38 practice questions on Planning & NITI Aayog from the Economy section of the UPSC Prelims syllabus.
38 come with a written explanation and 3 are actual previous year questions.
Try the sample set below - the answer stays hidden until you ask for it.
14 Easy20 Medium4 Hard3 from past papers
Sample questions
Q1
Previous year questionmedium
With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct?
1. It is an organ of NITI Aayog.
2. It has a corpus of Rs. 4,00,000 crore at present.
Select the correct answer using the code given below :
A1 only
B2 only
CBoth 1 and 2
DNeither 1 nor 2
Show answer and explanation
Correct answer: D - Neither 1 nor 2
Statement 1 is wrong: the National Investment and Infrastructure Fund is not an organ of NITI Aayog; it is a fund managed by NIIF Limited, registered with SEBI as an Alternative Investment Fund. Statement 2 is wrong: its proposed corpus was about Rs. 40,000 crore (with the government contributing up to 49 percent), not Rs. 4,00,000 crore. Since both statements are incorrect, the answer is 'Neither 1 nor 2'.
Q2
Previous year questioneasy
The main objective of the 12th Five- Year Plan is
Ainclusive growth and poverty reduction
Binclusive and sustainable growth
Csustainable and inclusive growth to reduce unemployment
Dfaster, sustainable and more inclusive growth
Show answer and explanation
Correct answer: D - faster, sustainable and more inclusive growth
The stated objective of the Twelfth Five Year Plan (2012-17) was Faster, Sustainable and More Inclusive Growth, so option (d) is correct. The other phrasings are close but do not match the official wording of the Plan's vision, so (a), (b) and (c) are wrong.
Q3
Previous year questionhard
With reference to India's Five-Year Plans, which of the following statements is/are correct?
1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.
2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.
Select the correct answer using the code given below.
A1 and 2 only
B2 only
C3 only
D1, 2 and 3
Show answer and explanation
Correct answer: A - 1 and 2 only
The Second Five-Year Plan, built on the Mahalanobis model, deliberately emphasised the development of basic and capital goods industries to substitute imports and build a self-reliant industrial base, so statement 1 is correct. The Fourth Five-Year Plan explicitly aimed at growth with stability and at correcting the earlier concentration of wealth and economic power, so statement 2 is correct. Statement 3 is wrong because the financial sector was not introduced as an integral part of planning for the first time in the Fifth Plan; this claim does not reflect the Plan's recorded objectives. Therefore 1 and 2 only is correct.
Q4
medium
Consider the following statements about the NITI Aayog:
1. It was established by an executive resolution of the Union Cabinet, not by an Act of Parliament.
2. The Prime Minister serves as its ex-officio Chairperson.
3. It has the power to allocate financial resources to States like its predecessor body.
Which of the statements given above is/are correct?
A1 and 2 only
B1 and 3 only
C2 and 3 only
D1, 2 and 3
Show answer and explanation
Correct answer: A - 1 and 2 only
NITI Aayog was created in 2015 through a Cabinet resolution, so it is neither a constitutional nor a statutory body (statement 1 correct). The Prime Minister is its ex-officio Chairperson (statement 2 correct). Unlike the erstwhile Planning Commission, NITI Aayog is a policy think-tank and advisory body with no power to allocate or transfer financial resources to States (statement 3 wrong). Hence only 1 and 2 are correct.
Q5
medium
Which one of the following best describes the difference between the 'NITI Aayog' and the erstwhile 'Planning Commission'?
ANITI Aayog functions as an advisory think-tank and does not allocate funds to states
BNITI Aayog has powers to issue legally binding directives to states
CNITI Aayog formulates Five Year Plans with statutory force
DNITI Aayog replaced the Finance Commission in tax devolution
Show answer and explanation
Correct answer: A - NITI Aayog functions as an advisory think-tank and does not allocate funds to states
Unlike the Planning Commission, which allocated plan funds to states, NITI Aayog acts as a policy advisory and coordinating think-tank that does not disburse funds. It cannot issue binding directives, does not produce statutory Five Year Plans, and has no role in the Finance Commission's constitutional tax-devolution function.
Q6
medium
Consider the following statements about NITI Aayog:
1. It was established by an Act of Parliament to replace the Planning Commission.
2. The Prime Minister is the ex-officio Chairperson of NITI Aayog.
3. It does not allocate funds to States.
Which of the statements given above are correct?
A2 and 3 only
B1 and 2 only
C1 and 3 only
D1, 2 and 3
Show answer and explanation
Correct answer: A - 2 and 3 only
Statement 1 is wrong: NITI Aayog was set up by an executive resolution of the Union Cabinet in 2015, not by an Act of Parliament. Statement 2 is correct: the Prime Minister is its ex-officio Chairperson. Statement 3 is correct: unlike the erstwhile Planning Commission, NITI Aayog is a think tank/advisory body and does not allocate financial resources to States. Hence statements 2 and 3 are correct.
Q7
easy
Which of the following best describes the primary role of NITI Aayog in India?
AIt serves as a policy think-tank advising the government and fostering cooperative federalism, without allocating financial resources to states
BIt allocates plan funds and grants directly to state governments
CIt regulates monetary policy and controls the money supply
DIt is a constitutional body that recommends devolution of central taxes to states
Show answer and explanation
Correct answer: A - It serves as a policy think-tank advising the government and fostering cooperative federalism, without allocating financial resources to states
NITI Aayog is a non-constitutional, non-statutory policy think-tank that advises the central and state governments and promotes cooperative federalism, but it does not allocate financial resources to states (unlike the erstwhile Planning Commission). Fund allocation now flows through the budget and Finance Commission mechanisms. Monetary policy is the RBI's domain, and recommending tax devolution is the role of the constitutionally mandated Finance Commission.
Q8
medium
With reference to the institutional history of economic planning in India, the 'Bombay Plan' of 1944 is notable because it was:
AA blueprint drafted by leading industrialists proposing a substantial role for the state in economic development
BThe first Five Year Plan formally adopted by the Planning Commission
CA plan authored by M. N. Roy advocating a fully decentralized rural economy
DA Gandhian plan emphasising village self-sufficiency and cottage industries
Show answer and explanation
Correct answer: A - A blueprint drafted by leading industrialists proposing a substantial role for the state in economic development
The Bombay Plan (1944) was a development blueprint signed by eight prominent industrialists, including J. R. D. Tata and G. D. Birla, which, despite being a capitalist initiative, envisaged significant state intervention and public investment, especially in basic and heavy industries. The Gandhian Plan (S. N. Agarwal) and the People's Plan (M. N. Roy) were separate contemporaneous proposals.
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