46 Objective questions on Planning & Economic Development (Civil Service Examination)



1. Which one of the following vive years plans recognized human development as the cove 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

2. Which of the following are among the non-plan expenditures of the Government of India? [1995]

1. Defence expenditure

2. Subsidies

3. All expenditures linked with the previous plan periods

4. Interest payment Codes:

(a) 1 and 2 (b) 1 and 3

(c) 2 and 4 (d) 1, 2, 3 and 4

3. What is the annual rate aimed at in the Eighth Five Year Plan? [1995]

(a) 5.6% (b) 6%

(c) 6.5% (d) 7%

4. The largest source of financing the public sector outlay of the Eighth Five Year Plan comes from: [1995]

(a) balance from current revenue

(b) contribution of public enterprises

(c) government borrowings

(d) deficit financing

5. The New Exim Policy announced in 1992, is for period of: [1995]

(a) 3 years (b) 4 years

(c) 7 years (d) 5 years

6. 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? [1996]

(a) Both A and R are true and R is the correct explanation

(b) Both A and R are true R is not a correct explanation

(c) A is true but R is false

(d) A is false but R is true

7. The Eighth Five Year Plan is different from the earliest ones. The critical difference lies in the fact that: [1996]

(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

8. Consider the following statements;

Most international agencies which find Development Programme in India on intergovernmental bilateral agreements, mainly provide: [1996]

1. Technical assistance

2. Soft loans which are required to be paid back with interest

3. Grants, not required to be paid back

4. Food assistance to be paid back

(a) 2 and 4 are correct

(b) 1, 2 and 3 are correct

(c) 1, 2 and 4 are correct

(d) 3 and 4 are correct

9. Consider the following items imported by India: [1996]

1. Capital goods

2. Petroleum

3. Pearls and precious stones

4. Chemicals

5. Iron and Steel

The correct sequence of the decreasing order of these items (as per 94-95 figures), in terms of value is:

(a) 1,2,3,4,5 (b) 1,2,4,3,5

(c) 2,1,3,4,5 (d) 2,1,4,5,3

10. The Sixth and the Eighth Five Year Plans covered the period 1930-1985 and 1992-1997 respectively. The Seventh Five Year Plan covered the period: [1997] (a) 1987-1992 (b) 1986-1991

(c) 1985-1990 (d) 1988-1994

11. Which of the following come under Non-plan expenditure? [1997]

1. Subsidies

2. Interest payments

3. Defence expenditure

4. Maintenance expenditure for the infrastructure created in the previous plans

Choose the correct answer using the codes given below:

(a) 1 and 2 (c) 1 and 3

(b) 2 and 4 (d) 1, 2, 3 and 4

12. Which one of the following regions of the world supplies the maximum of our imported commodities (in terms of rupee value)? [1998]

(a) Africa (b) America

(c) Asia and Oceania (d) Europe

13. The planning process is the industries 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? [1999]

(a) With the advent of liberalisation, industrial investment development have largely been placed within the domain of private and multinational sectors

(b) With market 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

(d) The nation's priorities have shifted away from industrial development to rural development

15. Which one of the following is the objective of National Renewal Fund? [1999]

(a) To safeguard the interests of workers who may be affected by technological upgradation of industry or closure of sick units

(b) To develop the core sector of the economy

(c) For the development of infrastructure such as energy, transport communications and irrigation

(d) For human resource development such as full literacy, employment population control, housing and drinking water

16. A rise in 'SENSSEX' means: [2000]

(a) a rise in prices of shares of all companies registered with Bombay Stock Exchange

(b) a rise in prices of shares of all companies registered with National Stock Exchange

(c) an overall rise in prices of shares of group up companies registered with Bombay Stock Exchange

(d) a rise in prices of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange

17. Assertion (A): The rate of growth of India's exports has shown an appreciable increase after 1991. [2000]

Reason (R): The Govt. of India has resorted to devaluation.

(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 a correct explanation of A

(c) A is true but R is false

(d) A is false but R is true

18. Match List I with List II and select the correct answer using the codes given below the lists: [2000]


A. Development Programme

B. National Council

C. Indira Gandhi Institute of

D. World Bank


1. UN India Human Development Report

2. India Development Report

3. World Development Report Development Research

4. Human Development Report


(a) A-4; B-1; C-2; D-3

(b) A-4; B-2; C-1; D-3

(c) A-2; B-3; C-4; D-1

(d) A-2; B-1; C-4;D-3

19. "...instil into the vast millions of workers, men and women, who actually do the job, a sense of partnership and of cooperative performance..." The above passage relates to:

(a) Planned Development [2000]

(b) Community Development

(c) Panchayati Raj System

(d) Integrated Development Programme

20. Economic liberalisation in India started with: [2000]

(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

21. Consider the following statements: [2000]

The Indian rupee is fully convertible:

1. in respect of Current Account of Balance of payment

2. in respect of Capital Account of Balance of payment

3. into gold

Which of these statements is/are correct?

