Developmental Experience And Economic Reforms MCQ | Class 12 | Economics | Chapter 8

Developmental Experience MCQ

Below are some of the very important NCERT MCQ Questions of Developmental Experience Class 12 Economics Chapter 8 with Answers.

These Developmental Experience MCQ And Economic Reforms have been prepared by expert teachers and subject experts based on the latest syllabus and pattern of term 1 and term 2.

We have given these Developmental Experience MCQ And Economic Reforms Class 12 Economics Questions with Answers to help students understand the concept.

MCQ Questions for Class 12 Economics Chapter 8 are very important for the latest CBSE term 1 and term 2 pattern. These MCQs are very important for students who want to score high in CBSE Board.

We have put together these NCERT  Questions of Developmental Experience MCQ And Economic Reforms for Class 12 Economics Chapter 8 with Answers for practice on a regular basis to score high in exams. Refer to these MCQs Questions with Answers here along with a detailed explanation.

MCQ

1. India entered the __________ stage of Demographic Transition after the year 1921.

(a) forth
(b) second
(c) third
(d) first

Ans. (B)

Explanation: The first stage of demographic transiüon was experienced in India, during the period of 1891-1921.

2. During British period, Indian Economy was

(a) Semi-feudal economy
(b) Disintegrated economy
(c) Colonial economy
(d) All of the above

Ans. (D)

3. Match the following.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. D

Explanation: During the Briüsh rule, some basic infrastructure was developed in the form of railways, water transport, ports, post and telegraph, etc. However, the real intention behind these developments was to serve their own colonial interest.

4. During the British regime, which one of the following works was not performed? 

(a) Establishment of railways
(b) Establishment of telephone system 
(c) Establishment of wireless system 
(d) Establishment of Metro in Delhi

Ans. (D)

Explanation: the construction of Delhi Metro was begin in 1988 Delhi Metro first started in the year 2002 

5. In British India, cloth industry was centered at

(a) Ahmedabad
(b) Hyderabad 
(c) Bengaluru 
(d) Ghaziabad  

Ans (A) 

Explanation: The cloth industry during British India was concentrated at Ahmedabad, Gujarat, India. The textile industry of Ahmedabad, Gujarat, India has a history since the the 19th century, The Indian cloth industry was congidcred from the very ancient times as one of the finest industries of the world.

6. Match the following and choose the correct match.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. (B)

Explanation: Formal and modern census, as they are now, were conducted non synchronously between between 1865 and 1872 in different parts of the country. This effort which ended in 1872 has been called the first census in India. However, the first synchronous census in India was held in 1881,

7. Which of the following statements is not true about the agricultural sector at the time of independence?

(a) The agricultural produce was highly affected by the Zamindari system.
(b) There were a large number of landless and bonded labourers.
(c) The yield per hectare was very less.
(d) There was heavy mechanisation of agriculture

Ans. (D)

Explanation; Farmers had not enough means to undertake mechanised method* of cultivation.

8. Which of the following statements is not true about the industrial sector at the time of independence? 

(a) Industrialisation of Indian Handicraft Industry 
(b) One sided modern industrial structure
(c) Lack of capital goods industries
(d) Limited operation of public sector 

Ans. (A)

Explanation: Traditional handicraft industries started declining in the 18th century and proceeded rapidly almost to the beginning of the 19th century. This process is called as deindustrialisation. 

9. Match the following.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. (B)

10. First attempt to estimate the National Income in India during the British period was made by

(a) Findlay Shirras       
(b) William Digby
(c) Dadabhai Naoroji
(d) V.KR.V. Rao  

Ans. (C)

Explanation: Dadabhai Naoroji was the first to estmate the country’s per capita national income during the British rule for the year 1888,

11. Indian Planning Commission was constituted in

(a)1947
(b) 1950
(c) 1951
(d) 1971  

Ans. (B) 

Explanation: Planning Commission, agency of the government of India established in 1950 to oversee the country’s economic and social development, chiefly through the formulation of five-year plans,

12. National Development Council has been constituted in  

(a) 1950
(b) 1947
(c) 1951
(d) 1952

Ans. (D)

Explanation: It was established on 6 August 1952 to strengthen and consolidate national efforts and resources to fund the Five Year Plan of the Planning Commission, to promote common economic policies across all key sectors, and to ensure balanced and rapid development in all parts of the country.

