Prepare for the UPSC Prelims with topic-wise questions on Indian Economy focusing on Agriculture and Industries. Gain a comprehensive understanding of key concepts and nuances within these vital sectors. These curated questions delve into the intricate dynamics of agricultural practices, industrial growth, and their impact on the Indian economy. Strengthen your grasp on crucial topics such as agricultural policies, market trends, industrial development, and their socio-economic implications. With a strategic approach to studying these subjects, enhance your preparation and boost your chances of success in the UPSC Prelims examination. Dive deep into the fundamentals, analyze real-world scenarios, and sharpen your critical thinking skills to excel in one of the most competitive exams in India.
Q1. Agricultural Income Tax is assigned to the state Government by (1995)
(a) the Finance Commission
(b) the National Development Council
(c) the Inter-state Council
(d) the Constitution of India
Ans. (d)
Agricultural taxation falls under the jurisdiction of State Governments according to the Indian Constitution. To fully harness the benefits of demographic advantage, India should prioritize the enhancement of skill sets. Demographic advantage refers to the favorable circumstances presented by a nation’s population structure, wherein there is a large working-age population and a comparatively smaller dependent population. Therefore, to capitalize on this advantage, it’s imperative to ensure that a significant proportion of the country’s youth receive skill development across various sectors. Skill enhancement is widely acknowledged as a crucial factor in fostering employment opportunities in India. India boasts a distinctive demographic edge, with over 60% of its populace belonging to the youthful age bracket.
Q2. Which of the following are the objectives of the Commission for Agricultural Costs and Prices (CACP)? (1995)
1. To stabilise agricultural prices.
2. To ensure meaningful real income levels to the farmers.
3. To protect the interest of the consumers by providing essential agricultural commodities at reasonable rates through public distribution system.
4. To ensure maximum price for the farmer.
Which of the statements given above is/ are correct?
(a) 1,2 and 3
(b) 1,2 and 4
(c) 1,3 and 4
(d) 2,3 and 4
Ans. (a)
Statements (1), (2), and (3) are accurate.
The primary objectives of the Commission for Agricultural Costs and Prices (CACP) are to stabilize agricultural prices, ensure meaningful real income levels for farmers, and safeguard consumer interests by offering essential agricultural commodities at reasonable rates through the public distribution system.
Established in January 1965 as the Agricultural Prices Commission and rechristened as the Commission for Agricultural Costs & Prices (CACP) in 1985, its core mandate is to propose Minimum Support Prices (MSPs) to incentivize farmers towards adopting modern technology, enhancing productivity, and boosting overall grain production to meet evolving demand patterns in the nation. Ensuring a profitable and steady pricing environment is crucial for augmenting agricultural output and efficiency, given the inherent instability of agricultural produce markets. Consequently, the commission annually recommends MSPs for key agricultural products, determined by the government, to facilitate the smooth supply of commodities through the Public Distribution System at fair rates. Presently, the CACP suggests MSPs for 23 commodities, encompassing 7 cereals.
Q3. One of the reasons for India’s occupational structure remaining more or less the same over the years has been that (1995)
(a) Investment pattern has been directed towards capital intensive industries.
(b) Productivity in agriculture has been high enough to induce people to stay with agriculture.
(c) Ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture.
(d) People are largely unaware of the significance of transition from agriculture to industry for economic development.
Ans. (a)
India’s occupational composition has largely persisted over time due to the predominant investment focus on capital-intensive sectors, with comparatively less attention given to small-scale and cottage industries. However, there is now a notable shift in India’s approach, with increased emphasis placed on small-scale and cottage industries. This shift is driven by the recognition of the pivotal role played by small-scale industries in job creation, enhancing people’s economic well-being, fostering rural development, and addressing regional disparities within India.
