APPSC Paper I · Paper I · Topic 6
6 APPSC Paper I Indian Economy & Planning questions with answers
37 questions from APPSC Paper I Mock 1 with answers and APPSC EO Grade III 2026 Paper I question paper with answers. Try each one, then tap Show answer.
Previous-paper questions are as in the original paper. Medha AI wrote the answers and explanations.
6.1.1National income, planning & reformsNotes
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According to NCERT, as part of financial sector reforms the foreign investment limit in Indian banks was raised to around
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Answer B. 74 per cent
NCERT states the foreign investment limit in banks was raised to around 74 per cent.
Source: NCERT Class 11 Indian Economic Development ch.3 (p.58)
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Consider the following statements:
I. Gross value added of a firm is the value of its output minus the value of intermediate goods used.
II. Net value added is gross value added plus depreciation.
III. GDP is the sum of gross value added of all producing units in the economy.
Which of the statements given above is/are correct?
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Answer C. I and III only
I and III are correct. Net value added is gross value added minus (not plus) depreciation.
Source: NCERT Class 12 Introductory Macroeconomics ch.2 (p.30)
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Consider the following statements:
I. Gross capital formation is gross fixed capital formation plus change in stocks.
II. Net investment is gross investment minus depreciation.
III. Depreciation forms part of the income of households.
Which of the statements given above is/are correct?
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Answer A. I and II only
I and II are correct. Depreciation is an allowance for wear and tear of capital and does not become anybody's income.
Source: PW Indian Economy (ref) ch.2 (p.16-17); NCERT Class 12 Introductory Macroeconomics ch.2 (p.35)
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The total income of the country divided by its total population is called
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Answer B. Per Capita Income
Per capita income = national income ÷ population; it shows the average income per person.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q91, final key
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Gross Domestic Product is defined as
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Answer B. It is the value of all final goods and services produced within a country during a particular year
GDP is the market value of all final goods and services produced within a country's domestic territory in a given year; counting only final goods avoids double counting.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q93, final key
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The Second Five Year Plan was based on a modified Soviet Model. What was that model ?
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Answer C. Mahalanobis Model
The Second Plan (1956-61) followed P. C. Mahalanobis's two/four-sector model stressing rapid growth of heavy and basic industries.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q95, final key
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Planning Commission of India was established in
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Answer B. 1950
The Planning Commission was set up by a resolution of the Union Government in March 1950, with Jawaharlal Nehru as its first chairman.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q101, final key
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Per Capita Income is obtained by
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Answer B. National Income ÷ Population
Per capita income is national income divided by the total population of the country.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q103, final key
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NITI Aayog was established in
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Answer C. 2015
NITI Aayog replaced the Planning Commission on 1 January 2015.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q105, final key
6.2.1Money, banking & inflationNotes
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Consider the following statements about the Liquidity Adjustment Facility (LAF) corridor:
I. The SDF rate is the floor of the LAF corridor.
II. The MSF rate is the ceiling of the LAF corridor.
III. After April 2022 the fixed-rate reverse repo continued to be the floor of the corridor.
Which of the statements given above is/are correct?
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Answer B. I and II only
I and II are correct. From April 2022 the SDF rate replaced the fixed-rate reverse repo as the floor.
Source: PW Indian Economy, ch.4 Monetary Policy and Inflation (LAF corridor)
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Consider the following statements about the Bank Rate:
I. It is published under Section 49 of the RBI Act, 1934.
II. It is now aligned with the Marginal Standing Facility rate.
III. It is the rate at which the RBI absorbs surplus liquidity from banks without collateral.
Which of the statements given above is/are correct?
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Answer B. I and II only
I and II are correct. Absorbing surplus liquidity without collateral is done through the Standing Deposit Facility.
Source: PW Indian Economy, ch.4 Monetary Policy and Inflation (Bank Rate; SDF)
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Arrange the following benchmark systems for bank lending rates in India in the order in which they were introduced:
I. Marginal Cost of Funds based Lending Rate (MCLR)
II. Base Rate
III. External benchmark based lending rate
IV. Benchmark Prime Lending Rate (BPLR)
Select the correct answer using the code given below.
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Answer C. IV, II, I, III
The order is BPLR (2003), Base Rate (July 2010), MCLR (April 2016) and external benchmark linked rates (October 2019).
Source: Indian Economy (reference) ch.4 p.43; RBI circulars on lending rates
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In India, who will issue currency notes on behalf of the Central Government ?
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Answer A. RBI
Under Section 22 of the RBI Act, 1934 the Reserve Bank has the sole right to issue bank notes in India (one-rupee notes are issued by the Government itself).
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q94, final key
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What is the NABARD'S primary role ?
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Answer C. To act as refinance institution
NABARD is the apex development bank for agriculture and rural areas; its main role is to refinance cooperative banks, RRBs and others that lend in rural areas.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q141, final key
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Where has the SBI inaugurated the country's first overseas banking unit (OBU) ?