13. First Five Year Plan was started on:

(a) 15th August, 1947 
(b) 1st April 1951 
(c) 2nd October, 1956 
(d) 1st July, 1962 

Ans. (B)

Explanation: The First Five-year Plan wag launched in 1951 which mainly focused in the  development of the primary sector.

14. Plan Holiday Period was

(a) 1961-64
(b) 1966-69 
(c) 1972-75
(d) 1978-81

Ans. (B)

Explanation: The government was forced to declare “plan holidays” (from 1966 to 1967, 1967-68, and 1968-69) due to miserable failure Of the Third Plan.

15. Match the following.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. (C)

Explanation: It was established on 6 August, 1952 to strengthen and consolidate national efforts and resources to fund the Five Year Plan of the Planning Commission, to promote common economic policies across all key sectors, and to ensure balanced and rapid development in all parts of the country.

16. Duration of Second Five Year Plan in India was:

(a) 1950-55
(b) 1951-56
(c) 1956-61
(d) 1953-58

Ans. (C)

Explanation: Second Five-year Plan was made for the duration of 1956 to 1961, under the leadership of Jawaharlal Nehru with main focus on the industrial development of the country

17. Mahalanobis Model was adopted in Indian planning in

(a) First Plan
(b) Third Plan
(c) Second Plan
(d) Fourth Plan

Ans. (B)

Explanation: This model was created as a review framework for India’s Second Five-year Plan in 1955 with the appointment of Prime Minister Jawaharlal Nehru, as India saw the need to introduce a formal-plan model after the First Five Year Plan (1951-1956).

18. Which of the following statements is not true about the Planning commission?

(a) The Planning Commission of India was established on 15th March, 1952.
(b) Its objective was to evaluate the physical, capital and human resources and on this basis make programmes for the Plan Development and its evaluation.
(c) The Planning Commission of India has now been dissolved in 2015.
(d) It was replaced by the National Institution for transforming India (NITI) Aayog.

Ans. (A)

19. Which of the following statements is not true about the characteristics of Planning?  

(a) Maximum utilisation of resources
(b) Applicable on the whole economy
(c) Central Planning Authority
(d) No interference by the State 

Ans. Option (D) is correct.

20. Match the following.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. (B)

Explanation: Second Five-year plan was made for the duration of 1956 to 1961, under leadership of Jawaharlal Nehru with focus on-the industrial development country,

21. Match the following.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. (B)

Explanation: Economic planning is often defined as a continuous process that involves making decisions or choosing alternatives to use existing resources to the fullest for the purpose of achieving certain goals in the future.

22. Green revolution implies

(a) Increase in area under rice crops
(b) Increase in area under all the crops
(c) Increase in area under food grains crops
(d) Increase in production of food gains in a short period

Ans. (D)

Explanation: The Green Revolution was intended to mean that the path forward in food production is increasing production per hectare in the short-run, not the expansion of the area.

23. Which of the following elements is not related to the green revolution?

(a) Improved seeds
(b) New strategy for agriculture
(c) Fertilizers
(d) Increase in population

Ans. (D)

Explanation: Green Revolution means a large increase in crop production in developing countries achieved by the use of artificial fertilizers, pesticides, and high-yield crop varieties.

24. Which crop was benefited most by the green revolution?

(a) Wheat  
(b) Tea
(c) Cotton 
(d) Oil seeds

Ans. (A)

Explanation: Post-Green Revolution, the production of wheat and rice doubled due to initiatives of the government,

25. Green revolution increased the use of

(a) Improved seeds
(b) Irrigation
(c) Chemical fertilizers 
(d) All of the above

Ans. (A)

Explanation: Green Revolution means a large increase in crop production in developing countries achieved by the use of artificial fertilizers, pesticides, and high-yield crop varieties.

26. Main element of Green Revolution is

(a) HYV seeds
(b) Use of fertilizers
(c) Extension of irrigation facilities
(d) All of the above

Ans. (D)

27. Match the following.

(a) 1-a
(b) 2-b
(c) 3-c
(d) 4-d

Ans. (A)

Explanation: Agriculture is the primary  source of livelihood for about 58% of India’s population.  

28. Founder of Green Revolution is:

(a) Norman E. Borlaug
(b) M.S. Swaminathan
(c) Gerri Baker
(d) None of the Above 

Ans. (A)

Explanation: The Green Revolution was started by Norman Borlaug in the 1940s.