Q4. The number of industries for which industrial licensing is required has now been reduced to (1997)
(a) 15
(b) 6
(c) 35
(d) 20
Ans. (b)
The requirement for industrial licensing has been significantly reduced to just six industries. During the reforms of 1991-92, industrial licensing was abolished for all but a shortlist of 18 industries as per the New Industrial Policy of 1991. As of 2015, only five industries remain subject to compulsory licensing, primarily due to environmental, safety, and strategic concerns. These industries are:
- Manufacturing of Tobacco
- Electronic aerospace and defense equipment
- Specified hazardous chemicals
- Industrial Explosives
- Distillation and Brewing of Alcoholic Products
Q5. ‘Eco mark’ is given to the Indian products that (1998)
(a) pure and unadulterated
(b) rich in proteins
(c) environment friendly
(d) economically viable
Ans. (c)
The ‘Eco mark’ is awarded to Indian products that meet environmentally friendly standards. This certification is administered by the Bureau of Indian Standards (BIS). Introduced in 1991, the marking scheme aims to raise consumer awareness about minimizing environmental harm. The logo chosen for the eco mark scheme in India is an Earthen pot.
Q6. Consider the following statements. (2004)
India continues to be dependent on imports to meet the requirement of oilseeds in the country because
1. farmers prefer to grow foodgrains with highly remunerative support prices.
2. most of the cultivation of oilseed crops continues to be dependent on rainfall.
3. oils from the seeds of free origin and rice bran have remained unexploited.
4. it is far cheaper to import oilseeds than to cultivate the oilseed crops.
Which of the statement(s) given above are correct?
(a) 1 and 2
(b) 1,2 and 3
(c) 3 and 4
(d) 1, 2, 3 and 4
Ans. (b)
Statements (1), (2), and (3) are accurate.
India’s reliance on imports to fulfill the demand for oilseeds persists due to farmers’ preference for cultivating foodgrains, which offer highly lucrative Minimum Support Prices (MSP). Oilseed production yields lower profits compared to competing crops like maize, cotton, and chickpeas, given the prevailing agricultural and market conditions.
In India, oilseed cultivation heavily relies on rainfall, with over 70% of the crops grown in rainfed ecosystems. Although oilseeds are cultivated across 26.67 million hectares annually, totaling 30.06 million tonnes, a significant portion remains under rainfed conditions. Oils extracted from non-genetically modified seeds, such as those from free-origin sources and rice bran, have remained underutilized in India. These non-hybrid seeds are renowned for their superior taste and flavor. While rice bran oil is recognized, its importance is still limited in India’s market.
Q7. Which one of the following was the largest IT software and services exporter in India during the year 2002-03? (2004)
(a) Birlasoft
(b) Infosys Technologies
(c) Tata Consultancy Services
(d) Wipro Technologies
Ans. (c)
During 2002-03, Tata Consultancy Services (TCS) held the position of the largest IT software and services exporter in India. The top five IT firms in India at that time were:
- TCS
- Infosys
- Wipro
- HCL Technologies
- Tech Mahindra
As of 2022-23, TCS remains the largest IT software and services exporter in India. Infosys retains its position among the top IT firms, and Reliance Industries has emerged as a significant player in the sector.
Q8. Who among the following is the President of the FICCI? (2005)
(a) Sunil Mittal
(b) Brijmohan Lal Munjal
(c) Onkar S.Kunwar
(d) Vivek Burman
Ans. (c)
Onkar S. Kunwar served as the President of the Federation of Indian Chambers of Commerce & Industry (FICCI). As of 2022, Sanjiv Mehta holds the position of President. Mehta also serves as the CEO and Managing Director of Hindustan Unilever Limited (HUL). Established in 1927, FICCI stands as the largest and oldest apex business organization in India.
Q9. Which one of the following companies has started a rural marketing network called ‘e-Chaupals’? (2005)
(a) ITC
(b) Dabur
(c) Procter and Gamble
(d) Hindustan Liver
Ans. (a)
Launched in June 2000, e-Chaupal is an Indian business initiative pioneered by ITC Limited, aimed at providing internet access to rural farmers. The initiative seeks to establish direct connectivity with rural farmers through the internet for the procurement of agricultural products such as soybean, wheat, coffee, and prawns. e-Chaupal provides real-time and relevant information on weather, price discovery, agricultural knowledge, and best practices to farmers. These information kiosks are managed by trained local farmers who assist their fellow agricultural community members in accessing the information in their local language.
