20 questionswith explanationsfor RAS, Patwari, VDO and other Rajasthan exams
A budgeting method in which every item of expenditure must be justified afresh from zero each year, instead of starting from the previous year's allocation, is called:
Answer: (2) Zero-based budgeting
Explanation
Zero-based budgeting requires each expenditure to be justified from scratch every year.
The 'Outcome Budget', which links financial outlays to measurable physical outcomes, was first introduced by the Union Government in:
Answer: (3) 2005-06
Explanation
The first Outcome Budget was presented for 2005-06 (tabled in August 2005), linking outlays to measurable outcomes.
Consider the following statements: 1. The separate Railway Budget was merged with the Union Budget from 2017-18. 2. From 2017, the Union Budget began to be presented on 1 February instead of the last working day of February. Which of the statements given above is/are correct?
Answer: (3) Both 1 and 2
Explanation
Both changes took effect with the Union Budget 2017-18, presented on 1 February 2017, which also included the Railway Budget.
The Lok Sabha's power to make a 'vote on account', granting an advance for part of a financial year pending passage of the budget, is provided in which Article of the Constitution?
Answer: (4) Article 116
Explanation
Article 116 provides for votes on account, votes of credit and exceptional grants.
Which of the following is a capital receipt of the Union Government?
Answer: (4) Proceeds from disinvestment
Explanation
Disinvestment proceeds reduce government assets and are capital receipts; taxes, interest and dividends are revenue receipts.
'Effective Revenue Deficit', a concept introduced in the Union Budget 2011-12, is equal to:
Answer: (1) Revenue deficit minus grants for creation of capital assets
Explanation
Effective Revenue Deficit = Revenue Deficit − Grants for creation of capital assets (given to States and others).
In a hypothetical budget, revenue receipts are ₹30 lakh crore, revenue expenditure is ₹39 lakh crore and capital expenditure is ₹11 lakh crore. The revenue deficit is:
Answer: (4) ₹9 lakh crore
Explanation
Revenue deficit = revenue expenditure − revenue receipts = 39 − 30 = ₹9 lakh crore; capital expenditure is not counted.
Consider the following statements: 1. The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003. 2. The FRBM Review Committee headed by N.K. Singh recommended fiscal deficit as the sole anchor and rejected any debt target. Which of the statements given above is/are correct?
Answer: (1) 1 only
Explanation
The FRBM Act dates from 2003; the N.K. Singh committee made debt the primary anchor (60% of GDP for general government) with fiscal deficit as the operational target.
Which of the following is NOT a statement laid before Parliament under the FRBM Act, 2003 (as amended in 2018)?
Answer: (2) Annual Financial Statement
Explanation
The Annual Financial Statement is laid under Article 112 of the Constitution; the other three are FRBM statements (the MTFP and FPS statements were merged into one after the 2018 amendment).
The Goods and Services Tax (GST) was introduced through which Constitutional Amendment Act, and from which date did it come into force?
Answer: (1) 101st Amendment; 1 July 2017
Explanation
GST came through the Constitution (101st Amendment) Act, 2016 (introduced as the 122nd Amendment Bill) and was rolled out on 1 July 2017.
Consider the following statements about the GST Council: 1. It is constituted under Article 279A of the Constitution. 2. The Union Finance Minister is its Chairperson. 3. Its decisions are taken by a simple majority of the weighted votes of members present and voting. Which of the statements given above is/are correct?
Answer: (1) 1 and 2 only
Explanation
Decisions of the GST Council need at least three-fourths of the weighted votes (Centre 1/3, States together 2/3), so statement 3 is wrong.
Which of the following is kept outside the scope of GST by the Constitution itself (in the definition of GST under Article 366)?
Answer: (2) Alcoholic liquor for human consumption
Explanation
Article 366(12A) excludes only alcoholic liquor for human consumption; petroleum crude, petrol, diesel, ATF and natural gas are within GST, to be taxed from a date the GST Council recommends (Article 279A(5)).
After the GST rate rationalisation that took effect on 22 September 2025, the GST rate structure mainly consists of:
Answer: (2) 5% and 18% slabs, plus a special 40% rate
Explanation
Following the 56th GST Council meeting, the 12% and 28% slabs were removed, leaving 5% and 18% plus a 40% rate for sin and luxury goods.
Integrated GST (IGST) on supplies in the course of inter-State trade or commerce is levied and collected by the Government of India under which Article?
Answer: (3) Article 269A
Explanation
Article 269A, inserted by the 101st Amendment, provides for GST on inter-State supplies, levied and collected by the Centre.
Consider the following statements about the Finance Commission: 1. Its recommendations are binding on the Union Government. 2. It is constituted by the President every fifth year or earlier under Article 280. Which of the statements given above is/are correct?
Answer: (2) 2 only
Explanation
The Finance Commission under Article 280 is constituted by the President; its recommendations are advisory, not binding.
Consider the following statements about the Sixteenth Finance Commission: 1. It was chaired by Arvind Panagariya. 2. Its award covers the period 2026-27 to 2030-31. 3. It raised the States' share in the divisible pool of central taxes to 42%. Which of the statements given above is/are correct?
Answer: (1) 1 and 2 only
Explanation
The 16th FC (chair Arvind Panagariya; report tabled 1 February 2026) covers 2026-31 and retained the States' share at 41%.
For the horizontal distribution of taxes among States, the Sixteenth Finance Commission (award period 2026-31) introduced which new criterion with a 10% weight?
Answer: (3) Contribution to GDP
Explanation
The 16th FC added 'contribution to GDP' (10%) and dropped the 15th FC's 'tax and fiscal effort' criterion; forest and demographic performance were existing criteria.
Which of the following does NOT form part of the divisible pool of central taxes shared with the States?
Answer: (4) Surcharge on income tax
Explanation
Cesses and surcharges (and cost of collection) are excluded from the divisible pool, so the Centre keeps them fully.
As per the Union Budget 2026-27, the fiscal deficit of the Union Government for 2026-27 (Budget Estimates) is targeted at what percentage of GDP?
Answer: (4) 4.3%
Explanation
The Union Budget 2026-27 (presented 1 February 2026) set the fiscal deficit target at 4.3% of GDP, down from 4.4% for 2025-26.
Which of the following is a direct tax administered by the Central Board of Direct Taxes (CBDT)?
Answer: (3) Securities Transaction Tax
Explanation
Securities Transaction Tax is a direct tax administered by the CBDT; the others are indirect taxes under the CBIC.