj Krishna, the Hindu Rate of Growth was the low annual growth rate
of the Indian economy, which stagnated around 3.5% from the 1950s to the 1980s, while per capita income
grew by a mere 1.3%.
Q46. The World Bank Group's "Ease of Doing Business" report was discontinued in 2021 due to data
irregularities. What was India's final rank in its last published report (Doing Business 2020)?
A) 142
B) 100
C) 63
D) 45
Answer: C
Explanation: India made significant strides in the Ease of Doing Business rankings, jumping from 142 in 2014
to 63 in the 2020 report (the final report published before the World Bank discontinued the index).
Q47. Under the National Infrastructure Pipeline (NIP), which sector holds the highest share of the
projected capital expenditure?
A) Roads
B) Energy (Power/Renewables)
C) Railways
D) Urban Development
Answer: B
Explanation: In the NIP, the Energy sector (comprising power, renewables, atomic energy, and petroleum)
constitutes the highest share of the projected infrastructure investments (around 24%), closely followed by
Roads (19%) and Urban Development (16%).
Q48. The "E-Shram" portal was developed by the Ministry of Labour & Employment for what primary
purpose?
A) To create a national database of highly skilled IT workers for foreign deployment.
B) To register unorganized workers and provide them with a Universal Account Number (UAN) for social
security schemes.
C) To automate the payroll systems of Central PSUs.
D) To track corporate tax evasion by large employers.
Answer: B
Explanation: The e-Shram portal is a centralized database of unorganized workers in India (construction
workers, migrant workers, street vendors, domestic workers). It aims to link them with social security schemes
and provides them with a 12-digit UAN card.
Q49. Which of the following is an example of an "Indirect Tax" in the Indian Economic Architecture?
A) Corporate Income Tax
B) Capital Gains Tax
C) Goods and Services Tax (GST)
D) Securities Transaction Tax (STT)
Answer: C
Explanation: Indirect taxes are levied on the consumption of goods and services rather than on income or
profit. The liability to pay an indirect tax can be passed on to the final consumer. GST, Customs Duty, and
Excise Duty are examples. Direct taxes (like Income Tax and Corporate Tax) are paid directly by the entity to
the government.
Q50. Under the Foreign Exchange Management Act (FEMA), what defines a "Person Resident in India"?
A) Any person who holds an Indian passport, regardless of where they live.
B) A person residing in India for more than 182 days during the course of the preceding financial year.
C) Any foreign citizen who buys property in India.
D) A person residing in India for more than 90 days in the current calendar year.
Answer: B
Explanation: Section 2(v) of FEMA defines a "Person Resident in India" fundamentally as a person residing in
India for more than 182 days during the course of the preceding financial year. However, it specifically
excludes those who have gone abroad for employment, business, or any other purpose indicating an intention
to stay outside India for an uncertain period.
 JAIIB Paper 1: Indian Economy & Indian Financial System (IE & IFS)
Module A: Indian Economic Architecture - Practice Set 4 (50 Questions)
Q1. The First Five-Year Plan of India (1951-1956) was based on which of the following economic
models?
A) Mahalanobis Model
B) Harrod-Domar Model
C) Gadgil Yojana
D) PURA Model
Answer: B
Explanation: The First Five-Year Plan was based on the Harrod-Domar model with a few modifications. It
focused heavily on agricultural development, price stability, and power & transport infrastructure to rebuild the
economy post-independence.
Q2. The "Rolling Plan" in India was introduced by the Janata Party government for the period of:
A) 1966 - 1969
B) 1978 - 1980
C) 1990 - 1992
D) 1997 - 2002
Answer: B
Explanation: The Janata Party government terminated the Fifth Five-Year Plan in 1977-78 and launched its
own sixth plan for the period 1978-83, known as the "Rolling Plan". However, the Congress government
resumed power in 1980 and launched a new Sixth Plan (1980-1985).
Q3. Under the Pradhan Mantri MUDRA Yojana (PMMY), what is the maximum loan amount that can be
sanctioned under the "Tarun" category?
A) Up to Rs. 50,000
B) Between Rs. 50,000 and Rs. 5 Lakh
C) Between Rs. 5 Lakh and Rs. 10 Lakh
D) Up to Rs. 1 Crore
Answer: C

Explanation: MUDRA loans are divided into three categories: Shishu (loans up to Rs. 50,000), Kishore (loans
from Rs. 50,001 to Rs. 5,00,000), Tarun (loans from Rs. 5,00,001 to Rs. 10,00,000) and Tarun plus (this covers
loans above Rs. 10 Lakh and up to Rs. 20 Lakh, and it is available specifically to entrepreneurs who have
successfully repaid previous loans under the standard 'Tarun' category).

4. The primary objective of the "Stand-Up India" scheme is to facilitate bank loans between Rs. 10 lakh
and Rs. 1 Crore for setting up a greenfield enterprise. This scheme targets which specific
demographic?
A) Only youth below 25 years of age
B) Only MSMEs operating in the manufacturing sector
C) At least one SC/ST borrower and at least one Woman borrower per bank branch
D) Farmers in drought-prone areas
Answer: C
Explanation: Stand-Up India aims to promote entrepreneurship among women and scheduled castes and
tribes. The scheme mandates that every bank branch must facilitate at least one SC/ST borrower and at least
one woman borrower for setting up a new (greenfield) enterprise.
Q5. According to the Reserve Bank of India's Priority Sector Lending (PSL) guidelines, what is the
housing loan limit for individuals in metropolitan centres (with a population of 10 lakh and above) to be
classified under the priority sector?
A) Rs. 25 lakh, provided the overall cost of the dwelling unit does not exceed Rs. 30 lakh.
B) Rs. 35 lakh, provided the overall cost of the dwelling unit does not exceed Rs. 45 lakh.
C) Rs. 50 lakh, provided the overall cost of the dwelling unit does not exceed Rs. 60 lakh.
D) Rs. 75 lakh, regardless of the overall cost of the dwelling unit.
Answer: B
Explanation: For housing loans to qualify as PSL, the limit in metropolitan centres (population ≥ 10 lakh) is Rs.
35 lakh, given the total cost of the house does not exceed Rs. 45 lakh. In other centres, the loan limit is Rs. 25
lakh, with a total cost limit of Rs. 30 lakh.
Q6. Under the revised Priority Sector Lending norms, what is the mandated PSL target for Regional
Rural Banks (RRBs)?
A) 40% of Adjusted Net Bank Credit (ANBC)
B) 60% of Adjusted Net Bank Credit (ANBC)
C) 75% of Adjusted Net Bank Credit (ANBC)
D) 100% of Adjusted Net Bank Credit (ANBC)
Answer: C
Explanation: Because Regional Rural Banks (RRBs) and Small Finance Banks (SFBs) are specifically
mandated to cater to rural, unbanked, and underserved segments, their overall Priority Sector Lending target is
higher, set at 75% of their ANBC.
