Nature of Indian Economy – 30 MCQs (SSC Exam-Oriented)

Target Exams: SSC CGL | CHSL | CPO | GD | MTS | SSC JE| Other One-Day Exams

How to use: Try each question first. Click “Show Answer & Explanation” to check.

MCQs

1) The Indian economy is classified as a:

  1. Socialist economy
  2. Capitalist economy
  3. Mixed economy
  4. Command economy
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Answer: C) Mixed economy

India combines public and private sector participation in production and distribution.

2) Which of the following sectors contributes the largest share to India’s GDP (recent years)?

  1. Agriculture
  2. Industry
  3. Services
  4. Manufacturing
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Answer: C) Services

Services contribute the highest share in GDP compared to agriculture and industry.

3) Which year is known for the introduction of economic liberalization in India?

  1. 1980
  2. 1991
  3. 1995
  4. 2001
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Answer: B) 1991

LPG reforms (Liberalization, Privatization, Globalization) began in 1991.

4) Which of the following is NOT a characteristic of the Indian economy?

  1. Predominance of agriculture in employment
  2. High per capita income
  3. Mixed economy
  4. Large population
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Answer: B) High per capita income

India is still classified as a developing economy with relatively lower per capita income.

5) Which sector is the largest employer in India?

  1. Agriculture
  2. Industry
  3. Services
  4. Mining
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Answer: A) Agriculture

Agriculture employs the largest share of the workforce.

6) Which is the primary reason India is considered a developing economy?

  1. High GDP growth
  2. High literacy rate
  3. Low per capita income
  4. High export rate
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Answer: C) Low per capita income

Per capita income is a key indicator in development classification.

7) India’s economic planning is based on which model (especially Second Five-Year Plan)?

  1. Harrod–Domar model
  2. Mahalanobis model
  3. Keynesian model
  4. Chicago model
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Answer: B) Mahalanobis model

Emphasized heavy industries for long-term growth.

8) Which of the following is NOT a feature of the Indian economy?

  1. Large labor force
  2. Dependence on agriculture
  3. Technologically advanced infrastructure everywhere
  4. Regional imbalance
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Answer: C) Technologically advanced infrastructure everywhere

Infrastructure is uneven across regions.

9) Which sector experienced the fastest growth in the post-reform period?

  1. Agriculture
  2. Manufacturing
  3. Services
  4. Mining
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Answer: C) Services

IT, finance, communication, and modern services boomed after 1991.

10) The economy’s shift from agriculture to services without fully maturing in manufacturing is called:

  1. Premature industrialization
  2. Premature deindustrialization
  3. Over-industrialization
  4. Balanced growth
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Answer: B) Premature deindustrialization

Services gained dominance before manufacturing matured.

11) The Green Revolution in India was aimed at:

  1. Industrial growth
  2. Agricultural productivity
  3. Service sector development
  4. Poverty reduction directly
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Answer: B) Agricultural productivity

Introduced HYV seeds, irrigation, fertilizer use and improved practices.

12) The informal sector in India is also called the:

  1. Organized sector
  2. Unorganized sector
  3. Formal economy
  4. Government sector
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Answer: B) Unorganized sector

Includes small, unregistered, labor-intensive economic activities.

13) India’s position in world GDP (Nominal) is:

  1. 3rd
  2. 5th
  3. 7th
  4. 2nd
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Answer: B) 5th

India is among the top economies by nominal GDP.

14) As per World Bank income classification, India is a:

  1. Low income
  2. Lower-middle income
  3. Upper-middle income
  4. High income
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Answer: B) Lower-middle income

Based on GNI per capita thresholds.

15) “Demographic dividend” refers to:

  1. Increase in elderly population
  2. Increase in working-age population
  3. Increase in literacy rate
  4. Increase in per capita income
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Answer: B) Increase in working-age population

Higher share of 15–64 years can boost growth potential.

16) The Indian economy is described as “developing” mainly due to:

  1. High industrial growth
  2. Income inequality and poverty
  3. High exports
  4. Low unemployment
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Answer: B) Income inequality and poverty

Persistent poverty and inequality despite growth.

