Challenge Prelims V1.0 – Day 62 – GS Paper (Indian Economy)

1. How many of the following forms a part of the Revenue Expenditure of the Government of India?

1. Grants given to state government for asset creation
2. Subsidies and pensions given to widows
3. Purchase of Rafale aircraft
4. Interest payment on debt incurred by the government

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2. How many of the following can be accounted as Capital Receipts in the Annual Financial Statement?

1. Loans received from foreign governments
2. Borrowings by the government through the sale of Treasury Bills
3. Collection and appropriation of direct tax
4. Recovery of loans and advances

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3. How many of the following forms a part of the internal debt of India?

1. Securities issued to international financial institutions
2. Dated securities
3. Market Stabilization Scheme bonds
4. NRI deposits

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4. How many of the following can be classified as short-term external debt of the country?

1. Foreign Institutional Investors’ (FII) investment in corporate securities
2. Investment in Treasury Bills by foreign Central Bank
3. Export Credits
4. External commercial borrowings

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5. Public debt and other liabilities combined together are the Total Debt of the Government of India. In this context, which of the following are considered as Public Debt of the Government of India?

1. Treasury Bills
2. Borrowings from World Bank
3. Public Provident Fund
4. Dated Securities

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6. In the context of “Deficit” in the Annual Financial Statement, consider the following statements:

1. Effective Revenue Deficit signifies that amount of capital receipts that are being used for actual consumption expenditure of the government.
2. Gross Primary Deficit refers to the difference between the Gross fiscal deficit and the Net interest liabilities.

Which of the statements given above is/are correct?

7. With reference to monetized deficit as a method to finance debt, consider the following statements:

1. Monetized deficit is that part of the Government deficit which is financed solely by borrowing from the Reserve Bank of India.
2. Monetized deficit includes short-term finance instruments as well as long-term securities.

Which of the statements given above is/are correct?

8. With reference to off-budget borrowings by the Indian government, how many of the following statements is/are correct?

1. These loans are not taken by the centre directly, but by another public institution that borrows on the directions of the central government.
2. These loans are included in the national fiscal deficit.
3. These borrowings can be used to fund both capital and revenue expenditure.

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9. In the context of gender budgeting in India, consider the following statements:

1. Gender budget statement was first released in the budget 2005-06.
2. Gender budget statement includes only those schemes in which there is at least 50 percent provision for women.

Which of the statements given above is/are correct?

10. With reference to the functions of departments under the Ministry of Finance, consider the following pairs:

Nodal Department: Function

1. Department of Expenditure: International Banking Relation
2. Department of Investment and Public Asset Management: Strategic Disinvestment
3. Department of Financial Services: Overseeing the Public financial management system
4. Department of Economic Affairs: Maintains the cadre of the Indian Economic Service

How many pairs given above is/are not correctly matched?

11. With reference to the Fiscal Responsibility and Budget Management(FRBM) Act, consider the following statements:

1. The FRBM Act bans the purchase of primary issues of the Central Government securities by the RBI.
2. The rules under the FRBM Act aim to eliminate the fiscal deficit of the Central Government.

Which of the statements given above is/are correct?

12. Which of the following can be the potential traits of a Contractionary Fiscal Policy?

1. Decrease in tax rates of vehicles in order to increase the sale
2. Reduction in subsidies of LPG cylinders
3. Increase in government expenditure on infrastructure development

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13. In the context of fiscal policies, consider the following statements:

1. Increasing government expenditure and reducing tax rates during a recession is an example of counter-cyclical fiscal policy.
2. Reducing government expenditure and increasing tax rates during the boom period is an example of pro-cyclical fiscal policy.

Which of the statements given above is/are correct?

14. With reference to the different systems of taxation, consider the following statements:

1. The percentage tax rate increases proportionally with the increase in the income under the Proportional Taxation Regime.
2. A proportional income tax makes disposable income as well as consumer spending more sensitive to fluctuations in GDP.

Which of the statements given above is/are correct?

15. How many of the following state-level taxes have been subsumed under Goods and Service Tax (GST)?

1. Luxury tax
2. Sales tax
3. Stamp duty
4. Octroi

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