Most important MCQs on Indian Economy for Class 12th Economics -

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In this post/article, we are providing you 10 most important MCQs on Indian Economy/ Indian Economic Development for CBSE Class 12. These MCQs are related to first two chapters of the book Indian Economic Development, namely Indian Economy on the eve of Independence and Indian Economy 1950-90.

These MCQs come with a brief explanation of the answer so that you can get an idea behind the right answer. MCQs are designed in such a way that these are beneficial not only to CBSE Class 12 Economics students for their final exams, but also helpful in exam of CUET Economics Domain.

Moreover, these are helpful for competition exams like SSC, UPSC and other state level exams to have an insightful idea about India Economy before Independence and in initial years after Independence.

Though, these MCQs are just 10 in number, in future, we will try to provide more MCQs chapter-wise, especially for CBSE final exams 2025.

Now start your 10 most important MCQs on Indian Economy

Q.1 . …………was Finance Minister and ………………was Prime Minister of India at the time of Economic Reforms-1991.

Manmohan Singh, Charan Singh
P.Chidambram, Rajiv Gandhi
Manmohan Singh, P V Narsimharao
Pranab Mukherjee, Indira Gandhi

Answer: Option (3) is correct option

Brief Explanation: During the balance of payment crisis of late 1980s and early 1990s, Sh. P V Narsimharao was elected as Prime Minister of India in 1991. To handle the situation of economic crisis, the eminent economists, Dr. Manmohan Singh (who was also PM of India during 2004-2014) was appointed as Finance Minister of India. Dr. Manmohan Singh presented the New Economic Policy-1991 and thus initiated the reforms of liberalisation and privatisation.

Q.2 Who made the first attempt to measure National Income in India?

Dada Bhai Naoroji
William Digby
V. K.R.V. Rao
Findley Shirras

Answer: Option (1) is correct option

Brief Explanation: There were many attempts to measure national income of India before Independence. Among them were famous personalities like Dada Bhai Naoroji, William Digby, V.K.R.V Rao, Findley Shirras. However, the first attempt was made by Dada Bhai Naoroji (a famous freedom fighter also) for 1867-68.

Q.3 What was the character of Indian Economy during British Rule?

Semi-feudal
Disintegrated
colonial
All of the

Answer: Option (4) is correct option

Brief Explanation: British had made Indian Economy a backward by destroying traditional handicraft industries. They made it a semi feudal economy by introducing Zamindars as intermediaries between government and peasants. Moreover, they changed character of Indian economy to a Colonial Economy and exploited Indian resources for Britain’s benefits. Further, Indian economy was disintegrated as it had very low growth rate.

Q.4 Which Organisation formulated five year plans in India?

Planning Commission
NITI Ayog
Finance Commission
Election Commission

Answer: Option (1) is correct option

Brief Explanation: After Independence, India decided to development its economy through planning. To oversee the planning process in the country, Planning Commission was established in March 1950.

Q.5 When did India started its first Industrial Policy?

1956
1948
1977
1991

Answer: Option (2) is correct option

Brief Explanation: The newly independent India adopted its 1^st Industrial Policy Resolution in 1948. In this resolution, India decided that it would be a mixed economy, having best practices of both capital and socialist economic system.

Q.6 What does Green Revolution mean?

Decrease in Food-grain production.
Increase in Food-grain production.
Increase in Green Cover.
Decrease in Green Cover.

Answer: Option (2) is correct option

Brief Explanation: Agriculture has been a dominant economy activity in Indian History. After independence, India was facing food insecurity particularly due to low productivity in food grain production. However, during mid-1960s, Green Revolution started in India which aimed at increasing the food grain production by the use of High Yield Variety seeds, chemical fertilizers & pesticides, better irrigation facilities and mechanized farming. Within few years, India became food sufficient country from a food deficient country.

Q.7 Which industry is reserved for public sector only?

Atomic Energy
Industrial Explosive
Medicine
Defense Equipment

Answer: Option (1) is correct option

Brief Explanation: After adoption of New Economic Policy in 1991, India started its economic reforms process. Most of the industries which were earlier reserved for Public Sector opened for private sector. Now, all industries except Atomic Energy and some establishments of Railways are operated exclusively by the Public Sector.

Q.8 In which Plan, Mahalanobis Model was adopted?

First
Second
Third
Forth

Answer: Option (2) is correct option

Brief Explanation: P C Mahalanobis one of the earliest members of the planning commission. He was a great statistician. As a members of planning commission, he developed a model plan for 2^nd five-year plan which is popularly known as Mahalanobis Model. This model focused on rapid industrialization of the country in which public sector would play the key role.

Q.9 During the British Rule, where were Textile and Jute industries centralised in India?

Maharashtra and Uttar Pradesh
Gujarat and Karnataka
Maharashtra and Bengal
Haryana and Bengal

Answer: Option (3) is correct option

Brief Explanation: During British period, modern industries in India could not grow to their potential. However, some modern industries did come up in the later half of 19^th century. These industries were related to textile and jute industries. Cotton textile industries were flourishing in western part of Indian in Gujarat and Maharashtra while Jute industries developmed in Bengal. In textile industries, investment was predominately made by Indians while in Jute industries, it was made by Europeans.

Q.10 Regional Equality was main aim/objective of which Industrial Policy?

1956 Industrial Policy Resolution-1956
1991New Industrial Policy
Industrial Policy Resolution-1948
None of the above

Answer: Option (1) is correct option

Brief Explanation: Regional Equality was one of the objective of the Industrial Policy Resolution-1956. The policy sought to achieve this objective through industrial licensing. The policy made a provision that producer would be provided industrial licenses easily if they would set up their factories in economically backward areas of the country.