(a) 1 alone (b) 3 alone

(c) 1 and 2 (d) 1, 2 and 3

22. The growth rate of per capita income at current prices is higher than that of per capita income at constant prices, because the latter takes into account the rate of: [2000]

(a) growth of population

(b) increase in price level

(c) growth of money supply

(d) increase in the wage rate

23. 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? [2002]

(a) Commercial loans

(b) Foreign Direct Investment

(c) Foreign Portfolio Investment

(d) External Commercial borrowings

24. With reference to the Indian Public Finance, consider the following statements: [2002]

1. External liabilities reported in the Union Budget are based on historical exchange rates

2. The continued high borrowing has kept the real interest rates high in the economy

3. The upward trend in the ratio of Fiscal Deficit of GDP a recent years has a adverse effect on private investment

4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government

Which of these statements are correct?

(a) 1, 2 and 3 (b) 1 and 4

(c) 2, 3 and 4 (d) 1,2,3 and 4

25. Five Year Plan in India is finally approved by: [2002]

(a) Union Cabinet

(b) President on the advice of Prime Minister

(c) Planning Commission

(d) National Development Council

26. Which one of the following is the correct statement? Service tax is a/an: [2006]

(a) direct tax levied by the Central Government.

(b) indirect tax levied by the Central Government.

(c) Direct tax levied by the State Government.

(d) Indirect tax levied by the State Government.

27. Participatory Notes (PNs) are associated with which one of the following? [2007]

(a) Consolidated Fund of India

(b) Foreign Institutional Investors

(c) United Nations Development Programme

(d) Kyoto Protocol

28. During which Five Year Plan was the Emergency clamped, new elections took place and the Janata Party was elected? [2009]

(a) Third (b) Fourth

(c) Fifth (d) Sixth

29. Consider the following statements regarding Indian Planning: [2009]

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

30. Which one of the following brings out the publication called "Energy Statistics" from time to time? [2009]

(a) Central Power Research Institute

(b) Planning Commission

(c) Power Finance Corporation Ltd.

(d) Central Statistical Organization

31. Consider the following: [2009]

1. Fringe Benefit Tax

2. Interest Tax

3. Securities Transaction Tax

Which of the above is/are Direct Tax/Taxes?

(a) 1 only (b) 1 and 3 only

(c) 2 and 3 only (d) 1, 2 and 3

32. In the context of independent India's economy, which one of the following was the earliest event to take place? [2009]

(a) Nationalization of Insurance companies

(b) Nationalization of State Bank of India

(c) Enactment of Banking Regulation Act

(d) Introduction of First Five-Year Plan

33. The SEZ Act, 2005 which came, into effect in February 2006 has certain objectives. In this context, consider the following: [2010]

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

34. 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? [2010]

(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

35. India-based Neutrino Observatory is included by the Planning Commission as a mega science project under the 11th Five-Year Plan. In this context, consider the following statements: [2010]

1. Neutrinos are chargeless elementary particles that travel close to the speed of light.

2. Neutrinos are created, in nuclear reactions of beta decay.

3. Neutrinos have a negligible, but non-zero mass

4. Trillions of Neutrinos pass through human body every second.

Which of the statements given above are correct?

(a) 1 and 3 only (b) 1, 2 and 3 only

(c) 2, 3 and 4 (d) 1,2,3 and 4

36. In the context of Indian economy, consider the following pairs: [2010]

Term Most Appropriate description

1. Melt down Fall in stock prices

2. Recession Fall in growth rate

3. Slowdown Fall in GDP

Which of the pairs given above is/are correctly matched?

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

37. In the context of governance, consider the following: [2010]

1. Encouraging Foreign Direct Investment inflows

2. Privatization of higher educational Institutions

3. Down-sizing o/bureaucracy

4. Selling/offloading the shares of Public Sector Undertakings

Which of the above can be used as measures to control the fiscal deficit in India?

