Union Budget - MCQ

What is budget?

Budget is the annual financial statement of the estimated receipts and expenditure of the government for the particular year. It is legal document because legislature passed it and the President approved it. The prime motive of Government financial management is to determine how adequately the financial and resource management responsibilities have been discharged.

Process of budget passing in the Parliament

There are six stages to present , consider and pass the budget in the Parliament.

1. Presentation of Budget

2. General Discussion

3. Scrutiny by departmental committees

4. Voting on Demands for grants

5. Passing of appropriation bill

6. Passing of finance bill.

Finance Bill

Finance Bill is a Money Bill as defined in Article 110 of the Constitution. It is proposals of the government for levy of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through this bill.

Vote on Account

Vote-on-account refers to a vote on the accounts of the government. Usually, the annual budget is presented by the first week of February after which it is discussed — details of the budget are scrutinized by a Parliamentary committee and it is finally passed by mid-May. It is taken whereby a government gets parliamentary approval to run the government for a few months, using funds drawn from the Consolidated Fund of India.

Interim Budget

Interim budget is a complete set of accounts, including both expenditure and receipts. It also can be presented by all governments whether incumbent or regular or caretaker, however, Interim Budget becomes of special importance when the elections are underway and a caretaker government is in place. It can also be presented when a new Government has recently sworn in.

Components of Budget

There are 14 components in the Budget , which are mentioned below.

1. Annual Financial Statement

2. Demands for Grants

3. Receipts Budget

4. Expenditure Budget Volume 1

5. Expenditure Budget Volume 2

6. Finance Bill

7. Appropriation Bill

8. Memorandum explaining the provisions in the Finance Bill

9. Budget at a Glance

10. Highlights of the Budget

11. Macro-economic policy framework for the relevant financial year

12. Fiscal Policy Strategy Statement for the financial year

13. Medium term Fiscal Policy Statement

14. Medium term Expenditure Framework Statement

MULTIPLE CHOICE QUESTIONS

1. With regard to union budget which is the correct statement?

I. It is a statement of financial position for a future period, setting out proposed expenditure and means of financing it.

II. Article 111 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year.

Select correct one:

A. Only I

B. Only II

C. Both I & II

D. Neither I nor II

Ans: A

2. The bill to solve problems in infrastructure contracts, PPP and Public Utilities?

A. Skill Development Programme

B. Companies Amendment Bill

C. Public Utility Resolution of Disputes Bill

D. Goods & Services Tax

Ans: C

3. Consider the following statement (s) is/are related to the annual financial statement (Budget)

I. The annual financial statement is divided into three parts, consolidated fund, contingency fund and public account.

II. All revenues raised by the government, money borrowed and receipts from loans given by the government flow into the consolidated fund of India.

III. Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year.

Select the correct statement (s):

A. Only I

B. Only II

C. Both I & II

D. I, II and III

Ans: D

4. Consider the following statement (s) is/are related to the MUDRA Yojna.

I. It has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it.

II. According to this Yojna, loan is issued through Mudra credit card with a pre-assigned credit limit and the repayment tenure is as high as 7 years.

Correct statement:

A. Only I

B. Only II

C. Both I and II

D. Neither I nor II

Ans: C

5. Consider the following statement (s):

I. Budget is the process of preparing business estimates

II. Budgetary control is the means to achieve performance on the basis of budget

Select the correct statement

A. Only I

B. Only II

C. Both I and II

D. Neither I nor II

Ans: B

6. Consider the following statement (s) is/are true about budget, budgeting & budgetary control.

I. Budgetary control is a wider concept whereas Budget and budgeting are narrower concepts

II. Budget is the process of preparing business estimates.

Which of the following statements is/are correct?

A. Only I

B. Only II

C. Both I and II

D. Neither I nor II

Ans: A

7. Which of the following new restructured scheme was launched to increase the governance capabilities of PRIs ( Panchayathi Raj Institutions)?

A. National Skill Development Mission

B. PM Kaushal Vikas Yojana

C. Swaccha Bharat Abhiyaan

D. Rashtriya Gram Swaraj Abhiyan

Ans: D

8. What do you mean by "Fiscal Federalism"?

A. It refers to the devolution of power and responsibilities of national, sub-national, and governments.

B. It refers to the financial relations between units of governments in a federal government system.

C. It is the amount of money that households have available for spending and saving after income taxes have been accounted for.

D. It states that when per capita income increases above the minimum specific level, population tens to increase.

Ans: B

9. Select the incorrect phase of budget process in India.

A. Budget formulation: the preparation of estimates of expenditure and receipts for the ensuing financial year;

B. Budget enactment: approval of the proposed Budget by the Legislature through the enactment of Finance Bill and Appropriation Bill

C. Budget execution: enforcement of the provisions in the Finance Act and Appropriation Act by the government—collection of receipts and making disbursements for various services as approved by the Legislature.