29. Fixation of Maximum Land Ceiling is one type of

(a) Technical reform
(b) Institutional reform
(c) Structural reform 
(d) Market reform 

Ans. (B)

30. In India, Green Revolution was started in

(a) Decade of 1960
(b) Decade of 1970
(c) Decade of 1980
(d) Decade of 1990

Ans. (A)

Explanation: In India, the Green Revolution first began in the late 1960s. With its success, India achieved food satisfaction within a decade in the late 1970s.

31. The most benefited state due to green revolution is

(a) Odisha
(b) Bihar
(c) Kerala
(d) Punjab 

Ans. (D)

Explanation: Among the Indian states that is said to have benefited most from the Green Revolution in India is the state of Punjab, where food-grains production increased from 5.37 million tonnes in 1965-66 to 32 million tonnes in 1995-96. 

32. Which of the following is not true regarding the importance of agriculture in the Indian Economy? 

(a) Main source of structural unemployment
(b) Contribution in National Income
(c) Base of industrialisation
(d) Base of economic development 

Ans (A) 

Q. 33. Which of the following is not true about the benefits of the Green Revolution?

      (A)    Rise in production and productivity

      (B)    Increase in income 

      (C) Increase in employment

      (D) Rural disparity

Ans. (D)

34. Match the following.

      A. 1-a, B. 2-b, C. 3-c, D. 4-d

Ans. (A)

Explanation: The Prime Minister is the Chairman of the Planning Commission which works under the overall guidance of the National Development Council.

Q. 35. Identify the correctly matched pair from Column A to that of Column B:

      A. 1-a, B. 2-b, C. 3-c, D. 4-d

Ans. (A)

Explanation: HYV seeds are a variety of high yield seeds with a short life cycle and thus enable farmers to grow their own crops more often.     

Q. 36. In how many categories industries were divided in Industrial Policy, 1956?

(A). 3, (B). 2, (C). 5, (D). 4

Ans. (A)

Explanation: Industries were divided into 3 categories in Industrial Policy, 1956:

Schedule A: Industries that are exclusively owned by the state.

Schedule B: In this, Industries can be under the private sector, but the starting of the new units will be under the public sector control.

Schedule C: Some industries will be under the private sector, but these have to take a license from the public sector.

Q. 37. Liberalised Industrial Policy was announced on:

(A) April 1, 1991        (B) May 1, 1991

(C) June 24, 1991      (D) July 24, 1991

Ans. (D)

Explanation: The long-awaited liberalised industrial policy was announced by the Government of India in 1991 during the country’s major economic downturn. The aim of the policy was to increase efficiency and accelerate economic growth.

Q.38. Identify the correctly matched pajr from Column

(A). 3, (B). 2, (C). 5, (D). 4

Ans. (D)

Explanation: Industrial Policy Resolution of 1956 (JPR 1956) 1B a resolution adopted by the Indian Parliament in April 1956, According to this decision the purpose of the socio-economic policy in India was to establish a social pattern.

Q. 39. First Industrial Policy of independent India was declared in:

(A) 1947 (B) 1948 (C) 1950 (D) 1951

Ans.  (B)

Explanation: After gaining independence, the Government of India announced its first Industrial Policy on April 6, 1948. The Industrial Policy 1948 was introduced in parliament by the Minister of Industry Dr. Shyama Prasad Mukherjee. 

Q. 40. Process of industrialisation was started in India in: 

    (A) First Plan     (B) Second Plan

    (C) Third Plan    (D) Fourth Plan

Ans. (B)

Explanation; The second plan was to set India on the path of industrialisation. 

Q. 41. To increase the annual growth rate of industries, efforts should be made for:

      (A)    Full utilisation of production capacity

      (B)    Use of modern technology

      (C)    Industrial peace 

      (D) All of the above 

Ans. (D) 

Q. 42. Industrial Policy in force presently in India is:

(A) 1948 (B) 1956 (C) 1977 (D) 1991 

Ans. (D)

Explanation; The last industrial policy was implemented in 1991. The aim of the policy was to increase efficiency and accelerate economic growth.

Q. 43. Industries (Development and Regulation) Act wag implemented in: 

     (A) 1951       (B) 1952

     (C) 1953       (D) None of the above

Ans. (A)

Explanation: Industrial (Development and Regulation) Act, 1951, including the industrial development policies regulated by the Central Government in India.  

