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All questions of Budget and Economic Survey for CUET Commerce Exam

In 1969, which Finance Minister presented the Union Budget that proposed the nationalization of 14 major Indian banks?
  • a)
    Morarji Desai
  • b)
    Indira Gandhi
  • c)
    Y.B. Chavan
  • d)
    C.D. Deshmukh
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Union Budget of 1969


  • Finance Minister: Indira Gandhi

  • Proposal: Nationalization of 14 major Indian banks

  • Significance: This move was aimed at bringing about social welfare and reducing economic disparities in the country.

  • Impact: The nationalization of banks played a crucial role in expanding the reach of banking services to rural areas and promoting financial inclusion.

Clear all your doubts with EduRev

In which year was the new currency symbol of the Indian rupee officially adopted?
  • a)
    2018
  • b)
    2000
  • c)
    2010
  • d)
    1995
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • In 2010 the new currency symbol of the Indian rupee was officially adopted.
  • The symbol of the Indian Rupee typifies India's international identity for money transactions and economic strength.
    • The Indian Rupee sign is an allegory of Indian ethos.
    • The symbol is an amalgam of Devanagari "Ra" and the Roman Capital "R" with two parallel horizontal stripes running at the top representing the national flag and also the "equal to" sign. The Indian Rupee sign was adopted by the Government of India on 15th July 2010.
    • The symbol, conceptualized and designed by Udaya Kumar, a postgraduate in Design from the Indian Institute of Technology Bombay, has been chosen from thousands of concept entries received by the Ministry of Finance through an open competition among resident Indian nationals.
    • The process of establishing and implementing this new identity is underway through various digital technology and computer applications.

What of the following period is covered in the Union Budget?
  • a)
    April to March
  • b)
    January to December
  • c)
    July to June
  • d)
    October to September
Correct answer is option 'A'. Can you explain this answer?

Sushil Kumar answered
Explanation:


  • Period covered in the Union Budget: April to March


Detailed


  • The Union Budget in India covers the fiscal year, which runs from April 1st to March 31st of the following year.

  • During this period, the government presents its budget for the upcoming financial year, outlining its revenue and expenditure plans.

  • This budget includes allocations for various sectors, taxes, subsidies, and other financial aspects of the government's functioning.

  • It is an important document that sets the financial direction for the government and impacts various stakeholders in the economy.

  • Overall, the Union Budget for India covers the period from April to March each year.

Which state has become the largest manufacturing hub in the country as per the RBI?
  • a)
    Maharashtra
  • b)
    Gujarat
  • c)
    Tamil Nadu
  • d)
    Uttar Pradesh
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
  • Gujarat state’s Gross Value Addition (GVA) has grown at 15.9 per cent annually (in manufacturing) on average between FY’12 and FY’20 to touch Rs 5.11 lakh crore, according to data released by the Reserve Bank of India.
  • Gujarat displaced Maharashtra state.
  • Maharashtra’s annual growth rate during the period was 7.5 per cent, taking the state’s total manufacturing GVA to Rs 4.34 lakh crore in FY’20.
  • Maharashtra continues to lead as the nation’s biggest services hub.
  • Rajasthan, Telangana, and Andhra Pradesh respectively were among the worst performer states which were already among the top ten.

How does the revised fiscal deficit in Budget 2024 compare to the previous estimate?
  • a)
    Decreased by 1.3%
  • b)
    Increased by 0.5%
  • c)
    Remained unchanged
  • d)
    Increased by 1.8%
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Revised Fiscal Deficit in Budget 2024 Comparison:


  • Original Estimate: The previous estimate of the fiscal deficit in Budget 2024 was X%.

  • Revised Estimate: The revised fiscal deficit in Budget 2024 is Y%, which is different from the original estimate.


Comparison of Revised Fiscal Deficit:


  • Decreased by 1.3%: The revised fiscal deficit in Budget 2024 has decreased by 1.3% compared to the previous estimate.

  • Increased by 0.5%: The revised fiscal deficit in Budget 2024 has increased by 0.5% compared to the previous estimate.

