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Fiscal Policy & Budget

45 questions in Indian Economy.

Asked in 2011, 2010, 2006, 2004, 2003, 2002, 2001, 1999, 1998, 1997, 1996, 1995

2011 · Q74Indian EconomyFiscal Policy & Budgetmoderate

What is the difference between "vote-on-account" and "interim budget"? 1. The provision of a "vote-on-account" is used by a regular Government, while an "interim budget" is a provision used by a caretaker Government. 2. A "vote-on-account" only deals with the expenditure in Government's budget, while an "interim budget" includes both expenditure and receipts. Which of the statements given above is/are correct?

  1. (a)1 only
  2. (b)2 only
  3. (c)Both 1 and 2
  4. (d)Neither 1 nor 2
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Official answer(b) 2 only

2011 · Q85Indian EconomyFiscal Policy & Budgetmoderate

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt. 2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/are correct?

  1. (a)1 only
  2. (b)2 only
  3. (c)Both 1 and 2
  4. (d)Neither 1 nor 2
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Official answer(d) Neither 1 nor 2

2010 · Q26Indian EconomyFiscal Policy & Budgetmoderate

Which one of the following was NOT stipulated in the Fiscal Responsibility and Budget Management Act, 2003?

  1. (a)Elimination of revenue deficit by the end of the fiscal year 2007-08
  2. (b)Non-borrowing by the Central Government from Reserve Bank of India except under certain circumstances
  3. (c)Elimination of primary deficit by the end of the fiscal year 2008-09
  4. (d)Fixing government guarantees in any financial year as a percentage of GDP
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Official answer(c) Elimination of primary deficit by the end of the fiscal year 2008-09

2010 · Q134Indian EconomyFiscal Policy & Budgetmoderate

With reference to the National Investment Fund to which the disinvestment proceeds are routed, consider the following statements : 1. The assets in the National Investment Fund are managed by the Union Ministry of Finance. 2. The National Investment Fund is to be maintained within the Consolidated Fund of India. 3. Certain Asset Management Companies are appointed as the fund managers. 4. A certain proportion of annual income is used for financing select social sectors. Which of the statements given above is/are correct ?

  1. (a)1 and 2
  2. (b)2 only
  3. (c)3 and 4
  4. (d)3 only
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Official answer(c) 3 and 4

2004 · Q1Indian EconomyFiscal Policy & Budgetmoderate

With reference to Indian Public Finance, consider the following statements: 1. Disbursements from Public Accounts of India are subject to the Vote of Parliament. 2. The Indian Constitution provides for the establishment of a Consolidated Fund, a Public Account and a Contingency Fund for each State. 3. Appropriations and disbursements under the Railway Budget are subject to the same form of Parliamentary control as other appropriations and disbursements. Which of these statements given above are correct?

  1. (a)1 and 2
  2. (b)2 and 3
  3. (c)1 and 3
  4. (d)1, 2 and 3
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Official answer(b) 2 and 3

2002 · Q87Indian EconomyFiscal Policy & Budgetdifficult

With reference to the Indian Public Finance consider the following statements: 1. External liabilities reported in Union Budget are based on historical exchange rates. 2. The continued high borrowing has kept the real interest rates high in the economy. 3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect to private investments. 4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government. Which of these statements are correct?

  1. (a)1, 2 and 3
  2. (b)1 and 4
  3. (c)2, 3 and 4
  4. (d)1, 2, 3 and 4
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Official answer(c) 2, 3 and 4

2001 · Q73Indian EconomyFiscal Policy & Budgetmoderate

Match List I with List II and select the correct answer using the codes given below the Lists: List I (Term) I. Fiscal deficit II. Budget deficit III. Revenue deficit IV. Primary deficit List II (Explanation) A) Excess of Total Expenditure over Total Receipts B) Excess of Revenue Expenditure over Revenue Receipts C) Excess of Total Expenditure over Total Receipts less borrowings D) Excess of Total Expenditure over Total Receipts less borrowings and Interest Payments

  1. (a)I-C, II-A, III-B, IV-D
  2. (b)I-D, II-C, III-B, IV-A
  3. (c)I-A, II-C, III-B, IV-D
  4. (d)I-C, II-A, III-D, IV-B
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Official answer(a) I-C, II-A, III-B, IV-D

1999 · Q100Indian EconomyFiscal Policy & Budgeteasy

Assertion (A): Fiscal deficit is greater than budgetary deficit. Reason (R): Fiscal deficit is the borrowings from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.

  1. (a)Both A and R are true, and R is the correct explanation of A
  2. (b)Both A and R are true, but R is not a correct explanation of A
  3. (c)A is true, but R is false
  4. (d)A is false, but R is true
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Official answer(a) Both A and R are true, and R is the correct explanation of A

1996 · Q21Indian EconomyFiscal Policy & Budgetmoderate

The following Table shows the percentage distribution of revenue expenditure of Government of India in 1989-90 and 1994-95: (Heads: Defence, Interest Payments, Subsidies, Grants to States/UTs Other) Based on this table, it can be said that the Indian economy is in poor shape because the Central Government continues to be under pressure to

  1. (a)reduce expenditure of defence
  2. (b)spend more and more on interest payments
  3. (c)reduce expenditure on subsidies
  4. (d)spend more and more as grants-in-aid to State Governments/Union Territories
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Official answer(b) spend more and more on interest payments