Q90. On Infrastructure Investment Trusts:
I. Interest distributions to investors are exempt while dividends are taxable.
II. InvITs are recognised as borrowers under SARFAESI legislation.
Which is correct?
[UPSC CSE Prelims 2023]
(A) Both correct and II explains I
(B) Both correct but unrelated
(C) Only I correct
(D) Only II correct
Answer: (D) Only II correct
Explanation: Interest flowing through an InvIT to unitholders is generally taxed in their hands, invalidating the proposed blanket exemption. Legislative changes recognise pooled investment vehicles as borrowers for SARFAESI purposes. This makes the second statement correct and the first false.
Q89. Which constitutional Article provides for discretionary grants by the Union or States for any public purpose?
[CGPSC Prelims 2023, General Studies]
(A) Article 275
(B) Article 281
(C) Article 282
(D) Article 228
Answer: (C) Article 282
Explanation: Article 282 allows the Union and State governments to make grants for any public purpose even if that purpose is outside their ordinary legislative field. These discretionary grants are distinct from the statutory grants-in-aid envisaged by Article 275 of the Constitution.
Q88. What does the expression budget deficit indicate?
[SSC MTS, 1 September 2023, Shift 3]
(A) Government revenue exceeding expenditure
(B) The allocation exclusively for defence
(C) The allocation exclusively for welfare schemes
(D) Government expenditure exceeding revenue
Answer: (D) Government expenditure exceeding revenue
Explanation: A budget deficit is a shortfall when the government’s expenditure exceeds its receipts under the relevant budget presentation. It is different from a particular departmental allocation. Modern Indian fiscal reporting emphasizes fiscal, revenue and primary deficits, each defined by specified receipt and expenditure categories.
Q87. What is a government budget?
[SSC MTS, 8 September 2023, Shift 3]
(A) A historical report measuring GDP
(B) A family’s financial plan
(C) A statement of estimated government receipts and expenditure for a period
(D) A statement of foreign-policy priorities
Answer: (C) A statement of estimated government receipts and expenditure for a period
Explanation: The government budget sets out proposed revenues, borrowings, spending and related fiscal policy for the financial year. In India, the Constitution calls the principal document the Annual Financial Statement, and Parliament exercises control over the proposed withdrawals from the Consolidated Fund.
Q86. Under Union Budget 2023–24, how much of every rupee of government receipts was shown as coming from corporation tax?
[SSC MTS, 12 May 2023, Shift 1]
(A) 4 paise
(B) 15 paise
(C) 17 paise
(D) 7 paise
Answer: (B) 15 paise
Explanation: The Union Budget 2023–24 composition infographic attributed fifteen paise per rupee of receipts to corporation tax. Budget receipt charts commonly express tax and borrowing sources as portions of one rupee, which must not be confused with rates imposed on corporate profits.
Q85. Non-tax revenue forms part of which section of government accounts?
[SSC CGL Tier I, 25 July 2023, Shift 3]
(A) Revenue expenditure
(B) Revenue receipts
(C) Capital expenditure
(D) Capital receipts
Answer: (B) Revenue receipts
Explanation: Non-tax income such as fees, interest, fines and dividends belongs to revenue receipts because it does not normally generate repayment obligations or dispose of government assets. Government borrowings and proceeds from disinvestment, by contrast, are classified within capital receipts.
Q84. In which Union Budget was the National Investment and Infrastructure Fund (NIIF) first announced?
[SSC CGL Tier I, 20 July 2023, Shift 4]
(A) 2015–16
(B) 2021–22
(C) 2017–18
(D) 2019–20
Answer: (A) 2015–16
Explanation: The NIIF was first announced in the Union Budget 2015–16 as a vehicle for attracting long-term capital into infrastructure investments. Its funding model sought participation alongside private and institutional investors. The question refers to the budget announcement rather than the later operational development.
Q83. Who chaired the Twelfth Finance Commission of India?
[MPPSC State Service Prelims, 17 December 2023, Paper I]
(A) A. M. Khusro
(B) C. Rangarajan
(C) Vijay Kelkar
(D) Y. V. Reddy
Answer: (B) C. Rangarajan
Explanation: The President constituted the Twelfth Finance Commission in 2002 with former RBI Governor C. Rangarajan as chairperson. Its recommendations covered fiscal transfers for 2005–10. Khusro, Kelkar and Reddy led the Eleventh, Thirteenth and Fourteenth Commissions respectively.
Q82. Which category of tax is NOT subsumed under India’s Goods and Services Tax?
[CDS General Knowledge, 3 September 2023]
(A) Customs duties
(B) Central excise duties
(C) Service tax
(D) Taxes on petroleum and petroleum products
Answer: (D) Taxes on petroleum and petroleum products
Explanation: The listed petroleum products remain outside the effective GST levy, so their applicable excise and VAT arrangements continue. The original indirect-tax regime also retained basic customs duty. The examined option emphasises petroleum taxation, making the petroleum category the intended answer.
Q81. A reduction in taxes usually has what multiplier effect on aggregate demand compared with an equal rise in government spending?
[SSC CHSL Tier I, 3 August 2023, Shift 4]
(A) No multiplier effect
(B) A smaller multiplier effect
(C) A higher multiplier effect
(D) An equivalent multiplier effect
Answer: (B) A smaller multiplier effect
Explanation: When the government spends directly, the amount immediately adds to demand. Tax reductions first increase disposable income, some of which households may save. Therefore, under a simple Keynesian model, the tax multiplier’s absolute size is generally smaller than the spending multiplier.
