LEVEL A (KNOWLEDGE AND CONCEPTS)

Q1. Which of the following statements is not true about the demographic condition of India during the
Colonial period?
(a) Infant mortality rate was very high
(b) After 1921, India entered the second stage of demographic transition
(c) Life expectancy was too high
(d) Female literacy rate was just 7%
Ans c
Q2 _______________sector played a predominant role in occupational structure during the Colonial period.
(a)Agriculture
(b) Manufacturing
(c) Service
(d) Infrastructure
Ans (a)Agriculture
Q3. Estimation of National Income by --------------------- is considered most significant.
(a)R C Desai (b)Dadabhai Naoroji ( c)V V K R V Rao (d)WilliamDigdy
Ans c
Q4. First official census in India was conducted in :
(a) 1871 (b) 1881 ( c) 1891 (d) 1981
Ans b
Q5 Match the following
Column A Column B
1. Opening of Suez Canal (a) 1757
2. First Railway Bridge linking Bombay to (b) 1869
Thane
3. Battle of Plassey (c) 1907
4. Setting of TISCO (d) 1853

Choose the correct option

(a) i , ii , iii, iv
(b) ii , iv , i ,iii
(c) ii, iii , iv , i
(d) i, iv , ii , iii
Ans b
Q6. The President is the chairman of the planning commission. (True/ False)
Q7. Fill in the blank
___________ has replaced the planning commission in 2015.
Ans Niti Ayog
Q8. In the IPR of 1956, industries were classified in ___________ categories.
Ans Three
Q9. Define the term ‘Quota’.
Ans It refers to non tarrif barriers imposed on the quantity of imports and exports
Q10. What do you mean by Commercialization of Agriculture?
Ans It means production of crops for sale in the market rather than for self consumption
Q11. Explain the financial sector reform. 3
Ans Financial Sector Reforms: Financial sector includes financial institutions, such as commercial banks,
investment banks, stock exchange operations and foreign exchange market.
 Major aim of financial sector reforms is to reduce the role of RBI from regulator to facilitator of
financial sector.
 The reform policies led to the establishment of private sector banks, Indian as well as foreign.
 Foreign investment limit in banks was raised to around 74 per cent.
 Those banks which fulfil certain conditions have been given freedom to set up new branches without
the approval of the RBI and rationalise their existing branch networks.
 Though banks have been given permission to generate resources from India and abroad, certain
managerial aspects have been retained with the RBI to safeguard the interests of the account-holders
and the nation.
 Foreign Institutional Investors (FII), such as merchant bankers, mutual funds and pension funds, are
now allowed to invest in Indian financial markets.
Q12. What do you mean by demonetization. State its features. 3
Ans It is the act of removing a currency unit of its status as a legal tender.
Features
1. It is viewed as a Tax Administration Measure.
2. It has indicated that Tax Evasion will no longer be tolerated.
3. It led to channelizing savings into the formal financial system.
4. It aims to create a less-cash or cash-lite economy
Q13. What was the state of agriculture sector of the Indian economy on the eve of independence? 3
Ans 1. Low production and productivity
2. High degree of uncertainty
3. Dominance of subsistence farming
4. Gulf between tiller of the soil and owner of the soil
5. Small and fragmented holdings
6. Land revenue system (any 3 with explanation)
Q14. Explain Green Revolution. 4
Ans Green Revolution refers to the large increase in production of food grains due to use of high yielding
variety (HYV) seeds.
It was implemented because:
• The agricultural sector accounted for the largest share of workforce with approximately 70-75 per cent.
• The producvity in the agricultural sector was very low due to use of outdated technology and absence of
required intrastructure and India was forced to import food from the United States of America.
Benefits of Green Revolution
The spread of Green Revolution benefitted the farmers.
1. Attaining Marketable Surplus: Green Revolution resulted in 'Marketable Surplus. Marketable surplus refers
to that part of agricultural produce which is sold in the market by the farmers after meeting their own
consumption requirement.
2. Buffer Stock of Food Grains: The green revolution enabled to procure sufficient amount of food grains to
build a stock which could be used in times of food shortage.
3. Benefit to low-income groups: As large proportion of food grains was sold by the farmers in the market,
their prices declined relative to other items of consumption. The low-income groups, who spend a large
percentage of their income on food, benefited from this decline in relative prices.