  • Remained Unchanged: The revised fiscal deficit in Budget 2024 has remained unchanged from the previous estimate.

  • Increased by 1.8%: The revised fiscal deficit in Budget 2024 has increased by 1.8% compared to the previous estimate.


Therefore, the correct answer is option B: Increased by 0.5%. This means that the revised fiscal deficit in Budget 2024 is 0.5% higher than the previous estimate.

Which of the following is true about the term Hawkish Stance used in economy?
  • a)
    It indicates a willingness on the part of the central bank to expand money supply and cut interest rates.
  • b)
    It indicates that the central bank’s top priority is to keep the inflation low.
  • c)
    The central bank typically adopts such a policy when growth needs policy support and inflation is not the immediate concern.
  • d)
    This stance is typically adopted when the policy priority is equal on both inflation and growth.
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
  • A hawkish stance indicates that the central bank’s top priority is to keep the inflation low.
  • During such a phase, the central bank is willing to hike interest rates to curb money supply and thus reduce the demand.
  • A hawkish policy also indicates tight monetary policy.
  • When the central bank increases rates or 'tightens' the monetary policy, banks too increase their rate of interest on loans to end borrowers which, in turn, curbs demand in the financial system. Hence, option B is correct.

Nirmala Sitharaman presented the Union Budget in the year 2024. At what time did she do so?
  • a)
    5th time
  • b)
    7th time
  • c)
    6th time
  • d)
    4th time
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
Nirmala Sitharaman presented the Union Budget for the first time in 2019. Since then, she has presented the Union Budget annually until 2023. Therefore, by 2024, she would have presented the Union Budget for the sixth time.

Consider the following Statements regarding Economic Survey 2022-23:
  1. It is prepared by Budget Division of Department of Economic Affairs.
  2. It is one of the documents mandated under FRBM Act 2003.
Select the correct answer using the code given below:
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'D'. Can you explain this answer?

Sushil Kumar answered
  • The Economic Survey of India is an annual document released by the Ministry of Finance. It is usually presented in Parliament a day before the Union Budget.
  • It is prepared by the Economics Division of the Department of Economic Affairs (DEA) under the guidance of the Chief Economic Advisor. Hence, statement 1 is not correct.
  • Statements mandated under the FRBM Act (Fiscal Responsibility and Budget Management Act) 2003: (a) Macro-Economic Framework Statement (b) Fiscal Policy Strategy Statement (c) Medium Term Fiscal Policy Statement. Hence, statement 2 is not correct.

What is the main challenge mentioned in the statement regarding Compressed Biogas (CBG) blending mandate?
  • a)
    Lack of government support for CBG production.
  • b)
    Difficulty in enforcing the blending mandate.
  • c)
    Limited availability and transport challenges for CBG.
  • d)
    Insufficient awareness about the benefits of CBG blending.
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
Main Challenge in Compressed Biogas (CBG) Blending Mandate


  • Limited Availability: One of the main challenges mentioned in the statement is the limited availability of CBG. This can be attributed to the low production of CBG facilities and the insufficient infrastructure for its distribution.

  • Transport Challenges: Another key challenge is the transport challenges associated with CBG. The lack of a well-established transport network for CBG can hinder its distribution to blending facilities.


These challenges pose significant obstacles to the successful implementation of the CBG blending mandate, as they impact the overall supply chain and availability of CBG for blending with conventional fuels.

The concept of Zero-Based Budgeting was introduced in which Union Budget?
  • a)
    2018-19
  • b)
    2017-18
  • c)
    2016-17
  • d)
    2015-16
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
Explanation of Zero-Based Budgeting in Union Budget


  • Introduction of Zero-Based Budgeting: Zero-Based Budgeting was introduced in the Union Budget of 2016-17.

  • Definition of Zero-Based Budgeting: Zero-Based Budgeting is a budgeting technique where all expenses must be justified for each new period. Unlike traditional budgeting methods that only consider incremental changes, zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs.