Q10. Which of the following pairs are correctly matched? (2005)
| Enterprises | Industrial Groups |
| 1. VSNL | Bharti Group |
| 2. Mundra SEZ | Adani Group |
| 3. CMC Ltd | Tata Group |
| 4. IPCL | Reliance Group |
Select the correct answer using the codes given below.
(a) 1, 2 and 3
(b) 3 and 4
(c) 1,2 and 4
(d) 2, 3 and 4
Ans. (d)
Pairs (2), (3), and (4) are accurately matched.
Mundra Port, owned by the Adani Group, stands as India’s largest private port, situated on the Gulf of Kutch near Mundra, Gujarat.
CMC Limited, previously owned by Tata Consultancy Services, was an IT services, consulting, and software company owned by the Government of India, with its headquarters in New Delhi.
Indian Petrochemicals Corporation Limited (IPCL), formerly a public sector undertaking (PSU), is presently owned by Reliance Petroinvestments, with a 46% stake, through a wholly-owned subsidiary of Reliance Industries.
Q11. Match items in the List I (Businesswoman) with those in the List II (Company) and select the correct answer using the codes given below the lists. (2005)
| List I (Business Women) | List II (Companies) |
| A. Zia Mody | 1. Venkateshwara Hatcheries |
| B. Anuradha J Desai | 2. AZB and Partners |
| C. Villoo Morawal Patel | 3. Quantum Market Research |
| D. Meena Kaushik | 4. Avestha Gangraine Technologies |
| 5. Biocon India |
Codes
A B C D
(a) 4 1 5 3
(b) 2 3 4 1
(c) 4 3 5 1
(d) 2 1 4 3
Ans. (d)
The correct matching is:
A-2, B-1, C-4, D-3.
Here’s the breakdown:
A. Zia Mody is the founder partner of AZB & Partners. (Match: 2)
B. Anuradha J Desai is the Chairperson of Venkateshwara Hatcheries Private Limited, popularly known as “Venky.” (Match: 1)
C. Villoo Morawala-Patel is the founder and current Chairman and Managing Director of the Indian biotechnology company Avesthagen. (Match: 4)
D. Meena Kaushik is the Chairman of Quantum Market Research. (Match: 3)
Q12. Match List I with List II and select the correct answer using the code given below the lists. (2005)
| List I (Distinguished Persons) | List II (Area of Work) |
| A. BV Rao | 1. Automobiles Manufacture |
| B. CK Prahalad | 2. Fisheries Economy |
| C. John Kurien | 3. Information Technology and Software |
| D. Kiran Karnik | 4. Poultry Farming |
| 5. Management Science |
Codes
A B C D
(a) 2 5 1 3
(b) 4 3 2 5
(c) 2 3 1 5
(d) 4 5 2 3
Ans. (d)
The correct matching is:
A-4, B-5, C-2, D-3.
Here’s the breakdown:
A. Dr. BV Rao worked for the development of the poultry sector and transformed poultry farming in India from simple cottage enterprises into a highly integrated industry. (Match: 4)
B. CK Prahalad was a distinguished University Professor of Corporate Strategy at the Stephen M. Ross School of Business in the University of Michigan and was frequently ranked as one of the most prominent business thinkers in the world. (Match: 5)
C. John Kurien conducts research in the socio-economics and political ecology of small-scale fisheries. (Match: 2)
D. Kiran Karnik is a prominent Indian administrator known for his work in the broadcasting and outsourcing industries across the country. (Match: 3)
Q13. Match List I with List II and select the correct answer using the code given below the lists. (2005)
| List I (Persons) | List II (Organisations) |
| A. VRS Natrajan | 1. Bharat Heavy Electricals Limited |
| B. AK Puri | 2. Air India |
| C. V Thulasidas | 3. Maruti Udyog Limited |
| D. Jagdish Khattar | 4. Bharat Earth Movers Limited |
| 5. Indian Space Research Organisation |
Codes
A B C D
(a) 2 3 5 1
(b) 4 1 2 3
(c) 2 1 5 3
(d) 4 3 2 1
Ans. (b)
The correct matching is:
A-4, B-1, C-2, D-3.
