Public Finance

Which one of the following best describes the ‘Crowding Out Effect’ in the context of fiscal policy?

Consider statements: capital receipts create liability or reduce government assets; borrowings and disinvestment are capital receipts; interest received on loans creates a government liability.

Given revenue expenditure ₹80,000 crore, revenue receipts ₹60,000 crore, borrowings ₹10,000 crore and interest payments ₹6,000 crore, which deficit statements are correct?

A country’s fiscal deficit is ₹50,000 crore and total receipts excluding borrowing are ₹10,000 crore; interest liabilities are ₹1,500 crore. What is primary deficit?

Which statements correctly describe the 15th Finance Commission recommendations on grants, States’ share of Union taxes and tax-effort criteria?

Consider the following statements: Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment. Statement-II: The USA Government debt is not backed by any hard assets, but only by the faith of the Government. Which one of the following is correct in respect of the above statements?

Consider the fol~owing : 1. Demographic performance 2. Fore~t and ecology 3. Governance reforms 4. Stable government 5. Tax and fiscal efforts For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?

With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? 1. Acquiring new technology is capital expenditure. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below:

Consider the following statements: 1. Tight monetary policy of the US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial borrowing (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBs. Which of the statements given above are correct?

Which among the following steps is most likely to be taken at the time of an economic recession?

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

Consider the following statements 1. The Fiscal Responsibility and Budget Management (FRBM) 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 Governments. 2. The Central Government has domestic liabilities of 21% of GDP as compared to that of war of GDP of the State 2 Governments. 3. As per the Constitution of India, it is mandatory for a State to take the Central Government’s consent for raising any loan if the former owes any outstanding liabilities to the latter. Which of the statements given above is/are correct?

Consider the following statements: 1. Tax revenue as a percent of GDP of India has steadily increased in the last decade. 2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade. Which of the statements given- above is/are correct?

1. Reducing revenue expenditure 2. Introducing new welfare schemes 3. Rationalizing subsidies 4. Reducing import duty

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

With reference to the Fourteenth Finance Commission, which of the following statements is/are correct?

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?

With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure? 1. Defence -expenditure 2. Interest payments 3. Salaries and pensions 4. Subsidies

In India, deficit financing is used for raising resources for

Who among the following constitute the National Development Council? 1\. The Prime Minister 2\. The Chairman, Finance Commission 3\. Ministers of the Union Cabinet 4\. Chief Ministers of the States Select the correct answer using the codes given below:

Which of the following is/are among the noticeable features of the recommendations of the Thirteenth Finance Commission? 1. A design for the Goods and Services package linked to adherence to the proposed design. 2. A design for the creation of lakhs of jobs in the next ten years in consonance with India’s demographic dividend 3. Devolution of a specific share of central taxes to local bodies as grants **Select the correct answer using the codes given below:**

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt. 2. The Government no longer intends to retain the management control of the CPSEs. Which of the statements given above is/are correct?

Which one of the following statements appropriately describes the “fiscal stimulus”?