Q7. Foreign banks operating in India with less than 20 branches have a Priority Sector Lending target
of 40% of ANBC. Which of the following statements is TRUE regarding their sub-targets?
A) They must allocate 18% strictly to Agriculture.
B) They must allocate 12% to Weaker Sections.
C) They do not have specific sub-targets for Agriculture and Weaker Sections and can achieve the 40% total
through any permissible priority sector.
D) They are exempt from Priority Sector Lending entirely.
Answer: C
Explanation: Foreign banks with less than 20 branches have to achieve the 40% overall PSL target. However,
unlike domestic banks or foreign banks with 20+ branches, they do not have specific sub-targets for Agriculture
(18%) or Weaker Sections (12%). They can meet their target by lending to any priority sector, including export
credit up to 32%.
Q8. The Index of Industrial Production (IIP) is a crucial macroeconomic indicator published monthly by
the National Statistical Office (NSO). What is the current base year for IIP?
A) 2004-05
B) 2011-12
C) 2015-16
D) 2020-21
Answer: B
Explanation: The base year for the Index of Industrial Production (IIP) was revised by the Ministry of Statistics
and Programme Implementation (MoSPI) from 2004-05 to 2011-12 to better reflect current economic realities.
Q9. Which of the following core industries carries the highest weightage in the Index of Industrial
Production (IIP)?
A) Coal
B) Electricity
C) Refinery Products
D) Steel
Answer: C
Explanation: The Eight Core Industries comprise 40.27% of the weight of items included in the IIP. Among
them, Refinery Products have the highest weightage (28.04% within the core sectors), followed by Electricity,
Steel, Coal, Crude Oil, Natural Gas, Cement, and Fertilizers.
Q10. "Bharatmala Pariyojana" is a massive umbrella program initiated by the Government of India for
the development of:
A) Inland Waterways
B) Highways and Road Networks
C) Ports and Coastal areas
D) Bullet Trains
Answer: B
Explanation: Bharatmala Pariyojana is the second largest highways construction project in India after NHDP.
It aims to optimize the efficiency of freight and passenger movement across the country by bridging critical
infrastructure gaps.
Q11. The "Sagarmala Programme" primarily focuses on:
A) Linking major rivers of India
B) Port-led development and coastal logistics
C) Deep-sea mining of minerals
D) Developing offshore wind energy farms
Answer: B
Explanation: Sagarmala aims to harness India's 7,500 km long coastline and potentially navigable waterways
for port-led development, reducing logistics costs for domestic and EXIM cargo.
Q12. What does 'InvIT' stand for in the context of Indian financial architecture?
A) Investment in Information Technology
B) Infrastructure Investment Trust
C) Indian Venture and Innovation Trust
D) Institutional Vehicle for International Trade
Answer: B
Explanation: Infrastructure Investment Trusts (InvITs) are collective investment vehicles (similar to mutual
funds) regulated by SEBI. They enable direct investment of money from individual and institutional investors in
operational infrastructure projects to earn a portion of the income as a return.
Q13. Real Estate (Regulation and Development) Act (RERA) was introduced in 2016 primarily to:
A) Fix standard prices for all real estate properties across India
B) Protect home-buyers and boost investments in the real estate sector
C) Nationalize the construction industry
D) Eliminate all private builders from the housing market
Answer: B
Explanation: RERA was enacted to establish the Real Estate Regulatory Authority to regulate and promote
the real estate sector, ensuring transparency, protecting the interests of consumers/home-buyers, and
establishing a speedy dispute resolution mechanism.
Q14. In 1999, the stringent Foreign Exchange Regulation Act (FERA) of 1973 was repealed and
replaced by a more liberal act known as:
A) Foreign Trade (Development and Regulation) Act
B) Foreign Contribution (Regulation) Act (FCRA)
C) Foreign Exchange Management Act (FEMA)
D) Prevention of Money Laundering Act (PMLA)
Answer: C
Explanation: To facilitate external trade and payments and promote the orderly development of the foreign
exchange market in India, the restrictive FERA (which treated forex violations as criminal offenses) was
replaced by FEMA (which treats them as civil offenses) in 1999.
Q15. Under India's current Foreign Direct Investment (FDI) policy, what is the maximum permissible
FDI limit in the Insurance sector under the automatic route?
A) 26%
B) 49%
C) 74%
D) 100%
Answer: C
Explanation: To attract more capital into the insurance sector, the Government of India increased the
permissible FDI limit in insurance companies from 49% to 74% under the automatic route (subject to certain
management and control safeguards).
Q16. What is the current maximum permissible FDI limit in the Defence manufacturing sector under the
automatic route?
A) 49%
B) 74%
C) 100%
D) It is strictly reserved for the public sector
Answer: B
Explanation: The FDI limit in the Defence manufacturing sector has been enhanced to 74% under the
automatic route. FDI up to 100% is allowed through the government route wherever it is likely to result in
access to modern technology.
Q17. Which institution of the World Bank Group provides loans exclusively to the poorest countries at
zero interest rates?
A) International Bank for Reconstruction and Development (IBRD)
B) International Finance Corporation (IFC)
C) Multilateral Investment Guarantee Agency (MIGA)
D) International Development Association (IDA)
Answer: D
Explanation: The IDA is the part of the World Bank that helps the world's poorest countries. It provides zero-
to-low-interest loans (called "credits") and grants for programs that boost economic growth, reduce inequalities,
and improve people's living conditions.
Q18. The International Finance Corporation (IFC), an arm of the World Bank Group, is specifically
focused on:
A) Resolving balance of payment crises of member countries
B) Providing political risk insurance to investors
C) Promoting private sector investment in developing countries
D) Settling investment disputes between nations
Answer: C
Explanation: The IFC focuses exclusively on the private sector in developing countries. It provides
investment, advisory, and asset-management services to encourage private-sector development and
entrepreneurship.
Q19. Which arm of the World Bank provides political risk insurance and credit enhancement to
investors and lenders against non-commercial risks in developing countries?
A) IBRD
B) MIGA
C) ICSID
D) IDA
Answer: B
Explanation: The Multilateral Investment Guarantee Agency (MIGA) promotes foreign direct investment into
developing countries by offering political risk insurance (guarantees) to investors and lenders against losses
related to currency inconvertibility, expropriation, and war/civil disturbance.
Q20. TRIMS is a crucial agreement under the World Trade Organization (WTO). What does TRIMS stand
for?
