6B) Government Budgeting and Govt. Accounts (Prelims PYQs)

2022 Prelims PYQs

1] With reference to the Indian economy, consider the following statements: [2022]

1. A share of the household financial savings goes towards government borrowings.
2. Dated securities issued at market-related rates in auctions form a large component of internal debt.
Which of the above statements is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

2020 Prelims PYQs

1] Along with the Budget, the Finance Minister also places other documents before the Parliament which include ‘The Macro Economic Framework Statement’. The aforesaid document is presented because this is mandated by: [2020]

a) Long standing parliamentary convention
b) Article 112 and Article 110(1) of the Constitution of India
c) Article 113 of the Constitution of India
d) Provisions of the Fiscal Responsibility and Budget Management Act, 2003

2] In the context of the Indian economy, non-financial debt includes which of the following? [2020]

1. Housing loans owed by households
2. Amounts outstanding on credit cards
3. Treasury bills
Select the correct answer using the code given below:

a) 1 only
b) 1 and 2 only
c) 3 only
d) 1, 2 and 3

2019 Prelims PYQs

1] Consider the following statements: [2019]

1. Most of India’s external debt is owed by governmental entities.
2. All of India’s external debt is denominated in US dollars.
Which of the statements given above is/are correct?

a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

2018 Prelims PYQs

1] Consider the following Statements: [2018]

1. The Fiscal responsibility and the budget Management Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) Government by 2023, comprising 40% for the Central government and 20% for the State Government.
2. The Central government has domestic liabilities of 21% of GDP as compared to 49% of GDP of the State Governments.
3. As per the Constitution of India, it is mandatory for the state to take Central government’s consent for raising any loans if the former owes any liabilities to the latter.
Which of the given statement is/ are correct?

a) 1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3

2016 Prelims PYQs

1] There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit? [2016]

1. Reducing revenue expenditure
2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Reducing import duty
Select the correct answer using the code given below.

a) 1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2, 3 and 4

2] Which of the following is/are included in the capital budget of the Government of India? [2016]

1. Expenditure on acquisition of assets like roads, buildings, machinery, etc.
2. Loans received from foreign governments
3. Loans and advances granted to the States and Union Territories
Select the correct answer using the code given below.

a) 1 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3

2015 Prelims PYQs

1] With reference to the Union Government consider the following statements. [2015]

1. The Department of Revenue is responsible for the preparation of Union Budget that is presented to the parliament
2. No amount can be withdrawn from the Consolidated Fund of India without the authorization of Parliament of India.
3. All the disbursements made from Public Account also need the Authorization from the Parliament of India
Which of the following statements given above is/are correct?

a) 1 and 2 only
b) 2 and 3 only
c) 2 only
d) 1, 2 and 3

2] There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit? [2015]

1. Reducing revenue expenditure
2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Expanding industries
Select the correct answer using the code given below.

a) 1 and 3 only
b) 2 and 3 only
c) 1 only
d) 1,2,3 and 4

2014 Prelims PYQs

1] With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure? [2014]

1. Defence expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies
Select the correct answer using the code given below.

a) 1 only
b) 2 and 3 only
c) 1, 2, 3 and 4
d) None

2013 Prelims PYQs

1] In India deficit financing is used for raising resources for? [2013]

a) Economic development
b) Redemption of public debt
c) Adjusting the balance payments
d) Reducing the foreign debt

2012 Prelims PYQs

1] Which of the following are the methods of Parliamentary control over public finance in India: [2012]

1. Placing Annual Financial Statement before the Parliament
2. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill
3. Provisions of supplementary grants and vote-an-account
4. A periodic or at least a mid-year review of programme of the Government against macroeconomic forecasts and expenditure by a Parliamentary Budget Office
5. Introducing Finance Bill in the Parliament

Select the correct answer using the codes given below:
a) 1, 2, 3 & 5 Only
b) 1, 2 & 4 only
c) 3, 4 & 5 Only
d) 1, 2, 3 , 4 & 5 Only

2011 Prelims PYQs

1] What is the difference between “vote-on-account” and interim budget? [2011]

1.The provision of a “vote-on-account’’ is used by a regular government, while an ”interim budget’’ is a provision used by a caretaker government.
2.A “vote-on-account’’ only deals with the expenditure in government is budget, while an “interim budget’’ includes both expenditure and receipts.

