11th March Static Quiz 2021 (Indian Economy)

Solution: a)

The normal formula is GNP = GDP Income from Abroad. But it becomes GNP = GDP (—Income from
Abroad) = GDP — Income from Abroad, in the case of India.
IFA usually includes remittances, trade balance and interest on external loans.
This is because usually the IFA component of India is negative. So, India’s GNP is generally lower than its GDP.
The different uses of the concept GNP are as given below:
1. This is the ‘national income’ according to which the IMF ranks the nations of the world in terms of the volumes—at Purchasing Power Parity (at PPP).
2. It is the more exhaustive concept of national income than the GDP as it indicates towards the ‘quantitative ‘as well as the ‘qualitative ‘aspects of the economy, i.e., the ‘internal’ as well as the ‘external’ strength of the economy.
3. It enables us to learn several facts about the production behaviour and pattern of an economy, such as, how much the outside world is dependent on its product and how much it depends on the world for the same (numerically shown by the size and net flow of its ‘balance of trade’) etc.

Solution: a)

Although Jawaharlal Nehru, the first Prime Minister of India, did not officially accept the plan, “the Nehruvian era witnessed [what was effectively] the implementation of the Bombay Plan; a substantially interventionist state and an economy with a sizeable public sector

Solution: B

Solution: A