Q. 44. Industrial Licensing Policy was made liberal particularly in:

     (A) 1990      (B) 1991

     (C) 1992       (D) 1985 

Ans. (B)

Q. 45. Problem of Small-Scale Industries is:

      (A)    Shortage of raw material

      (B)    Inadequate use of capacity

      (C)    Shortage of capital and credit

      (D)    All of the above

Ans. (D)

Q. 46. Which of the following statements is not true about problems in the public sector in India? 

     (A) Lack of technical efficiency

     (B)    Discriminating policy of organisation

     (C)    Lack of incentives

     (D)    Adequate control of parliament

Ans. (D)

Q. 47. Identify the correct pair by matching the items in Column A to that of Column B:

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

Ans. (A)

Q. 48. Which of the following statements is not true about the problems of small sector in India?  

     (A) Shortage of capital 

     (B)    Undeveloped production system

     (C)    Problem of raw material

     (D)    Lack of unorganised market

Ans. (D)

Explanation: One of the problems faced by the small scale sector in India is lack of organised sector.

Q. 49. Identify the correctly matched pair from Column A to that of Column B:

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

Ans. (C)

Q. 50. After independence, India had favourable Balance of Trade situations for:

     (A) Two times       (B) Three times 

     (C) Four times      (D) Always   

Ans. (A)

Q. 51. What percentage of India’s share in World trade has been targeted in Foreign trade Policy, 2004-2009?

     (A) 1 percent    (B) 2 percent

     (C) 1.5 percent    (D) 2.5 percent

Ans. (C)

Explanation: India had a share of 0.8% in Foreign trade between 2003-2004, the target in this policy was set to achieve 1.5% share in world made by 2009.

Q. 52. Trade policy was made liberal in India in: 

     (A) 1990    (B) 1991 

     (C) 1992    (D) 1993 

Ans. (B).

Explanation: The long-awaited liberalised industrial policy was announced by the Government of India in 1991 during the country’s major economic downturn. The aim of the policy was to increase efficiency and accelerate economic growth,

Q. 53. Import-Export Policy 2009-14 was declared on:

   (A) 27th August,2009 

   (B) 28th March, 2009

   (C) 1st April, 2002   

   (D) 1st April, 2009    

Ans. (A)

Explanation; On August 27, 2009, the Minister of Commerce and Industry, Anand Sharma, unveiled a five-year Foreign Trade policy (FTP) for 2009-2014, Aiming to curb cuts in exports for ten consecutive months, the new FTP has a few steps to ensure healthy growth in foreign frade, The steps include financial approval and procesy relaxation,

Q. 54. Features of New EXIM Policy are:

      (A)    Abolition of quantitative restriction on export.

      (B)    Special incentives on exports of agricultural products.

      (C)    Improvement in facilities of Special Economic Zones.

      (D)    Alt of the above.

Ans. (D)

Q. 55. Identify the correctly matched pair of Column A to that of Column B:

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

Ans. (D)

Explanation: When there is excess of imports over exports, it is called an unfavourable balance of trade.

Q. 56. Need for import substitution policy is due to:

    (A) Shortage of foreign exchange.     

    (B) Adverse Balance of trade.  

    (C) Devaluation of money.

     (D) Any of the above. 

Ans. (D)

Q. 57. To increase foreign trade, we should resort to: 

     (A) Reduction in tariff rates.

     (B)    Credit faciliües to exporters from foreign markets.

     (C)    To make available better infrastructural facilities to exporters. 

      (D) All of the above.

Ans. (D)

Q. 58. Identify the correctly matched pair of Column A to that of Column B:

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

Q. 59. Which of the following statements is not true about the need for import substitution for the Indian economy?

      (A)    Unfavourable balance of trade.

      (B)    Devaluation of rupee.

      (C)    Abundance of foreign aid.  

      (D) Shortage of essential commodities.

Ans. (C)

Explanation: Import Substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production to protect domestic industries. Thus, there was no requirement of foreign aid

Q. 60. Identify the correctly matched pair of Column A to that of Column B:

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

Ans. (D)

Explanation: Aim of import substitution was  to decrease their dependence on developed countries.

Q. 61. ———- was the Indian Finance Minister in 1991, acknowledged for his capabilities to steer away the economic crisis looming large on the erstwhile Indian Economy. 