Q15. Why were reforms introduced in India? 4

Ans The various reasons for introduction of reforms in India are:

1. Poor Performance of Public Sector; In the last 4 decades, the overall performance of public sector was very
poor as huge losses were incurred by a good number of public sector enterprises
2. Deficit in Balance of Payments (BOP); Even after imposing heavy tariffs and quotas, there was a sharp rise
in imports. On the other hand, there was slow growth of exports due to high prices of Indian goods in the
international market. It led to deficit in BOP.
3. Inflationary Pressures: There was a consistent rise in the general price level in the economy due increase in
money supply and shortage of essential goods,
4. Fall in foreign exchange reserves: In 1991, foreign exchange reserves fell to the lowest level. Foreign
exchange reserves declined to a level that was not adequate: (i) To finance imports for not more the two weeks;
and (ii) To pay the interest that needs to be paid to international lenders.
5. Huge burden of debts: The expenditure of the government was much higher than revenue. As a result
government had to borrow money from banks, public and from international financial institutions
6. Inefficient Management: The government was not able to generate sufficient revenue and the expenditure
began to exceed its revenue by large margins
Q16 State four features of India's demographic profile during the British rule. 6
Ans Features of India's demographic profile during the British rule:
1. High birth rate and death rate.
2. High infant mortality rate (death rate of children below the age of one year per 1000 live births
3. Low life expectancy (average life of a person).
4. Low female literacy rate indicating high degree of gender-bias in the society.
Q17 Discuss briefly the rationale behind choosing 'Self-reliance and equity “ as a planning objective for the
Indian economy
Ans
 Self-reliance means reliance on the domestically available resources for the growth and development of
the economy.
 It was considered essential to minimise our dependence on foreign aid/investment as it often leads to
political interference by the donor countries. Aid is often tied to the projects and policies as dictated by
the donor countries.
 Example: Aid from US would generally mean that we buy our defence equipment only from US even
when we get a better deal from other countries. Hence, the focus on self-reliance
  Benefits of growth must spread across larger sections of the society, so that the distribution of income
becomes equitable.

 'Equity' (in terms of equitable distribution of income) implies social justice, and economic growth must
be combined with social justice.

 That is why, planning in India, focuses not merely on economic growth, but on growth with social
justice'.
Q18 What do you mean by IPR 1956? State the classification of Industries. 6
Ans Industrial Policy is a comprehensive package of policy measures which covers various issues connected
with different industrial enterprises of the country. Industrial Policy is essential for devising various
procedures, principles, rules and regulations for controlling industrial enterprise of the country.

According to Industrial Policy Resolution 1956, the industries were reclassified into three
1. Schedule A: This first category comprised industries which would be exclusively owned by the state. In this
schedule, 17 industries were included, like arms and ammunitions; atomic energy: heavy and core industries;
aircraft; oil; railways; shipping, etc.

2. Schedule B: In this schedule, 12 industries were placed, which would be progressively state-owned. The
state would take the initiative of setting up industries and private sector will supplement efforts of the state.
This schedule includes industries like aluminium, other mining industries, machine tools, fertilizers, etc.

3. Schedule C: This schedule consisted of the remaining industries which were to be in the private sector. The
state would facilitate and encourage the development of all these industries These industries were controlled by
the state through a system of licences, enforced under Industries (Development and Regulation) Act, 1951.

LEVEL B (SUBJECT SKILL AND COMPETENCY)

Q19. Why is the year 1921 called the year of great divide ?
(a) Population started increasing at an decreasing rate
(b) Population started increasing at an increasing rate
(c) Population started increasing
(d) None of these
Ans b
Q20. Inward Looking Trade Strategy was operationalised ___________
(a) to protect emerging domestic infant industries (b) to minimize competition
(c) to be self-dependent (d) all of the above
Ans d
Q21. Match the items in Column A to that of Column B and choose the correct alternative:
Column A Column B
1. Launch of first five year plan (a) 1991
2. Setting of Planning Commission (b) 1955
3. NEP (c) 1950
4. Karve Committee (d) 1951
(a) 1(d) 2(c) 3(a) 4(b) (b) 1(d) 2(c) 3(b) 4(a)
(c) 1(d) 2(a) 3(c) 4(b) (d) 1(d) 2(c) 3(b) 4(a)
Ans a
Q22. Identify the correct pair.
Column I Column II
1. Subsidies (a) Maximum quantity of goods that can be imported
2. Import Substitution Policy (b) To encourage substitution
3. Quota (c) To protect foreign firms
4. Karve Committee,1955 (d) Using SSI to promote rural development
(a) 1(a) (b) 2(b)
(c) 3(c) (d) 4(d)
Ans d
Q23. Statement I: India became an exporter of primary products and an importer of finished consumer and
capital goods produced in Britain.
Statement II: Restrictive policies of commodity production, trade and tariff pursued by the colonial
government adversely affected the structure , composition and volume of India’s foreign Trade
(a) Both statements are true
(b) Both statements are false
(c) Statement I is true, Statement II is false
(d) Statement I is false, Statement II is true
Ans a

Q24 Statement 1 - Import substitution industrialization (ISI) is a trade and economic policy that advocates
replacing foreign imports with domestic production.

