Q30. What is the Aaykar Setu initiative associated with?
[CDS General Knowledge, 18 November 2018]
(A) Quality certification for GST service delivery
(B) Mobile-assisted income-tax information and online tax services
(C) A database exclusively for tax defaulters
(D) Electronic customs import declarations
Answer: (B) Mobile-assisted income-tax information and online tax services
Explanation: Aaykar Setu was a CBDT digital outreach and taxpayer-service initiative launched in 2017, with features supporting income-tax information and access to online facilities. It was not a customs declaration platform or an enforcement-only database, distinguishing its purpose from those alternatives.
Q29. What are the most likely advantages of introducing GST?
I. Replacement of multiple indirect taxes and creation of a single market.
II. Drastic reduction of current-account deficit.
III. Immediate overtaking of China in GDP.
[UPSC CSE Prelims 2017]
(A) I only
(B) II and III only
(C) I and III only
(D) I, II and III
Answer: (A) I only
Explanation: GST harmonises multiple consumption levies and promotes a more integrated domestic market with input credits. It does not guarantee a dramatic external-account improvement or any specific international GDP ranking. Consequently, only the first proposed advantage is sound.
Q28. The task force that proposed a Goods and Services Tax was headed by whom?
[MPPSC General Studies 2017, Official Paper]
(A) Vijay Kelkar
(B) Montek Singh Ahluwalia
(C) Arun Jaitley
(D) M. Narasimham
Answer: (A) Vijay Kelkar
Explanation: The Vijay Kelkar Task Force on indirect taxation advocated a comprehensive GST as part of wider reform. A unified value-added system was intended to reduce cascading and fragmentation between indirect levies. The full national GST framework was implemented considerably later, in 2017.
Q27. Which actions can help reduce a recurring fiscal deficit?
I. Reduce revenue spending.
II. Introduce new unfunded welfare schemes.
III. Rationalise subsidies.
IV. Lower import duties.
[UPSC CSE Prelims 2016]
(A) I only
(B) II and III only
(C) I and III only
(D) All four
Answer: (C) I and III only
Explanation: Controlling recurring expenditure and directing subsidies more efficiently can narrow the expenditure–receipt gap. New unfunded programmes raise spending, while lowering customs rates may initially reduce revenue. Thus the first and third actions are the credible deficit-reducing measures.
Q26. Which are part of India’s capital budget?
I. Acquisition of roads and buildings.
II. Loans received from foreign governments.
III. Loans granted to States and Union Territories.
[UPSC CSE Prelims 2016]
(A) I only
(B) II and III only
(C) I and III only
(D) I, II and III
Answer: (D) I, II and III
Explanation: Capital expenditure covers asset acquisition and loans advanced by the government. Borrowings from foreign governments are capital receipts because they create liabilities. The capital budget includes both sides, so all listed examples fall within its scope.
Q25. About the Financial Stability and Development Council:
I. It is a branch of NITI Aayog.
II. Finance Minister chairs it.
III. It monitors macroprudential financial stability.
Which are correct?
[UPSC CSE Prelims 2016]
(A) I and II only
(B) III only
(C) II and III only
(D) All three
Answer: (C) II and III only
Explanation: The Financial Stability and Development Council was established independently of NITI Aayog and is chaired by the Union Finance Minister. It addresses coordination among financial regulators, financial stability and macroprudential oversight. Therefore only the second and third statements hold.
Q24. Which statements about taxation are correct?
I. Ability to pay links taxes to income or wealth.
II. The benefit principle links tax to benefits received.
III. Progressive taxes burden poor people proportionately more.
IV. Indirect taxes can be relatively convenient to collect.
[CDS General Knowledge, 14 February 2016]
(A) I and III only
(B) II and IV only
(C) I, II and IV only
(D) I, II, III and IV
Answer: (C) I, II and IV only
Explanation: The ability-to-pay and benefit principles offer different rationales for allocating tax burdens. Progressive taxation imposes higher average burdens on those with greater taxable capacity, not on lower-income groups. Indirect taxes are often collected through sellers, which can simplify administration.
Q23. Regarding the Fourteenth Finance Commission:
I. It raised the States’ share in the divisible pool from 32% to 42%.
II. It recommended sector-specific grants.
Which is correct?
[UPSC CSE Prelims 2015]
(A) I only
(B) II only
(C) Both I and II
(D) Neither I nor II
Answer: (A) I only
Explanation: The Fourteenth Finance Commission significantly increased States’ vertical share of divisible central taxes to 42 percent. Unlike some earlier commissions, it did not recommend sector-specific grants in the manner described by the question. The distinction concerns tax devolution versus earmarked transfer mechanisms.
Q22. Concerning Union government accounts:
I. Department of Revenue prepares the Budget.
II. Consolidated Fund withdrawals require parliamentary authorization.
III. Public Account disbursements always require parliamentary authorization.
Which is correct?
[UPSC CSE Prelims 2015]
(A) I and II only
(B) II and III only
(C) II only
(D) I, II and III
Answer: (C) II only
Explanation: The Department of Economic Affairs, not Revenue, coordinates Union Budget preparation. Expenditure from the Consolidated Fund requires legislative appropriation under constitutional procedure. Money in the Public Account is held in a custodial capacity, and its withdrawals generally do not require a separate parliamentary vote.
Q21. A decline in a country’s tax-to-GDP ratio was associated by the examination with which outcome?
I. Slower economic growth.
II. Less equitable income distribution.
[UPSC CSE Prelims 2015]
(A) I only
(B) II only
(C) Both I and II
(D) Neither I nor II
Answer: (A) I only
Explanation: The ratio compares tax receipts with national output. A falling ratio may be associated with slowing activity and weaker taxable bases, although many causes are possible. It does not, by itself, establish how equally national income is distributed among households.
