Union Budget, Deficits and Public Finance

Attempt the quiz above first, then review every question with its correct answer and a short explanation below.

1. Q1.The Union Budget in India is presented in Parliament by the:

   • A.Prime Minister
   • B.Finance Minister✓ Correct Answer
   • C.President
   • D.RBI Governor

   Explanation: The Finance Minister presents the Annual Financial Statement on behalf of the Government.

2. Q2.The financial year in India runs from:

   • A.1 January to 31 December
   • B.1 July to 30 June
   • C.1 October to 30 September
   • D.1 April to 31 March✓ Correct Answer

   Explanation: India follows an April-to-March financial year.

3. Q3.Since 2017, the Union Budget has been presented on:

   • A.28 February
   • B.1 March
   • C.1 February✓ Correct Answer
   • D.31 March

   Explanation: The presentation date was advanced to 1 February so that the budget could be passed before the new financial year begins.

4. Q4.A revenue deficit occurs when:

   • A.capital expenditure exceeds capital receipts
   • B.total receipts exceed total expenditure
   • C.exports exceed imports
   • D.revenue expenditure exceeds revenue receipts✓ Correct Answer

   Explanation: Revenue deficit = revenue expenditure minus revenue receipts.

5. Q5.Primary deficit is equal to the fiscal deficit minus:

   • A.tax revenue
   • B.subsidies
   • C.interest payments✓ Correct Answer
   • D.defence expenditure

   Explanation: Primary deficit shows borrowing needs apart from interest on past debt.

6. Q6.The Finance Commission is appointed by the President after every:

   • A.three years
   • B.seven years
   • C.ten years
   • D.five years✓ Correct Answer

   Explanation: Article 280 provides for a Finance Commission every five years to recommend the sharing of taxes between the Centre and the States.

7. Q7.In the Constitution, the budget is described as the:

   • A.Annual Financial Statement✓ Correct Answer
   • B.Appropriation Account
   • C.Consolidated Statement
   • D.Economic Survey

   Explanation: Article 112 requires the President to lay an Annual Financial Statement before Parliament each year.

8. Q8.Fiscal deficit is equal to total expenditure minus:

   • A.revenue receipts only
   • B.total receipts excluding borrowings✓ Correct Answer
   • C.tax revenue only
   • D.capital receipts only

   Explanation: Fiscal deficit equals the government's total borrowing requirement for the year.

9. Q9.The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in:

   • A.2003✓ Correct Answer
   • B.1991
   • C.1999
   • D.2008

   Explanation: The FRBM Act, 2003 sets targets to reduce the fiscal deficit and promote fiscal discipline.

10. Q10.The Consolidated Fund of India is provided for under Article:

    • A.266✓ Correct Answer
    • B.110
    • C.112
    • D.280

    Explanation: Article 266 creates the Consolidated Fund into which all revenues and loans of the Union are paid.

11. Q11.The Contingency Fund of India is placed at the disposal of the:

    • A.Prime Minister
    • B.Finance Minister
    • C.Speaker of the Lok Sabha
    • D.President✓ Correct Answer

    Explanation: Under Article 267 the fund meets urgent unforeseen expenditure, subject to later approval by Parliament.

12. Q12.The definition of a "Money Bill" is given in Article:

    • A.110✓ Correct Answer
    • B.112
    • C.116
    • D.266

    Explanation: Article 110 defines a Money Bill; it can be introduced only in the Lok Sabha.

13. Q13.A "vote on account" is passed by Parliament to meet expenditure for:

    • A.the whole year in advance
    • B.a part of the year, pending passage of the full budget✓ Correct Answer
    • C.defence expenditure only
    • D.emergencies only

    Explanation: Article 116 allows a vote on account so that government spending can continue before the budget is passed.

14. Q14.Gender budgeting was introduced in the Union Budget in:

    • A.1991-92
    • B.2005-06✓ Correct Answer
    • C.1999-2000
    • D.2014-15

    Explanation: A Gender Budget Statement was first included in the 2005-06 Budget.

15. Q15.By convention, the Public Accounts Committee of Parliament is headed by a member of the:

    • A.ruling party
    • B.opposition✓ Correct Answer
    • C.Council of Ministers
    • D.Rajya Sabha nominated members

    Explanation: The PAC examines CAG audit reports and is chaired by an opposition member to keep scrutiny independent.

16. Q16.Withdrawal of money from the Consolidated Fund of India requires the passing of an:

    • A.Finance Commission report
    • B.Ordinance
    • C.Appropriation Act✓ Correct Answer
    • D.Economic Survey

    Explanation: Under Article 114, no money may be withdrawn from the Consolidated Fund except under an Appropriation Act.

17. Q17.Who chaired the Fourteenth Finance Commission?

    • A.N. K. Singh
    • B.Vijay Kelkar
    • C.Y. V. Reddy✓ Correct Answer
    • D.C. Rangarajan

    Explanation: The 14th Finance Commission (2015-20) was chaired by Y. V. Reddy and raised the States' share in central taxes to 42 per cent.

18. Q18.Who chaired the Fifteenth Finance Commission?

    • A.Y. V. Reddy
    • B.Vijay Kelkar
    • C.Arvind Panagariya
    • D.N. K. Singh✓ Correct Answer

    Explanation: The 15th Finance Commission was chaired by N. K. Singh.

19. Q19.Which Article states that no tax shall be levied or collected except by authority of law?

    • A.Article 110
    • B.Article 266
    • C.Article 265✓ Correct Answer
    • D.Article 280

    Explanation: Article 265 embodies the principle of "no taxation without law".

20. Q20.The Comptroller and Auditor General of India is appointed under Article 148 by the:

    • A.President✓ Correct Answer
    • B.Prime Minister
    • C.Chief Justice of India
    • D.Speaker of the Lok Sabha

    Explanation: The CAG is appointed by the President and can be removed only like a Supreme Court judge.