Statement 2 -It is based on the premise that a country should attempt to reduce its foreign dependency through
the local production of industrialized products.

a) Both the statements are true. b) Both the statements are false.

c) Statement 1 is true and Statement 2 is false d) Statement 2 is true and Statement 1 is false

ANS-A

Q25 Statement I: New Economic Policy includes Liberalisation, Privatisation and

Globalisation.
Statement II: Privatisation leads to improvement in economic and technical
efficiency.

a. Both statements are true

b. Both statements are false
c. Statement I is true, Statement II is false
d. Statement I is false, Statement II is true
Ans a
Q26. __________________ was known the architect of Indian Economic Planning.

a. Dr. B.R Ambedkar b. Dr. Manmohan Singh

c. Dr. P.C Mahanalobis d. Jawahar Lal Nehru
Ans c
Q27 What was the infant mortality rate during the British period?
Ans 218 per thousand
Q28 When was planning commission set up?
Ans 1950
Q29. What was the two-fold motive behind the systematic de-industrialisation effected t British in pre-
independent India? 3
Ans The two-fold motive for the systematic destabilisation of indigenous Indian industries in the British era is
as under:
One, it was to exploit India's wealth of raw material for the then expanding process of industrialisation in
Britain. Supplies of raw material were diverted from indigenous industries to the expanding industries in Great
Britain. It was possible simply because India was treated as a colonial territory of Great Britain.
Two, it was to exploit Indian economy as a potential market for the industrial products of Britain. Great Britain
was experiencing industrial revolution. Revolutionary expansion of industry in Britain required an equally
revolutionary expansion of the market for the British industrial goods. The trade policy adopted by the British
was such that the British products started replacing Indian products in the Indian markets. This led to
destruction of the Indian industry.
Q30. What do you understand by the term 'import substitution'? Explain the role of tariffs and quotas in India
to achieve import substitution. 3
Ans Import substitution is a strategy to save foreign exchange by encouraging domestic production of such
goods which the country has been importing from rest of the world. Domestic industry is offered protection
from foreign competition through import restrictions and import duties.

Role of Tariffs and Quotas in India:

(1) Import tariffs are raised to protect the domestic industry, focusing on the domestic production of the goods
which otherwise need to be imported.

(i) Import quotas are fixed for the domestic producers with a view to minimising imports and encouraging
production of import substitutes.3
Q31. Explain 'growth with equity' as a planning objective. 4

Ans. Growth refers to increase in the country's capacity to produce the output of goods and services within the
country. Growth implies:

 Either a larger stock of productive capital

 larger size of supporting services like transport and banking:
  Or an increase in the efficiency of productive capital and services.

A good indicator of economic growth is steady increase in the Gross Domestic Product (GDP). Increase in
GDP or availability of goods and services enables people to enjoy a more rich and varied life.

According to Equity, every Indian should be able to meet his or her basic needs (food, house, education
and health care) and inequality in the distribution of wealth should be reduced. Equity aims to raise the
standard of living of all people.

So, 'growth with equity' helps to achieve planning objective of development with social justice.

Q32. Do you think outsourcing is good for India? Why are developed countries opposing it? 4
Ans. Yes, outsourcing is good for India. The following points justify this:
(1) Employment: It provides employment to a large number of unemployed Indians. (i) Exchange of
technical know-how: Outsourcing enables the exchange of ideas and technical know-
(2) how of sophisticated and advanced technology.
(3) International worthiness: Outsourcing also enhances India's international worthiness credibility.
(4) Better standard of living and eradication of poverty: By creating more and higher paying jobs,
outsourcing improves the standard and quality of living of the people.
However, developed countries oppose outsourcing to India because of following reasons:
(i) Outsourcing leads to outflow of funds from the developed countries to India, which reduces the income
disparities between the two countries.
(ii) Outsourcing reduces the employment generation and creates job insecurity in the developed countries.
Q33. Identify the reforms taken by the government after 1991. 4
(i) Introduction of Goods and Service Tax
(ii) Devaluation of rupee
(iii) De-reservation of Small Scale Industries
(iv) Removal of quantitative quotas
ANS (i) Introduction of Goods and Service Tax.- tax reforms
(ii) Devaluation of rupee.- foreign exchange reforms
(iii) De-reservation of Small Scale Industries- Industrial reforms
(iv) Removal of quantitative quotas- trade reforms
Q34. Distinguish between: 6