    (A) Dr. Subramanian Swamy

    (B) Dr. Manmohan Singh

    (C)    Pranab Mukherjee

     (D)    Dr. Urjit Patel      

Ans. (B)

Q. 62. To accelerate the rate of growth, the reform programmes were initiated in the year:

     (A) 1990      (B) 1991

     (C) 1993        (D) 1994 

Ans. (B)

Explanation: India’s New Economic Policy was introduced in 1991 under the leadership of P. V. Narasimha Rao. The Narasimha Rao government has reduced import duties, opened up a private sector, and reduced Indian currency to increase exports, This is also known as the LPG Model for growth.

Q. 63. Identify the correctly matched pair in Column A and Column B from the following:

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

Ans. (C)

Q. 64. Out of the following, which industry is reserved for public sector? 

    (A) Atomic energy

    (B) Industrial explosive

    (C) Medicines

    (D) All of the above

Ans. (A)

Explanation: The three industries: Railways, Atomic Energy and Defence, are reserved for the operation and management by government only. This is due to the need for security and confidentiality to be maintained especially in the operations of the Atomic Energy and Defence sectors of the country.

Q. 65. New Economic Policy, 1991 is also called:

     (A)    L-Turn policy

     (B)    S-turn policy

     (C)    U-turn policy

     (D)    None of the above 

Ans. (C)

Q. 66. New Economic Policy includes:

     (A) Liberalisation    (B) Privatisation 

     (C) Globalisation    (D) All of these

Ans. (D)

Explanation: LPG stands for Liberalisation, Privatisation and Globalisation.

Q. 67. Which was not the objective of demonetisation 2016?

      (A)    To curb corruption

      (B)    To curb counterfeit currency

      (C)    To stop the use of low denomination notes for terrorist activities

      (D)    discourage the accumulation of “black money”

Ans. (C)

Explanation: On November 8, 2016, the government announced a landmark program, which had a significant impact on the economy. The two largest denomination notes, 500 and 1000, immediately were “demonetized ceased to be official tenders.

The purpose of this action Was to prevent corruption; to curb counterfeiång; to stop the use of high denomination notes in terrorist activities; and especially the accumulation Of ‘black money”, made by unpublished revenue to the tax authoriåes.

Q. 68. What kind of Tax is GST?

      (A)    Direct Tax

      (B)    Indirect Tax

      (C)    Depends on the type of goods and services 

      (D) None of the above 

Ans. (B)

Explanation: Goods and Services Tax is an indirect tax used in India on the supply of goods and services.

Q. 69. Which of the following statements is not true regarding the benefit of Privatisation? 

      (A)    Less political intervention

      (B)    Improvement in economic efficiency and technical efficiency

      (C)    Increased accountability

      (D) Destabilization of economy

Ans. (D)

Q. 70. Which of the following statements is not true regarding the benefit of GST?

      (A)    GST provides comprehensive and wider coverage of input credit set-off, you can use service tax credit for the payment of tax on sale of goods, etc.

      (B)    All indirect taxes in state and central level have been included by GST.

      (C)    Uniformity of tax rates across the states.

      (D)    Ensure better compliance due to aggregate tax rate reduction.

Ans. (B)

Q. 71. Identify the correctly matched pair in Column A and Column B from the following: 

(A). 1-a, (B). 2-b, (C). 3-c, (D). 4-d

 Ans. (C)

Assertion and Reasoning MCQs 

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as: 

(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation  of the Assertion (A),

(C) Assertion (A) is true, but Reason (R) is false. 

(D) Assertion (A) is false, but Reason (R) is true.

Q.1. Assertion (A): India became an exporter of primary products and an importer of finished consumer and capital goods produced in Britain.

Reason (R): 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. 

Ans. (A)

Q. 2. Assertion (A): During colonial period, India’s export trade was export surplus,

Reason (R): During colonial period, India’s export were more than its import. 

Ans. (B)

Explanation: British policies made Indian handicrafts more expensive And ifs global demand declining sharply, As a result the export basket of India during the colonial period contained major products such as sugar, jute, raw silk, indigo, wool, etc, and finished imports for consumer such as cotton silk and wool garments and large good such as light machines from Britain. India has registered a large export balance during the colonial period.

Q. 3. Assertion (A): Indian economy wag gource Of raw material for BritiAh indu•trie•.

Reason (R): During colonial period, the raw materials were exported from India to Britain to be used in the industry.