D. Judicial review of budget implementation: audits of government’s financial operations on behalf of the Legislature.

Ans: D

10. First Finance minister of independent India?

A. Shanmukhan Chetty

B. Rajendra Prasad

C. C. D Deshmukh

D. Liaquat Ali Khan

Ans: A

11. Select the correct component of Components of the Union (Central) Budget of India?

A. Revenue Budget

B. Capital Budget

C. Expenditure Budget

D. Both A & B

Ans: D

12. Find out the correct definition of Capital payments?

A. It refers to capital expenditures on construction of capital projects and acquisition of assets like land, buildings machinery and equipment.

B. It refers to capital revenue collected from the construction of capital projects and acquisition of assets like land, buildings machinery and equipment.

C. It is the expenditure incurred on the day-to-day running of the Government and its various departments, and for services that it provides.

D. None of the above

Ans: A

13. Which of the following is not the objective of Indian Budget?

I. To managed and proper distribution of resources

II. To reduce inequalities in income and wealth

III. To achieve social stability

Select the correct statement/s:

A. Only I

B. Only II

C. Only III

D. I, II & III

Ans: C

14. Which of the following is the most likely to cause current account deficit in India?

I. Reduced excise duties on Sports Utility Vehicles

II. Reduced duties on Gold

III. Ban on export of Onions

Code:

A. Both I & II

B. Both II & III

C. Only I & III

D. I, II & III

Ans: D

15. Examine the following statement (s) in the context of Zero Based Budgeting (ZBB).

I. It was first taken up in India in the Union Budget 1987

II. It is based on prioritizing all governing expenditure

III. There is a cost benefit analysis of all schemes and the most important ones are kept alive if they are working well.

Select the correct statement/s

A. I and II

B. I and III

C. II and III

D. All of these

Ans: A

16. What is the difference between ‘vote-on account’ and ‘interim budget’?

I. The provision of a vote-on-account is used by a regular government, while interim budget is provision used by a caretaker government.

II. A vote-on-account only deals with the expenditure in government’s budget while an interim budget include both expenditure and receipts

Select the correct statement/s

A. Only I

B. Only II

C. Both I and II

D. Neither I nor II

Ans: C

17. With reference to Indian Public Finance, consider the following statements (s).

I. Disbursement from Public Account of India are subject to the Vote of Parliament.

II. The Indian Constitution provides for the establishment of a Consolidated Fund, a Public Account and a Contingency Fund for each State.

III. Appropriations and disbursements under the Railways Budget are subject to the same form of parliamentary control as other appropriations and disbursement.

Which of these statements are correct?

A. I and II

B. II and III

C. I and III

D. I, II and III

Ans: B

18. The authorization for the withdrawal of funds from the consolidated Fund of India must come from:

A. The President of India

B. The Parliament of India

C. The Prime Minister of India

D. The Union Finance Minister

Ans: B

19. When annual budget is passed by the Lok Sabha__________.

A. the Budget is modified and presented again

B. the Budget is referred to the Rajya Sabha for suggestions

C. the Union Finance Minister is asked to resign

D. the Prime Minister submits to the consideration of Council of Ministers

Ans: D

20. Arrange the following stages in the enactment of budget in proper order:

I. General discussion

II. Appropriation Bill

III. Finance Bill

IV. Voting of the demands for grant

V. Presentation to legislature

A. I, II, III, IV, V

B. V, I, II, III

C. V, I, IV, III, II

D. V, I, III, IV, II

Ans: B

21. Which of the following documents are presented to the legislature along with the budget?

I. An explanatory memorandum on the budget

II. A summary of demands for grants

III. An Appropriation Bill

IV. A Finance Bill

V. The economic survey

Select the correct option/s:

A. I, III and V

B. I, II and III

C. II, III and V

D. I, II, III and IV

Ans: D

22. The word ‘Budget’ is mentioned in which of the following Articles of the Constitution of India:

A. Art. 266

B. Art. 112

C. Art. 265

D. None

Ans: D

23. The budget was formally introduced in India in:

A. 1860

B. 1947

C. 1950

D. 1868

Ans: A

24. The correct statements about Public Account of India are:

I. The public account is the fund to which all public moneys received by or on behalf of the government are credited.

II. No legislative appropriation is required for payments from the Public Account of India.

III. Legislative appropriation is required for payments from the Public Account of India.

IV. All public moneys, other than those credited to the Consolidated Fund of India, which are received by or on behalf of the government are credited to the Public Account of India.

V. It is operated by executive action.

A. I, II and V

B. I, III and V

C. II, IV and V

D. II and IV

Ans: C

25. Which of the following social campaign of the Government of India that aims to generate awareness and improve the efficiency of welfare services intended for girls?

A. Beti Bachao, Beti Padhao

B. Gender sensitisation

C. Ladli

D. Swachchha Bharat Mission

Ans: A