Fiscal Policy & Revenue (Part – I)

41. Which one of the following is responsible for the preparation and presentation of Union Budget to the Parliament? [I.A.S (Pre) 2010]

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

Correct Answer: (b) Department of Economic Affairs

Solution:The Department of Economic affairs of Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country's economic policies and programmes. A principal responsibility of this department is the preparation and presentation of the Union Budget. The Department of Revenue of Finance Ministry exercises control in respect of revenue matters through the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC). The Ministry of Finance in consultation with CBDT and CBIC prepares revenue estimates of the Budget to be generated in the ensuing financial year.

42. Which of the following is responsible for preparing the Annual Economic Survey? [U.P.U.D.A./L.D.A. (Sol.) (Pre) 2010]

(a) Ministry of Planning
(b) Ministry of Finance
(c) Reserve Bank of India
(d) Central Statistical Organisation

Correct Answer: (b) Ministry of Finance

Solution:

The Economic Survey is an annual report presented by the government before the Union Budget to assess India's economic condition.
Prepared by the Economic Division of the Ministry of Finance under the Chief Economic Adviser's supervision, it is tabled in both houses of Parliament by the Union Finance Minister.
The survey assesses economic performance, highlights sectoral developments, outlines challenges and provides an economic outlook for the coming year.
The Economic Survey was first presented in 1950-51 as part of the budget and became a separate document from the Union Budget in 1964, tabled a day before the budget.
India's Gross Domestic Product (GDP) is projected to grow between 6.3-6.8% in FY26 (2025-26), with real Gross Value Added (GVA) estimated at 6.4% in FY25 (2024-25).

43. Economic Survey of India is published officially every year by the: [I.A.S (Pre) 1998, U.P.P.C.S. (Mains) 2010, Uttarakhand U.P.U.D.A./L.D.A. (Pre) 2007]

(a) Reserve Bank of India
(b) Planning Commission of India
(c) Ministry of Finance, Govt. of India
(d) Ministry of Industries, Govt, of India

Correct Answer: (c) Ministry of Finance, Govt. of India

Solution:Economic Survey of India is published every year officially by the Department of Economic Affairs, Ministry of Finance, Government of India. It is presented in the Parliament before the Union Budget. It is prepared under the guidance of the Chief Economic Adviser of India. Economic Survey of India reviews the developments in the Indian Economy over the past financial year, summarizes the performance on major development programs and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term

44. Economic Survey in India is published by: [U.P.P.C.S. (Mains) 2015]

(a) Ministry of Finance
(b) Planning Commission
(c) Ministry of Commerce
(d) Indian Statistical Institute

Correct Answer: (a) Ministry of Finance

Solution:Economic Survey of India is published every year officially by the Department of Economic Affairs, Ministry of Finance, Government of India. It is presented in the Parliament before the Union Budget. It is prepared under the guidance of the Chief Economic Adviser of India. Economic Survey of India reviews the developments in the Indian Economy over the past financial year, summarizes the performance on major development programs and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.

45. Match List-I with List-II and select the correct answer using the codes below the lists: [I.A.S (Pre) 2001]

List -I	List -II
A. Ministry of Industry	1. Report on Currency and Finance
B. Central Statistical Organization	2. Economic Survey
C. Reserve Bank of India	3. Wholesale Price Index
D. Ministry of Finance	4. National Accounts Statistics

Code:

	A	B	C	D
(a)	4	3	2	1
(b)	3	4	1	2
(c)	4	3	1	2
(d)	3	4	2	1

(a)
(b)
(c)
(d)

Correct Answer: (b)

Solution:The correctly matched lists are as follows:

List -I	List -II
A. Ministry of Commerce Industry	Wholesale Price Index
B. Central Statistical Organization (now National Statistical Office)	National Accounts Statistics
C. Reserve Bank of India	Report on Currency and Finance
D. Ministry of Finance	Economic Survey

46. 'Budget' is an instrument of- [Jharkhand P.C.S. (Pre) 2013]

(a) monetary policy of the government
(b) commercial policy of the government
(c) fiscal policy of the government
(d) money-saving policy of the government

Correct Answer: (c) fiscal policy of the government

Solution:Budget is an instrument of fiscal policy of the government. Under Article 112 of the Constitution, a statement of the estimated receipts and expenditure of the Government of India has to be laid before both the Houses of Parliament in respect of every financial year. This statement titled 'Annual Financial Statement' is the main budget document.