A) Trade-Related Investment Measures
B) Tariffs and Restrictions in Multilateral Systems
C) Trade Rights and International Merchandise Standards
D) Taxation Rules for International Market Services
Answer: A
Explanation: TRIMS (Agreement on Trade-Related Investment Measures) are rules that apply to the domestic
regulations a country applies to foreign investors, often as part of an industrial policy. It prohibits investment
measures that restrict or distort trade.
Q21. The "Most-Favored-Nation" (MFN) principle is a core founding pillar of the WTO. What does MFN
dictate?
A) A country must grant the WTO Secretariat favored tax status.
B) Developing nations get absolute free trade access to developed nations.
C) A country cannot normally discriminate between its trading partners; a favor granted to one must be granted
to all other WTO members.
D) Countries can selectively choose their favorite trading partner for exclusive low tariffs without extending it to
others.
Answer: C
Explanation: The MFN principle (Article I of GATT) states that a country must treat all WTO members equally.
If a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all
its WTO trading partners.
Q22. The Uruguay Round of multilateral trade negotiations (1986-1994) culminated in the creation of
which international organization?
A) World Bank
B) International Monetary Fund (IMF)
C) World Trade Organization (WTO)
D) United Nations Conference on Trade and Development (UNCTAD)
Answer: C
Explanation: The Uruguay Round was the 8th round of multilateral trade negotiations conducted within the
framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986 to 1994 and leading to
the creation of the WTO in 1995.
Q23. Which of the following best defines "Absolute Poverty"?
A) Poverty measured in comparison to the average standard of living in a specific society.
B) A condition characterized by severe deprivation of basic human needs, including food, safe drinking water,
sanitation facilities, health, shelter, education, and information.
C) The inequality of income distribution within a country.
D) When an individual cannot afford luxury goods despite having basic necessities.
Answer: B
Explanation: Absolute poverty refers to a condition where a person does not have the minimum amount of
income needed to meet the minimum requirements for one or more basic living needs over an extended
period. Relative poverty, on the other hand, is defined in relation to the economic status of other members of
the society (Option A).
Q24. The Gini Coefficient is a widely used statistical measure in economics to represent:
A) The rate of inflation
B) The degree of income or wealth inequality within a nation
C) The ratio of imports to exports
D) The fiscal deficit of a country
Answer: B
Explanation: The Gini index or Gini coefficient measures income distribution across a population. A Gini
coefficient of 0 represents perfect equality (everyone has the same income), while a coefficient of 1 (or 100%)
represents perfect inequality (one person has all the income).
Q25. Which economic concept establishes an inverse relationship between the rate of unemployment
and the rate of inflation in an economy?
A) Laffer Curve
B) Lorenz Curve
C) Phillips Curve
D) Kuznets Curve
Answer: C
Explanation: The Phillips curve, named after A.W. Phillips, states that inflation and unemployment have a
stable and inverse relationship. When unemployment is low, inflation tends to be high, and vice versa (though
this relationship can break down in the long run or during stagflation).
Q26. Sustainable Development Goal (SDG) Number 3 specifically aims to ensure:
A) Clean Water and Sanitation
B) Quality Education
C) Good Health and Well-being
D) Affordable and Clean Energy
Answer: C
Explanation: SDG 3 focuses on ensuring healthy lives and promoting well-being for all at all ages. (SDG 4 is
Quality Education, SDG 6 is Clean Water, and SDG 7 is Affordable Energy).
Q27. SDG 4, which is fundamental to India's social infrastructure planning, focuses on:
A) Gender Equality
B) Quality Education
C) Decent Work and Economic Growth
D) Industry, Innovation, and Infrastructure
Answer: B
Explanation: Sustainable Development Goal 4 aims to "ensure inclusive and equitable quality education and
promote lifelong learning opportunities for all." The National Education Policy (NEP) 2020 aligns closely with
this goal.
Q28. The concept of "Common But Differentiated Responsibilities" (CBDR) is a principle widely
discussed in the context of:
A) Banking Basel Norms
B) International Climate Change agreements
C) WTO dispute settlements
D) Anti-Money Laundering frameworks
Answer: B
Explanation: CBDR is a principle within the United Nations Framework Convention on Climate Change
(UNFCCC). It acknowledges that while all countries are responsible for addressing climate change, they have
different capabilities and differing historical contributions to environmental degradation (i.e., developed vs.
developing nations).
Q29. The Paris Agreement (2015) aims to strengthen the global response to the threat of climate
change by keeping a global temperature rise this century well below _____ above pre-industrial levels.
A) 1.0 degrees Celsius
B) 1.5 degrees Celsius
C) 2.0 degrees Celsius
D) 3.0 degrees Celsius
Answer: C
Explanation: The central aim of the Paris Agreement is to limit global warming to well below 2 degrees
Celsius, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.
Q30. Which international financial institution is headquartered in Shanghai, China, and was established
by the BRICS states?
A) Asian Development Bank (ADB)
B) Asian Infrastructure Investment Bank (AIIB)
C) New Development Bank (NDB)
D) Bank for International Settlements (BIS)
Answer: C
Explanation: The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a
multilateral development bank established by the BRICS states (Brazil, Russia, India, China, and South Africa)
in 2014, headquartered in Shanghai.
Q31. According to the Companies Act 2013, Corporate Social Responsibility (CSR) is mandatory for
companies meeting certain financial thresholds. What percentage of the average net profits of the past
three years must be spent on CSR activities?
A) 1%
B) 2%
C) 5%
D) 10%
Answer: B
Explanation: Section 135 of the Companies Act 2013 mandates that qualifying companies must spend at least
2% of their average net profit of the preceding three financial years on Corporate Social Responsibility (CSR)
initiatives.
Q32. The Special Economic Zones (SEZ) Act was passed in India to boost exports and foreign
investments in which year?
A) 1991
B) 2000
C) 2005
D) 2014
Answer: C
Explanation: While the SEZ policy was introduced in 2000 to overcome the shortcomings of the Export
Processing Zones (EPZ), the comprehensive Special Economic Zones (SEZ) Act was passed by the
Parliament in 2005 and came into effect in 2006.
Q33. Under the Prime Minister’s Employment Generation Programme (PMEGP), implemented by KVIC
at the national level, what is the maximum cost of a project admissible for setting up a unit in the
manufacturing sector?
A) Rs. 10 Lakh
B) Rs. 20 Lakh
C) Rs. 25 Lakh
D) Rs. 50 Lakh
Answer: D
Explanation: The government has recently enhanced the maximum project cost under PMEGP. It is now Rs.
50 lakh for the manufacturing sector (up from Rs. 25 lakh) and Rs. 20 lakh for the service sector (up from Rs.
10 lakh).