Ans. (A)

Q. 4. Assertion (A): India adopted import substitution  policy during the first seven Five-year plans precisely

Reason (R): Import substitution was to substitute the imports of our economy with domestic production.

Ans. (B)

Explanation: India adopted import substitution policy during the first seven Five-year plans precisely to protect domestic industries.

Q. 5. Assertion (A): Equity in agriculture called for land reforms which primarily refer to change of ownership from tillers to Zamindars.

Reason (R): The Zamindari system introduced by the British Raj led to the destruction of the agricultural sector in India so the land reforms had to be introduced.

Ans. (D)

Explanation: In post-independent India, equity in agriculture called for land reforms which primarily refer to change in the ownership of landholdings from Zamindars to tillers.

Q. 6. Assertion (A): The goal of equity was fully served by abolition of intermediaries.

Reason (R): The growth of the country can lead to income inequality and with more modernization unemployment will increase leading to people Jiving under poverty line, 

Ans. (D)

Explanation: The goal of equity was not fully served by abolition of intermediaries as Zamindars continued to own large areas of land due to loopholes in the legislation.

Q. 7. Assertion (A): The major policy initiatives i.e. land reforms and green revolution helped India to become self-sufficient in food grains production.

Reason (R): proportion Of people depending on Agriculture did not decline as expected 

Ans. (R)

Explanation: In this case, insecticides and pesticides were used which resulted in greater production of wheat and rice,

Q. 8. Assertion (A): revolution though improved the production of crops but did not increase the income of the farmers.

Reason (R): The farmers sold more crops at lesser price.

Ans. (D)

Explanation: By 1970, Punjab was producing 70% of the country’s total food grains, and farmers’ incomes were increasing by over 70%.

Q. 9. Assertion (A): Green revolution increased the productivity due to the extensive use of fertilisers. 

Reason (R): The government gives economic subsidy in the fertilisers to ensure that farmers have adequate availability of fertilizers.

Ans. (A)

Q. 10. Assertion (A): Economy cannot develop without industrial development.

Reason (R): Industrial development leads the economy to have high rate of employment and less poverty in the economy.

Ans. (A)

Q. 11. Assertion (A): In cottage industries, machines are not used whereas these are used in small sector. 

Reason (R): Cottage industries are smaller industries than the small sector industries. 

Ans. (C)

Explanation: Cottage industries are industries whose labor force consists of family units or individuals working at home with their own equipment.

Q. 12. Assertion (A): Small Scale Industries face a shortage of capital.

Reason (R); The government is reluctant in providing them any assistance and loans. 

Ans. (C)

Explanation; The NSIC provides for financial aid to procure raw materials, for activities in relation to marketing and for financing with banks through syndication to MSMEs,

Q. 13. Assertion (A): Finished goods were exported from India during the Colonial Era.

Reason (R): India was a hub for raw materials for the British Industries.

Ans. (D)

Explanation: From the time of Independence, India has been one of the important trading countries, exporting primary items like cotton, raw silk, sugar, wool, jute, and indigo, etc. and importer of finished consumer goods like woolen clothes, cotton, silk, and capital goods like light machinery manufactured in Britain.

Q. 14. Assertion (A): During British rule, India saw huge drain of wealth.

Reason (R): India generated large export surplus during the period.

Ans. (B)

Explanation: The drain of wealth means that British economic policies in India were driven primarily by grabbing huge profits from Indian trade. Foreign trade in India has produced a large export balance. This export balance did not result in the importation of gold or silver to India. There was drain of India’s wealth into Britain.

Q. 15. Assertion (A): Import substitution leads to unfavorable foreign bade. 

Reason (R): Import substitution leads the goods to be produced in the country itself.

Ans. (A)

Q. 16. Assertion (A): Every year government fixes a target for disinvestment of Public Sector Enterprises (PSFs).

Reason (R): Disinvestment is an excellent tool for discarding the loss incurring Public Sector Enterprises (PSES). 

Ans. (B)

Explanation: It Was considered that private funds and management skills could be used effectively to improve the performance of PSUs. 

Q. 17. Assertion (A): Foreign exchange crisis was the basis of economic policies of liberalization, privatization and globalization.

Reason (R): During the fiscal year 1990-91, foreign exchange reserves fell to a lower level of 0,400 crores, which was just enough for the payments of three weeks imports. 