Here’s the breakdown:
A. VRS Natrajan was the outgoing CMD of Bharat Earth Movers Limited. (Match: 4)
B. AK Puri was the former Chief Managing Director of Bharat Heavy Electronics Limited (BHEL). (Match: 1)
C. V Thulasidas was the Chairman and MD of Air India in December 2003. (Match: 2)
D. Jagdish Khattar was the former Managing Director of Maruti Udyog Limited and had previously served as an officer of the Indian Administrative Service. (Match: 3)
Q14. Which one of the following pairs is not correctly matched? (2005)
| Projects | Companies |
| a) Integrated Steel Plant at Jajpur (Odisha) | Steel Authority of India |
| (b) Power Plant at Jamnagar (Gujarat) | Essar Power |
| c) Nabinagar Power Plant (Bihar) | Indian Railways |
| (d) Kayamkulom Power Plant (Kerala) | National Thermal Power Corporation |
Ans. (a)
Got it, let’s correct the mismatched pair:
The Integrated Steel Plant at Jajpur belongs to Tata Steel and is located at the Kalinganagar Industrial Complex in Jajpur district of Odisha. The plant, initially at six Million Tonnes Per Annum (MTPA), aims to expand its capacity to 16 Metric Tonnes Per Annum (MTPA) with an investment of one lakh crore by 2025.
Here are the corrected matches:
a. Integrated Steel Plant at Jajpur – Tata Steel (Corrected)
b. Salaya project – Essar Power
c. Nabinagar Thermal Power Station Project (NTPS) – Bhartiya Rail Bijlee Company Limited (joint venture of NTPC Limited and Indian Railways)
d. Kayamkulam Power Plant (Kerala) – NTPC
Q15. Match List I (Centre of Handicrafts) with List II (State) and select the correct answer using the codes given below the lists. (2006)
| List I (Centre of Handicrafts) | List II (States) |
| A. Mon | 1. Arunachal Pradesh |
| B. Nalbari | 2. Assam |
| C. Naisghat | 3. Meghalaya |
| D. Tura | 4. Nagaland |
Codes
A B C D
(a) 4 2 1 3
(b) 1 3 4 2
(c) 4 3 1 2
(d) 1 2 4 3
Ans. (a)
The corrected matching is:
A-4, B-2, C-1, D-3.
Here’s the revised breakdown:
A. The natives of Mon in Nagaland, particularly the Konyaks, are traditionally skilled in handicraft works. Various handmade native ornaments, crafts, handlooms, head brushes and gears, wood carvings, and items of home decor are readily available. (Match: 4)
B. The major handicrafts of Nalbari in the district of Assam include bamboo, cane, and cane handicrafts, which are renowned worldwide for their intricate designs. (Match: 2)
C. The Naisghat center of handicrafts in Arunachal Pradesh is renowned for its brilliant craftworks. It is especially famous for the beautifully crafted sword, known as Pha-nap, which is highly popular in the region. (Match: 1)
D. The Tura handicraft center in Meghalaya is known for its Bamboo Carrying Baskets and the Garo bamboo house called “Nokachik”. (Match: 3)
Q16. Which one of the following companies is associated with the exploration and commercial production of oil in Barmer-Sanchor basinof Rajasthan? (2006)
(a) Cairn Energy
(b) Unocal Corporation
(c) Reliance Energy Ventures
(d) Oil and Natural Gas Commission
Ans. (a)
Cairn Energy has made an oil discovery in well NB 1 within its block RJ ON 90/1. Initial estimates by Cairn Energy suggest that the in-place oil reserves in this discovery range between 450 and 1100 million barrels (equivalent to 63 million metric tonnes to 153 million metric tonnes). Cairn Energy has made a total of five discoveries within this block. Various companies, including Cairn Energy, ONGC, OIL, Essar Oil Limited, a Polish oil and gas company, and Phoenix Overseas Limited, are actively exploring oil and gas reserves in Rajasthan.
