The fiscal responsibility law of Bihar, which sets a ceiling on the fiscal deficit as a share of the state domestic product, was enacted in:
- A.2003
- B.2006
- C.2011
- D.2016
Correct answer
Explanation
The correct answer is B, 2006. The Bihar Fiscal Responsibility and Budget Management Act was passed in 2006, after the central Act of 2003 and the recommendation of the Twelfth Finance Commission that states pass such laws to earn debt relief. It requires the state to keep its fiscal deficit within three per cent of the gross state domestic product, to eliminate the revenue deficit and to follow a path for the debt to product ratio, with relaxation allowed in defined situations.
Option A, 2003, is the year of the Union Fiscal Responsibility and Budget Management Act and is the main distractor. Option C, 2011, and option D, 2016, are years of amendments and of other laws, prohibition being the law of 2016. The examinable points are the year 2006, the three per cent ceiling on the fiscal deficit, and the requirement that the state lay a medium-term fiscal policy statement along with the budget every year.
Read the full article: Economy and State Budget of Bihar: Sectors, Articles and Facts
Practice Questions
View allUnder which Article of the Constitution is the annual financial statement, that is the budget, laid before the legislature of a state such as Bihar?
- A.Article 112
- B.Article 202
- C.Article 266
- D.Article 293
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Article 202 requires the Governor to cause a statement of the estimated receipts and expenditure of the state for every financial year, called the annual financial statement, to be laid before the House or Houses of the legislature.
Read the full explanation →Money withdrawn from the Consolidated Fund of Bihar after the demands for grants are voted is authorised by:
- A.A Finance Bill
- B.An Appropriation Bill
- C.A vote on account
- D.A supplementary demand
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Under Article 204 an Appropriation Bill is introduced after the Vidhan Sabha has voted the demands for grants, and it alone makes the withdrawal of money from the Consolidated Fund of the State lawful; no money may leave that fund except under an appropriation made by law.
Read the full explanation →In India, which of the following is NOT a type of budget?
- A.Balanced
- B.Surplus
- C.Losses
- D.Reserved
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A budget is classified by the relation between receipts and expenditure, which gives three kinds only: a balanced budget, in which estimated receipts equal estimated expenditure; a surplus budget, in which receipts exceed expenditure; and a deficit budget, in which expenditure exceeds receipts.
Read the full explanation →The Contingency Fund of a State, from which the Chief Minister can meet unforeseen expenditure, is provided by which Article?
- A.Article 199
- B.Article 203
- C.Article 267(2)
- D.Article 280
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Article 267(2) allows the legislature of a state to establish a Contingency Fund of the State by law, placed at the disposal of the Governor, from which advances can be made for unforeseen expenditure pending authorisation by the legislature, the amount being recouped later through a supplementary demand.
Read the full explanation →Bihar lost almost its entire mineral belt when which state was carved out of it in November 2000?
- A.Chhattisgarh
- B.Jharkhand
- C.Uttarakhand
- D.Odisha
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The Bihar Reorganisation Act, 2000 created Jharkhand on 15 November 2000, and with the Chhotanagpur plateau Bihar lost its coal, iron ore, copper, bauxite and mica, along with the heavy industry at Jamshedpur, Bokaro and Ranchi.
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