Q34. The "CHAMPIONS" portal launched by the Ministry of MSME stands for:
A) Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength
B) Credit and Housing Assistance for Micro Producers In Organizing National Sales
C) Centralized Hub for Aiding Manufacturing Professionals In Overcoming National Shortfalls
D) Corporate Help and MSME Protection In Operational and Non-performing Sectors
Answer: A
Explanation: The CHAMPIONS portal is an ICT-based technology system aimed at making the smaller units
big by helping them resolve their grievances, encouraging them, and supporting them in terms of finance, raw
materials, and labor.
Q35. The Foreign Trade Policy (FTP) 2023 sets an ambitious target to achieve a total export (goods and
services combined) of what amount by the year 2030?
A) $1 Trillion
B) $2 Trillion
C) $5 Trillion
D) $10 Trillion
Answer: B
Explanation: The FTP 2023 envisions Indian exports of goods and services reaching USD 2 Trillion by 2030.
It shifts from an incentive-based regime to a remission and entitlement-based regime.
Q36. Which of the following organizations publishes the 'Multidimensional Poverty Index' (MPI)?
A) World Bank
B) World Economic Forum (WEF)
C) United Nations Development Programme (UNDP) & Oxford Poverty and Human Development Initiative
(OPHI)
D) International Monetary Fund (IMF)
Answer: C
Explanation: The global Multidimensional Poverty Index (MPI) is an international measure of acute
multidimensional poverty covering over 100 developing countries, published annually by OPHI and the UNDP.
In India, NITI Aayog publishes the National MPI based on similar parameters.
Q37. In India, the Khadi and Village Industries Commission (KVIC) functions under the administrative
control of which ministry?
A) Ministry of Rural Development
B) Ministry of Agriculture and Farmers Welfare
C) Ministry of Micro, Small and Medium Enterprises (MoMSME)
D) Ministry of Commerce and Industry
Answer: C
Explanation: KVIC is a statutory body formed in 1956. It functions under the Ministry of MSME with the broad
objective of planning, promoting, and organizing programs for the development of Khadi and other village
industries in rural areas.
Q38. "Stagflation" in an economy refers to a situation characterized by:
A) High economic growth accompanied by high inflation
B) Stagnant economic growth accompanied by deflation
C) Stagnant economic growth, high unemployment, and high inflation
D) Rapid decline in prices due to technological advancements
Answer: C
Explanation: Stagflation is a portmanteau of "stagnation" and "inflation." It is an anomalous economic
condition where the economy experiences sluggish/stagnant growth and high unemployment simultaneously
with high inflation, posing a major challenge for monetary policy formulation.
Q39. What was the central objective of the PM-KUSUM scheme launched by the Government of India?
A) To provide free cooking gas to rural women
B) To promote solar farming by subsidizing solar water pumps and grid-connected solar power plants for
farmers
C) To provide micro-credit to urban street vendors
D) To guarantee 100 days of wage employment in rural areas
Answer: B
Explanation: PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) aims to ensure
energy security for farmers in India by setting up decentralized solar power plants, replacing agriculture diesel
pumps with solar agriculture water pumps, and solarizing existing grid-connected agriculture pumps.
Q40. The transition from FERA to FEMA marked a shift in India's approach to foreign exchange from:
A) Regulation to Management
B) Subsidization to Taxation
C) Promotion to Prohibition
D) Capital Account Convertibility to Current Account Convertibility
Answer: A
Explanation: The very names of the acts reflect the philosophical shift of the 1991 reforms. FERA (Foreign
Exchange Regulation Act) viewed forex as a scarce resource to be heavily conserved and policed. FEMA
(Foreign Exchange Management Act) views forex as a resource to be managed to facilitate external trade.
Q41. Which committee recommended the introduction of the Liquidity Adjustment Facility (LAF) in the
Indian banking system?
A) Narasimham Committee I (1991)
B) Narasimham Committee II (1998)
C) Urjit Patel Committee (2014)
D) Nachiket Mor Committee (2013)
Answer: B
Explanation: The Narasimham Committee II (Committee on Banking Sector Reforms, 1998) recommended
the introduction of a Liquidity Adjustment Facility (LAF) under which the RBI would conduct auctions
periodically to manage market liquidity.
Q42. In the context of economic classification, 'Maharatna', 'Navratna', and 'Miniratna' statuses are
granted to:
A) Top-performing private sector IT companies
B) Central Public Sector Enterprises (CPSEs) based on their financial autonomy and performance
C) Outstanding Micro, Small, and Medium Enterprises (MSMEs)
D) Foreign Multi-National Companies (MNCs) operating in India
Answer: B
Explanation: The Government of India grants these statuses to Central Public Sector Enterprises (CPSEs) to
grant them varying degrees of financial and operational autonomy, empowering them to compete globally.
Maharatna represents the highest tier of financial autonomy.
Q43. The "Production Linked Incentive" (PLI) scheme aims to give companies incentives on
incremental sales from products manufactured in domestic units. This is primarily an initiative under
which broader campaign?
A) Skill India
B) Digital India
C) Aatmanirbhar Bharat (Make in India)
D) Swachh Bharat Abhiyan
Answer: C
Explanation: The PLI scheme is a cornerstone of the Aatmanirbhar Bharat vision, designed to boost domestic
manufacturing capabilities, enhance exports, and reduce dependency on imports across sectors like
electronics, pharmaceuticals, and automobiles.
Q44. Which of the following entities determines the "Repo Rate" in India?
A) Ministry of Finance
B) Monetary Policy Committee (MPC) of the RBI
C) Indian Banks' Association (IBA)
D) Securities and Exchange Board of India (SEBI)
Answer: B
Explanation: The Monetary Policy Committee (MPC) is a statutory committee of the Reserve Bank of India,
mandated to determine the policy interest rate (Repo Rate) required to achieve the inflation target.
Q45. As per the National Education Policy (NEP) 2020, what is the targeted Gross Enrolment Ratio
(GER) in Higher Education (including vocational education) to be achieved by 2035?
A) 25%
B) 40%
C) 50%
D) 100%
Answer: C
Explanation: NEP 2020 aims to significantly expand the capacity of the higher education system, setting an
ambitious target to increase the Gross Enrolment Ratio (GER) in higher education to 50% by 2035.
Q46. The Asian Development Bank (ADB), heavily involved in financing infrastructure in India, is
headquartered in:
A) Tokyo, Japan
B) Beijing, China
C) Manila, Philippines
D) Singapore
Answer: C
Explanation: The Asian Development Bank (ADB) is a regional development bank established in 1966,
headquartered in Mandaluyong, Metro Manila, Philippines. It focuses on reducing poverty in Asia and the
Pacific through inclusive economic growth.
