Static Quiz 27 April 2022
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Static Quiz 27 April 2022 for UPSC Prelims
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- Question 1 of 5
1. Question
Which of the following statement about Fiscal Responsibility and Budget Management (FRBM) Act, 2003?
1. The FRBM is an act of the parliament that set targets for the Government of India to establish financial discipline, improve the management of public funds, strengthen fiscal prudence and reduce its fiscal deficits.
2. It was first introduced in the parliament of India in the year 2000 by Vajpayee Government for providing legal backing to the fiscal discipline to be institutionalized in the country.
3. As a result, the FRBM Act of 2003 had mandated that, apart from limiting the fiscal deficit to 0% of the nominal GDP, the revenue deficit should be brought down to 3%.CorrectAns;- a) Only 1 and 2
Explanation;-
• The 3rd statements percentage is reversed that’s y it is incorrect.About FRBM Act 2003
• The FRBM is an act of the parliament that set targets for the Government of India to establish financial discipline, improve the management of public funds, strengthen fiscal prudence and reduce its fiscal deficits.
• It was first introduced in the parliament of India in the year 2000 by Vajpayee Government for providing legal backing to the fiscal discipline to be institutionalized in the country.
• Subsequently, the FRBM Act was passed in the year 2003.
• As a broad rule, it is considered fiscally imprudent for a government to borrow money for “revenue” purposes.
• As a result, the FRBM Act of 2003 had mandated that, apart from limiting the fiscal deficit to 3% of the nominal GDP, the revenue deficit should be brought down to 0%.
• This would have meant that all the government borrowing (or fiscal deficit) for the year would have funded only capital expenditure by the government.IncorrectAns;- a) Only 1 and 2
Explanation;-
• The 3rd statements percentage is reversed that’s y it is incorrect.About FRBM Act 2003
• The FRBM is an act of the parliament that set targets for the Government of India to establish financial discipline, improve the management of public funds, strengthen fiscal prudence and reduce its fiscal deficits.
• It was first introduced in the parliament of India in the year 2000 by Vajpayee Government for providing legal backing to the fiscal discipline to be institutionalized in the country.
• Subsequently, the FRBM Act was passed in the year 2003.
• As a broad rule, it is considered fiscally imprudent for a government to borrow money for “revenue” purposes.
• As a result, the FRBM Act of 2003 had mandated that, apart from limiting the fiscal deficit to 3% of the nominal GDP, the revenue deficit should be brought down to 0%.
• This would have meant that all the government borrowing (or fiscal deficit) for the year would have funded only capital expenditure by the government. - Question 2 of 5
2. Question
Which of the following statements about Interim Budget are correct?
1. Interim Budget deals with both receipts and expenditure.
2. Interim Budget is passed after discussion in Lok Sabha.CorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Interim Budget
• When the elections are approaching it is impractical to present a full budget, so the government presents an interim budget, which is like a budget for the transition period (few months remaining in power).
• Interim Budget deals with both receipts and expenditure.
• Interim Budget is passed after discussion in Lok Sabha.
• The Constitution gives the government the power to make changes in the tax regime in the interim budget.IncorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Interim Budget
• When the elections are approaching it is impractical to present a full budget, so the government presents an interim budget, which is like a budget for the transition period (few months remaining in power).
• Interim Budget deals with both receipts and expenditure.
• Interim Budget is passed after discussion in Lok Sabha.
• The Constitution gives the government the power to make changes in the tax regime in the interim budget. - Question 3 of 5
3. Question
Which of the following statements about Vote on account are correct?
1. A vote-on-account contains only the expenditure of the government
2. A Vote-On-Account is treated as a formal matter and passed by the Lok Sabha without discussionCorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Vote on Account
• The vote-on-account is passed through the interim budget. Vote-on-Account is a special provision by which the government obtains Parliament’s approval for funds sufficient to incur expenditure for a part of the year (till the formation of a new government)
• A vote-on-account contains only the expenditure of the government
• A Vote-On-Account is treated as a formal matter and passed by the Lok Sabha without discussion
• Any alteration in direct taxes can only be done through passing the Finance Bill. Hence it is important to note that Vote on Account cannot change the Direct Taxes.
• Votes on account, votes of credit and exceptional grants are specified in Article 116 of the constitution.IncorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Vote on Account
• The vote-on-account is passed through the interim budget. Vote-on-Account is a special provision by which the government obtains Parliament’s approval for funds sufficient to incur expenditure for a part of the year (till the formation of a new government)
• A vote-on-account contains only the expenditure of the government
• A Vote-On-Account is treated as a formal matter and passed by the Lok Sabha without discussion
• Any alteration in direct taxes can only be done through passing the Finance Bill. Hence it is important to note that Vote on Account cannot change the Direct Taxes.
• Votes on account, votes of credit and exceptional grants are specified in Article 116 of the constitution. - Question 4 of 5
4. Question
Which of the following statements about Token Grant are correct?
1. It is granted when funds to meet the proposed expenditure on a new service can be made available by reappropriation.
2. A demand for the grant of a token sum (of Re 1) is submitted to the vote of the Lok Sabha and if assented, funds are made available.CorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Token Grant
• It is granted when funds to meet the proposed expenditure on a new service can be made available by reappropriation. A demand for the grant of a token sum (of Re 1) is submitted to the vote of the Lok Sabha and if assented, funds are made available.
• Reappropriation involves transfer of funds from one head to another. It does not involve any additional expenditure.IncorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Token Grant
• It is granted when funds to meet the proposed expenditure on a new service can be made available by reappropriation. A demand for the grant of a token sum (of Re 1) is submitted to the vote of the Lok Sabha and if assented, funds are made available.
• Reappropriation involves transfer of funds from one head to another. It does not involve any additional expenditure. - Question 5 of 5
5. Question
Which of the following statements about Excess Grant are correct?
1. It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year.
2. It is voted by the Lok Sabha after the financial year.CorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Excess Grant
• It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year. It is voted by the Lok Sabha after the financial year.
• Before the demands for excess grants are submitted to the Lok Sabha for voting, they must be approved by the Public Accounts Committee of Parliament.
• The demand for excess grant is provided for under Article 115 of the Indian Constitution.
• This demand for extra money or excess grants is made when the expenditure has been incurred after a financial year has expired.IncorrectAns;- c) Both 1 and 2
Explanation;-
• Both the statements are correct.About Excess Grant
• It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year. It is voted by the Lok Sabha after the financial year.
• Before the demands for excess grants are submitted to the Lok Sabha for voting, they must be approved by the Public Accounts Committee of Parliament.
• The demand for excess grant is provided for under Article 115 of the Indian Constitution.
• This demand for extra money or excess grants is made when the expenditure has been incurred after a financial year has expired.