Ans. (A)

Q. 18. Assertion (A): Navaratna Policy of the government helped in improving the performance of public sector undertakings in India.

Reason (R): Navaratna Policy boosted the public sector industries and helped them to produce more efficiently and also made them competitive in the market. 

Ans. (B)

Explanation: Navaratna Policy boosted the public sector industries as they were given greater managerial and operational autonomy 

Case Based MCQs 

I. Read the following hypothetical text and answer question that follow:

India’s Micro, Small and Medium Enterprises (MSME) sector is poised for a mega transformation in 2020, with the launch of an Alibaba-like e-marketplace, trendy yet affordable khadi products to appeal to the masses and digital data-based credit ratings to help entrepreneurs avail loans. 

However, the MSME sector is often considered the bulwark of the economy as it contributes around 29% to the GDP and 48% to the Indian exports. 

There is an urgent need of major reforms and policy interventions towards ensuring timely availability of low-cost credit, improving ease of doing business and technological upgradation, to take on the formidable challenge of creating millions of jobs, ensure equitable distribution of national income and achieving large-scale import substitution. 

The World Bank has recently approved loan worth $750 million to address the immediate liquidity and credit needs of India’s MSME sector that has been severely impacted by the Covid-19 crisis. This will give a push to the Atmanirbhar Bharat vision of the government. 

Q. 1. Identify which of the following is not an advantage of the MSME sector?

      (A)    It is suited for the utilization of local resources.

      (B)    It is helpful in creaüon of employment opportunities. 

      (C)    It requires more capital than labour.

      (D)    It ensures equitable disfribution of income in the country. 

Ans. (C)

Explanation: MSMEs don’t require heavy capital investment as they produce simple products by using simple technologies mainly labor intensive production techniques. 

Q. 2. MSME sector suffered to a large extent in COVID-19 pandemic situation due to 

      (A) Liquidity crunch

      (B)    Obsolete technology

      (C)    Government Interventions

      (D)    All of the above

Ans. (A)

Explanation: The World Bank has recently approved loan Worth $750 million to address the immediate liquidity and credit needs of India’s MSME sector that has been severely impacted by the Covid-19 crisis.

Q. 3. Read the following statements – 

Assertion (A) and Reason (R).

Assertion (A): Small scale industries ensure a more equitable distribution of national income and wealth.

Reason (R): The ownership of small-scale industries is more wide spread than the ownership of large-scale industries.

Select the correct alternative from the following:

(A) Both Assertion (A) and Reason (R) are bue,  and Reason (R) is the correct explanaüon of the Assertion (A).

(B) Both Assertion (A) and Reason (R) are frue, but  Reason (R) is not the correct explanation of the  Assertion (A).

(C) Assertion (A) is true, but Reason (R) is false.

(D) Assertion (A) is false, but Reason (R) is bue.   

Ans. (A)

Explanation: The ownership of small-scale industries is one individual in sole-proprietorship or it can be with a few individuals in partnership.

Q.4. ———- are the largest employer of the labour force in India. 

     (A) Agricultural Sector 

     (B) Small Scale Industries

     (C) Cottage Industries 

     (D) Service Sector

Ans. (A)

Explanation: The apicultural sector is the largest employer in the Indian economy. Nearly 51% of the population is engaged in this section in one way or the other.

Il. Read the following hypothetical text and answer the questions that follow:

The performance of Indian economy during the period of first seven five-year plans (1950-1990) was satisfactory if not very impressive. On the eve of independence, India was an industrially backward country, but during this period of first seven plans our indusfries became far more diversified, with the stress being laid on the public investments in the industrial sector. 

The policy of import substitution led to protection of the dometics industries against the foreign producers but we failed to promote strong export gurplug. 

Although public Sector expanded to a large extent but it could not bring desired level of improvement in thé secondary sector. 

Excessive government regulations prevented the natural trajectory of growth of entrepreneurship as there was no competition, no innovation and no modernization on the front of the industrial sector. 

Many Public Sector Undertakings (PSUs) incurred huge loges due to operational inefficiencies, red-tapism, poor technology and other similar reasons. 

These PSUs continued to function because it wag difficult to close a government undertaking even it is a drain on country’s limited resources. On the Agricultural front, due to the measures taken under the green Revolution, India more or less became selfsufficient in the production of food Fains.