(1) Strategic and Minority Sale

(2) Tariff and Non-Tariff Barriers
(3) Bilateral and Multilateral trade
Ans.
(1) Strategic Sale involves sale of atleast 51% share (i.e. majority stake) of a Public Sector Undertaking (PSU)
to the highest bidder, i.e. management of the government organisation is handed over to the private sector.
Whereas, Minority Sale involves sale of less than 49% stake of a PSU to the private sector and the control and
management of PSU remains with the government.
(ii) The barriers which are imposed on imports of goods and services to make them relatively costlier and to
protect the domestic producers from the stiff international competition are known as tariff barriers. For
example, Import Duties.
On the other hand, Non-tariff barriers are those barriers which are imposed on quantity of import and export of
goods and services. For example, Quota and Import Licensing.
(iii) The trade (export and import) between two countries is known as bilateral trade, whereas, multi- lateral
trade is the trade between more than two countries 6
Q35 "Modernisation as a planning objective shows a dichotomy with employment generation” Justify the
statement. 6
Ans Modernisation as a planning objective was not expected to show a dichotomy with employment
generation. In fact both (modernisation and employment generation) as goals of planning w taken as
complementary, not contradictory to each other. The complementarity between the was expected to work as
under:
 Modernisation leads to increase in productivity.

 Increase in productivity leads to higher level of production activity and higher level of income in the
economy. Implying, a rising demand for goods and services in the economy

 Expansion of demand leads to expansion of opportunities of employment.

However, of late the nature of growth process has taken a dramatic turn. Technology has emerged as the
principal driver of growth process. And, the nature of technology is such that it is substituting labour rather
than supplementing it. Consequently, 'jobless growth' is an emerging challenge for the politicians and the
planners.
Thus, even when 'modernisation' and 'employment generation' were taken as complementary objectives (under
Five Year Plans) the dichotomy between the two has emerged as an undeniable reality.

LEVEL C (RESEARCH SKILLS)

Q36 Arrange the following events in chronological order in context of Indian economy.
(i) Establishment of TISCO
(ii) First census data collected during British India
(iii) Opening of Suez Canal
(iv) Introduction of railways by the British
Ans iv iii ii i
Q37 Read the following statements - Assertion (A) and Reason (R):
Assertion (A): Modernisation refers only to the use of new technology.
Reason ( R) : Modernisation also refers to change in social outlook such as recognition that women should
have the same rights as men. A modern society makes use of the talents of women in the workplace – in banks,
factories and schools, etc.

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

c) Assertion (A) is true but Reason (R) is false.

d) Assertion (A) is false but Reason (R) is true.

ANS-D
Q38 Assertion (A): The purpose of licence policy was to promote regional equalities. Reason
(R): The motive of licensing system was to monitor and control the industrial production.

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true but Reason (R) is false.
(d)Assertion (A) is false but Reason (R) is true.
Ans b
Q39 Assertion (A): India has become a favourite outsourcing destination.
Reason (R): There is a lot of resistance in the USA regarding outsourcing to India.

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
Ans b

Q40 Stabilization measures and Structural reform measures are the two groups of which policy?
a) New Industrial Policy
b) New Economic Policy
c) Trade Policy
d) Monetary Policy

Answer: b New Economic Policy can be divided into two groups, Stabilization measures and Structural
reform measures.

Q41 “Licensing policy is pursued primarily with a view to promoting regional equality.” True/ False
Ans True. Licensing policy is pursued to establish industry in the backward regions of the country to promote
regional equality
Q42 “Small-scale industry shows locational flexibility and therefore, conducive to balanced regional
growth.” True/False
Ans. True. Small-scale industries show locational flexibility, contributing to equality of growth and
development across different regions of the country.