  • Objective of Zero-Based Budgeting: The main objective of zero-based budgeting is to reduce wasteful spending and ensure that all expenses are necessary and efficient.

  • Implementation in Union Budget: By introducing zero-based budgeting in the Union Budget of 2016-17, the government aimed to streamline budget allocations, prioritize spending on essential services, and improve overall fiscal discipline.

  • Impact of Zero-Based Budgeting: Zero-based budgeting has helped the government in identifying areas of inefficiency and reallocating resources to where they are needed the most. It has also encouraged better accountability and transparency in budgeting processes.

The Union Budget of India is also known as:
  • a)
    Fiscal Statement
  • b)
    Economic Plan
  • c)
    Annual Financial Plan
  • d)
    None of the above
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
Explanation:


  • Union Budget of India: The Union Budget of India is an annual financial statement presented by the Government of India in Parliament, detailing the revenue and expenditure of the upcoming fiscal year.

  • Also Known As: The Union Budget of India is also known as the Annual Financial Plan.

  • Fiscal Statement: The Union Budget can also be referred to as a Fiscal Statement as it outlines the government's finances for the upcoming year.

  • Economic Plan: While the Union Budget does include economic planning elements, it is more commonly known as the Annual Financial Plan.

  • None of the Above: This option is incorrect as the Union Budget is indeed known as the Annual Financial Plan.

Which of the following is planning to regulate Financial Influencers (Finfluencers) in India?
  • a)
    RBI
  • b)
    SEBI
  • c)
    NABARD
  • d)
    None of the above
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
  • The Securities and Exchange Board of India (SEBI) is reportedly working on a framework to regulate financial influencers.
  • The framework is expected to include the following provisions:
    • Registration and licensing: Financial influencers would need to register with SEBI and obtain a license to operate in India.
    • Education and training: Financial influencers would need to undergo education and training on financial markets and products.
    • Disclosure requirements: Financial influencers would need to disclose their conflicts of interest and any remuneration they receive for promoting financial products or services.
    • Complaints mechanism: Investors would have a mechanism to lodge complaints against financial influencers who violate the regulations.

PM-PRANAM scheme was announced in Budget 2023. What is the objective of the scheme?
  • a)
    To increase vaccine manufacturing in India
  • b)
    To reduce the use of chemical fertilizers in agriculture
  • c)
    To increase India's electronic export market 
  • d)
    None of the above
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
  • Under the scheme, the government aims to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers. 
  • The main objective of the scheme is to reduce the use of chemical fertilizers in agriculture.
  • 500 new 'waste to wealth' plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme will be established for promoting circular economy.
  • These will include 200 compressed biogas (CBG) plants, including 75 plants in urban areas, and 300 community or cluster-based plants at total investment of Rs 10,000 crore.
  • Also, a 5 per cent CBG mandate will be introduced for all organisations marketing natural and biogas.
  • For the collection of bio-mass and distribution of bio-manure, appropriate fiscal support will be provided.
  • Bhartiya Prakritik Kheti Bio-Input Resource Centres:
    • To facilitate 1 crore farmers to adopt natural farming, 10,000 Bio-Input Resource Centres will be set up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.
  • The government has also secured Rs 35,000 crore to support the transition towards energy efficiency and security.

Who was the first woman Finance Minister of India to present the Union Budget?
  • a)
    Indira Gandhi
  • b)
    Nirmala Sitharaman
  • c)
    Arun Jaitley
  • d)
    Pranab Mukherjee
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
First woman Finance Minister of India


  • Nirmala Sitharaman: Nirmala Sitharaman became the first woman Finance Minister of India to present the Union Budget in 2019. She is also the second woman to hold the office of the Finance Minister after Indira Gandhi.

  • Indira Gandhi: Although Indira Gandhi served as the Prime Minister of India, she was not the Finance Minister who presented the Union Budget.

  • Arun Jaitley and Pranab Mukherjee: Arun Jaitley and Pranab Mukherjee were both male Finance Ministers of India who presented the Union Budget during their respective tenures.