Q17. With reference to the steel industry in India in the recent times, consider the following statements. (2007)
1. Vizag Steel Plant (RINL) has been declared Mini Ratna.
2. Merger of IISCO with SAIL has been completed.
Which of the statement(s) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (c)
Both statements (1) and (2) are correct.
Statement 1: The Vizag Steel Plant (RINL) was conferred with Mini Ratna status and subsequently obtained Navratna status on June 26, 2014. It is based in Visakhapatnam, Andhra Pradesh, with its main plant located 26 km from Visakhapatnam. It is recognized as one of India’s premier steel plants.
Statement 2: The Union Cabinet authorized the Ministry of Steel to allow the Steel Authority of India Limited (SAIL) to initiate the SAIL after obtaining approval from the Board of Industrial and Financial Reconstruction (BIFR).
Q18. Which of the following pairs about India’s economic indicator and agricultural production (all in rounded figures) are correctly matched? (2008)
1. GDP per capita : 37000 (current price)
2. Rice: 180 million tonnes
3. Wheat Codes : 75 million tonnes
(a) 1,2 and 3
(c) 2 and 3
(d) 1 and 3
Ans. (d)
Pair (1) and (3) are correctly matched.
Pair (1): The induction of rice and wheat was 73 million and 75.5 million tonnes, respectively, in the 2007-08 Financial Year.
Pair (3): India’s rice production was at a record high of 102.36 million tonnes in the Kharif season of 2020-21.
Q19. Which of the following are the Public Sector Undertakings of the Government of India? (2008)
1. Balmer Lawrie and Company Limited
2. Dredging Corporation of India
3. Educational Consultants of India Limited
Codes
(a) 1 and 2
(b) 2 and 3
(c) 1 and 3
(d) 1, 2 and 3
Ans. (d)
All statements (1), (2), and (3) are correct.
Statement (1): The Balmer Lawrie and Company Ltd. is a public sector undertaking company of India with its headquarters in Kolkata. It was established in 1867 by George Stephen Balmer and Alexander Lawrie. The company manufactures industrial packaging, barrels and drums, LPG cylinders, greases and lubricants, leather chemicals, functional additives, and marine freight containers.
Statement (2): The Dredging Corporation of India is a public sector undertaking company with its headquarters in Visakhapatnam. Established in 1976, its primary purpose is to provide dredging services to the major ports of India.
Statement (3): Educational Consultants of India Limited (Ed. CIL) was conceived and incorporated as a public sector undertaking by the Government of India in 1981 under the Ministry of Education and Culture, which was later reconstituted as the Ministry of Human Resource Development in 1985. Ed. CIL offers consultancy and technical services in various areas of education and human resource development.
Q20. With which one of the following has the BK Chaturvedi Committee dealt? (2009)
(a) Review of Centre-State relations
(b) Review of Delimitation Act
(c) Tax reforms and measures to increase revenues
(d) Price reforms in the oil sector
Ans. (d)
The BK Chaturvedi Committee was indeed tasked with addressing price reforms in the oil sector. Established by then Prime Minister Dr. Manmohan Singh, the committee, led by BK Chaturvedi, a member of the erstwhile Planning Commission, provided recommendations regarding the financial position of oil companies. One of the key suggestions put forth by the committee was to gradually increase the prices of petrol and diesel to reflect market prices. It proposed the implementation of a dual pricing policy, wherein consumers in large cities would pay more for fuel.
Q25. Consider the following pairs. (2009)
| Firms | Groups |
| 1. Ashok Leyland: | Hinduja |
| 2. Hindalco Industries | AV Birla |
| 3. Suzlon Energy | Punj Lloyd |
Which of the pair(s) given above is/are correctly matched?
