Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following: 1. Foreign currency convertible bonds 2. Foreign institutional investment with certain conditions 3. Global depository receipts 4. Non-resident external deposits Which of the above can be included in Foreign Direct Investments?

a) 1, 2 and 3
b) 3 only
c) 2 and 4
d) 1 and 4
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

Which among the following steps is most likely to be taken at the time of an economic recession?

a) Cut in tax rates accompanied by increase in interest rate
b) Increase in expenditure on public projects
c) Increase in tax rates accompanied by reduction of interest rate
d) Reduction of expenditure on public projects
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?

a) It is the investment through capital instruments essentially in a listed company.
b) It is largely non-debt creating capital flow.
c) It is the investment which involves debt-servicing
d) It is the investment made by foreign institutional investors in the Government securities.
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: 1. Worker productivity per worker (at 2004-05 prices) increased in urban areas while it decreased in rural areas. 2. The percentage share of rural areas in the workforce steadily increased. 3. In rural areas, the growth in the non-farm economy increased. 4. The growth rate in rural employment decreased. Which of the statements given above is/are correct?

a) 1 and 2 only
b) 3 and 4 only
c) 3 only
d) 1, 2 and 4
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

With reference to India’s Five-Year Plans, which of the following statements is/are correct? 1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries. 2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power. 3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan. Select the correct answer using the code given below:

a) 1 and 2 only
b) 2 only
c) 3 only
d) 1, 2 and 3
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

If a commodity is provided free to the public by the Government, then

a) the opportunity cost is zero.
b) the opportunity cost is ignored.
c) the opportunity cost is transferred from the consumers of the product to the tax-paying public.
d) the opportunity cost is transferred from the consumers of the product to the Government.
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following has/have occurred in India after its liberalization of economic policies in 1991? 1. Share of agriculture in GDP increased enormously. 2. Share of India’s exports in world trade increased. 3. FDI inflows increased. 4. India’s foreign exchange reserves increased enormously. Select the correct answer using the codes given below:

a) 1 and 4 only
b) 2, 3 and 4 only
c) 2 and 3 only
d) 1, 2, 3 and 4
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

With reference to ‘Financial Stability and Development Council’, consider the following statements: 1. It is an organ of NITI Aayog. 2. It is headed by the Union Finance Minister. 3. It monitors macroprudential supervision of the economy. Which of the statements given above is/are correct?

a) 1 and 2 only
b) 3 only
c) 2 and 3 only
d) 1, 2 and 3
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

The Government of India has established NITI Aayog to replace the

a) Human Rights Commission
b) Finance Commission
c) Law Commission
d) Planning Commission
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following are associated with ‘Planning’ in India? 1. The Finance Commission 2. The National Development Council 3. The Union Ministry of Rural Development 4. The Union Ministry of Urban Development 5. The Parliament Select the correct answer using the code given below:

a) 1, 2 and 5 only
b) 1, 3 and 4 only
c) 2 and 5 only
d) 1, 2, 3, 4 and 5
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

The main objective of the 12th Five-Year Plan is

a) inclusive growth and poverty reduction
b) inclusive growth and sustainable growth
c) sustainable and inclusive growth to reduce unemployment
d) faster, sustainable and more inclusive growth
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following can be said to be essentially the parts of ‘Inclusive Governance’? 1. Permitting the Non-Banking Financial Companies to do banking 2. Establishing effective District Planning Committees in all the districts 3. Increasing the government spending on public health 4. Strengthening the Mid-day Meal Scheme Select the correct answer using the codes given below:

a) 1 and 2 only
b) 3 and 4 only
c) 2, 3 and 4 only
d) 1, 2, 3 and 4
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following would include Foreign Direct Investment in India? 1. Subsidiaries of foreign companies in India 2. Majority foreign equity holding in Indian companies 3. Companies exclusively financed by foreign companies 4. Portfolio investment Select the correct answer using the codes given below:

a) 1, 2, 3 and 4
b) 2 and 4 only
c) 1 and 3 only
d) 1, 2 and 3 only
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following can aid in furthering the Government’s objectives of inclusive growth? 1. Promoting Self-Help Groups 2. Promoting Micro, Small and Medium Enterprises 3. Implementing the Rights to Education Act Select the correct answer using the codes given below:

a) 1 only
b) 1 and 2 only
c) 2 and 3 only
d) 1, 2 and 3
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

a) FII helps bring better management skills and technology, while FDI only brings in capital
b) FII helps in increasing capital availability in general, while FDI only targets specific sectors
c) FDI flows only into the secondary market, while FII targets primary market
d) FII is considered to be more stable than FDI
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following actions which the Government can take: 1. Devaluing the domestic currency. 2. Reduction in the export subsidy. 3. Adopting suitable policies which attract greater FDI and more funds from FIIs. Which, of the above action/ actions can help in reducing the current account deficit?

