Nature of Indian Economy

Indian Economy (Features and Structure) - PYQ Points

• 'India will be a global player in the digital economy' was stated by Sundar Pichai.
• The Indian economy is characterized by (correct statements):
  (i) Low per capita income
  (iii) Improving rate of capital formation.
• Mixed Economy refers to the co-existence of public and private sectors.
• In the Indian economy, the sectors most severely affected by the COVID pandemic are: (a) Micro, Small and Medium Enterprises (MSME), (b) Aviation sector, and (c) Tourism and Hospitality sector.
• The sector occupying a predominant place in the Indian economy is Agriculture.
• The sector that generates the highest income in the Indian economy is the Tertiary sector / Service sector.
• Incorrect statement under the strengths of Indian Economy: "Industries play the key role" is incorrect (India has experienced higher growth in the service sector).
• Statements regarding Mixed Economy (correct):
  (i) In a mixed economy, both public and private sectors coexist.
  (ii) India follows a mixed economic system.
  (Answer: Both (i) and (ii) are correct).
• The economic system that fully incorporates the ideas of Karl Marx is the Socialist Economy.
• During the Great Depression, the economic system that failed to respond to the needs of the people was the Capitalist System.
• Major issues in the IT Sector:
  (i) Infrastructure and services
  (ii) Electronic governance
  (iii) Education.
• Correct Matches:
  2. Father of Socialism – Karl Marx
  4. Author of the concept of Scarcity – Lionel Robbins
  (Note: The Father of Capitalism is Adam Smith, not Alfred Marshall).
• The term referring to the coexistence of two completely different characteristics in an economy is Dualism.
• Correct statements about the Indian Economy:
  (ii) Agriculture is the occupation pursued by the maximum number of people in India.
  (iii) The Indian economy is a member of the G20 countries.
• Assertion and Reason:
  Assertion [A]: The prices of essential commodities are continuously increasing.
  Reason [R]: This affects the purchasing power of poor people.
  Answer: Both [A] and [R] are correct, but [R] is not the correct explanation of [A].
• The correct statement applicable to the Indian economy: Presence of a Mixed Economy.
• According to A.V. Kneese (1988), Circular Economy refers to the efficient use and reuse of resources.
• The target year set for achieving a '5 Trillion Dollar Indian Economy' is 2024-25.

• India’s National Income is calculated by the Central Statistical Organisation (CSO).
• Correct statements regarding India's position in the world economy:
  (2) India ranks third in the world economy in terms of Purchasing Power Parity (PPP).
  (4) According to 2017 data, China has the highest number of internet users in the world.
• Correct statement regarding Black Money: Assets whose production or income is not reported to the Government.
• Statements regarding the definition of GDP: The given statements (a) not related to a specific time period, (b) not related to services, and (c) non-monetary measure are all Wrong.
• Capital-output ratio refers to the amount of capital required to produce one unit of output.
• Match the economic indicators and measures:
  (a) High income growth – Annual growth rate of Gross Domestic Product (GDP)
  (b) Income inequality – Gini Coefficient
  (c) Regional disparity – Per capita Gross State Domestic Product
  (d) High total income and output – Gross Domestic Product (GDP).
• In 2016-17, India ranked Seventh in Nominal GDP in the world economy.
• The institution responsible for calculating GDP in India is the National Statistical Office (NSO).
• Match the types of investment with their features:
  (a) Foreign Direct Investment (FDI) – Creation of productive assets in a country through foreign capital.
  (b) Foreign Portfolio Investment (FPI) – Foreigners purchasing shares, bonds and financial assets of the country.
  (c) Commercial Borrowings – Borrowing loans from foreign financial institutions.
  (d) Foreign Institutional Assistance – Financial assistance provided by foreign institutions.
• In 2010-11, the contribution of agriculture and allied sectors to India’s Gross National Product (at 2004-05 prices) was 14.4 percent.
• The relationship between GDP and unemployment is explained by Okun’s Law.
• Per Capita Income is calculated as: National Income / Population.
• In 2019-20, the recorded ratios were: Gross Domestic Savings – 30.9 percent and Investment – 32.2 percent.
• The National Statistical Commission (NSC) was established in the year 2005.