Q47. If a country imposes a limit on the physical quantity of a specific good that can be imported
during a given period, this barrier to trade is known as a:
A) Tariff
B) Quota
C) Embargo
D) Subsidy
Answer: B
Explanation: An import quota is a type of trade restriction that sets a physical limit on the quantity of a good
that can be imported into a country in a given period of time. Tariffs are taxes on imports, while an embargo is
a complete ban on trade.
Q48. MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is a flagship social
security measure. How many days of guaranteed wage employment does it provide in a financial year
to a rural household?
A) 50 days
B) 100 days
C) 150 days
D) 365 days
Answer: B
Explanation: MGNREGA aims to enhance livelihood security in rural areas by providing at least 100 days of
guaranteed wage employment in a financial year to every household whose adult members volunteer to do
unskilled manual work.
Q49. The Tendulkar Committee Methodology is predominantly associated with the estimation of:
A) Non-Performing Assets (NPAs) in Banks
B) Poverty line in India
C) Disinvestment targets for PSUs
D) Inflation indices
Answer: B
Explanation: The Suresh Tendulkar Committee (2009) was constituted to look into the methodology for the
estimation of poverty in India. It famously shifted the methodology away from calorie-intake based calculations
to a broader consumption expenditure basket.
Q50. The Governing Council of NITI Aayog consists of:
A) Only the Prime Minister and Cabinet Ministers
B) The Prime Minister, Chief Ministers of all States and Union Territories with Legislatures, and Lt. Governors
of other Union Territories
C) RBI Governor, Finance Minister, and SEBI Chairman
D) Only prominent economists and academicians appointed by the President
Answer: B
Explanation: NITI Aayog acts as the quintessential platform for the Government of India to bring states to act
together in national interest. The Governing Council, chaired by the PM, includes all State Chief Ministers and
Lieutenant Governors of UTs, reflecting its core mandate of cooperative federalism.
 JAIIB Paper 1: Indian Economy & Indian Financial System (IE & IFS)
Module A: Indian Economic Architecture - Practice Set 5 (50 Questions)
Q1. According to the Angus Maddison database, what was India's approximate contribution to the
global GDP in 1000 AD?
A) 15%
B) 28.9%
C) 50.5% (combined with China)
D) 10.5%
Answer: C
Explanation: According to the Angus Maddison database, in 1000 AD, India and China together contributed
approximately 50.5% of the global GDP. By 1600 AD, India's individual share was around 23%. This data is
frequently asked to test the historical context of the Indian Economy.
Q2. The term 'Hindu Rate of Growth', which refers to the low annual growth rate of the Indian economy
before the 1991 economic reforms, was coined by?
A) Amartya Sen
B) Manmohan Singh
C) Raghuram Rajan
D) Prof. Raj Krishna
Answer: D
Explanation: Prof. Raj Krishna coined the term 'Hindu Rate of Growth' in 1978 to describe the slow, stagnant
economic growth rate (around 3.5%) that India experienced from the 1950s to the 1980s.
Q3. Which of the following statements BEST describes a "Sunrise Sector"?
A) A sector that is highly mature and dominating the global market.
B) A sector that is still in its infancy but has the potential for significant rapid growth.
C) A sector that is characterized by a low degree of innovation and technological stagnation.
D) A traditional agricultural sector that relies solely on natural sunlight.
Answer: B
Explanation: A sunrise sector is one that is still in its infancy but demonstrates the potential for significant
growth, usually characterized by high innovation. Examples in India include Green Energy, Fintech, and IT.
Statement C is incorrect as sunrise sectors have high, not low, innovation.
Q4. Under the revised guidelines by the Government of India, a "Micro Enterprise" in the MSME sector
is defined as an enterprise where:
A) Investment in plant and machinery does not exceed Rs. 5 crore and turnover does not exceed Rs. 25 crore.
B) Investment in plant and machinery does not exceed Rs. 1 crore and turnover does not exceed Rs. 5 crore.
C) Investment in plant and machinery does not exceed Rs. 10 crore and turnover does not exceed Rs. 50
crore.
D) Investment in plant and machinery does not exceed Rs. 50 crore and turnover does not exceed Rs. 250
crore.
Answer: B
Explanation: The revised composite MSME definition (effective July 2020) looks at both investment and
turnover. Micro: Investment ≤ Rs. 1 cr & Turnover ≤ Rs. 5 cr. Small: Investment ≤ Rs. 10 cr & Turnover ≤ Rs.
50 cr. Medium: Investment ≤ Rs. 50 cr & Turnover ≤ Rs. 250 cr.
Q5. Based on recent RBI updates regarding Priority Sector Lending (PSL), the revised overall PSL
target for Urban Cooperative Banks (UCBs) has been adjusted to:
A) 40% of ANBC
B) 60% of ANBC
C) 75% of ANBC
D) 100% of ANBC
Answer: B
Explanation: In a major regulatory relief move, the RBI reduced the overall Priority Sector Lending (PSL)
target for Urban Cooperative Banks (UCBs) from 75% back down to 60% of their Adjusted Net Bank Credit
(ANBC). This was done to ease compliance pressures.
Q6. Under the current Priority Sector Lending (PSL) guidelines for Scheduled Commercial Banks, what
is the maximum loan limit for education under the priority sector per individual?
A) Rs. 10 lakh
B) Rs. 20 lakh
C) Rs. 25 lakh
D) Rs. 30 lakh
Answer: C
Explanation: The RBI recently increased the PSL loan limit for education from Rs. 20 lakh to Rs. 25 lakh per
individual. Loans beyond this amount are still permissible but do not qualify under the priority sector quota.
Q7. The Second Five-Year Plan of India (1956-1961) heavily focused on rapid industrialization and the
public sector. This plan was based on which of the following economic models?
A) Harrod-Domar Model
B) Mahalanobis Model
C) Gadgil Strategy
D) Rao-Manmohan Model
Answer: B
Explanation: The 2nd Five-Year Plan was drafted by statistician P.C. Mahalanobis. It focused on the
development of heavy industries and capital goods, aiming for rapid industrialization. The 1st plan was based
on the Harrod-Domar model.
Q8. NITI Aayog replaced the erstwhile Planning Commission in 2015. Unlike the Planning Commission,
NITI Aayog follows which approach to planning?
A) Top-down approach
B) Centralized command approach
C) Bottom-up approach
D) Laissez-faire approach
Answer: C
Explanation: NITI Aayog (National Institution for Transforming India) fosters cooperative federalism and uses
a "bottom-up" approach to policy-making, ensuring that state governments have a significant voice, unlike the
centralized "top-down" approach of the Planning Commission.
Q9. The "Plan Holiday" in the Indian economic planning history refers to which of the following
periods?