a) 1 and 2
b) 2 and 3
c) 3 only
d) 1 and 3
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Inclusive growth as enunciated in the Eleventh-Five Year Plan does not include one of the following:

a) Reduction of poverty
b) Extension of employment opportunities
c) Strengthening of capital market
d) Reduction of gender inequality
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

The SEZ Act, 2005 which came into effect in February 2006 has certain objectives. In this context, consider the following: 1. Development of infrastructure facilities 2. Promotion of investment from foreign sources 3. Promotion of exports of services only. Which of the above are the objectives of this Act?

a) 1 and 2 only
b) 3 only
c) 2 and 3 only
d) 1, 2 and 3
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

In the context of India’s Five Year Plans, a shift in the pattern of industrialization, with lower emphasis on heavy industries and more on infrastructure begins in

a) Fourth Plan
b) Sixth Plan
c) Eight Plan
d) Tenth Plan
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and mature economies like UK and France. Why?

a) India has preference for certain countries as regards receiving FDI
b) India has double taxation avoidance agreement with Mauritius
c) Most citizens of Mauritius have ethnic identity with India and so they feel secure to invest in India
d) Impending dangers of global climatic change prompt Mauritius to make huge investments in India
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

During which Five Year Plan was the emergency clamped, new elections took place and the Janata Party was elected?

a) Third
b) Fourth
c) Fifth
d) Sixth
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following statements regarding Indian Planning: 1. The Second Five-Year Plan emphasized on the establishment of heavy industries. 2. The Third Five-Year Plan introduced the concept of import substitution as a strategy for industrialization. Which of the statements given above is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following statements: 1. The Oil Pool Account of Government of India was dismantled with effect from 1 April 2002 2. Subsidies on PDS kerosene and domestic LPG are borne by Consolidated Fund of India 3. An expert committee headed by Dr. R A Mashelkar to formulate a national auto fuel policy recommended that Bharat Stage-II Emission Norms should be applied throughout the country by 1 April, 2004 Which of the statements given above are correct?

a) 1 and 2
b) 2 and 3
c) 1 and 3
d) 1, 2 and 3
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

In the last one decade, which one among the following sectors has attracted the highest Foreign Direct Investment inflows into India?

a) Chemicals other than fertilizers
b) Services sector
c) Food processing
d) Telecommunication
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following statements: 1. The maximum limit of shareholding of Indian promoters in private sector banks in India is 49% of paid up capital. 2. Foreign Direct Investment upto 49 per cent from all sources is permitted in private sector banks in India under the automatic route. Which of these statements is/are correct?

a) Only 1
b) Only 2
c) Both 1 and 2
d) Neither 1 nor 2
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Which one of the following statements is correct with reference to FEMA in India?

a) The Foreign Exchange Regulation Act (FERA) was replaced by Foreign Exchange Management Act (FEMA) in the year 2001
b) FERA was given a sunset clause of one year till 31st May, 2002 to enable Enforcement Directorate to complete the investigation of pending issues
c) Under FEMA, violation of foreign exchanges rules has ceased to be a criminal offence
d) As per the new dispensation, Enforcement Directorate can arrest and prosecute the people for the violation of foreign exchange rules
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

The Government holding in BPCL is

a) more than 70%
b) between 60% and 70%
c) between 50% and 60%
d) less than 50%
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

With reference to Government of India’s decisions regarding Foreign Direct Investment (FDI) during the year 2001-02, consider the following statements: 1. Out of the 100% FDI allowed by India in tea sector, the foreign firm would have to disinvest 33% of the equity in favor of an Indian partner within four years. 2. Regarding the FDI in print media in India, the single largest Indian shareholder should have a holding higher than 26%. Which of these statements is/are correct?

a) Only 1
b) Only 2
c) Both 1 and 2
d) Neither 1 nor 2
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Five Year Plan in India is finally approved by

a) Union Cabinet
b) President on the advice of Prime Minister
c) Planning Commission
d) National Development Council
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Global capital-flows to developing countries increased significantly during the nineties. In view of the East Asian Financial crisis and Latin American experience, which type of inflow is good for the host country?

a) Commercial loans
b) Foreign Direct Investment
c) Foreign Portfolio Investment
d) External Commercial Borrowings
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following statements: The objectives of the National Renewal Fund set up in February 1992 were 1. to give training and counseling for workers affected by retrenchment or VRS. 2. redeployment of workers. Which of these statements is/are correct?

a) Neither 1 nor 2
b) Both 1 and 2
c) 1 only
d) 2 only
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

