In the budget figures of the Government of India, fiscal deficit is
(1) total expenditure – total receipts
(2) revenue expenditure – revenue receipts
(3) capital expenditure – capital receipts + market borrowings
(4) sum of budget deficit and Government’s market borrowings and liabilities
Solution: (4)
The fiscal deficit is the difference between the government’s total expenditure and its total receipts (excluding borrowing). The elements of the fiscal deficit are (a) the revenue deficit, which is the difference between the government’s current (or revenue) expenditure and total current receipts (that is, excluding borrowing) and (b) capital expenditure. The fiscal deficit can be financed by borrowing from the Reserve Bank of India (which is also called deficit financing or money creation) and market borrowing (from the money market that is mainly from banks).
Which authority decides about the States’ share in central taxes?
(1) Finance Commission
(2) Planning Commission
(3) Election Commission
(4) Finance Ministry
Solution: (1)
The Finance Commission of India came into existence in 1951. It was established under Article 280 of the Indian Constitution by the President of India. It was formed to define the financial relations between the centre and the state. The Constitution of India has made several provisions to bridge the gap of finances between the Centre and the States. These include various articles in the constitution like Article 268, which facilitates levy of duties by the Centre but equips the states to collect and retain the same. Similarly, there are Articles 269, 270, 275, 282 and 293 all of which specify ways and means of sharing resources between Union and States. Apart from the above- mentioned provisions, The Indian Constitution provides an institutional framework to facilitate Centre- State Transfers. This body is the Finance Commission
The famous slogan “GARIBI HATAO” (Remove Poverty) was launched during the
(1) First Five Year Plan (1951-56)
(2) Third Five Year Plan (1961-66)
(3) Fourth Five Year Plan (1964-66)
(4) Fifth Five Year Plan (1974-79)
Solution: (4)
Garibi Hatao (Meaning “Abolish Poverty” in Hindi) was the theme and slogan of Indira Gandhi’s 1971 election bid. The slogan and the proposed anti-poverty programs that came with it were designed to give Gandhi an independent national support, based on rural and urban poor. The fifth plan prepared and launched by D.D. Dhar proposed to achieve two main objectives viz, ‘removal of poverty’ (Garibi Hatao) and ‘attainment of self reliance’, through promotion of high rate of growth, better distribution of income and a very significant growth in the domestic rate of savings.
In the budget figures of the Government of India the difference between total expenditure and total receipts is called
(1) Fiscal deficit
(2) Budget deficit
(3) Revenue deficit
(4) Current deficit
Solution: (1)
Fiscal deficit refers to a situation when a government’s total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits. A fiscal deficit is regarded by some as a positive economic event. For example, economist John Maynard Keynes believed that deficits help countries climb out of economic recession. On the other hand, fiscal conservatives feel that governments should avoid deficits in favor of a balanced budget policy.
The official agency responsible for estimating National Income in India is
(1) Indian Statistical Institute
(2) Reserve Bank of India
(3) Central Statistical Organisation
(4) National Council for Applied Economics and Research
Solution: (3)
At the national level, the Central Statistical Organisation (CSO) is the apex statistical body with the primary objective of providing technical leadership in building up the statistical system in the country. It has been charged with the responsibility of coordinating activities in the country, laying down and maintenance of standards relating to concepts, definitions, methodologies, procedures etc, providing consultancy and advisory services to other statistical agencies, computing of national income, keeping liaison with the international statistical agencies, preparing and publishing national accounts statistics, processing, analysing and publication of industrial statistics, conduct of economic censuses, etc.
Who coined the term ‘Hindu rate of growth’ for Indian economy?
(1) A.K. Sen
(2) Kirit S. Parikh
(3) Raj Krishna
(4) Montek Singh Ahluwalia
Solution: (3)
The Hindu rate of growth refers to the low annual growth rate of the socialist economy of India before 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income growth averaged 1.3%. The term was coined by Indian economist Raj Krishnaa. It suggests that the low growth rate of India, a country with a high Hindu population was in a sharp contrast to high growth rates in other Asian countries, especially the East Asian Tigers, which were also newly independent. This meaning of the term, popularised by Robert McNamara, was used disparagingly and has connotations that refer to the supposed Hindu outlook of fatalism and contentedness.
The Commission in India dealing with minimum support price, procurement price, etc in connection with agricultural goods is the
(1) Planning Commission
(2) Agricultural Costs and Prices Commission
(3) Agricultural Price Commission
(4) National Marketing Commission
Solution: (1)
The Commission for Agricultural Costs and Prices (CACP), the government’s nodal agency to recommend the minimum price for farm commodities. The Agricultural Prices Commission was set up in January, 1965 to advise the Government on price policy of major agricultural commodities with a view to evolving a balance and integrated price structure in the perspective of the overall needs of the economy and with due regard to the interests of the producer and the consumer. Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices.
The Report of Vijay Kelkar Committee relates to
(1) Trade Reforms
(2) Centre-State Financial Relations
(3) Disinvestment in Public Sector Enterprises
(4) Tax Reforms
Solution: (4)
Vijay Kelkar, former finance secretary and advisor to the finance minister almost a decade ago, was mandated by the finance minister to give a report outlining a roadmap for fiscal consolidation. Kelkar, who headed the 13th Finance Commission, was told to present a fiscal road map for the medium term
When was the Jawahar Rozgar Yojna launched ?
(1) 1985
(2) 1987
(3) 1989
(4) 1991
Solution: (3)
By merging the two erstwhile wage employment programme – National Rural Employment programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP) the Jawahar Rozgar Yojana (JRY) was started with effect from April, 1, 1989 on 80:20 cost sharing basis between the centre and the States. The main objective of the Yojana was additional gainful employment for the unemployed and under-employed persons in rural areas. The other objective was the creation of sustained employment by strengthening rural economic infrastructure and assets in favour of rural poor for their direct and continuing benefits.
Reserve Bank of India was nationalised in
(1) 1947
(2) 1948
(3) 1949
(4) 1951
Solution: (3)
The Reserve Bank of India (RBI) is India’s central banking institution, which controls the monetary policy of the Indian rupee. It was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934. Following India’s independence in 1947, the RBI was nationalised in the year 1949. Though originally set up as a shareholders’ bank, the RBI has been fully owned by the Government of India since its nationalization in 1949.
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