Q43 What is the name of the tax introduced by Indian Parliament in 2016 to unify the indirect tax system in
India?
a) Sales tax
b) Value-added tax
c) Goods and Services tax
d) Custom duty

Answer: c Indian Government introduced the Goods and Services tax in 2016 with the aim to establish a
unified tax system. Thus, c is the correct option.

Q44 Why did Inda opt for planning?

Ans A big push of investment (supported by the government) was needed in the Indian economy to break the
vicious circle of economic backwardness. Such an economy could not be left to the market forces of supply
and demand. Hence, the recourse to economic planning.

Q45 Which is regarded as the defining year to mark the demographic transition from its first to the
second decisive stage?
Ans. The year 1921 is regarded as the defining year to mark the demographic transition from its fir to the
second decisive stage. 1921 is also known as the year of great divide.

Q46. ‘Atamnirbhar Bharat' had been at the roots of the Indian planning process in the form of self reliance as
an objective of the planning process. Do you agree with the given statement? Justify the rationale of the given
statement. 3
Ans. The given statement is correct. In the early post-independence period, the aim of the government's policy
was to reduce the dependence on the foreign countries for goods, services, technology and capital. It stressed
on the use of domestic resources to avoid foreign interference as it was feared that the dependence on the
imported food supplies, foreign technology and foreign capital may increase foreign interference in the policies
of our country. Similarly, the main thrust of the 'Atmanirbhar Bharat' is also to make India an economy that is
self-reliant and self-sufficient.

Q47. Indicate the volume and direction of foreign trade of India at the time of Independence. 3
Ans. The restrictive policies of commodity production, trade and tariff pursued by the colonial rule adversely
affected the volume and direction of India's foreign trade, as:
(i) British maintained monopoly control over India's exports and imports.
(ii) More than half of India's foreign trade was restricted to Britain while the rest was allowed with a few other
countries like China, Ceylon (Sri Lanka) and Persia (Iran).
(iii) India had huge export surplus during the colonial
Q48. From the given statements, identify the goals of India’s plans. 4
(i) Talent of women must be used at the work place.
(ii) Manufacturing fighter planes in India.
(iii) Rise in the GDP by 8.2%
(iv) Provision of free vaccine to the people below poverty line.
Ans a. Talent of women must be used at the work place.- Modernization
b. Manufacturing fighter planes in India.- Self Reliance
c. Rise in the GDP by 8.2%- Growth
d. Provision of free vaccine to the people below poverty line- Equity
Q49. Read the excerpt given and answer the question that follows: 4
The case for privatisation is based on the belief that the private sector is more efficient, and that public
sector units do better when in private hands. But what does the evidence tell us? These are issues to ponder
as India embarks on a major sell-off.
India, it seems, is on the verge of its most ambitious privatisation drive ever. In the Union Budget for 2021-
22, Finance Minister Nirmala Sitharaman announced that outside four strategic sectors, public sector units
(PSUs) in the non-strategic sectors would be privatised or closed. In the strategic sectors themselves a bare
minimum of PSUs will be present. The four sectors are atomic energy, space and defence; transport and
telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial
services.
We have not been told the time frame for implementation of this policy. The expression being used is
‘privatisation’, not ‘disinvestment’, which is the sale of minority stakes in PSUs. The change in lexicon has
been widely noted. The government’s privatisation programme has the support of much of the intellectual
community. Several economists have been urging the government for years to step up privatisation, most
recently at a meeting with the prime minister in early January. The ideological reason is the superior
efficiency that is said to be associated with the private sector relative to the public sector.
The government has, however, not articulated the case for privatisation at any length. The Economic
Survey of 2019-20 highlighted the efficiency gains from privatisation. In recent months, economists have
said that the government needs to increase investment in infrastructure and, in the present fiscal situation,
the necessary resources can come only from privatisation.
There you have the two principal reasons for privatisation. The ideological reason is the superior efficiency
that is said to be associated with the private sector relative to the public sector. The practical reason is that
the government’s finances are strained and it looks to augment its resources by selling government assets,
notably PSUs.