So, the needs for reform of economic policy was widely felt in the context of changing global economic scenario to achieve desired gowth in the country.

Q. 1. Which of the following was not a reason for the public sector to play a major role in the initial phase of Indian Economic Planning?

      (A)  Private entrepreneurs lacked sufficient capital for 

      (B)  Government aimed at social welfare. 

      (C) The market was big enough to encourage private indusfrialists for investment.

      (D) The government wanted to protect the indigenous producers from the foreign competition.

   Ans. (C)

Q. 2. Inward looking trade s&ategy aimed at

      (A)    Protecting domesüc industries from international competition

     (B)    Industrialization

     (C)    Improving performance of public sector

      (D)    None of the above

Ans. (A)

Explanation; The policy of import substitution led to protection of the domestic industries against the foreign producer.

Q, 3. Mechanization of the Indian agriculture was one of the causes of India’s. 

     (A) Green Revolution

     (B)    White Revolution

     (C)    Yellow Revolution

     (D)    None of the above

Ans. (A)

Explanation: This necessitated the “Green Revolution”, which wag largely due to the advent of technology, improved Water supply and better agricultural practices, addition, the increase in agricultural mechanization and the use of crop protection systems have also contributed to the emergence of “Green Revolution” in India.

Q. 4. Read the following statements – Assertion (A) and Reason (R).

Assertion (A): Many public sector undertakings incurred huge losses due to operational inefficiencies.

Reason (R): Red-tapism was one of the reasons for continuation of such enterprises.

Select the correct alternative from the following:

(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Asseråon (A).

(C) Assertion (A) is true, but Reason (R) is false.

(D) Assertion (A) is false, but Reason (R) is frue. 

Ans. (A)

Explanation: Red-tapism refers the practice of requiring excessive paperwork and tedious procedures before official action can be considered or completed.

Ill. Read the news report given below and answer the questions that follow:

In a 40 minute long speech Prime Minister Narendra Modi announced the demonetization of existing notes of and during a televised address on Tuesday evening.

Modi announced that the notes of {500 and {1,000 “will not be legal tender from midnight tonight” and these will be “just worthless pieces of paper. PM also urged people to ‘join this mahayojna against the ills of corruption.

Here is a guide for you explaining everything about the move, 

What is demonetization of currency? 

Demonetization for us means that Reserve Bank of India has withdrawn the old {500 and {1,000 notes as an official mode of payment. According to  Investopedia, demonetization is the act of stripping a currency unit of its status as legal tender.

What was the reason?

The reasoning given by Modi was:

(A) tackle black money in the economy.

(B) lower the cash circulation in the country which “is directly related to corruption in our country, ” according to PM Modi.

(C) eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India.

(D) The move is estimated to scoop out more than  lakh crore black money from the economy, according to Baba Ramdev, a staunch Modi supporter.

Q. 1. Why is demonetisation termed as the mahayojna  by the Prime Minister?

      (A)    It is to curb the ills of corruption. 

      (B)    It is to tackle the black money. 

      (C)    It is to digitalise the economy. 

      (D)    All of the above. 

Ans. (A)

Q. 2. What is not the benefit of demonetisation:

      (A)    To lower the cash circulation.

      (B)    To tackle black money in the economy.

      (C)    To eliminate fake currency

      (D)    Growth of revenue in States and Union Territories

Ans. (D)

Q. 3. Demonetisation is an act ofa currency unit of its status as legal tender. 

    (A) Stripping

    (B) Covering     

    (C) Clothing

    (D) Removing

Ans. (A)

Explanation: Demonetization is a situation where the Central Bank of the country (Reserve Bank in India) withdraws the currency notes of certain denomination official mode of payment.

Q. 4, How much black money is the move estimated to scoop out? 

     (A) ₹ 4 lakh crore

     (B)    ₹ 5 lakh crore

     (C)    ₹ 6lakh crore

     (D)    ₹ 7lakh crore

Ans. (B)

Final Words

From the above article, you have practiced Developmental Experience MCQ And Economic Reforms of class 12 Economics Chapter 8. We hope that the above-mentioned MCQs for term 1 of chapter 8  Developmental Experience MCQ And Economic Reforms will surely help you in your exam. 

If you have any doubts or queries regarding Developmental Experience MCQ And Economic Reforms MCQ (Multiple Choice Questions) with Answers, feel free to reach us and we will get back to you as early as possible.