Q70. Which deficit measure provides the best estimate of the government’s overall borrowing requirement?
[SSC CHSL Tier I, 3 August 2023, Shift 2]
(A) Primary deficit
(B) Revenue receipts
(C) Money supply
(D) Fiscal deficit
Answer: (D) Fiscal deficit
Explanation: Fiscal deficit measures total expenditure less non-borrowed receipts, giving a broad estimate of the financing gap. Primary deficit removes interest payments and therefore measures a narrower need. Revenue receipts are funding inflows, whereas money supply is a monetary aggregate.
Q69. An annual statement of estimated government receipts and expenditure for a financial year is called what?
[SSC CGL Tier I, 17 July 2023, Shift 2]
(A) Income sheet
(B) Plan
(C) Account
(D) Budget
Answer: (D) Budget
Explanation: A budget is the government’s annual financial proposal for spending and financing public commitments. It contains projected tax and non-tax revenue, capital receipts and expenditure, and deficit indicators. It differs from a final account recording only completed transactions.
Q68. Which of these is an indirect tax?
[SSC CGL Tier II (2022 cycle), 3 March 2023]
(A) Capital-gains tax
(B) Goods and Services Tax
(C) Wealth tax
(D) Gift tax
Answer: (B) Goods and Services Tax
Explanation: Goods and Services Tax is collected on supplies and can be passed on in prices to the buyer. Capital gains, wealth and gift taxes are conventionally classed as direct taxes. The examination belongs to the SSC CGL 2022 recruitment cycle, held in 2023.
Q67. Which of these was not an indirect tax?
[SSC CGL Tier I, 5 December 2022, Shift 2]
(A) Excise duty
(B) Goods and Services Tax
(C) Customs duty
(D) Wealth tax
Answer: (D) Wealth tax
Explanation: Wealth tax was imposed directly on assessable wealth and is therefore categorised as a direct tax, although the Indian levy was abolished from assessment year 2016–17. Excise, GST and customs duties are indirect levies associated with goods or supplies.
Q66. Regarding an organisation’s spending:
I. Buying new technology is capital expenditure.
II. Debt financing is capital expenditure, whereas equity financing is revenue expenditure.
Which is correct?
[UPSC CSE Prelims 2022]
(A) I only
(B) II only
(C) Both I and II
(D) Neither I nor II
Answer: (A) I only
Explanation: Technology that yields benefits over multiple accounting periods can be a capital asset. Raising finance by issuing debt or equity is a financing transaction, not automatically an expenditure. Consequently, only the first proposition correctly identifies capital expenditure.
Q65. Regarding government debt:
I. Some household financial savings fund government borrowing.
II. Auctioned dated securities form a large component of internal public debt.
Which is correct?
[UPSC CSE Prelims 2022]
(A) I only
(B) II only
(C) Both I and II
(D) Neither I nor II
Answer: (C) Both I and II
Explanation: Household savings can reach government securities directly or through institutions such as banks, insurers and pension funds. Market-auctioned dated government securities make up a substantial part of internal debt. Therefore both statements correctly describe public-debt financing.
Q64. Which advantages apply to Inflation-Indexed Bonds?
I. They can permit lower real coupons.
II. They protect investors against unexpected inflation.
III. Interest and capital gains are exempt from tax.
[UPSC CSE Prelims 2022]
(A) I and II only
(B) II and III only
(C) I and III only
(D) I, II and III
Answer: (A) I and II only
Explanation: Indexation links bond payments to inflation, safeguarding investors’ real purchasing power and potentially lowering the government’s inflation-risk premium. The bonds do not enjoy a blanket exemption for interest or capital gains. Thus the first two statements are correct.
Q63. In India’s tax discussions, which situation illustrates an indirect transfer?
[UPSC CSE Prelims 2022]
(A) An Indian firm pays overseas tax on outward investment
(B) A foreign investor pays ordinary home-country tax
(C) An Indian firm sells foreign physical assets
(D) Shares of an overseas company derive major value from assets in India and are sold
Answer: (D) Shares of an overseas company derive major value from assets in India and are sold
Explanation: An indirect transfer occurs when foreign-company shares change hands and derive substantial value from assets situated in India. The economic ownership of Indian assets changes despite the offshore transaction. It became prominent in debates on retrospective capital-gains taxation.
Q62. About the Finance Commission:
I. It has five members.
II. At least one must already be a judge.
III. Its Chairman cannot be reappointed. IV. K. Santhanam was the first Chairman.
Which statements are true?
[CGPSC Civil Services 2021 Prelims (held 13 February 2022)]
(A) I, II and IV
(B) I, II and III
(C) I and III
(D) I only
Answer: (D) I only
Explanation: The constitutional Finance Commission consists of a Chairman and four members. Judicial experience is one permissible qualification rather than a compulsory sitting-judge post. Members may be reappointed, and K. C. Neogy, not K. Santhanam, was its inaugural Chairman.
Q61. Who chairs the Goods and Services Tax (GST) Council?
[NDA General Ability, 10 April 2022]
(A) Prime Minister
(B) Union Finance Minister
(C) Lok Sabha Speaker
(D) President of India
Answer: (B) Union Finance Minister
Explanation: The Union Finance Minister is the constitutional Chairperson of the GST Council under Article 279A. State finance or taxation ministers participate in its decisions. Despite being constituted by a presidential notification, the President does not chair this tax coordination institution.