By analyzing the options provided, it is clear that Nirmala Sitharaman was the first woman Finance Minister of India to present the Union Budget. This historic moment marked a significant milestone for gender equality in Indian politics.

How much amount have been allocated to the Khelo India Programme in Union Budget 2022?
  • a)
    174 crore
  • b)
    874 crore
  • c)
    974 crore
  • d)
    1004 crore
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • The central government has allocated Rs 3062.60 crore for the financial year 2022-23, an increase of Rs 305.58 crore.
  • In the previous financial year, the government had allocated Rs 2596.14 crore for sports, which was later revised to Rs 2757.02 crore. 
  • The financial allocation towards the Khelo India programme, which got Rs 657.71 crore in the last budget, was increased to Rs 974 crore.

What is the significance of the “Rolling Budget”?
  • a)
    It was introduced in the 1980s for long-term economic planning
  • b)
    It allows for adjustments and updates throughout the fiscal year
  • c)
    It was the first budget presented after economic liberalization in 1991
  • d)
    It focuses on reducing the fiscal deficit
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Significance of the Rolling Budget:


  • Allows for adjustments and updates: The rolling budget allows organizations to make adjustments and updates throughout the fiscal year. This flexibility is crucial in a dynamic business environment where changes can occur rapidly.


  • Enhances accuracy: By incorporating new information and data as the year progresses, the rolling budget can provide a more accurate financial forecast compared to traditional static budgets.


  • Encourages forward-looking planning: With the rolling budget, organizations are encouraged to take a more proactive and forward-looking approach to financial planning. This helps in identifying potential issues early on and taking corrective actions in a timely manner.


  • Improves decision-making: The ability to adjust the budget in real-time enables better decision-making based on the most up-to-date information available. This can lead to more informed and strategic business decisions.


  • Increases accountability: Rolling budgets promote accountability as they require regular reviews and revisions. This ensures that budget holders are actively involved in the budgeting process and accountable for meeting their financial targets.

What is the main reason behind the increased revenue buoyancy in India?
  • a)
    The decision to share data between the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes & Customs (CBIC) on an automatic and regular basis.
  • b)
    The reduction in tax evasion through multiple consistency checks in the digital systems.
  • c)
    The increase in direct tax collections is due to better income reporting.
  • d)
    The introduction of faceless assessment and appeal systems.
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
  • One prominent reason behind the higher revenue buoyancy is the introduction of technology-backed tax governance reforms for simplifying tax processes, enhancing compliance, and improving fraud detection systems.
  • The faceless assessment and appeal systems no longer require a physical interface between taxpayers and the Income Tax department. Moreover, multiple consistency checks possible with integrated digital systems reduce tax evasion.
    • As an illustration, the GST return filing mechanism results in better income reporting, leading to higher direct tax collections.
  • In this regard, the decision to share data and information between CBDT and CBIC on an automatic and regular basis is a promising reform, and it would result in efficiency gains in the tax system.
    • These reforms augur well for future economic growth and future resource mobilisation in the economy.

What measures did the government and the Reserve Bank of India (RBI) take to help the financial sector recoup balance sheet stress during the 2010s?
  • a)
    Recapitalisation of Public Sector Banks (PSBs)
  • b)
    Amendment to the SARFAESI Act 2002
  • c)
    Implementation of the Insolvency and Bankruptcy Code
  • d)
    All of the above
Correct answer is option 'D'. Can you explain this answer?

Sushil Kumar answered
  • As investments made by companies went sour, it impaired their ability to repay bank loans. Hence, banks’ non-performing assets began to rise.
    • That set-in motion a long period of repair of the financial and non-financial sector balance sheets in the second half of the last decade.
  • The government and the RBI took several policy initiatives to help the financial sector recoup the balance sheet stress during the 2010s.
  • Some of these such as the amendment to the SARFAESI Act 2002, implementation of the Insolvency and Bankruptcy Code (IBC), launch of ‘Asset Quality Review’ (AQR), introduction of prompt corrective action (PCA) framework, recapitalisation of Public Sector Banks (PSB), and merger of PSBs among others, helped in cleaning up the balance sheets of banks/corporates.
  • Hence, option D is correct.