(a) 1, 2 and 3

(b) 2, 3 and 4

(c) 1, 2 and 4

(d) 3 and 4 only

38. Inclusive growth as enunciated in the Eleventh Five Year Plan does not include one, of the following: [2010]

(a) Reduction of poverty

(b) Extension of employment opportunities

(c) Strengthening of capital market

(d) Reduction of gender inequality

39. Who of the following shall cause every recommendation made by the finance Commission to be laid before each House of Parliament? [2010]

(a) The President of India

(b) The Speaker of Lok Sabha

(c) The Prime Minister of India

(d) The Union Finance Minister

40. Which one at the following is responsible for the preparation and presentation of Union Budget to the Parliament? [2010]

(a) Department of Revenue

(b) Department of Economic Affairs

(c) Department of Financial Services

(d) Department of Expenditure

41. Consider the following actions by the Government: [2010]

1. Cutting the tax rates

2. Increasing the government spending

3. Abolishing the subsidies In the context of economic recession, which of the above actions can be considered a part of the "fiscal stimulus" package?

(a) 1 and 2 only (b) 2 only

(c) 1 and 3 only (d) 1,2 and 3

42. 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 [2010]

(a) Fourth Plan

(b) Sixth Plan

(c) Eighth Plan

(d) Tenth Plan

43. With reference to the National Investment Fund to which the disinvestment proceeds are routed, consider the following statements: [2010]

1. The assets in the National Investment Fund are managed by the Union Ministry of Finance.

2. The National Investment Fund is to be maintained within the Consolidated Fund of India.

3. Certain Asset Management companies are appointed as the fund managers.

4. A certain proportion of annual, income is used for financing select social sectors.

Which of the statements given above is/are correct?

(a) 1 and 2

(b) 2 only

(c) 3 and 4

(d) 3 only

44. In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years? [2010]

(a) Service tax

(b) Personal income tax

(c) Excise duty

(d) Corporation tax

45. Which one of the following authorities makes recommendation to the Governor of a State as to the principles for determining the taxes and duties which may be appropriated by the Panchayats in that particular State?


(a) District Planning Committees

(b) State Finance Commission

(c) Finance ministry of that State

(d) Panchayati Raj Ministry of that State

46. Consider the following statements:

In India, taxes on transactions in Stock Exchanges and Futures Markets are [2010]

1. levied by the Union

2. collected by the states

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


1. (d) The theme of the eighth five year plan (1992-1997) was "Plan with a human face".

2. (d) Non plan expenditures include non-developmental expenditure (interest payment, subsidies, defence expenditure, civil administration), developmental expenditure and expenditure incurred on projects which remained unfinished in the previous plan.

3. (a) The targeted annual growth rate was 5.6% but the achieved growth rate was 6.7%.

4. (d) Deficit financing, practice in which a government spends more money than it receives as revenue, the difference being made up by borrowing or minting new funds.

5. (d) It was for five years (April 1, 1992 - March 31, 1997)

6. (a) Both statements are correct and explains.

7. (a) Eighth Five Year Plan (1992-97)

8. (b) A soft loan is a loan with a below-market rate of interest. This is also known as soft financing. Sometimes soft loans provide other concessions to borrowers, such as long repayment periods or interest holidays. Soft loans are usually provided by governments to projects they think are worthwhile. The World Bank and other development institutions provide soft loans to developing countries.

9. (b)

10. (c) Period between 1990-92 was second plan holiday. The first plan holiday was between 1966-69.

11. (d) Non plan expenditures include non-developmental expenditure (interest payments, subsidies, defence expenditure, civil administration), developmental expenditure and expenditure incurred on projects which remained unfinished in the previous plan.

12. (d)

13. (d) Statement (a), (b) and (c) are True which explain the less important position of industries sector after minutes.

14. (b)

15. (a) The Concept of the National renewal Fund was announced by the Government as a part of the New Industrial Policy, 1991. The Government formal established the National Renewal Fund (NRF) by a Government of India resolution on 3rd February, 1992.

16. (c) Increase in Sensex reflects the overall mood of the economy of India. A rise in it means that investors & FIIs are positive about the growth of Indian economy & it will be sustained in future. But a rise in Sensex doesn't necessarily mean that the price of your stocks also move up.

17. (a) Devaluation of currency is conscious decision take by Central bank of country to lower the external value of domestic currency. As a result of this Indian goods become cheaper for Foreigners.

18. (a) National council of applied economic research brings out India development report.

19. (b) Community development programme was started in the year 1952.

20. (a) Economic liberalization in India started with industrial de-licensing.

