Under the fiscal responsibility law of Madhya Pradesh, the fiscal deficit of the state is normally to be kept within what share of the gross state domestic product?
- A.One per cent
- B.Three per cent
- C.Six per cent
- D.Ten per cent
Correct answer
Explanation
The correct answer is B, Three per cent. The Madhya Pradesh Fiscal Responsibility and Budget Management Act, passed in the middle of the 2000s on the pattern of the central Act of 2003 and the advice of the Twelfth Finance Commission, requires the state to keep its fiscal deficit within three per cent of the gross state domestic product, to do away with the revenue deficit and to follow a path for its debt, with extra borrowing allowed only in the situations the law and the Union together permit.
Option A, one per cent, is close to the ceiling states are expected to observe for the revenue deficit rather than the fiscal deficit, so it is a near miss by design. Option C, six per cent, and option D, ten per cent, are far above any statutory limit, though actual deficits rose above the normal ceiling in years when the Union allowed extra borrowing. Along with the three per cent figure, remember that such a law requires a medium-term fiscal policy statement and a fiscal policy strategy statement to be laid before the Vidhan Sabha with the budget.
Read the full article: Economy and State Budget of Madhya Pradesh: Facts and PYQs
Practice Questions
View allWhich of the following is NOT the work of the legislature?
- A.Making law
- B.Budgeting
- C.Passing of budget
- D.Control on the executive
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Preparing the budget, that is estimating the receipts and the expenditure of every department and putting the estimates together, is the work of the executive: in Madhya Pradesh the Finance Department prepares it and the Finance Minister presents it.
Read the full explanation →The legislature of Madhya Pradesh, before which the state budget is laid, consists of:
- A.Only the Vidhan Sabha, with the Governor
- B.The Vidhan Sabha and the Vidhan Parishad
- C.Only the Vidhan Parishad
- D.The Vidhan Sabha and a joint council of districts
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Madhya Pradesh has a unicameral legislature: the Governor and one House, the Vidhan Sabha, whose strength is 230. The annual financial statement under Article 202 is therefore laid before that single House, which votes the demands for grants and passes the Appropriation Bill.
Read the full explanation →Madhya Pradesh is the only state in India that produces which mineral?
- A.Diamond
- B.Gold
- C.Petroleum
- D.Uranium
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The Majhgawan pipe near Panna is the only working diamond mine in the country, which makes Madhya Pradesh India’s sole diamond-producing state, and the stones are sold through the government diamond office at Panna.
Read the full explanation →Madhya Pradesh is the largest producer in India of which crop, because of which it is called the soya state?
- A.Groundnut
- B.Soyabean
- C.Mustard
- D.Sunflower
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The black soil of the Malwa plateau and the Narmada valley suits soyabean, and the districts around Indore, Ujjain, Dewas and Sehore grow so much of it that the state is called the soya state and Indore became the centre of the soyabean oil and cake trade.
Read the full explanation →The Malanjkhand mine of Madhya Pradesh, which holds the largest copper ore reserves in India, is in which district?
- A.Balaghat
- B.Panna
- C.Jhabua
- D.Shahdol
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The Malanjkhand copper project of Hindustan Copper Limited, in Balaghat district on the eastern edge of the state, works the largest copper ore deposit in the country, and its concentrate feeds smelters outside the state.
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