Fiscal Policy & Revenue (Part – VI)

11. In the year 2001, the Prime Minister announced a five year excise duty holiday for industries in: [I.A.S. (Pre) 2002]

(a) cyclone prone coastal Andhra Pradesh
(b) border States of North-East
(c) earthquake ravaged Kutch district
(d) recently formed States of Chhattisgarh and Jharkhand

Correct Answer: (c) earthquake ravaged Kutch district

Solution:In the year 2001, the Prime Minister Atal Bihari Vajpayee announced a five year excise duty holiday for industries in earthquake ravaged Kutch district of Gujarat.

12. The Union Budget 2000 awarded a Tax Holiday for the North-Eastern Region to promote industrialisation for: [I.A.S. (Pre) 2001]

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

Correct Answer: (d) 10 years

Solution:The then Finance Minister Yashwant Sinha during the presentation of Union Budget 1999-2000, announced 10-years Tax Holiday for industries in North-Eastern region to promote industrialization.

13. Consider the following sources of Revenue of the Panchyats: [U.P.P.C.S. (Mains) 2007]

1. Local Authority Grant by Finance Commission

2. Assistance by Central Cooperative Banks

3. Allocations for Centrally Sponsored Schemes

4. NABARD

5. Allocation from State Finance Commission

Of the above, the correct sources of Finance for Panchyats would be?

(a) 1, 2, 3 and 5
(b) only 1 and 2
(c) 1, 2 and 5
(d) 1, 2, 4 and 5

Correct Answer: (a) 1, 2, 3 and 5

Solution:Following are the five major income sources of Panchayats-

1. Public assistance and fund contribution

2. Taxes, fees and economic penalties

3. Grants-By State Government for administration

- For the schemes of State Government

- For the schemes of Central Government

- From district council/committee

-From Finance Commission of India

-From State Finance Commission

4. Borrowings from cooperative banks

5. Self income

Hence option (a) is the correct answer.

14. Which of the following taxes is levied by the Gram Panchayats? [U.P.P.C.S. (Pre) 2018]

(a) Sales Tax
(b) Land Revenue Tax
(c) Tax on Local Fairs
(d) None of the above

Correct Answer: (c) Tax on Local Fairs

Solution:Among the given options, tax on local fairs is levied and collected by the Gram Panchayats.

15. Consider the following actions by the government : [I.A.S. (Pre) 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

Correct Answer: (a) 1 and 2 only

Solution:In the context of economic recession, cutting the tax rates and increasing the government spending can be considered as a part of the 'fiscal stimulus' package. While abolishing the subsidies is not a part of fiscal stimulus.

16. The main source of fund for the National Highway Authority of India is: [U.P.P.C.S (Pre) 2011]

(a) Cess
(b) Foreign assistance
(c) Market borrowings
(d) Budgetary support of Union Government

Correct Answer: (a) Cess

Solution:

National Highways Authority of India (NHAI) was set up by the NHAI Act, 1988, an Act to provide for the constitution of an Authority for the development, maintenance and management of National highways. The main source of fund for the National Highway Authority of India is cess fund. NHAI'S other sources of funds include Government support in the form of capital base, additional budgetary support, capital grant, maintenance grant, ploughing back of toll revenue, loan from multilateral agencies, and market borrowings.