A government budget is an annual financial statement which outlines estimated government expenditures and expected government receipts or revenues for the forthcoming fiscal year. Depending on the feasibility of these estimates which of the following is NOT the budget type?
- A.Deficit budget
- B.Balanced budget
- C.Economy budget
- D.Surplus budget
Correct answer
Explanation
The correct answer is C, Economy budget. By the balance between estimated receipts and expenditure, a budget is of only three types. A balanced budget has receipts equal to expenditure. A surplus budget has receipts higher than expenditure, and a government may use it to cool an overheated, inflationary economy. A deficit budget has expenditure higher than receipts; it is the normal case in India and is used to push demand and growth, the gap being met by borrowing. 'Economy budget' is not a recognised type at all; it is a distractor. In India the budget is called the Annual Financial Statement under Article 112, is presented on 1 February since 2017, and the first budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. Option A is wrong because a deficit budget is a real type. Option B is wrong because a balanced budget is a real type. Option D is wrong because a surplus budget is a real type. Exam tip: three types by balance, balanced, surplus and deficit; India normally runs a deficit budget.
Practice Questions
View allAccording to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to
- A.improve
- B.diminish
- C.remain constant
- D.first diminish and then improve
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Each extra unit of a good gives a consumer less additional satisfaction than the unit before it, so marginal utility falls as consumption rises.
Read the full explanation →Consider the following statements about impact of tax : 1. A tax is shifted forward to consumers if the demand is inelastic relative to supply. 2. A tax is shifted backward to producers if the supply is relatively more inelastic than demand. Which of the statements given above is/are correct?
- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
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The burden of a tax falls more heavily on whichever side of the market is less elastic, the side that cannot easily walk away.
Read the full explanation →UBI, as an alternative for subsidies in poverty alleviation, stands for
- A.Union Basic Income
- B.Undefined Basic Income
- C.Unconditional Basic Income
- D.Universal Basic Income
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UBI is the idea of paying every citizen a fixed sum of money regularly, without conditions, in place of a large number of separate subsidies and welfare schemes.
Read the full explanation →Who among the following is the Chairman of the Fourteenth Finance Commission?
- A.C. Rangarajan
- B.Vijay Kelkar
- C.Y. V. Reddy
- D.Rakesh Mohan
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The Fourteenth Finance Commission, set up in 2013 for the award period 2015-2020, was chaired by Y. V. Reddy, a former Governor of the Reserve Bank of India.
Read the full explanation →Why was constitutional amendment needed for introducing GST?
- A.States were not willing to agree with the Union for introduction of GST without amendment in the Constitution.
- B.GST was to be implemented on concurrent base and Article 246 was inadequate for such a case.
- C.The Empowered Committee of Finance Ministers had recommended for constitutional amendment.
- D.The GST Council had recommended for constitutional amendment so that its power enhances.
Show answer
GST is levied by the Union and the States together on the same supply, and Article 246, which splits taxing powers between them through separate lists, did not allow such a concurrent tax.
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