1 The Government in recent drive to privatization plans to privatize its PSUs leaving bare minimum presence in
4 sectors, Which of the following is not the strategic sector as given in the article ?
a) Coal and mineral b) Power and petroleum
c) Textile and handloom d) Energy space and defence.
ANS-C
2. Read the following statements-Assertion (A) and Reason (R) and select the correct alternative in each cases.
Assertion (A): Privatization of the PSU’s by selling of part of the equity of PSU’s to the public is known as
disinvestment.
Reason (R): The purpose was to improve financial discipline, modernization and improved performance the
PSU’s.
a) Both the statements are true and reason (R) the correct explanation of assertion (A)
b) Both the statements are true but reason (R) is not the correct explanation of assertion (A)
c) Assertion (A) is true but reason (R) is false.
d) Assertion (A) is false but reason (R) is true
ANS-B
3 Read the following statements-Assertion (A) and Reason (R) and select the correct alternative in each cases.

Assertion (A): Privatisation can be done by Disinvestment and strategic sales of shares of Central Public Sector
Enterprises (CPSE’s.)
Reason: Sale of part of shares but retaining the control over management is known as disinvestment.
 a) Both the statements are true and reason (R) the correct explanation of assertion (A)
b) Both the statements are true but reason (R) is not the correct explanation of assertion (A)
c) Assertion (A) is true but reason (R) is false.
d) Assertion (A) is false but reason (R) is true.
ANS-B

4 During reforms how did government made attempts improving the performance of PSU’s.
a) Giving PSU’s Financial support.
b) Giving them greater autonomy in managerial and operational decision making.
c) Providing technological support.
d) All of the above.
ANS-B

Q50. Read the given case study and answer the following questions 4
Vocal for local’ call prompts desi cos to promote their roots

When contacted, the chairman of the board of administration at CSD Alok Raj confirmed that CSD has written to
all its suppliers and some have already replied. A Hindustan Unilever spokesperson said, “Yes, we have received a
query from Central Police Canteen (CPC) Dept. we are submitting the details. It is an opportunity to reiterate that
we are manufacturing our products in India and contributing to Make in India.”

Nestle, which makes products under brand names, such as Maggi, Kit Kat and Nescafe, said it has submitted the
details to such queries.

‘Vocal for local’ has prompted homegrown companies like Dabur, ITC, Parle products, among others, to promote
their ‘desi roots’. On the other hand, multinationals which have been present in India for decades- some being
market leaders in their respective categories-worry about the unnecessary “scrutiny” in this front even as they have
been investing behind setting up new manufacturing units in the country.

CPC, which came into existence in 2006 as a measure of welfare for the serving and retired Central Armed Police
Forces, has around 119 master canteens and over 1,700 subsidiary canteens, according to its website.
1. Use of local products will reduce the dependence of Indians on ___________.
(a) Imports (b) Exports (c) Both (d) None
Ans a
2. During the planning period India followed the import substitution policy. The aim
behind it was____________
(a) Growth (b) Equity (c) Self-reliance (d) Modernization

Ans c
3. Assertion (A): Private sector developed at a faster rate after the implementation of New
Economic Policy 1991.
Reason (R): Licensing policy of the government discouraged private sector to flourish during
the planning period.
(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
Ans a
4. Assertion (A): Many Multi-National Companies have become market leaders in India.
Reason (R): MNCs have technology edge over domestic companies.
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

Ans a
Q51. India is often called as Outsourcing Destination' of the world. Discuss the prime reasons for this given to
India. 6
Ans Availability of Cheap Labour: The wage rates in India are comparatively lower than that of in the
developed countries. As a result, MNCs outsource their business in India.

(i) Availability of skilled manpower; India has vast skilled manpower, which enhances the faith of
MNC
(ii) Favourable Government Policies: MNCs gets various types of lucrative offers from the Indian
government like tax holidays, low tax rates, etc.
(iii) International worthiness: India has a fair international worthiness and credibility.
Q52 Out of Liberalisation, Privatisation and Globalisation, which term matches the best from the following
statements?

(i) It involves deregulation and reduction of government controls and greater autonomy of private
investment.
(ii) It means integration of economy of the country with the world economy.
(iii) It implies greater role of private sector in the economic activities of the country.
(iv) It aims to remove entry and growth restrictions on the Private Sector.
(v) It involves selling off part of the equity of public sector undertakings to the public.
(vi) It aims to create a borderless world.
ANS
(i) Liberalisation
(ii) Globalisation
(iii) Privatisation
(iv) Liberalisation
(v) Privatisation
(vi) Globalisation

Q53 British rule adversely hampared the industrial sector of India. Give reasons to support your answer. 6
Ans 1. Systematic de-industrializing
2. Decline of indigenous handicraft industries
3. More import
4. Less role of modern industries
5. Very few capital goods industry
6. Less growth rate
7. Less role of public sector (any 6 with explanation)