21. (a) In respect of capital account of balance of payment, the Indian rupee is partially convertible.

22. (b) National income calculated on the basis of price levels prevailing in current year where as National income at constant prices means NI calculated by using certain past base year prices to arrive at real change in the NI over a period of time.

23. (b) FDI is defined as investment by a foreign multinational or its subsidiary or a foreign company in terms of setting up a project in another country either by way of a 100% subsidiary or by way of a joint venture. Thus, FDI is long term in nature. Thus, it can not be pulled out of the country. It is also non-debt creating.

24. (c)

25. (d) According to given options, the right answer is NDC.

But actually it is finally approved by the Parliament.

26. (b) 95th constitutional amendment act 2003

27. (b) Participatory notes (PNs / P-Notes) are instruments used by investors or hedge funds that are not registered with the SEBI (Securities & Exchange Board of India) to invest in Indian securities. Participatory notes are instruments that derive their value from an underlying financial instrument such as an equity share and, hence, the word, 'derivative instruments'. SEBI permitted FIIs to register and participate in the Indian stock market in 1992.

28. (c) This all happened from 1975-78 during fifth five year plan (1974-78)

29. (a) Second Five- Year Plan (1956-1961); The fourth Five- Year Plan (1969-74) introduced the concept of import substitution as a strategy for industrialization.

30. (d) It is published by Ministry of statistics & Programme implementation, Central Statistical organization.

31. (d) Fringe Benefits Tax (FBT) was the tax applied to most although not all, fringe benefits. A new tax was imposed on employers by India's Finance Act 2005 was introduced for the financial year commencing April 1, 2005. The Fringe Benefit Tax is abolished in the Finance Bill of 2009 by Finance Minister Pranab Mukherjee. Securities Transaction Tax (STT) is the tax payable on the value of taxable securities transaction. STT was introduced in India by the 2004 budget and is applicable with effect from 1st October 2004.

32. (c) Nationalization of State Bank of India - 1955; Introduction of First Five-Year Plan - 1951; Enactment of Banking Regulation Act - 1949; Nationalization of Insurance companies - 1955-56

33. (a)The objectives of SEZs include making available goods and services free of taxes and duties supported by integrated infrastructure for export, production, expeditious and single window approval mechanism and a package of incentives to attract foreign and domestic investments for promoting export-led growth.

34. (b) India has comprehensive Double Taxation Avoidance Agreements (DTAA) with 23 countries. This means that there are agreed rates of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. Under the Income Tax Act 1961 of India, there are two provisions, Section 90 and Section 91, which provide specific relief to taxpayers to save them from DTAA. Section 90 is for taxpayers who have paid the tax to a country with which India has signed DTAA, while Section 91 provides relief to tax papers who have paid tax to a country with which India has not signed a DTAA. Thus, India gives relief to both kind of taxpayers.

35. (d)A neutrino is an elementary particle that usually travels close to the speed of light, is electrically neutral, and is able to pass through ordinary matter almost undisturbed. This makes neutrinos extremely difficult to detect. Neutrinos have a very small, but nonzero rest mass. Neutrinos are affected only by a "weak" sub­atomic force of much shorter range than electromagnetism, and are therefore able to pass through great distances in matter without being affected by it.

36. (a) Recession is slow down in demand.

37. (b) Fiscal deficit = Revenue receipts + Non-debt creating capital receipts - Total expenditure

38. (c) Inclusive growth is 'broad-based growth', 'shared growth', and 'pro-poor growth".

39. (a) As per provisions given under article 281 of the Indian constitution.

40. (b) The DEA is also responsible for preparation and presentation to the Parliament of Central Budget and the Budgets for the Stale Governments under President's Rule and Union Territory Administrations.

41. (a) Abolishing the subsidies will lead to higher prices of basic goods. Thus it is not good for providing stimulus in the economy.

42. (c) It was during eighth plan period (1992-97)

43. (c) On 27 January 2005, the Government had decided to constitute a 'National Investment Fund' (N1F) into which the realization from sale of minority shareholding of the Government in profitable CPSEs would be channelised Salient features of NIF:

44. (c) The excise duty's share in the total tax revenue, which was 41.3 percent in 1992-93. declined to 25.1 percent in 2006-07. The customs duty's share in the total tax revenue, which was 31.9 percent in 1992-93,, fell to 17.5 percent in 2006-07, as a result of massive structuring on excise and customs," Assocham said."

45. (b) Article 243 I of the constitution of India

46. (a)