Which of the statements given  above is/are correct?
a) 1 only                           b) 2 only
c) Both 1 and 2                 d) Neither 1 nor2.

2] In the union budget 2011-12, a full exemption from the basic customs duty was extended to the bio-based asphalt (biosphalt). What is the importance of this material? [2011]

1. Unlike traditional  asphalt, bio-asphalt is not based on fossil fuels.
2. Biosphalt can be made from non-renewable resources.
3. Bioasphalt can be made from organic waste materials.
4. It is eco-friendly to use bioasphalt for surfacing of the roads.

Which the correct answer using the codes given below?
a) 1,2,and 3 only              b) 1,3 and 4 only.
c) 2 and 4 only                  d) 1,2,3, and 4

3] Which one of the following statements appropriately describes the “fiscal stimulus”? [2011]

a) It is a massive investment by the government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth.
b) It is an intense affirmative action of the government to boost economic activity in the country.
c) It is government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation.
d) It is an extreme affirmative action by the government to pursue its policy of financial inclusion

4] The authorization for the withdrawal of funds from the consolidated fund of India must come from? [2011]

a) The president of India.
b) The parliament of India.
c) The prime minister of India.
d) The union finance minister.

5] All revenues received by the union government by way of taxes and other receipts for the conduct of government business are credited to the? [2011]

a) Contingency fund of India.
b) Public account.
c) Consolidated fund of India
d) Deposits and advances fund.

6] When the annual budget is not passed by the lok sabha? [2011]

a) The budget is modified and presented again.
b) The budget is referred to the rajya sabha for suggestions.
c) The union finance minister is asked to resign.
d) The prime minister submits the resignation of council of ministers.

2010-1995 Prelims PYQs

1] With reference to the National Investment Fund to which the disinvestment proceeds are routed, consider the following statements: [2010]

1. The assets in the National Investment Fund are managed by the Union Ministry of Finance.
2. The National Investment Fund is to be maintained within the Consolidated Fund of India.
3. Certain Asset Management Companies are appointed as the fund managers.
4. A certain proportion of annual income is used for financing select social sectors.

Which of the statement given above is/are correct?
a) 1 and 2            b) 2 only
c) 3 and 4            d) 3 only

2] In the context of governance, consider the following: [2010]

1. Encouraging Foreign Direct Investment inflows.
2. Privatization of higher educational Institutions.
3. Down – sizing of bureaucracy.
4. Selling / offloading the shares of Public Sector Undertakings.

Which of the above can be used as measures to control the fiscal deficit in India?
a) 1, 2 and 3                       b) 2, 3 and 4
c) 1, 2 and 4                       d) 3 and 4 only

3] Which one of the following is responsible for the preparation and presentation of Union Budget to the Parliament? [2010]

a) Department of Revenue
b) Department of Economic Affairs
c) Department of Financial Services
d) Department of Expenditure

4] Consider the following actions by the Government: [2010]

1. Cutting the tax rates
2. Increasing the government spending
3. Abolishing the subsidies

In the context of economic recession, which of the above actions can be considered a part of the “fiscal stimulus” package?
a) 1 and 2 only                  b) 2 only
c) 1 and 3 only                  d) 1, 2 and 3

5] Which one of the following was not stipulated in the Fiscal Responsibility and Budget Management Act , 2003? [2010]

a) Elimination of revenue deficit by the end of the Fiscal year 2007-2008.
b) Non borrowing by the central government from Reserve Bank of India except under certain Circumstance.
c) Elimination of Primary deficit by the end of the fiscal year 2008-2009.
d) Fixing government Guarantees in any financial year as a percentage of GDP.

6] Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns: [2006]

a) Fiscal deficit only
b) Revenue deficit only
c) Both fiscal and revenue deficit
d) Neither fiscal deficit nor revenue deficit.

7] With reference to Indian Public Finance, consider the following statements: [2004]

1. Disbursements from Public Accounts of India are subject to the Vote of Parliament.
2. The Indian Constitution provides for the establishment of a Consolidated Fund, a Public Account and a Contingency Fund for each State.
3. Appropriations and disbursements under the Railway Budget are subject to the same form of parliamentary control
as other appropriations and disbursements.