A) 1966 - 1969
B) 1978 - 1980
C) 1990 - 1992
D) 1997 - 2002
Answer: A
Explanation: Due to the failure of the Third Plan, the Indo-Pak war (1965), and severe droughts, the
government declared a "Plan Holiday" from 1966 to 1969, during which three Annual Plans were implemented
instead of a five-year plan.
Q10. The Foreign Trade Policy (FTP) 2023 is built upon four fundamental pillars. Which of the following
is NOT one of these pillars?
A) Incentive to Remission
B) Export promotion through collaboration
C) Enhancing import tariffs to protect domestic industries
D) Emerging Areas – E-Commerce Developing Districts
Answer: C
Explanation: FTP 2023 focuses on facilitation rather than protectionism. Its four pillars are: (1) Incentive to
Remission, (2) Collaborative Export Promotion (Exporters, States, Districts), (3) Ease of doing
business/reduction in transaction cost, and (4) Emerging Areas (E-Commerce).
Q11. Under the FTP 2023, the government introduced a one-time 'Amnesty Scheme'. What is the
primary objective of this scheme?
A) To pardon corporate tax evaders.
B) To resolve pending disputes and defaults related to Export Obligations under EPCG and Advance
Authorization schemes.
C) To provide free credit to MSME exporters.
D) To pardon non-performing assets (NPAs) in the banking sector.
Answer: B
Explanation: Inspired by the "Vivaad se Vishwaas" initiative, the Amnesty Scheme under FTP 2023 provides
a one-time settlement opportunity for exporters who defaulted on their Export Obligations under the EPCG and
Advance Authorization schemes, reducing their duty and interest burden.
Q12. In the context of globalization and capital flows, which of the following is widely considered as
"Hot Money"?
A) Foreign Direct Investment (FDI)
B) Foreign Institutional Investment (FII) / Foreign Portfolio Investment (FPI)
C) External Commercial Borrowings (ECB)
D) Sovereign Wealth Funds
Answer: B
Explanation: Foreign Institutional Investment (FII) or Portfolio Investment is referred to as "hot money"
because it is highly liquid and can be quickly withdrawn from the host country's stock/bond markets at the first
sign of economic instability, unlike FDI, which represents a long-term interest in tangible assets.
Q13. The landmark Economic Reforms of 1991 (LPG Reforms) in India aimed to correct severe
macroeconomic imbalances. Which of the following was NOT an objective of these reforms?
A) Achieving high economic growth
B) Increasing the current account deficit
C) Lowering inflation
D) Addressing the balance of payments crisis
Answer: B
Explanation: The 1991 economic reforms aimed to minimize the current account deficit, not increase it. The
main goals were to resolve the Balance of Payments (BoP) crisis, lower inflation, attract FDI, and stimulate
high economic growth through Liberalization, Privatization, and Globalization.
Q14. The Narasimham Committee-I, formed in 1991, made several foundational recommendations for
the Indian financial system. Which of the following was one of its key recommendations?
A) Complete nationalization of all private banks
B) Progressive reduction of the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
C) Fixing minimum lending rates rigidly by the RBI
D) Banning the entry of foreign banks in India
Answer: B
Explanation: The Narasimham Committee-I (1991) recommended a progressive reduction in CRR and SLR to
free up bank funds for productive lending. It also recommended the deregulation of lending rates, the
introduction of capital adequacy norms, and allowing the entry of new private banks.
Q15. Renewable Energy projects are eligible for Priority Sector Lending (PSL). What is the maximum
loan limit per borrower for renewable energy projects (like solar/biomass) under PSL guidelines?
A) Rs. 10 crore
B) Rs. 15 crore
C) Rs. 30 crore
D) Rs. 35 crore
Answer: D
Explanation: Under the revised PSL guidelines, the loan limit for renewable energy projects (solar power,
biomass, micro-hydel plants) has been increased to Rs. 35 crore per borrower. For individual households
adopting renewable energy, the limit remains Rs. 10 lakh.
Q16. PM Gati Shakti is a massive initiative introduced by the Government of India. What is its primary
focus?
A) Providing free food grains to BPL families
B) Universal health coverage
C) Multimodal connectivity infrastructure to reduce logistics costs
D) Providing direct cash transfers to farmers
Answer: C
Explanation: PM Gati Shakti is a National Master Plan aimed at providing integrated and seamless multimodal
connectivity infrastructure across the country. Its goal is to break departmental silos, improve supply chain
efficiency, and reduce logistics costs.
Q17. Which of the following sectors is an example of "Social Infrastructure"?
A) Highways and expressways
B) Telecommunications networks
C) Health and Education facilities
D) Power plants
Answer: C
Explanation: Infrastructure is broadly divided into Economic and Social. Economic infrastructure (transport,
power, telecom) directly supports economic activities. Social infrastructure (health, education, housing,
sanitation) improves the quality of human capital and living standards.
Q18. As per the current Foreign Direct Investment (FDI) policy of India, what is the FDI limit allowed in
the Telecommunication sector under the automatic route?
A) 49%
B) 74%
C) 100%
D) FDI is prohibited in telecom
Answer: C
Explanation: To boost telecom infrastructure and ease liquidity, the Government of India allows 100% FDI
under the automatic route in the telecommunications sector.
Q19. The International Monetary Fund (IMF) utilizes a reserve asset known as SDR. What does SDR
stand for?
A) Special Drawing Rights
B) Standard Development Rates
C) Sovereign Default Ratio
D) Systematic Deposit Receipts
Answer: A
Explanation: SDR stands for Special Drawing Rights. It is an international reserve asset created by the IMF in
1969 to supplement its member countries' official reserves. It is often referred to as "Paper Gold."
Q20. The World Bank Group consists of five institutions. Which institution is primarily responsible for
providing loans to middle-income and creditworthy low-income countries, and is often interchangeably
referred to as the World Bank?
A) International Development Association (IDA)
B) International Bank for Reconstruction and Development (IBRD)
C) International Finance Corporation (IFC)
D) Multilateral Investment Guarantee Agency (MIGA)
Answer: B
Explanation: The IBRD is the original institution of the World Bank Group. Together, the IBRD and the IDA
(which provides zero-interest loans to the poorest countries) make up what is generally known as the "World
Bank".
Q21. During the COP26 summit, India presented its 'Panchamrit' climate action strategy. A key target of
this strategy is to achieve "Net Zero" carbon emissions by the year:
A) 2030
B) 2050
C) 2070
D) 2100
Answer: C
Explanation: India's 'Panchamrit' strategy announced at COP26 includes achieving Net Zero carbon
emissions by 2070. Another major target is reaching 500 GW of non-fossil energy capacity by 2030.
Q22. The United Nations adopted the Sustainable Development Goals (SDGs) in 2015 as a universal
call to action. How many SDGs are there in total?