The largest share of Foreign Direct Investment (1997–2000) went to

a) Food and food-product sector
b) Engineering sector
c) Electronics and electric equipment sector
d) Services sector
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Economic liberalization in India started with

a) substantial changes in industrial licensing policy
b) the convertibility of Indian rupee
c) doing away with procedural formalities for foreign direct investment
d) significant reduction in tax rates
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

The planning process in the industrial sector in India has assumed a relatively less important position in the nineties as compared to that in the earlier period. Which one of the following is not true in this regard?

a) with the advent of liberalization, industrial investments/development have largely been placed within the domain of private and multinational sectors
b) with markets assuming a central place, the role of central planning in many sectors has been rendered redundant
c) the focus of planning has shifted to sectors like human resource development, infrastructure, population control and welfare
d) the nation’s priorities have shifted away from industrial development to rural development
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Sometimes back, the Government of India, decided to delicense ‘white goods’ industry. ‘White goods’ include

a) stainless steel and aluminium utensils
b) milk and milk products
c) items purchased for conspicuous consumption
d) soaps, detergents and other mass consumption goods
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

The Sixth and the Eighth Five Year Plans covered the period 1980-1985 and 1992-1997 respectively. The Seventh Five Year Plan covered the period:

a) 1987–1992
b) 1986–1991
c) 1985–1990
d) 1988–1994
Answer: c
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Q . PLANNING, REFORMS, LIBERALIZATION

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Assertion (A): An important policy instrument of economic liberalization is reduction in import duties on capital goods. Reason (R): Reduction in import duties would help the local entrepreneurs to improve technology to face the global markets. In the context of the above two statements, which one of the following is correct?

a) Both A and R are true and R is the correct explanation
b) Both A and R are true but R is not a correct explanation
c) A is true but R is false
d) A is false but R is true
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Assertion (A): The emergence of economic globalism does not imply the decline of socialist ideology. Reason (R): The ideology of socialism believes in Universalism and globalism. In the context of the above two statements which one of the following is correct?

a) Both A and R are true and R is the correct explanation of A
b) Both A and R are true but R is not the correct explanation of A
c) A is true but R is false
d) A is false but R is true
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because:

a) convertibility of the rupee will stabilize its exchange value against major currencies of the world
b) it will attract more foreign capital inflow in India
c) it will help to promote exports
d) it will help India secure loans from the world financial markets at attractive terms
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

The Eighth Five Year Plan is different from the earliest ones. The critical difference lies in the fact that:

a) it has a considerably larger outlay compared to the earlier plans
b) it has a major thrust on agricultural and rural development
c) considerable emphasis is placed on infrastructure growth
d) industrial licensing has been abolished
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

The largest source of financing the public sector outlay of the Eighth Five Year Plan comes from:

a) balance from current revenue
b) contribution of public enterprises
c) government borrowings
d) deficit financing
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

As part of the liberalization programme and with a view to attract foreign exchange, the government and the RBI have, devised two scheme known as FCNR ‘A’ and FCNR ‘B’. Which of the following is/are true regarding these two schemes? 1. Under scheme ‘A’ RBI bears exchange rate fluctuations. 2. Under scheme ‘B’ other banks are to meet out the difference in exchange rate fluctuations. 3. Both the schemes stand withdrawn now. 4. Only scheme ‘A’ has been withdrawn Codes:

a) 3 only
b) 1 and 2
c) 1, 2 and 3
d) 1, 2 and 4
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

What is the annual rate aimed in the Eighth Five Year Plan

a) 5.60%
b) 6%
c) 6.50%
d) 7%
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

Which one of the following Five-Year Plans recognized human development as the core of all development efforts?

a) The Third Five Year Plan
b) The Fifth Five Year Plan
c) The Sixth Five Year Plan
d) The Eighth Five Year Plan
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

The basic difference between imperative and indicative planning is that

a) in the case of the imperative planning the market mechanism is entirely replaced by a command hierarchy, while in the case of indicative planning, it is looked upon as a way to improve the functioning of the market system.
b) In the case of indicative planning there is no need to nationalize any industry
c) in the case of imperative planning all economic activities belong to public sector, while in the other type they belong to the private sector
d) It is easier to achieve targets in imperative type of planning
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

Which one of the following statements is correct?

a) Neither the Finance Commission nor the Planning Commission is a constitutional body
b) The scope of the Finance Commission is limited to a review of the revenue segment of the budget while the Planning Commission takes an overall review embracing both capital and revenue requirements of the States.
c) No one can be a member of both the Finance Commission and the Planning Commission at the same time
d) There is no overlapping of work and responsibility of the Finance Commission and those of the Planning Commission
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Which one of the following modes of privatization is the most comprehensive and complete?

a) Introduction of private capital in public sector
b) Contracting out management of public enterprises to the private sector
c) Transferring ownership and management to the workers
d) Transferring ownership and management to the private sector
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

