Which country first introduced zero-based budgeting?
- A.India
- B.Germany
- C.The US
- D.The UK
Correct answer
Explanation
The correct answer is C, The US. Zero-based budgeting was first put to use in the United States. Peter Pyhrr developed it at Texas Instruments around 1970, and Jimmy Carter, then Governor of Georgia, applied it to a state budget in 1973 and later carried it to the federal government as President. Under this method every expense has to be justified afresh for each new period, starting from a zero base, instead of simply adding a percentage to last year's figure. Each activity is treated as a decision package, examined for its cost and benefit, and ranked; schemes that no longer serve a purpose are dropped. India began using zero-based budgeting in 1986-87 in some departments, and the Department of Science and Technology was the first to try it. Option A is wrong because India adopted the idea more than a decade after it began. Option B is wrong because Germany is not linked with its origin. Option D is wrong because the UK did not introduce it either. Exam tip: zero-based budgeting - Peter Pyhrr, the US, 1970; India from 1986-87.
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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