Economy MCQs for UPSC Prelims — May 2026

Q1. Under the Reserve Bank of India Act, 1934, who is the ex-officio Chairperson of the six-member Monetary Policy Committee that determines the policy repo rate and also holds a casting vote in case of a tie?

• A. Governor of the Reserve Bank of India
• B. Deputy Governor in charge of monetary policy
• C. Union Finance Minister
• D. Chief Economic Adviser

Q2. The below-normal southwest monsoon forecast for 2026, cited in the Monthly Economic Review as a food-inflation risk, is officially issued by which one of the following agencies?

• A. India Meteorological Department, Ministry of Earth Sciences
• B. Central Water Commission, Ministry of Jal Shakti
• C. National Remote Sensing Centre, ISRO
• D. Indian Agricultural Research Institute, ICAR

Q3. With reference to the macroeconomic data cited around the May 2026 Monthly Economic Review during the West Asia conflict, consider the following: Which of the above is/are correctly identified?

1. Retail (CPI) inflation, April 2026 — 3.48%
2. Wholesale (WPI) inflation, May 2026 — 9.68%
3. Indian basket crude oil, April 2026 average — US$106 per barrel
4. Foreign portfolio investor outflow after the escalation — about US$23.6 billion

• A. 1, 2 and 4 only
• B. 2, 3 and 4 only
• C. 1 and 3 only
• D. 1, 2, 3 and 4

Q4. The sharp rise in global crude oil prices flagged in the May 2026 Monthly Economic Review was primarily attributed to the closure, in March 2026, of which one of the following maritime chokepoints?

• A. Strait of Hormuz
• B. Strait of Malacca
• C. Bab-el-Mandeb Strait
• D. Suez Canal

Q5. With reference to the Economic Survey and the Monthly Economic Review, consider the following statements: Which of the above is/are correctly identified?

1. The Economic Survey is prepared under the overall guidance of the Chief Economic Adviser.
2. The Monthly Economic Review is a monthly publication of the Economic Division of the Department of Economic Affairs.
3. The Economic Survey is a legally binding document that the government is obligated to implement through the Budget.
4. Both documents are produced by the Economic Division of the Department of Economic Affairs.

• A. 1, 2 and 4 only
• B. 1 and 3 only
• C. 2, 3 and 4 only
• D. 1, 2, 3 and 4

Q6. Which one of the following is the flagship annual document, prepared by the Economic Division of the DEA, that is presented in Parliament by the Union Finance Minister immediately before the Union Budget?

• A. Economic Survey
• B. Monthly Economic Review
• C. Monetary Policy Report
• D. Half-Yearly Economic Review

Q7. With reference to the division of work among departments of the Ministry of Finance, consider the following statements: Which of the statements given above is/are correct?

1. The Department of Economic Affairs is the nodal department for macroeconomic policy and capital markets, whereas the Department of Revenue administers direct and indirect taxes.
2. Disinvestment and management of the government's equity in central public sector enterprises is handled by DIPAM rather than by the Department of Economic Affairs.
3. The management of India's external debt and multilateral funding is handled by the Department of Expenditure and not by the Department of Economic Affairs.

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q8. The preparation and presentation of the Union Budget to Parliament falls under the responsibility of which one of the following departments of the Ministry of Finance?

• A. Department of Economic Affairs
• B. Department of Expenditure
• C. Department of Revenue
• D. Department of Financial Services

Q9. With reference to the revised Consumer Price Index (CPI) series with base year 2024=100, consider the following statements: Which of the statements given above is/are NOT correct?

1. Its base year is 2024=100, replacing the earlier 2012=100 series.
2. Its weights are derived from the Household Consumption Expenditure Survey 2023-24.
3. It adopts the COICOP 2018 classification developed by the UN Statistics Division.
4. It is compiled and released by the Reserve Bank of India.

• A. 1 only
• B. 2 and 3 only
• C. 1 and 3 only
• D. 4 only

Q10. With reference to the Wholesale Price Index (WPI) and the Consumer Price Index (CPI) in India, consider the following statements: Which of the above is/are correctly identified?