(a) 1 and 2
(b) Only 2
(c) 1 and 3
(d) 1, 2 and 3
Ans. (a)
Thank you for the correction. Let’s adjust the pairing:
Pair (3) is matched incorrectly as Suzlon Energy is indeed a wind power company founded in 1995 by Tulsi Tanti and not by Punj Lloyd.
Here are the corrected pairs:
(1) Ashok Leyland: Indian automobile manufacturing company, founded in 1948, owned by Hinduja Group.
(2) Hindalco Industries Limited: Aluminium manufacturing company, subsidiary of the Aditya Birla Group, headquartered in Mumbai.
(3) Suzlon Energy: Wind power company, founded in 1995 by Tulsi Tanti.
Q26. Consider the following statements. (2009)
1. MMTC (Metals and Minerals Trading Corporation) Limited is India’s largest international trading organisation.
2. Neelanchal Ispat Nigam Limited has been set-up by MMTC jointly with the Government of Orissa.
Which of the statement(s) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (c)
Both statements (1) and (2) are indeed correct.
Statement (1): MMTC Limited (Metals and Minerals Trading Corporation of India) is India’s largest international trading organization. It was incorporated in 1963 as an independent entity primarily to deal in exports of minerals and ores and imports of non-ferrous metals.
Statement (2): Neelanchal Ispat Nigam Limited was established in 1982 by MMTC jointly with the Government of Orissa. It is located in the Kalinga Nagar Industrial Complex in Jajpur district of Orissa and was established in collaboration with the Industrial Promotion and Investment Corporation of Orissa Limited (IPICOL).
Q27. Consider the following statements. (2010)
1. The Union Government fixes the statutory minimum price of sugarcane for each sugar season.
2. Sugar and sugarcane are essential commodities under the Essential Commodities Act.
Which of the statement(s) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (a)
Statement (1) is correct: The Union Government indeed fixes the Statutory Minimum Price (SMP) of sugarcane for each sugar season. The SMP is announced by the Central Government based on the cost of cultivation estimated by the Commission for Agricultural Costs and Prices (CACP). This SMP serves as the basic price that sugar mills must pay sugarcane growers.
Statement (2) is incorrect: Sugarcane itself does not come under essential commodities as defined by the Essential Commodities Act. However, sugar, which is derived from sugarcane, is indeed considered an essential commodity under the Essential Commodities Act. The sugar industry is crucial to rural livelihoods, impacting around 50 million sugarcane farmers.
Regarding the schedule of essential commodities: At present, the “Schedule” contains nine commodities, which are: drugs; fertilizers, whether inorganic, organic, or mixed; foodstuffs, including edible oils; hank yarn made wholly from cotton; petroleum and petroleum products; raw jute and jute textiles; seeds of food crops and seeds of fruits and vegetables, seeds of cattle fodder, jute seed, and cotton seed; face masks; and hand sanitizers.
Q28. In India, during the last decade the total cultivated land for which one of the following crops has remained more or less stagnant? (2010)
(a) Rice
(b) Oilseeds
(c) Pulses
(d) Sugarcane
Ans. (c)
In India, the overall arable area dedicated to pulses has maintained a relatively consistent level for numerous years, fluctuating between 14-18 MT. However, starting from the 2016-17 period, production surged to 23 MT, and presently, it hovers around the 23 MT benchmark. Pulses boast high protein content and serve as a primary protein source for vegetarian individuals in India. They rank as the second most crucial component of the Indian diet, following cereals.
Q29. In India, which of the following have the highest share in the disbursement of credit to agriculture and allied activities? (2011)
(a) Commercial Banks
(b) Cooperative Banks
(c) Regional Rural Banks
(d) Micro-finance Institutions
Ans. (a)
Scheduled commercial banks constitute the primary source of credit disbursement to the agriculture and allied sectors, aligning with their priority sector lending obligations. According to the Reserve Bank of India’s 2019 report, these banks accounted for the majority share, approximately 78-80%, of agricultural and allied credit. Cooperative institutions also wield substantial influence in extending agricultural credit, with cooperative banks/institutions contributing around 15-16%. The remaining 5% of agricultural credit came from Regional Rural Banks (RRBs).
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