A) 8
B) 15
C) 17
D) 21
Answer: C
Explanation: There are 17 Sustainable Development Goals (SDGs), containing 169 targets, to be achieved by
the year 2030. They replaced the earlier Millennium Development Goals (MDGs).
Q23. In the context of capital markets and sustainability, what are "Green Bonds"?
A) Bonds printed on recycled green paper
B) Fixed-income instruments specifically earmarked to raise money for climate and environmental projects
C) Bonds issued exclusively by agricultural companies
D) High-risk "junk" bonds with lucrative yields
Answer: B
Explanation: Green bonds are financial instruments designed specifically to support specific climate-related or
environmental projects (like renewable energy, pollution prevention, or green infrastructure). India recently
issued Sovereign Green Bonds to fund public sector eco-friendly projects.
Q24. In India, various committees have been established over the years to estimate the poverty line.
Which of the following is NOT a committee related to poverty estimation?
A) Tendulkar Committee
B) Rangarajan Committee
C) Lakdawala Committee
D) Narasimham Committee
Answer: D
Explanation: The Narasimham Committee is famous for banking and financial sector reforms. The Tendulkar,
Rangarajan, and Lakdawala committees were constituted by the government specifically to define and
estimate poverty lines in India.
Q25. In the Indian agricultural sector, it is common to find more workers engaged in a farm than are
actually required for optimal production. The marginal productivity of these extra workers is practically
zero. What is this type of unemployment called?
A) Frictional Unemployment
B) Structural Unemployment
C) Disguised Unemployment
D) Cyclical Unemployment
Answer: C
Explanation: Disguised unemployment occurs when more people are employed in a job than actually
required, meaning their removal would not affect the total output. It is highly prevalent in the Indian agriculture
sector.
Q26. Which type of unemployment is caused by a mismatch between the skills workers possess and
the skills demanded by employers, often due to technological advancements?
A) Frictional Unemployment
B) Structural Unemployment
C) Disguised Unemployment
D) Seasonal Unemployment
Answer: B
Explanation: Structural unemployment occurs due to fundamental shifts in an economy (like automation or the
decline of a specific industry), rendering the existing skills of workers obsolete for the newly created jobs.
Q27. The portal "Udyam Registration" launched by the Government of India is associated with the
registration of:
A) Large multinational corporations
B) Non-Governmental Organizations (NGOs)
C) Micro, Small and Medium Enterprises (MSMEs)
D) Startups primarily in the agriculture sector
Answer: C
Explanation: Udyam Registration is a fully online, paperless, and free zero-cost registration portal specifically
for MSMEs, based strictly on self-declaration using an Aadhaar number.
Q28. What mechanism allows commercial banks to buy and sell Priority Sector Lending (PSL)
obligations without actually transferring the underlying loan assets?
A) Securitization Receipts (SRs)
B) Priority Sector Lending Certificates (PSLCs)
C) Letter of Credit (LC)
D) Credit Default Swaps (CDS)
Answer: B
Explanation: PSLCs are tradable certificates that allow banks having a shortfall in their PSL targets to buy
these certificates from banks that have overachieved their targets. The underlying loan risk remains with the
originating bank.
Q29. If a scheduled commercial bank falls short of its Priority Sector Lending (PSL) targets, it is
required to allocate the shortfall amount to which of the following funds?
A) Prime Minister's National Relief Fund
B) Rural Infrastructure Development Fund (RIDF) managed by NABARD
C) Consolidated Fund of India
D) MSME Credit Guarantee Trust
Answer: B
Explanation: Banks failing to meet their PSL targets must deposit the shortfall amount into designated funds,
most notably the Rural Infrastructure Development Fund (RIDF) maintained by NABARD, or other funds
specified by the RBI, earning a relatively low rate of interest.
Q30. A foreign company builds a brand-new manufacturing plant in India from the ground up, creating
new physical infrastructure and jobs. What type of Foreign Direct Investment (FDI) is this?
A) Brownfield FDI
B) Greenfield FDI
C) Joint Venture FDI
D) Portfolio Investment
Answer: B
Explanation: Greenfield FDI refers to a type of foreign investment where a parent company builds its
operations in a foreign country from the ground up (new facilities). Brownfield FDI occurs when a company
purchases or leases existing production facilities.
Q31. The Quaternary sector of an economy primarily involves activities related to:
A) Extraction of raw materials
B) Manufacturing and assembling goods
C) Knowledge-based services such as R&D, IT, and consulting
D) High-level government decision-making
Answer: C
Explanation: The Quaternary sector represents the knowledge-based part of the economy, including
information technology, research and development (R&D), financial planning, and education. The Quinary
sector relates to high-level decision-making (top executives, government officials).
Q32. The "Bretton Woods Twins" refers to which two international economic organizations established
in 1944?
A) WTO and IMF
B) IMF and World Bank
C) World Bank and Asian Development Bank
D) IMF and Bank for International Settlements (BIS)
Answer: B
Explanation: The International Monetary Fund (IMF) and the World Bank (specifically the IBRD) were created
at the Bretton Woods Conference in 1944 to rebuild the post-WWII international economic system. They are
collectively called the Bretton Woods Twins.
Q33. The TRIPS agreement, which sets down minimum standards for the regulation of intellectual
property, is administered by which organization?
A) World Bank
B) International Monetary Fund (IMF)
C) World Trade Organization (WTO)
D) World Health Organization (WHO)
Answer: C
Explanation: The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an
international legal agreement between all member nations of the World Trade Organization (WTO).
Q34. In the modern corporate and banking environment, "ESG" criteria are extensively used to
evaluate investment risks. What does ESG stand for?
A) Economic, Social, and Governance
B) Environmental, Social, and Governance
C) Essential, Strategic, and Growth
D) Equity, Sustainability, and Governance
Answer: B
Explanation: ESG stands for Environmental, Social, and Governance. It represents a set of standards for a
company's behavior used by socially conscious investors to screen potential investments and manage
sustainability-related risks.
Q35. A worker leaves their current job in search of a better-paying opportunity and remains
unemployed during the transition period. This temporary unemployment is termed as:
A) Structural Unemployment
B) Frictional Unemployment
C) Disguised Unemployment
D) Seasonal Unemployment
Answer: B
Explanation: Frictional unemployment is the short-term, natural transition phase when workers are between
jobs, searching for new ones, or moving from one job to another.
Q36. Under the Foreign Trade Policy (FTP) 2023, the government has enabled provisions to make India
a hub for "Merchanting Trade". What does merchanting trade involve?
A) Exporting goods directly produced by MSMEs in rural India.
B) Shipment of goods from one foreign country to another foreign country by an Indian intermediary, without
the goods ever touching Indian ports.
C) Exclusively trading via e-commerce platforms.
D) Importing heavy machinery duty-free for export production.