1. WPI is released by the Office of the Economic Adviser under the Ministry of Commerce and Industry.
2. CPI is released by the National Statistical Office under the Ministry of Statistics and Programme Implementation.
3. WPI captures prices of services, whereas CPI excludes them.
4. The revised WPI series adopts 2022-23 as its base year.

• A. 1, 2 and 4 only
• B. 1 and 3 only
• C. 2, 3 and 4 only
• D. 1, 2, 3 and 4

Q11. The Monthly Economic Review tracks a set of high-frequency indicators to gauge real-time economic activity. With reference to these, consider the following: Which of the above is/are correctly identified as high-frequency indicators used in the MER?

1. E-way bill generation
2. Purchasing Managers' Index (PMI)
3. Electricity consumption
4. Decadal Census enumeration figures

• A. 1 and 2 only
• B. 2, 3 and 4 only
• C. 1, 2 and 3 only
• D. 1, 2, 3 and 4

Q12. The Monthly Economic Review (MER), which characterised India's macro position as 'cautious resilience' in May 2026, is brought out primarily by which one of the following bodies?

• A. The Economic Division of the Department of Economic Affairs, Ministry of Finance
• B. The National Statistical Office under the Ministry of Statistics and Programme Implementation
• C. The Monetary Policy Committee of the Reserve Bank of India
• D. The Economic Advisory Council to the Prime Minister

Q13. Among the following trade-policy instruments, which one is the primary mechanism actually used by the Government to temporarily remove the Basic Customs Duty on cotton imports?

• A. Safeguard duty
• B. Countervailing duty
• C. Customs exemption notification
• D. Anti-dumping duty

Q14. Which single organisation acts as the central nodal agency for undertaking Minimum Support Price operations in cotton?

• A. Food Corporation of India
• B. National Agricultural Cooperative Marketing Federation (NAFED)
• C. Cotton Corporation of India
• D. Commission for Agricultural Costs and Prices

Q15. The following are stated to be among India's leading cotton-producing States. Which of the above is/are NOT correct?

1. Gujarat
2. Maharashtra
3. Telangana
4. Kerala

• A. 1 and 3
• B. 2 and 4
• C. 4 only
• D. 3 only

Q16. India's cotton marketing season, as referenced in duty-suspension notifications, is defined as spanning which twelve-month period?

• A. 1 April to 31 March
• B. 1 October to 30 September
• C. 1 July to 30 June
• D. 1 January to 31 December

Q17. Counting the 2026 waiver, in how many distinct calendar years since 2022 has the Government of India suspended the import duty on cotton?

• A. Two
• B. Three
• C. Four
• D. Five

Q18. In the context of India's recurring cotton import-duty suspensions, the 'lean season' during which the duty is typically waived corresponds to which period of the year?

• A. April to October, when domestic arrivals are low and mills rely more on imports
• B. November to March, when the new crop floods the mandis
• C. October to September, coinciding with the full marketing season
• D. January to June, matching the financial-year closing

Q19. Which single Union authority issues the customs notification that suspends the Basic Customs Duty on cotton imports?

• A. Ministry of Textiles
• B. Ministry of Finance
• C. Ministry of Commerce and Industry
• D. Ministry of Agriculture and Farmers Welfare

Q20. Before any exemption, the 11% import duty levied on raw cotton entering India is a cumulative figure obtained by combining how many distinct statutory levies?

• A. Two
• B. Three
• C. Four
• D. Five

Q21. The 2026 roadshow held in New Delhi to attract investors and technology providers for Surface Coal/Lignite Gasification Projects under the Rs 37,500 crore scheme was organised by which Ministry?

• A. Ministry of Coal
• B. Ministry of Petroleum and Natural Gas
• C. Ministry of Power
• D. Ministry of Heavy Industries

Q22. The projection that domestic coal gasification could substitute imports worth up to about Rs 3 lakh crore is attributed to the Union Minister holding which portfolio?

• A. Coal and Mines
• B. Petroleum and Natural Gas
• C. Chemicals and Fertilizers
• D. Heavy Industries

Q23. In the context of India's coal gasification push, the term 'import substitution' most precisely refers to which one of the following?

