Q120. Assess the Uttar Pradesh Budget 2023–24 claims:
I. Total size ₹7,60,000 crore.
II. Fiscal deficit ₹84,883.16 crore.
Which is correct?
[UPPSC RO/ARO, 11 February 2024]
(A) Both I and II
(B) Only II
(C) Neither I nor II
(D) Only I
Answer: (B) Only II
Explanation: The Uttar Pradesh Budget 2023–24 was approximately ₹6.90 lakh crore, so the first amount is overstated. The cited fiscal-deficit estimate of ₹84,883.16 crore was correct. The question tests precise state-budget figures for that financial year.
Q119. About the Union Budget:
I. The Finance Minister lays the Annual Financial Statement for the government headed by the Prime Minister.
II. No demand for a grant can be made without the President’s recommendation.
Which answer was accepted in the UPSC key?
[UPSC CSE Prelims 2024]
(A) I only
(B) II only
(C) Both I and II
(D) Neither I nor II
Answer: (C) Both I and II
Explanation: The UPSC key accepted both statements. Article 112 governs the annual statement, while Article 113 expressly requires presidential recommendation for demands for grants. Note the wording of statement I has drawn constitutional criticism because the President formally causes presentation of the statement.
Q118. Consider two claims about US Treasury debt:
I. In a default, bondholders cannot obtain due payments.
II. Treasury debt is backed by government credit rather than pledged hard assets.
Which answer did UPSC accept?
[UPSC CSE Prelims 2024]
(A) Both correct and II explains I
(B) Both correct but II does not explain I
(C) I correct, II incorrect
(D) I incorrect, II correct
Answer: (A) Both correct and II explains I
Explanation: UPSC treated both assertions as correct, linking payment failure during default with reliance on government credit rather than collateral. A legal distinction remains: default does not extinguish the underlying claim. This item reproduces the accepted examination interpretation, not a universal legal conclusion.
Q117. Who was appointed Chairman of India’s Sixteenth Finance Commission?
[MPPSC Assistant Professor, Economics Paper II, 4 August 2024]
(A) Raghuram Rajan
(B) M. K. Singh
(C) Arvind Subramanian
(D) Arvind Panagariya
Answer: (D) Arvind Panagariya
Explanation: Arvind Panagariya was appointed Chairman of the Sixteenth Finance Commission. Constituted under Article 280, the commission examines the sharing of central taxes and fiscal transfers between tiers of government. A chairman’s appointment does not itself prescribe the actual devolution percentage.
Q116. What does a budget deficit show?
[SSC MTS, 11 November 2024, Shift 2]
(A) Government expenditure exceeds government revenue
(B) No expenditure is allocated to public services
(C) Government is necessarily saving more for future schemes
(D) Government revenue exceeds expenditure
Answer: (A) Government expenditure exceeds government revenue
Explanation: A deficit signals that government expenditure is greater than the receipts considered in the relevant budget definition. Borrowing, drawing down balances or other financing arrangements may be needed. Do not confuse this general concept with the more precise fiscal-deficit and revenue-deficit accounting measures.
Q115. Which of the following constitutes a capital receipt in the government budget?
[SSC CGL Tier I, 25 September 2024, Shift 2]
(A) Grants received from another government
(B) Interest received on government bonds
(C) Proceeds from selling government assets
(D) Personal income tax receipts
Answer: (C) Proceeds from selling government assets
Explanation: Selling an existing government asset reduces the public sector’s stock of assets, so the proceeds are a capital receipt. Grants, interest and income tax generally form revenue receipts. This distinction is essential when measuring the non-borrowing components of fiscal deficit.
Q114. Select the historical order of these Indian levies:
I. Land revenue.
II. Sales tax.
III. MODVAT.
IV. Service tax.
[SSC CGL Tier I, 17 September 2024, Shift 3]
(A) III, II, IV, I
(B) IV, II, I, III
(C) I, II, III, IV
(D) II, IV, I, III
Answer: (C) I, II, III, IV
Explanation: Land revenue is among the oldest forms of government taxation. Sales taxes followed in modern tax administration; MODVAT was introduced in 1986, and service tax began in 1994. These successive changes illustrate how India’s indirect-tax system evolved before GST.
Q113. Why were wealth tax and gift tax sometimes described as paper taxes in India?
[SSC MTS, 21 October 2024, Shift 1]
(A) Collection was optional for government
(B) Their revenue yield was small compared with other taxes
(C) Returns could only be filed on paper
(D) Only legislators paid them
Answer: (B) Their revenue yield was small compared with other taxes
Explanation: The expression paper tax referred to levies whose administrative presence was much more prominent than their revenue contribution. It did not imply voluntary payment or physical paper filing. India abolished the former wealth-tax levy and has separate income-tax rules for taxable gifts.
Q112. If a tax rate rises as the taxable base rises, what type of tax is it?
[SSC MTS, 9 October 2024, Shift 3]
(A) Digressive
(B) Progressive
(C) Regressive
(D) Proportional
Answer: (B) Progressive
Explanation: A progressive tax schedule subjects higher taxable income ranges to higher marginal rates. This differs from proportional taxation, which applies a constant rate, and regressive taxation, whose average burden falls as income rises. Progressive taxation is associated with ability-to-pay considerations.
Q111. Which levy is excluded from the divisible pool of central taxes shared with States?
[CDS-II General Knowledge, 1 September 2024]
(A) Personal income tax
(B) Corporation tax
(C) Surcharge and cess
(D) Union excise duties
Answer: (C) Surcharge and cess
Explanation: Under the constitutional tax-devolution framework, shareable Union tax proceeds constitute the divisible pool. Surcharges under Article 271 and cesses earmarked for specific purposes are generally excluded. Ordinary corporation and personal income taxes contribute to the shareable proceeds, subject to constitutional arrangements.
