UPSC CSE Prelims

Fiscal Policy and Budget question bank (Indian Economy)

Practice 22 free UPSC CSE Prelims Indian Economy - Fiscal Policy and Budget questions with answers and step-by-step solutions.

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Q1.

Consider the following items in the Union Budget: 1. Corporation tax receipts 2. Interest payments on borrowings 3. Subsidies on fertilizers and food 4. Disinvestment proceeds Which of the above are categorized under Revenue Expenditure in the Union Budget?

Topic: Union Budget | Source: AI Generated (UPSC CSE Prelims) | Status: pending review

(A)

1 and 4 only

(B)

2 and 3 only

(C)

1, 2 and 3 only

(D)

2, 3 and 4 only

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Q2.

What is the primary difference between a Revenue Deficit and a Fiscal Deficit?

Topic: Union Budget | Source: AI Generated (UPSC CSE Prelims) | Status: pending review

(A)

Revenue deficit includes borrowings, while fiscal deficit excludes borrowings.

(B)

Revenue deficit considers only revenue receipts and expenditure, whereas fiscal deficit measures total borrowing requirements including capital expenditures.

(C)

Revenue deficit is always lower than fiscal deficit.

(D)

Revenue deficit is computed by the Finance Commission, while fiscal deficit is computed by the RBI.

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