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Nature of Indian Economy

📆 October 1, 2024

Total Questions: 18

1. Mixed economy means : [U.P.U.D.A./L.D.A. (Pre) 1999]

Correct Answer: (b) Where public sector and private sector co-exist in the national economy
Solution:A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, capitalism with socialism, free markets with state interventionism, or private enterprise with public enterprise. Hence, mixed economy is referred to the economic system in which both public and private sector co-exist and the government encourages both the sectors to develop simultaneously.

2. Mixed economy in India means : [U.P.P.C.S. (Mains) 2013]

Correct Answer: (c) Co-existence of public and private sector
Solution:A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, capitalism with socialism, free markets with state interventionism, or private enterprise with public enterprise. Hence, mixed economy is referred to the economic system in which both public and private sector co-exist and the government encourages both the sectors to develop simultaneously.

3. Mixed economy means : [U.P.P.C.S. (Pre) 1990, U.P.U.D.A. (Pre) 2006, Uttarakhand U.D.A./L.D.A. (Pre) 2007]

Correct Answer: (b) Existence of both private and public sectors
Solution:A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, capitalism with socialism, free markets with state interventionism, or private enterprise with public enterprise. Hence, mixed economy is referred to the economic system in which both public and private sector co-exist and the government encourages both the sectors to develop simultaneously.

4. Indian Economy is : [U.P.R.O. /A.R.O. (Mains) 2016]

Correct Answer: (a) Mixed economy
Solution:Indian economy is a prominent example of mixed economy. A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. Mixed economies typically maintain private ownership and control of most of the means of production, but often under government regulation and socialize selected industries that are deemed essential or that produce public goods. Gandhian socialist economy is based on decentralization and equal distribution of resources without any exploitation and violence. Self-employment and self-reliance are key features of Gandhian self-sufficient economy.

5. Which of the following is main characteristics of Indian Economy ? [U.P.P.C.S. (Pre) (Re-Exam) 2015, U.P.P.C.S. (Mains) 2013]

Correct Answer: (c) Mixed economy
Solution:Indian economy is a prominent example of mixed economy. A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. Mixed economies typically maintain private ownership and control of most of the means of production, but often under government regulation and socialize selected industries that are deemed essential or that produce public goods. Gandhian socialist economy is based on decentralization and equal distribution of resources without any exploitation and violence. Self-employment and self-reliance are key features of Gandhian self-sufficient economy.

6. Which type of economy does India have ? [B.P.P.C.S. (Pre) 2011, U.P.P.C.S. (Pre) 2007]

Correct Answer: (c) Mixed
Solution:Indian economy is a prominent example of mixed economy. A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. Mixed economies typically maintain private ownership and control of most of the means of production, but often under government regulation and socialize selected industries that are deemed essential or that produce public goods. Gandhian socialist economy is based on decentralization and equal distribution of resources without any exploitation and violence. Self-employment and self-reliance are key features of Gandhian self-sufficient economy.

7. It will be true to classify India as : [B.P.S.C (Pre) 2008]

Correct Answer: (b) A labour-surplus economy
Solution:India is classified as a labour-surplus economy because of its large population and with an unlimited number of workers willing to work at a subsistence wage. India is projected to have a skilled -labour surplus of around 245.3 million workers by 2010, owing mainly to its vast supply of working -age citizens and government programmes to boost worker's skills. A food-deficit economy describes a nation where food production is insufficient to meet the needs of its population, requiring it to import food to ensure adequate supplies. This situation can lead to economic and social challenges, including rising food prices, increased vulnerability to global supply shocks, and potential negative impacts on health and development.
A trade-surplus economy is a country where the value of its exports exceeds the value of its imports. This means the country sells more goods and services to other countries than it buys from them, resulting in a positive trade balance. This situation is also known as a "favorable balance of trade" or having a trade surplus.
A capital-surplus economy refers to a situation where a country or company has more capital available for investment than it needs. This surplus can be used for various purposes, including investing in infrastructure, expanding business operations, or lending to other countries.

8. An underdeveloped economy is generally characterized by : [U.P.P.C.S. (Mains) 2017]

I. Low per capita income

II. Low rate of capital formation

III. Low dependency ratio

IV. Work force largely in the tertiary sector

Select the correct answer from the codes given below :
Codes :

Correct Answer: (a) I and II
Solution:An underdeveloped economy is generally characterized by low per capita income, high rate of population growth, excessive dependence on backward agriculture, low rate of capital formation, high level of unemployment and underemployment, low levels of living, high levels of poverty and illiteracy, technical and industrial backwardness etc. Low dependency ratio and work force largely in the tertiary sector are features of developed economy.

9. Which of the following correctly explains that India is an underdeveloped economy ? [Chhattisgarh P.C.S. (Pre) 2017]

1. Inequitable distribution of income

2. High dependency ratio

3. Slower rate of increase in national income

4. Change in banking and financial sector

Select the correct answer using the codes given below .

Correct Answer: (e) 1, 2 and 3
Solution:Inequitable distribution of income, high dependency ratio and slower rate of increase in national income correctly explain that India is an underdeveloped economy while change in banking and financial sector is not among the characteristics of underdeveloped economy.                                                              A significant gap between the rich and poor, with a large portion of the population experiencing poverty, hinders economic growth and development.
A high dependency ratio (the ratio of dependents, such as children and elderly, to the working-age population) puts a strain on the productive workforce, impacting economic output and potentially leading to a larger share of the population being supported by a smaller number of workers.
A slow rate of increase in national income, relative to the population growth, results in a low per capita income, a key indicator of economic development.

10. Which of the following features indicates that Indian economy is in a developing category ? [U.P.P.C.S. (Mains) 2017]

I. Occupation is mainly agriculture

II. Disguised unemployment

III. Poor quality of human capital

IV. High per capita intake of proteins

Select the correct answer from the codes given below :
Codes :

Correct Answer: (d) I, II & III
Solution:Indian economy is characterised as a developing economy.

The following features indicates that Indian economy is in a developing category-

• Low per capita income;

• Excessive dependence on agriculture (Occupation is mainly agriculture);

• High rate of population growth and over population;

• Existence of chronic unemployment and disguised unemployment;

• Poor rate of capital formation;

• Low level of technology;

• Poor quality of human capital;

• Lack of infrastructure;

• High level of poverty and inequality;

• Low industrial development;

• Market imperfections;

• Low level of living of an average Indian etc.

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