Budget – Multiple Choice Questions (MCQs)

1. 37. What is 'Revenue Receipts' in the budget?

   • A. Proceeds from the sale of government assets
   • B. Borrowings by the government
   • C. Tax revenue and non-tax revenue
   • D. Disinvestment proceeds

2. 38. What is the 'Finance Commission' in India?

   • A. A body that advises the government on financial matters
   • B. A body that conducts audits of government accounts
   • C. A body that manages the stock market
   • D. A body that plans economic development

3. 39. What is the term of the Finance Commission?

   • A. 3 years
   • B. 5 years
   • C. 7 years
   • D. 10 years

4. 40. Who appoints the Chairman of the Finance Commission?

   • A. The President of India
   • B. The Prime Minister of India
   • C. The Finance Minister of India
   • D. The Governor of RBI

5. 41. What is the main recommendation of the Finance Commission?

   • A. Distribution of tax revenues between the Union and the States
   • B. Management of public debt
   • C. Control of inflation
   • D. Promotion of foreign investment

6. 42. What is 'Public Debt'?

   • A. The total liabilities of the government
   • B. Loans given by the government
   • C. Assets held by the government
   • D. Government's revenue receipts

7. 43. What are the sources of public debt for the Indian government?

   • A. Market borrowings
   • B. external debt
   • C. small savings
   • D. provident funds

8. 44. What is 'Debt Servicing'?

   • A. Repaying the principal amount of a loan
   • B. Paying interest on the outstanding debt
   • C. Managing the government's debt portfolio
   • D. Borrowing more money to repay old debts

9. 45. What is a 'Sinking Fund'?

   • A. A fund created to repay a specific debt over time
   • B. A fund for emergency expenditure
   • C. A fund for infrastructure development
   • D. A fund for social welfare programs

10. 46. What is 'External Debt'?

    • A. Debt owed by the government to its own citizens
    • B. Debt owed by the government to foreign entities
    • C. Debt incurred by private companies
    • D. Debt owed by state governments to the central government

11. 47. What is 'Internal Debt'?

    • A. Debt owed by the government to its own citizens
    • B. Debt owed by the government to foreign entities
    • C. Debt incurred by public sector undertakings
    • D. Debt owed by the central government to state governments

12. 48. What is the impact of a high fiscal deficit?

    • A. Increased government borrowing and potential debt trap
    • B. Lower interest rates
    • C. Increased private investment
    • D. Reduced inflation