Indian economy: budgeting and fiscal policy - One Line Questions

1. Which article of the Indian Constitution mandates the presentation of the Union Budget? — Article 112
2. The 'Economic Survey' is presented in Parliament: — Before the presentation of the Union Budget.
3. What does 'Off-Budget Borrowings' refer to? — Borrowings by government entities that are not reflected in the government's fiscal deficit.
4. Which component of the budget represents the income generated from taxes and other non-debt creating sources? — Revenue Receipts
5. Which of the following is a tool of fiscal policy for demand management? — Increasing government spending during a recession.
6. Which of the following is a non-tax revenue source for the government? — Profits from Public Sector Undertakings
7. Which of the following is a direct tax? — Income Tax
8. What does 'Zero-Based Budgeting' imply? — Every expenditure must be justified and approved from scratch, regardless of previous budgets.
9. Which of the following best describes 'Development Expenditure' in the budget? — Expenditure aimed at long-term economic and social development, such as on education, health, and infrastructure.
10. Which of the following is NOT a part of the government's fiscal policy framework? — Money supply and credit creation
11. What does 'Functional Finance' suggest? — Government spending and taxation should be used to stabilize the economy, regardless of the impact on the budget balance.
12. A 'Balanced Budget' means: — Government's total expenditure equals its total revenue.
13. A revenue deficit occurs when: — Government's total expenditure exceeds its total revenue receipts.
14. An increase in the fiscal deficit can lead to: — Higher inflation and increased national debt.
15. Which of the following is a 'Capital Receipt'? — Recovery of Loans
16. An increase in government spending, while keeping taxes constant, is likely to: — Increase aggregate demand and potentially lead to inflation.
17. What is the concept of 'Crowding Out' in fiscal policy? — Increased government borrowing raises interest rates, reducing private investment.
18. Which of the following is a measure to control fiscal deficit? — Disinvestment of PSUs.
19. Which of the following is a measure to reduce revenue deficit? — Reducing interest payments through debt restructuring.
20. Which of the following is a tool of fiscal policy? — Government Spending and Taxation
21. What is the impact of a large fiscal deficit on the balance of payments? — It can lead to a worsening of the current account deficit due to increased imports.
22. What is the main characteristic of 'Capital Expenditure' in the Union Budget? — It creates assets or reduces liabilities of the government.
23. What is the significance of the 'Finance Bill'? — It gives effect to the financial proposals of the government for the financial year.
24. Which of the following represents 'Revenue Receipts' in the Indian Budget? — Interest payments on government loans.
25. The 'Contingency Fund of India' is used for: — Meeting unforeseen expenditure of an urgent nature.
26. The 'Inflation Targeting Framework' adopted by India primarily falls under the purview of: — Monetary Policy
27. The term 'Capital Gains Tax' refers to a tax on: — Profits made from the sale of capital assets like stocks or property.
28. What is the difference between 'Public Debt' and 'Fiscal Deficit'? — Public debt is the total accumulated borrowings, while fiscal deficit is the borrowing in a single year.
29. Which of the following is an example of 'Revenue Expenditure'? — Payment of salaries and pensions to government employees.
30. The FRBM Act, 2003 aims to: — Reduce the fiscal deficit and government debt.
31. Which type of tax is characterized by a higher rate for higher incomes? — Progressive Tax
32. Which of the following is NOT a component of the Union Budget? — External Debt Repayment
33. Which of the following is a characteristic of an indirect tax? — The burden of the tax can be shifted to others.
34. Fiscal Deficit in India is defined as: — The difference between total government expenditure and total government revenue (excluding borrowings).
35. The 'Budget Speech' is delivered by: — The Finance Minister.
36. The 'Primary Deficit' in the budget indicates: — The fiscal deficit minus interest payments.
37. The 'Consolidated Fund of India' is: — The fund into which all revenues received by the government are deposited, and from which all expenditures are made.
38. What is 'Monetization of Deficit'? — The government finances its deficit by printing new money, often through the central bank.
39. What is the significance of 'Gilt-edged Securities' in government borrowing? — They are government securities that are considered very safe and are issued by the government.
40. What is the role of the 'Controller General of Accounts' (CGA)? — To establish the accounting principles, rules, and procedures for the government and to compile and submit the accounts of the Union and State governments.
41. What is the primary goal of fiscal policy during an economic recession? — To increase aggregate demand through higher government spending or lower taxes.
42. What is the main purpose of 'Performance Budgeting'? — To link government expenditure to the physical and financial targets of programs and to evaluate performance.
43. What is the main objective of the 'Twelfth Finance Commission' (example)? — To make recommendations on the distribution of net tax proceeds between the Union and States and the principles governing grants-in-aid.
44. What is the primary objective of a Union Budget in India? — To outline the government's expenditure and revenue for the upcoming financial year.
45. What is the role of the Finance Commission in India? — To recommend the distribution of net proceeds of taxes between the Union and the States.
46. What is the primary aim of 'Fiscal Consolidation'? — To reduce the fiscal deficit and bring down government debt to sustainable levels.
47. What is the purpose of 'Disinvestment' in the context of the Indian budget? — To reduce the government's stake in Public Sector Undertakings (PSUs) to raise revenue.
48. What is the objective of 'Stabilization Policies' in fiscal management? — To smooth out fluctuations in the business cycle and maintain economic stability.
49. The 'Public Account of India' is used for: — Transactions like provident fund deposits, small savings schemes, and other deposits where the government acts as a banker.
50. The 'Vote on Account' is a provision that allows the government to: — Withdraw funds from the Consolidated Fund of India for a part of the financial year, pending the completion of budget formalities.
All One Line Questions
E-Book Indian economy: budgeting and fiscal policy Online Test Indian economy: budgeting and fiscal policy Question Bank Indian economy: budgeting and fiscal policy