47. In which of the following countries, zero-based budgeting was first adopted? [U.P.P.C.S. (Mains) 2017]

(a) U.S.A
(b) France
(c) India
(d) Germany

Correct Answer: (a) U.S.A

Solution:Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period. Zero-base budget technique involves a critical review of every scheme before a budgetary provision is made. Developed by Peter Pyhrr in the 1970s, zero-based budgeting starts from a 'zero buse' at the beginning of every budget period, and every function within an organization is analyzed for its needs and costs. Jimmy Carter, then Governor of Georgia (U.S.), was the first to adopt the process of zero-base into the government in 1973 budget. Three years later, the U.S. federal government for the first time implemented zero-based budgeting in 'The Government Economy and Spending Reform Act, 1976'. In India, the Department of Science and Technology was the first to introduce zero-based budgeting in 1983 and in 1986, the Indian Government adopted zero-based budgeting for determining expenditure budget.

48. Consider the following statements and select the correct answer from the codes given below the statements: Statement: [U.P.P.C.S. (Mains) 2011]

Statement (A): Zero-Base Budget has been introduced in India.

Reason (R): Zero-Base Budget technique involves a critical review of every scheme before a budgetary provision is made.

Code:

(a) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(b) Both (A) and (R) are correct, but (R) is not the correct explanation of (A).
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true.

Correct Answer: (a) Both (A) and (R) are correct and (R) is the correct explanation of (A).

Solution:Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period. Zero-base budget technique involves a critical review of every scheme before a budgetary provision is made. Developed by Peter Pyhrr in the 1970s, zero-based budgeting starts from a 'zero buse' at the beginning of every budget period, and every function within an organization is analyzed for its needs and costs. Jimmy Carter, then Governor of Georgia (U.S.), was the first to adopt the process of zero-base into the government in 1973 budget. Three years later, the U.S. federal government for the first time implemented zero-based budgeting in 'The Government Economy and Spending Reform Act, 1976'. In India, the Department of Science and Technology was the first to introduce zero-based budgeting in 1983 and in 1986, the Indian Government adopted zero-based budgeting for determining expenditure budget.

49. Which of the following (Union Budget Departments 2023-24- Allocation amount approx. Rs.) is correctly matched? [U.P.P.C.S. (Pre) 2023]

Option	Department/Scheme	Allocated Amount (Approx. Rs.)
(a)	Pradhan Mantri Jan Arogya Yojana	Rs. 5,000 Crore
(b)	Dept. of Health and Family Welfare	Rs. 80,000 Crore
(c)	Ministry of Health	Rs. 89,155 Crore
(d)	Dept. of Health Research	Rs. 9,155 Crore

(a)
(b)
(c)
(d)

Correct Answer: (c)

Solution:According to Union Budget 2023-24, allocation of amount to given schemes was as follows:

Option	Department/Scheme	Allocated Amount (Approx. Rs.)
(a)	Pradhan Mantri Jan Arogya Yojana	Rs. 7,200 Crore
(b)	Dept. of Health and Family Welfare	Rs. 86,175 Crore
(c)	Ministry of Health and Family Welfare	Rs. 89,155 Crore
(d)	Dept. of Health Research	Rs. 2,980 Crore

So, the option (c) is correctly matched.

50. In the Union Budget for 2011-12, which one of the following sectors has been allocated the largest outlay? [U.P.P.C.S. (Mains) 2010, 2011]

(a) Rural Development
(b) Social Services (excluding Rural Housing)
(c) Energy
(d) Transport

Correct Answer: (c) Energy

Solution:As per the Union Budget 2011-12, option (c) was the correct answer. Details of allocated outlays for the given sectors as per the Interim Union Budget 2024-25 are as follows:

Allocated outlay (in Rs. crore)
Sectors	2023-24 (B.E.)	2023-24 (R.E.)	2024-25 (B.E.)
Energy	94915	54989	76302
Social Welfare	55080	46741	56501
Transport	517034	524941	544039
Rural Development	238204	238984	265808

According to above table it is clear that in the Interim Union Budget 2024-25, among the given sectors the largest outlay has been allocated to the transport sector. In the Budget Estimates for 2024-25, the 7 major items of expenditure are as follows:

1. Interest (Rs. 1190440 crore),

2. Transport (Rs. 544039 crore),

3. Defence (Rs. 454773 crore),

4. Subsidy (Rs. 409723 crore), in which Food Subsidy (Rs. 205250),

5. Transfer to States (Rs. 286787 crore).

6. Rural Development (Rs. 265808 crore).

7. Pension (Rs. 239612 crore)