List of top Economics Questions on Government Budget and the Economy

Column-I	Column-II
(a) Non-tax Revenue	(ii) Free-rider
(b) Indirect Tax	(i) Goods and Services Tax
(c) Capital expenditure	(iii) Borrowings
(d) Private goods	(iv) Rivalrous in nature

"Taxation is an effective tool to reduce the inequalities of income." Justify the given statement with valid reasons.

"Under the Ayushmaan Bharat Scheme, the government provides free medical treatment to the poorer section of the society.
"Identify and explain the nature of budget expenditure and its objective in the Ayushmaan Bharat Scheme statement.

Explain how, Goods and Services Tax (GST) has simplified the multiplicity of taxes on goods and services.

The main objective of measuring the primary deficit is to highlight present ___________.
(Choose the correct option to fill in the blank)

Read the following statements – Assertion (A) and Reason (R). Choose the correct alternative from the options given below:
Assertion (A): Direct taxes are imposed on income/profits of individuals/companies.
Reason (R): The burden of payment of direct taxes cannot be shifted to any other entity.

Read the following statements carefully :
Statement 1: Public goods are those goods for which the payments are made by all the entities in the country.
Statement 2: Private goods are those goods which are provided by the government of a country at subsidised rates.
In the light of the given statements, choose the correct option from the following :

Read the following statements carefully :
Statement 1: The government may reduce the repo rate, to control deflationary gap prevailing in the economy.
Statement 2: The government may reduce the deflationary gap, by selling off government securities (G-Sec) in the open market.
In the light of the given statements, choose the correct option from the following :

"As per the Economic Survey of India 2022 – 23, due to the outbreak of geopolitical conflict, the result was higher international prices for fertilizer and fuel. Thus, there was a higher fuel and fertilizer subsidy requirement for supporting the people."
On the basis of the given text, identify and explain the indicated objective of the government budget.

Read the following statements carefully :
Statement 1 : Foreign aids are the capital receipts for the government.
Statement 2 : Disinvestments may lead to a decrease in the assets of the government.
In the light of the given statements, choose the correct option from the following :

According to the data presented in the Union Budget 2023 – 24, the total receipts of the government (other than borrowings), and the total expenditure are estimated as ₹ 20 lakh crore and ₹ 45 lakh crore respectively. Therefore, the value of ........... deficit would be ₹ 25 lakh crore. (Choose the correct option to fill in the blank)

“In the recent Budget the Government allocated funds for construction of new metro lines in smart cities to improve public transportation and reduce pollution.”
Identify the nature of government expenditure \& its objective.

“A significant proportion of subsidies on fertilizer was a key component of the fiscal statement of the Central Government for year 2023–24.”
Identify the nature of government expenditure and its objective.

Read the following statements: Assertion (A) and Reason (R). Choose the correct option from those given below:
Assertion (A): Public goods are those goods that are collectively consumed by the public.
Reason (R): Public goods are excludable and rivalrous in nature.

Read the following text carefully:
Union Food and Consumer Affairs Minister said that the Central Government has taken many proactive steps in the past few years to control retail prices of food items. He said that the government aims to keep inflation under control without compromising the country’s economic growth. Retail inflation inched up to a three-month high of 5.55% in November 2023 driven by higher food prices. Inflation has been declining since August 2023, when it touched 6.83%. 140 new price monitoring centres had been set up by the Central Government to keep a close watch on wholesale and retail prices of essential commodities. The Government has banned the export of many food items like wheat, broken rice, non-basmati white rice, onions etc. It has also reduced import duties on edible oils and pulses to boost domestic supply and control price rise. On the basis of the given text and common understanding,
answer the following questions:

Define Government Budget.

What is meant by Fiscal policy?

Financial year in India is

Which of the following is a component of Budget?

Which of the following is a component of Budget Receipts?

Which fiscal measure is to be adopted in correcting inflationary gap?

Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative given below: Assertion (A): Goods and Services Tax (GST) was implemented by the Government of India on 8th November, 2016. Reason (R): GST was introduced to implement a unified indirect tax system in India. (Choose the correct alternative)

Distinguish between ‘Public Provision’ and ‘Public Production’.