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Answer D. Mumbai
SBI opened India's first offshore banking unit in the SEEPZ Special Economic Zone at Mumbai in 2003.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q142, final key
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To prevent scams in Indian Capital Market, the government has assigned regulatory powers to ?
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Answer D. SEBI
SEBI, made a statutory body in 1992 after the securities scam, regulates India's capital market and protects investors.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q143, final key
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The place where bankers meet and settle their mutual claims and accounts is known as
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Answer B. Clearing House
A clearing house is where banks exchange cheques and settle what they owe one another.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q144, final key
6.3.1Public finance & budgetNotes
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Which of the following statements about the GST Council is/are INCORRECT?
I. It is chaired by the Union Finance Minister.
II. Its Vice-Chairperson is chosen by the members from among the State members.
III. One-third of the total members form the quorum for its meetings.
IV. The vote of the Central Government has a weightage of one-third of the total votes cast.
Select the correct answer using the codes given below.
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Answer A. III only
Only statement III is incorrect: the quorum is one-half of the total members, not one-third. The other three statements follow Article 279A.
Source: Constitution Art. 279A; Polity reference (Parliament; Federal Dynamics) (p.138)
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Consider the following statements about the Goods and Services Tax:
I. The Central Sales Tax that existed before GST was a destination-based tax.
II. GST is a destination-based consumption tax.
III. Input tax credit under GST removes the cascading effect of taxes.
Which of the statements given above are correct?
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Answer B. II and III only
Statements II and III are correct. The old Central Sales Tax was origin-based: the revenue was kept by the State where the sale originated.
Source: NCERT Class 12 Introductory Macroeconomics ch.5 (Box 5.3, p.92-93); Indian Economy reference ch.5 (Government Budgeting and Fiscal Policy) (p.57)
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Which of the following statements is/are NOT correct?
I. The Department of Investment and Public Asset Management (DIPAM) is under the Ministry of Finance.
II. Disinvestment proceeds are non-debt-creating capital receipts.
III. Disinvestment increases the financial assets of the government.
Select the correct answer using the codes given below.
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Answer C. III only
Only statement III is not correct. Sale of shares in PSUs reduces the government's financial assets; that is why it is a capital receipt.
Source: Indian Economy reference ch.5 (Government Budgeting and Fiscal Policy) (p.51); NCERT Class 12 Introductory Macroeconomics ch.5 (p.79)
6.4.1External sector & tradeNotes
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Match List I (institution) with List II (headquarters):
List I
a. New Development Bank
b. Asian Infrastructure Investment Bank
c. Asian Development Bank
d. Bank for International Settlements
List II
I. Manila
II. Basel
III. Shanghai
IV. Beijing
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Answer D. a-III, b-IV, c-I, d-II
The New Development Bank is headquartered in Shanghai, the AIIB in Beijing, the ADB in Manila and the BIS in Basel.
Source: Indian Economy (reference) ch.6 pp.85-87
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Consider the following statements about autonomous and accommodating transactions:
I. Autonomous transactions are called 'above the line' items.
II. Official reserve transactions are autonomous transactions.
III. A balance of payments surplus or deficit is judged by comparing autonomous receipts with autonomous payments.
Which of the statements given above is/are correct?
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Answer A. I and III only
Statements I and III are correct. Official reserve transactions are made to fill the BoP gap, so they are accommodating ('below the line') items.
Source: NCERT Class 12 Introductory Macroeconomics ch.6 (Open Economy)
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Consider the following statements about trade policy reforms after 1991:
I. Import licensing was abolished except for hazardous and environmentally sensitive industries.
II. Quantitative restrictions on imports of manufactured consumer goods and agricultural products were fully removed in 1991 itself.
III. Export duties were removed to make Indian goods more competitive.
Which of the statements given above is/are INCORRECT?
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Answer C. II only
Statement II is incorrect: these quantitative restrictions were fully removed only from April 2001. Statements I and III are correct.
Source: NCERT Class 11 Indian Economic Development ch.3
6.5.1Agriculture, industry & developmentNotes
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Match the following industrial nodes with the industrial corridors they belong to:
List I
a. Krishnapatnam
b. Orvakal
c. Kopparthi
d. Dholera
List II
I. Visakhapatnam-Chennai Industrial Corridor
II. Chennai-Bengaluru Industrial Corridor
III. Delhi-Mumbai Industrial Corridor
IV. Hyderabad-Bengaluru Industrial Corridor
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Answer C. a-II, b-IV, c-I, d-III
The Union Budget 2024-25 named Kopparthi on the Visakhapatnam-Chennai corridor and Orvakal on the Hyderabad-Bengaluru corridor. Krishnapatnam Industrial Area is a node of the Chennai-Bengaluru corridor, and Dholera is on the Delhi-Mumbai corridor.
