Budget Quiz Questions with Answers

Take this free Budget Quiz and test your knowledge of the Budget. This Budget Quiz has 25 multiple-choice questions (MCQs) with answers.

Question 1: Which of the following comes under non-plan expenditure?

1. Subsidies
   
2. Interest Payments
   
3. Defence expenditure
   
4. Maintenance expenditure for the infrastructure created in the previous plans
   

Choose the correct answer using the codes given below.

(A) 1 and 2

(B) 1 and 3

(C) 2 and 4

(D) 1, 2, 3 and 4

Question 2: Which of the following are among the non-plan expenditures of the Government of India?

1. Defence expenditure
2. Subsidies
3. All expenditures linked with the previous plan periods
4. Interest payment

(A) 1 and 2

(B) 1 and 3

(C) 2 and 4

(D) 1, 2, 3 and 4

Question 3: Economic Survey in India is published officially, every year by the ___________.

(A) Reserve Bank of India

(B) Planning Commission of India

(C) Ministry of Finance, Government of India

(D) Ministry of Industries, Government of India

Question 4: If interest payment is added to primary deficit, it is equivalent to ____________.

(A) Budget deficit

(B) Fiscal deficit

(C) Deficit financing

(D) Revenue deficit

Question 5: ….. is the difference between total receipts and total expenditure.

(A) Capital deficit

(B) Budget deficit

(C) Fiscal deficit

(D) Revenue deficit

Question 6: In the Budget of Government of  India, Fiscal deficit less interest payment means ___________.

(A) Deficit financing

(B) Budget deficit

(C) Fiscal deficit

(D) Primary deficit

Question 7: Fiscal deficit implies __________.

(A) Total expenditure – (Revenue receipts + Recovery of Loans + Receipts from disinvestment)

(B) Total expenditure – Total receipts

(C) Total expenditure – (Revenue receipts + Receipts from disinvestment)

(D) Total expenditure – Disinvestment receipts

Question 8: The largest item of expenditure in the current account of Central Government budget is __________.

(A) Defence expenditure

(B) Subsidies

(C) Interest payment

(D) Expenditure on social services

Question 9: The largest item of public expenditure in the Union Budget in recent years has been __________.

(A) Defence expenditure

(B) Interest payments

(C) Major subsidies

(D) Capital expenditure

Question 10: Which one of the following forms the largest share of deficit in Govt. of India budget?

(A) Primary deficit

(B) Fiscal deficit

(C) Revenue deficit

(D) Budgetary deficit

Question 11: Which of the following deficit gives major contribution to total deficit of Government of India?

(A) Revenue deficit

(B) Budgetary deficit

(C) Fiscal deficit

(D) Primary deficit

Question 12: In the Union Budget in India, which one of the following is the largest in amount?

(A) Plan Expenditure

(B) Non-Plan Expenditure

(C) Revenue Expenditure

(D) Capital Expenditure

Question 13: What is the effect of deficit financing on economy?

(A) Reduction in taxes

(B) Increase in wages

(C) Increase in money supply

(D) Decrease in money supply

Question 14: Consider the following.

1. Market borrowing
   
2. Treasury bills
   
3. Special securities issued to RBI

Which of these is/are component(s) of internal debt?

(A) Only 1

(B) 1 and 2

(C) Only 2

(D) 1, 2 and 3

Question 15: With reference to the Indian Public Finance, consider the following statements.

1. External liabilities reported in the Union Budget are based on historical exchange rates.
   
2. The continued high borrowing has kept the real interest rates high in the economy.
   
3. The upward trend in the ratio of Fiscal deficit of GDP a recent years has an adverse effect on private investment.
   
4. Interest payment is the single largest component of the non plan revenue expenditure of the Union Government.

Which of these statements are correct?

(A) 1, 2 and 3

(B) 1 and 4

(C) 2, 3 and 4

(D) 1, 2, 3 and 4

Question 16: A country is said to be a debt trap if ___________.

(A) it has to borrow to make interest payments on outstanding loans

(B) it has to borrow to make interest payments on to standing loans

(C) it has been refused loans or aid by creditors abroad

(D) the World Bank charges a very high rate of interest on outstanding as well as new loans

Question 17: A larger part of the fiscal deficit in the Union Budgets is filled by ___________.

(A) Tax revenue

(B) Domestic borrowings

(C) Foreign borrowing

(D) Printing paper currency

Question 18: As compared to revenue deficit, fiscal deficit will always remain ____________.

(A) higher

(B) lower

(C) some

(D) All of the above

Question 19: What was the estimated social sector expenditure in budget 2018- 19?

(A) 1.36 lakh crore

(B) 1.37 lakh crore

(C) 1.38 lakh crore

(D) 1.39 lakh crore

Question 20: Which one of the following is not included in the revenue account of Union Budget?

(A) Interest Receipts

(B) Tax Receipts

(C) Profits and Dividends of Government Department and Public Undertakings

(D) Small saving

Question 21: What was the size of the Budget of Uttar Pradesh for 2018-19?

(A)824384.53 crores

(B)428354.53 crores

(C)428384.52 crores

(D)824254.52 crores

Question 22: Which one of the following did not take place in the Union Budget for 2017-18?

(A)Elimination of the classification of expenditure into ‘Plan’ and
‘Non-Plan’

(B) Increase in the number of centrally sponsored schemes

(C) Bringing Railway finances into the mainstream budgeting

(D) Advancing the date of Union Budget almost by a month

Question 23: Match List-I with List-II and select the correct answer using the codes given below the lists.

Code

Question 24:

• Assertion (A): Fiscal deficit is greater than budgetary deficit.
• Reason (R): Fiscal deficit is borrowing from the Reserve Bank of India plus other liabilities of Government to meet its expenditure.

In the context of the given two statements, which of the following is correct? 

(A)Both (A) and (R) are true and (R) is the correct explanation of (A)

(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

(C) (A) is true, but (R) is false

(D) (A) is false, but (R) is true

Question 25: Consider the following statements and select the correct answer from the codes given below.

• Assertion (A): Zero-Base Budget has been introduced in India.
  
• Reason (R): Zero-Base Budget technique involves critical review of every scheme for which a budgetary provision is made.

(A) Both (A) and (R) are true and (R) is the correct explanation of (A)

(B)Both (A) and (R) are true, but (R) is not the correct explanation of (A)

(C) (A) is true, but (R) is false

(D) (A) is false, but (R) is true

Question 26: Consider the following statements and select the correct answer using the codes given below.

• Assertion (A): There is a history of fiscal deficit in Central Government budgets in India.
  
• Reason (R): Indian agriculture has enjoyed large amount of subsidies compared to developed countries. 

(A) Both (A) and (R) are true and (R) is the correct explanation of (A)

(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

(C) (A) is true, but (R) is false

(D) (A) is false, but (R) is true

Question 27:As per Union Budget 2018-19, match List-I with List-II and select the correct answer from the codes
given below.

Code