• A. Replacing imported urea, ammonia and methanol with products derived domestically from gasified coal
• B. Completely banning all imports of chemicals to protect domestic manufacturers
• C. Exporting surplus syngas-derived products to earn foreign exchange
• D. Substituting imported coal entirely with imported LNG

Q24. With reference to the 2024 Rs 8,500 crore scheme for promotion of coal/lignite gasification, consider the following funding categories: 1. Category I – projects of Government PSUs – Rs 4,050 crore 2. Category II – projects of private sector and Government PSUs – Rs 3,850 crore 3. Category III – demonstration/indigenous-technology and small-scale plants – Rs 600 crore 4. Category IV – projects of foreign joint ventures – Rs 2,000 crore Which of the above are correctly identified?

1. Category I – projects of Government PSUs – Rs 4,050 crore
2. Category II – projects of private sector and Government PSUs – Rs 3,850 crore
3. Category III – demonstration/indigenous-technology and small-scale plants – Rs 600 crore
4. Category IV – projects of foreign joint ventures – Rs 2,000 crore

• A. 1 and 2 only
• B. 1, 2 and 3
• C. 2, 3 and 4
• D. 1, 2, 3 and 4

Q25. Under the 2026 Scheme for Promotion of Surface Coal/Lignite Gasification Projects (outlay Rs 37,500 crore), the financial incentive available to a single project is capped at which amount?

• A. Rs 5,000 crore
• B. Rs 9,000 crore
• C. Rs 12,000 crore
• D. Rs 1,350 crore

Q26. The National Coal Gasification Mission sets a target of gasifying how much coal by the year 2030?

• A. 75 million tonnes
• B. 100 million tonnes
• C. 50 million tonnes
• D. 150 million tonnes

Q27. Consider the following statements about India's coal gasification targets: 1. The National Coal Gasification Mission aims to gasify 100 MT of coal by 2030. 2. The 2026 Surface Coal/Lignite Gasification scheme targets gasification of about 75 MT, forming a part of the larger national target. 3. The 100 MT gasification goal is positioned under the Atmanirbhar Bharat initiative. Which of the statements given above is/are correct?

1. The National Coal Gasification Mission aims to gasify 100 MT of coal by 2030.
2. The 2026 Surface Coal/Lignite Gasification scheme targets gasification of about 75 MT, forming a part of the larger national target.
3. The 100 MT gasification goal is positioned under the Atmanirbhar Bharat initiative.

• A. 1 and 2 only
• B. 1 and 3 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q28. With reference to India's coal gasification programme, consider the following statements comparing the country's import dependence and the nature of syngas: 1. Ammonia is nearly 100% import-dependent, whereas urea is only about 20% imported. 2. Methanol's import dependence (about 80–90%) is higher than that of LNG (more than 50% imported). 3. The syngas produced by coal gasification is primarily a mixture of carbon dioxide and nitrogen. Which of the statements given above is/are correct?

1. Ammonia is nearly 100% import-dependent, whereas urea is only about 20% imported.
2. Methanol's import dependence (about 80–90%) is higher than that of LNG (more than 50% imported).
3. The syngas produced by coal gasification is primarily a mixture of carbon dioxide and nitrogen.

• A. 1 and 2 only
• B. 2 and 3 only
• C. 1 and 3 only
• D. 1, 2 and 3

Q29. With reference to India's defence acquisition and export framework, consider the following statements. Which of the above is/are NOT correct?

1. The Defence Acquisition Procedure (DAP) 2020 superseded the Defence Procurement Procedure (DPP) 2016.
2. The first Positive Indigenisation List was issued in 2020.
3. India's defence exports crossed a record of about ₹24,000 crore in FY 2024-25.
4. India targets ₹3 lakh crore in defence exports by 2029.

• A. 4 only
• B. 1 and 2
• C. 3 only
• D. 2 and 3

Q30. Under the Atmanirbhar Bharat targets for the defence sector, India aims to achieve annual defence exports of ₹50,000 crore by which year?

• A. 2029
• B. 2025
• C. 2027
• D. 2032