17) Which Five-Year Plan was called the “People’s Plan”?

  1. First Plan
  2. Third Plan
  3. Fourth Plan
  4. None of these
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Answer: D) None of these

“People’s Plan” was proposed by M.N. Roy; it was never implemented as an official plan.

18) The largest contributor to India’s foreign exchange earnings is:

  1. Gems and jewellery
  2. Petroleum products
  3. Software services
  4. Textiles
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Answer: C) Software services

IT/ITeS exports are a major source of forex earnings.

19) Which committee first recommended poverty lines in terms of calorie intake?

  1. Rangarajan Committee
  2. Tendulkar Committee
  3. Lakdawala Committee
  4. Alagh Committee
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Answer: D) Alagh Committee

In 1979, Alagh Committee proposed poverty lines based on nutrition (calorie) norms.

20) Which sector is known as the “sunrise sector” of India’s economy?

  1. Steel industry
  2. IT industry
  3. Textile industry
  4. Coal industry
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Answer: B) IT industry

Due to rapid growth, innovation, and export potential.

21) The term “Hindu rate of growth” refers to:

  1. High GDP growth before 1991
  2. Low GDP growth before 1991
  3. High GDP growth after 1991
  4. Negative GDP growth
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Answer: B) Low GDP growth before 1991

Coined by economist Raj Krishna for ~3–4% trend growth in earlier decades.

22) Which state has the largest economy in India by nominal GSDP?

  1. Maharashtra
  2. Tamil Nadu
  3. Gujarat
  4. Uttar Pradesh
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Answer: A) Maharashtra

Consistently ranks highest by nominal GSDP.

23) India’s rank in global GDP by Purchasing Power Parity (PPP) is:

  1. 2nd
  2. 3rd
  3. 4th
  4. 5th
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Answer (widely cited): 3rd

India is usually placed after China and the USA in PPP terms. (Some sources may vary; SSC commonly accepts 3rd.)

24) Which plan period is associated with the “Gadgil Yojana”?

  1. First Plan
  2. Third Plan
  3. Fourth Plan
  4. Fifth Plan
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Answer: B) Third Plan

Named after D.R. Gadgil; focus on agriculture and basic industry.

25) The first industrial policy of independent India was announced in:

  1. 1948
  2. 1951
  3. 1956
  4. 1991
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Answer: A) 1948

Outlined the mixed economy approach and roles of public–private sectors.

26) Which organization publishes the Human Development Index (HDI)?

  1. World Bank
  2. UNDP
  3. IMF
  4. WTO
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Answer: B) UNDP

United Nations Development Programme releases HDI annually.

27) India’s HDI category is generally considered:

  1. Very high human development
  2. High human development
  3. Medium human development
  4. Low human development
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Answer: C) Medium human development

India typically falls in the medium HDI category in recent reports.

28) The Blue Revolution in India relates to:

  1. Irrigation
  2. Fisheries
  3. Space research
  4. Industrial policy
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Answer: B) Fisheries

Focuses on increasing fish production and aquaculture.

29) Which state has emerged as a major contributor to India’s agriculture GVA due to crops like wheat, soybean, pulses?

  1. Uttar Pradesh
  2. Panjab
  3. Maharashtra
  4. Madhya Pradesh
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Answer: D) Madhya Pradesh

MP is a leading producer of wheat, soybean and pulses, boosting agri GVA.

30) Which policy was aimed at removing “License Raj” in India?

  1. 1956 Industrial Policy
  2. 1977 Industrial Policy
  3. 1991 New Industrial Policy
  4. 2001 Industrial Policy
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Answer: C) 1991 New Industrial Policy

Deregulated most industries by abolishing industrial licensing.

Quick Revision Notes

  • India is a mixed economy with a service-led GDP but agriculture-led employment.
  • 1991 reforms shifted the economy toward LPG; services saw the fastest growth.
  • Green Revolution → higher farm productivity; Blue Revolution → fisheries.
  • India is classified as a lower-middle income, developing economy with medium HDI.

Tip: Use these MCQs for quick practice and convert them into flashcards for daily revision.

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