In India the Public Sector is most dominant in

a) steel production
b) organized term lending financial institutions
c) transport
d) commercial banking
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

Based on the ideals of Supportive Economic Increment, complete nationalization based planning was first adopted by

a) China
b) USSR
c) Poland
d) Cuba
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Consider the following policy decisions of the Government: 1. Giving autonomy to the electronic media. 2. Appointing an industrialist as the Chairman of the Indian Airlines. 3. Hiring computer services on contract basis from the market. 4. Selling equity shares of the State Bank of India in the market. Of the above, which would constitute privatization?

a) 1 and 2
b) 2 and 3
c) 3 and 4
d) 2 and 4
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following is true?

a) Physical planning is more important than financial planning
b) Financial planning is more important than physical planning
c) Physical planning and financial planning are equally important
d) Physical planning and financial planning are complementary
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

In the Sixth Five-Year Plan, priority was given to

a) Strengthen the infrastructure for agriculture and industry both
b) Removal of poverty and attainment of economic self-reliance
c) Socialist pattern of society
d) Petroleum production
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

The long-term fiscal policy formulated in the context of Seventh Five-Year Plan lays emphasis on

a) Tackling the problems of deep-seated poverty and unemployment
b) Reforming taxing system
c) Capital formation by increasing money income and reducing real consumption
d) Making taxes easily comprehensible to the taxpayers
Answer: a
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The main goals of the Five-Year Plans(1985-90) are to reduce poverty and improve the quality of life for all citizens.

This is done by creating job opportunities, expanding education and health care systems, and improving infrastructure.

In addition, the plans must take into account environmental concerns to achieve sustainable development

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Q . PLANNING, REFORMS, LIBERALIZATION

Which of the following Five-Year Plans was terminated one year before its completion?

a) Second
b) Third
c) Fourth
d) Fifth
Answer: d
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  •   The fifth plan was terminated in 1977-78 one year before its completion by the Janta Government and they launched their own sixth plan for the period 1978-83 and called it ‘rolling plan’.
  •   Later the Janta government came down and Indira Gandhi again became prime minister of India who immediately discarded the sixth plan by the Janta government and launched her own plan for year 1980-85.
  •   The year 1978-79 was restored back to fifth plan of 1974-79.
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Q . PLANNING, REFORMS, LIBERALIZATION

The major source of revenue for executing Five-Year Plans is

a) Direct taxes
b) Indirect taxes
c) Foreign loans
d) Interest on investments
Answer: b
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The major source of revenue for executing Five-Year Plans is Indirect taxes including GST and excise duty among others.

It incorporates all those population involved in the consumption of goods and services in the ambit of tax collection which make much large amount of tax collection over Direct tax, Foreign loans and Intersests.

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Q . PLANNING, REFORMS, LIBERALIZATION

The novelty in the Sixth Plan was

a) Area planning
b) Sectoral planning
c) Rural development
d) New expansion programme
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Some of the measures of the Fifth Five-Year Plan were: I. Removal of poverty II. Economic self-sufficiency III. Heavy industrialization IV. Conservation of foreign exchange Of these the strategic objectives of the Plan in priority order were

a) I, II, III, IV
b) II, I, III, IV
c) I, II, IV, III
d) II, I, IV, III
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

First Five-Year Plan laid stress on

a) Agriculture
b) Industry
c) Power
d) Uplifting of poor people
Answer: a
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Q . PLANNING, REFORMS, LIBERALIZATION

Nehru Model of Development laid greater stress on

a) Collective use of land
b) Using imported seeds
c) Agricultural development
d) Rapid industrialisation with particular emphasis on the development of basic and heavy industries
Answer: d
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The Ideology guiding Nehru's Economic Policies:

  •   Nehru's economic policies have often been considered to be Socialist in nature.
  •   On the one hand, as a devoted Gandhian, he had strong belief in the betterment of rural economy. On the other hand, he had a strong belief that heavy industrial development would be the best way to serve India's economic interests.
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Q . PLANNING, REFORMS, LIBERALIZATION

Mixed economy means

a) Coexistence of small and large scale industries
b) Coexistence of private and public sectors
c) Promotion of agriculture as well as industries
d) Coexistence of rich and poor
Answer: b
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Q . PLANNING, REFORMS, LIBERALIZATION

Mixed economy refers to

a) The coexistence of heavy, small scale and cottage industries
b) The promotion of agriculture as well as cottage industries
c) The coexistence of rich as well as poor
d) Coexistence of public as well as private sector
Answer: d
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Q . PLANNING, REFORMS, LIBERALIZATION

“Socialistic Pattern” comes through

a) Free Economy
b) Mixed Economy
c) Public Sector
d) None of these
Answer: c
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