Which of the statements given above are correct?
a) 1 and 2                           b) 2 and 3
c) 1 and 3                           d) 1, 2 and 3

8] Consider the following statements: [2004]

1. Reserve Bank of India was nationalised on 26 January, 1950.
2. The borrowing programme of the Government of India is handled by the Department of Expenditure, Ministry of Finance.

Which of the statements given above is/are correct?
a) 1 only                            b) 2 only
c) Both 1 and 2                 d) Neither 1 nor 2

9] India’s external debt increased from US $98,158 million as at the end of March 2000 to US $100,225 million as at the end of March 2001 due to increase in: [2002]

a) Multilateral and bilateral debt
b) Rupee debt
c) Commercial borrowings and NRI deposits
d) Borrowing from International Monetary Fund

10] Which one of the following authorities recommends the principles governing the grants- in-aid of the revenues to the states out of the Consolidated Fund of India? [2002]

a) Finance Commission
b) Inter-State Council
c) Union Ministry of Finance
d) Public Accounts Committee

11] With reference to the Indian Public Finance consider the following statements: [2002]

1. External liabilities reported in Union Budget are based on historical exchange rates
2. The continued high borrowing has kept the real interest rates high in the economy
3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect to private investments.
4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government.

Which of these statements are correct?
a) 1, 2 and 3                       b) 1 and 4
c) 2, 3 and 4                       d) 1, 2, 3 and 4

12] In the year 2001, Germany approved a $32 million credit to India: [2002]

a) To promote primary education in selected states
b) For Tehri dam project
c) To assist in the development of nuclear
d) For oceanographic research

13] Consider the following: [2001]

I. Market borrowing
II. Treasury bills
III. Special securities issued to RBI

Which of these is/are component(s) of internal debt?
a) I only               b) I and II                           
c) II only              d) I, II and III

14] Match List I with List II and select the correct answer using the codes given below the Lists: [2001]

a) I-C, II-A, III-B, IV-D
b) I-D, II-C, III-B, IV-A
c) I-A, II-C, III-B, IV-D
d) I-C, II-A, III-D, IV-B

15] The Union Budget, 2000 awarded a Tax Holiday for the North-Eastern Region to promote industrialisation for: [2001]

a) 5 years                           b) 7 years
c) 9 years                            d) 10 years

16] Assertion (A): Fiscal deficit is greater than budgetary deficit: [1999]

Reason (R): Fiscal deficit is the borrowings from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.
a) Both A and R are true, and R is the correct explanation of A
b) Both A and R are true, but R is not a correct explanation of A
c) A is true, but R is false
d) A is false, but R is true

17] Economic Survey in India is published officially, every year by the: [1998]

a) Reserve Bank of India
b) Planning Commission of India
c) Ministry of Finance, Government of India
d) Ministry of Industries, Government of India

18] Which of the following come under Non-plan expenditure? [1997]

I. Subsidies
II. Interest payments
III. Defence expenditure
IV. Maintenance expenditure for the infrastructure created in the previous plans Choose the correct answer using the codes given below:

Codes:
a) I and II                            b) I and III
c) II and IV                          d) I, II, III and IV

19] The following Table shows the percentage distribution of revenue expenditure of Government of India in 1989-90 and 1994-95: [1996]

Based on this table, it can be said that the Indian economy is in poor shape because the Central Government continues to be under pressure to

a) Reduce expenditure of defence
b) Spend more and more on interest payments
c) Reduce expenditure on subsidies
d) Spend more and more as grants-in-aid to State Governments/Union Territories

20] Which of the following are among the non-plan expenditures of the Government of India? [1995]

I. Defence expenditure
II. Subsidies
III. All expenditures linked with the previous plan periods
IV. Interest payment

Choose the correct answer from the codes given below:
Codes:
a) I and II             b) I and III
c) II and IV           d) I, II, III and IV

We’re in the process of posting all the questions from 1995-2023. The tentative date of completion is 16 Dec 2023. We highly recommend purchasing our UPSC Prelims PYQ Book (2024 Edition) to access all questions in a single PDF.

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