Source: Union Budget 2024-25 speech (Andhra Pradesh); NICDC corridor nodes
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Consider the following statements about the Soil Health Card scheme:
I. It was launched at Suratgarh in Rajasthan.
II. Soil samples are tested only for nitrogen, phosphorus and potassium.
III. It was launched in 2015.
Which of the statements given above is/are NOT correct?
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Answer A. II only
Statement II is NOT correct. I is true (Suratgarh, February 2015); II is false (samples are tested on 12 parameters including micronutrients, pH, EC and organic carbon); III is true.
Source: PW Indian Economy, ch.8 Agriculture and Allied Sector, p.114
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Consider the following statements about the PLFS Annual Report 2023-24 (persons aged 15 years and above, usual status):
I. The unemployment rate was 3.2%.
II. The female labour force participation rate was 41.7%.
III. The labour force participation rate was 60.1%.
Which of the statements given above is/are correct?
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Answer D. I, II and III
All three are correct. PLFS 2023-24 gives UR 3.2%, female LFPR 41.7% and LFPR 60.1%.
Source: PLFS Annual Report 2023-24; PW Indian Economy
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Report published by UNDP which compares countries based on educational levels of people, health status and per capita income, is
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Answer D. Human Development Report
UNDP's Human Development Report (since 1990) ranks countries on the Human Development Index, built from health (life expectancy), education and per capita income.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q92, final key
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Which sector is characterized by small and scattered units which are largely outside the control of the government ?
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Answer B. Unorganised sector
The unorganised (informal) sector consists of small, scattered enterprises that are largely unregistered and outside government regulation.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q99, final key
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Disguised unemployment is mainly found in
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Answer C. Agriculture
Disguised unemployment means more people work on a job than needed, so their marginal productivity is near zero; it is typical of family farms in Indian agriculture.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q102, final key
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Green Revolution mainly increased the production of
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Answer C. Wheat and Rice
The Green Revolution of the late 1960s used high-yielding varieties, irrigation and fertilisers, and its gains were mostly in wheat and later rice.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q104, final key
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Integrated Rural Development Program envisages
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Answer D. Assistance to poor rural families to come up above the poverty line
IRDP (1978–80) gave subsidised assets and credit to rural poor families so that they could rise above the poverty line.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q146, final key
6.6.1Andhra Pradesh economyNotes
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Consider the following statements about the AP MSME & Entrepreneur Development Policy (4.0) 2024-29, as given in the AP Socio-Economic Survey 2024-25:
I. Power cost is reimbursed at Rs 1.00 per unit for 6 years.
II. Net SGST is reimbursed 100% for 6 years, capped at 5% of annual turnover.
III. Expansion units get a technology upgradation subsidy of 20% of FCI.
Which of the statements given above is/are correct?
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Answer D. I, II and III
All three statements are correct as per the AP SES 2024-25.
Source: AP SES 2024-25, ch.6, p.98-99
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Consider the following statements:
I. The average combined CPI (base 2012=100) of AP for April-December 2024 was higher than that of All-India.
II. AP's combined CPI peaked in October 2024 during April-December 2024.
Which of the statements given above is/are correct?
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Answer C. Both I and II
As per AP SES 2024-25, AP's combined CPI averaged 197.9 against 192.6 for India, and peaked at 201.3 in October 2024.
Source: AP SES 2024-25 p.36
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According to the AP Socio-Economic Survey 2024-25, the Gross State Domestic Product (GSDP) of Andhra Pradesh at current prices for 2024-25 (First Advance Estimates) is about
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Answer B. Rs 16.06 lakh crore
AP GSDP for 2024-25 (FAE) at current prices is Rs 16.06 lakh crore (Rs 16,06,109 crore). The constant-price figure is Rs 8.73 lakh crore.
Source: AP SES 2024-25 p.12; AP SES 2024-25 p.21
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How many Sutralu (Guiding Principles) were proposed to help achieve the goals of Swarna Andhra Vision 2047 ?
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Answer C. Only 10
The Swarna Andhra @ 2047 vision document sets out ten guiding principles (Das Sutralu), such as zero poverty, skilling, water security and farming using deep tech.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q97, final key
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What is the primary economic target set for Andhra Pradesh under the Swarna Andhra @ 2047 vision by the year 2047 ?
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Answer A. Rs. 308 Lakh crore economy
Swarna Andhra @ 2047 targets a GSDP of about USD 2.4 trillion (≈ Rs. 308 lakh crore) by 2047, with per capita income around USD 42,000.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q98, final key
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A key objective of the Talliki Vandanam Scheme is to reduce the burden of schooling cost, thus improving
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Answer B. The Gross Enrollment Ratio (GER)
Talliki Vandanam gives Rs. 15,000 a year to mothers for each school-going child in Andhra Pradesh, to cut schooling costs and raise the Gross Enrolment Ratio.
Source: APPSC EO Grade III 2026 Paper I (Notification 10/2025), Q147, final key
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