Answer: B
Explanation: Merchanting trade (or intermediary trade) allows Indian businesses to buy goods from Country A
and sell them to Country B directly. The goods never cross the Indian customs border. FTP 2023 provides a
formal framework to develop this to boost foreign exchange.
Q37. Which of the following is an initiative highlighted in FTP 2023 to boost local level exports?
A) Make in India 2.0
B) Districts as Export Hubs (DEH)
C) Stand-up India
D) PM KISAN
Answer: B
Explanation: The "Districts as Export Hubs" initiative aims to mobilize every district in the country to achieve
its potential as an export hub by identifying products and services with export potential and resolving local
bottlenecks.
Q38. The current base year used by the Central Statistics Office (CSO) to calculate India's real Gross
Domestic Product (GDP) is:
A) 2004-05
B) 2011-12
C) 2015-16
D) 2020-21
Answer: B
Explanation: In 2015, the Central Statistics Office (CSO) under the Ministry of Statistics and Programme
Implementation updated the base year for calculating national accounts (including GDP) from 2004-05 to 2011-
12.
Q39. Structural transformation in India has been somewhat unique compared to traditional economic
models. Traditionally, economies move from Agriculture to Industry, and then to Services. How did
India transition?
A) Agriculture -> Industry -> Services
B) Industry -> Agriculture -> Services
C) Agriculture leapfrogged largely to Services, bypassing a massive industrial phase
D) Services -> Agriculture -> Industry
Answer: C
Explanation: India experienced a unique structural transformation where the service sector grew exponentially
(IT, BPO, finance) and became the largest contributor to GDP, while the manufacturing/industrial sector
remained relatively stagnant, bypassing the traditional industrial boom phase.
Q40. Who is the Ex-Officio Chairperson of NITI Aayog?
A) President of India
B) Minister of Finance
C) Prime Minister of India
D) RBI Governor
Answer: C
Explanation: The Prime Minister of India serves as the ex-officio Chairperson of the NITI Aayog, providing
primary leadership and direction to the think tank.
Q41. In recent RBI measures to strengthen Rural and Urban Cooperative Banks, what was the
individual housing loan limit increased to for Rural Cooperative Banks?
A) Rs. 30 lakh
B) Rs. 50 lakh
C) Rs. 60 lakh
D) Rs. 75 lakh
Answer: D
Explanation: To boost affordable housing, the RBI recently more than doubled the individual housing loan
limits. For Urban Cooperative Banks, it went from Rs 30 lakh to Rs 60 lakh. For Rural Cooperative Banks, it
was increased two and a half times to Rs. 75 lakh.
Q42. Which sector is the highest contributor to India's Gross Value Added (GVA)?
A) Agriculture and Allied Sectors
B) Manufacturing and Industry
C) Services Sector
D) Mining and Quarrying
Answer: C
Explanation: The Services sector is the most dominant sector in the Indian economy, contributing over 50% to
India's GVA and being a major driver of FDI and exports.
Q43. Sustainable Development Goal (SDG) Number 1 aims to achieve:
A) Zero Hunger
B) Quality Education
C) Gender Equality
D) No Poverty
Answer: D
Explanation: The very first Sustainable Development Goal (SDG 1) is "No Poverty" – specifically, ending
poverty in all its forms everywhere by the year 2030. SDG 2 is Zero Hunger.
Q44. Which regulatory body is responsible for supervising the functioning of Mutual Funds in India?
A) Reserve Bank of India (RBI)
B) Securities and Exchange Board of India (SEBI)
C) Insurance Regulatory and Development Authority of India (IRDAI)
D) Association of Mutual Funds in India (AMFI)
Answer: B
Explanation: SEBI is the statutory regulatory body that oversees the securities and capital markets in India,
which inherently includes the registration, regulation, and supervision of all mutual funds. (AMFI is an industry
association, not a regulator).
Q45. Foreign Direct Investment (FDI) in India's public sector banking is currently capped at what
percentage?
A) 20%
B) 49%
C) 74%
D) 100%
Answer: A
Explanation: Under the current FDI policy, foreign direct investment in Public Sector Banks is capped at 20%
through the government approval route. For private sector banks, the limit is up to 74% (up to 49% under
automatic route and beyond that via government route).
Q46. What does the term "Balance of Payments" (BoP) primarily record?
A) The total taxes collected by the government versus its expenditure.
B) The balance sheet of the Reserve Bank of India.
C) All economic transactions between the residents of a country and the rest of the world over a specified
period.
D) The total outstanding loans of the public sector banks.
Answer: C
Explanation: The Balance of Payments (BoP) is a systematic accounting record of all economic transactions
(trade in goods, services, and capital transfers) between the residents of a country and the rest of the world
during a given period (usually a year).
Q47. The World Trade Organization (WTO) officially commenced operations in which year, replacing
the General Agreement on Tariffs and Trade (GATT)?
A) 1944
B) 1948
C) 1991
D) 1995
Answer: D
Explanation: The WTO was established on January 1, 1995, following the Marrakesh Agreement, effectively
replacing the GATT framework that had been in place since 1948.
Q48. Which of the following is considered a 'Capital Receipt' in the Government Budget?
A) Income tax collections
B) Dividends received from Public Sector Undertakings (PSUs)
C) Recovery of loans given by the government
D) Goods and Services Tax (GST) collections
Answer: C
Explanation: Capital receipts are government receipts that either create a liability (like borrowing) or reduce
an asset (like the recovery of loans or disinvestment of PSUs). Tax revenues and dividends are 'Revenue
Receipts' because they neither create liabilities nor reduce assets.
Q49. Small Finance Banks (SFBs) are niche banks set up to further financial inclusion. What is the
Priority Sector Lending (PSL) target set for Small Finance Banks?
A) 40% of ANBC
B) 60% of ANBC
C) 75% of ANBC
D) 100% of ANBC
Answer: C
Explanation: Small Finance Banks (SFBs) and Regional Rural Banks (RRBs) have a higher Priority Sector
Lending target of 75% of their Adjusted Net Bank Credit (ANBC), reflecting their core mandate of financial
inclusion, compared to the 40% target for Scheduled Commercial Banks.
Q50. The National Infrastructure Pipeline (NIP) was launched to provide world-class infrastructure
across the country. What was the initial projected total investment under NIP?
A) Rs. 50 Lakh Crore
B) Rs. 111 Lakh Crore
C) Rs. 250 Lakh Crore
D) Rs. 500 Lakh Crore
Answer: B
Explanation: The NIP for FY 2019-25 was unveiled with a projected infrastructure investment of approximately
Rs. 111 lakh crore. It aims to improve project preparation, attract domestic and foreign investments, and
significantly enhance India's infrastructure.