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Indian Economy — Questions and Answers

Indian Economy questions in competitive exams stay at the level of institutions, definitions and landmark reforms rather than technical macroeconomics. Which body regulates what, when a major reform took effect, and how the fiscal year is defined together account for most of what is asked in banking, SSC and state exams.

10 solved questionsBasic General KnowledgeFree · no signup

Indian Economy— Concepts, Formulas & Shortcuts

  • The Reserve Bank of India was established in 1935 and is the central bank and monetary authority.
  • The Indian financial year runs from 1 April to 31 March.
  • NITI Aayog replaced the Planning Commission on 1 January 2015.
  • GST came into force on 1 July 2017, subsuming most indirect taxes.
  • Repo rate is the rate at which the RBI lends to commercial banks; reverse repo is the reverse.
  • SEBI regulates securities markets; IRDAI regulates insurance; the RBI regulates banking.

Indian Economy Practice Questions with Answers

Attempt each question first, then open the explanation. All 10 questions below are free to read and require no signup.

  1. Q1.The Reserve Bank of India was established in:

    Moderate
    • A1925
    • B1935
    • C1947
    • D1950
    +Show Answer & Explanation

    Answer: B. 1935

    Explanation: The RBI began operations on 1 April 1935 under the RBI Act, 1934.

    Indian Economy question 1 of 10

  2. Q2.The Indian financial year runs from:

    Easy
    • A1 January to 31 December
    • B1 April to 31 March
    • C1 July to 30 June
    • D1 October to 30 September
    +Show Answer & Explanation

    Answer: B. 1 April to 31 March

    Explanation: India's fiscal year begins on 1 April and ends on 31 March.

    Indian Economy question 2 of 10

  3. Q3.NITI Aayog replaced which body?

    Moderate
    • AFinance Commission
    • BPlanning Commission
    • CElection Commission
    • DLaw Commission
    +Show Answer & Explanation

    Answer: B. Planning Commission

    Explanation: NITI Aayog replaced the Planning Commission with effect from 1 January 2015.

    Indian Economy question 3 of 10

  4. Q4.The Goods and Services Tax came into force on:

    Moderate
    • A1 April 2016
    • B1 July 2017
    • C1 April 2018
    • D1 January 2019
    +Show Answer & Explanation

    Answer: B. 1 July 2017

    Explanation: GST was rolled out nationwide on 1 July 2017.

    Indian Economy question 4 of 10

  5. Q5.The repo rate is the rate at which:

    Moderate
    • ABanks lend to customers
    • BThe RBI lends to commercial banks
    • CBanks lend to each other
    • DThe government borrows abroad
    +Show Answer & Explanation

    Answer: B. The RBI lends to commercial banks

    Explanation: It is the RBI's short-term lending rate to commercial banks and a key monetary policy tool.

    Indian Economy question 5 of 10

  6. Q6.Which body regulates the securities market in India?

    Easy
    • ARBI
    • BSEBI
    • CIRDAI
    • DNABARD
    +Show Answer & Explanation

    Answer: B. SEBI

    Explanation: The Securities and Exchange Board of India regulates stock exchanges and market intermediaries.

    Indian Economy question 6 of 10

  7. Q7.Which sector contributes the largest share to India's GDP?

    Moderate
    • AAgriculture
    • BIndustry
    • CServices
    • DMining
    +Show Answer & Explanation

    Answer: C. Services

    Explanation: Services account for the largest share of gross value added in the Indian economy.

    Indian Economy question 7 of 10

  8. Q8.The Green Revolution in India is most closely associated with:

    Moderate
    • AMilk production
    • BFood grain production
    • CFish production
    • DEgg production
    +Show Answer & Explanation

    Answer: B. Food grain production

    Explanation: It raised wheat and rice yields through high-yielding varieties, irrigation and fertilisers, led by M.S. Swaminathan.

    Indian Economy question 8 of 10

  9. Q9.Which institution issues currency notes in India?

    Moderate
    • AMinistry of Finance
    • BReserve Bank of India
    • CState Bank of India
    • DNITI Aayog
    +Show Answer & Explanation

    Answer: B. Reserve Bank of India

    Explanation: The RBI issues all currency notes except the one-rupee note, which the Ministry of Finance issues.

    Indian Economy question 9 of 10

  10. Q10.The White Revolution in India refers to a large increase in:

    Moderate
    • AWheat output
    • BMilk production
    • CCotton output
    • DSugar output
    +Show Answer & Explanation

    Answer: B. Milk production

    Explanation: Operation Flood, led by Verghese Kurien, made India the world's largest milk producer.

    Indian Economy question 10 of 10

Indian Economy — Frequently Asked Questions

Which sector contributes the largest share of India's GDP?+

The services sector, which accounts for over half of gross value added, ahead of industry and agriculture — although agriculture still employs the largest share of the workforce.

What is the difference between repo and reverse repo rate?+

The repo rate is what the RBI charges commercial banks for short-term loans; the reverse repo is what the RBI pays banks for parking surplus funds with it. Raising the repo rate tightens money supply.

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