In the Union Budget, what is the term used for the difference between total revenue and total expenditure?
  • a)
    Fiscal Deficit 
  • b)
    Revenue Deficit
  • c)
    Budget Deficit
  • d)
    Economic Deficit
Correct answer is option 'A'. Can you explain this answer?

Sushil Kumar answered
Fiscal Deficit:


  • Definition: Fiscal deficit is the difference between total revenue and total expenditure of the government.

  • Significance: It indicates the total borrowing requirements of the government to meet its expenditure.


Types of deficits:


  • Revenue Deficit: It is the excess of revenue expenditure over revenue receipts.

  • Budget Deficit: It is the difference between total revenue and total expenditure of the government.

  • Economic Deficit: It is the difference between total expenditure and total income of the government.


Importance of Fiscal Deficit:


  • It reflects the overall health of the economy and the government's financial position.

  • High fiscal deficit can lead to inflation and a decrease in the value of the currency.

  • It is used as a measure of the government's fiscal discipline and sustainability.


Conclusion:


  • Fiscal deficit is a crucial indicator of the government's financial health and management of the economy.

  • It is important for policymakers to monitor and control fiscal deficit to ensure economic stability and growth.

Who presented the “Black Budget” in 1957, known for proposing heavy taxes and increased public spending?
  • a)
    Morarji Desai
  • b)
    T.T. Krishnamachari
  • c)
    C.D. Deshmukh
  • d)
    Jawaharlal Nehru
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Explanation:


  • T.T. Krishnamachari: He presented the "Black Budget" in 1957, which was known for proposing heavy taxes and increased public spending.

  • Morarji Desai: He was a prominent Indian independence activist and later served as the Prime Minister of India.

  • C.D. Deshmukh: He was a prominent Indian civil servant and the first Indian to be appointed as the Governor of the Reserve Bank of India.

  • Jawaharlal Nehru: He was the first Prime Minister of India and played a crucial role in shaping the country's economic policies.


Therefore, the correct answer is T.T. Krishnamachari who presented the "Black Budget" in 1957.

In which year was the first Union Budget of independent India presented?
  • a)
    1945
  • b)
    1947
  • c)
    1950
  • d)
    1952
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
First Union Budget of Independent India


  • Year: 1950

  • Explanation: The first Union Budget of independent India was presented in the year 1950.

  • Significance: This budget marked a significant moment in India's history as it laid the foundation for the country's economic policies and financial planning post-independence.

  • Key Points:

    • It outlined the government's revenue and expenditure for the upcoming fiscal year.

    • It introduced various policies to promote economic growth and development in the newly independent nation.

    • It set the tone for future budgetary decisions that would shape India's economy in the years to come.




Conclusion


  • Therefore, the first Union Budget of independent India was presented in the year 1950, setting the stage for the country's economic trajectory post-independence.

How has digitalization impacted the economic growth in India between 2014 and 2019?
  • a)
    It has reduced overall economic growth.
  • b)
    The economy has grown slower and declined further.
  • c)
    A faster rate of growth has been recorded in the economy compared to other factors that impact the economy.
  • d)
    Initially, the economic growth was constant but later increased.
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
India’s Digital Economy:
  • Besides the push to physical infrastructure, the government’s emphasis on developing public digital infrastructure during the last few years has been a game changer in enhancing the economic potential of individuals and businesses.
  • A recently published article in the RBI’s Monthly Bulletin estimates that India’s core digital economy has grown at 2.4 times the overall economic growth between 2014 and 2019.
  • With its strong forward linkages to the non-digital sectors, digitalisation strengthens potential economic growth through various channels such as higher financial inclusion, greater formalisation, increased efficiencies and enhanced opportunities.
Hence, option C is correct.

Which of the following best describes the labour force participation rate?
  • a)
    The percentage of the working-age population out of the total population.
  • b)
    The percentage of the working-age population that is employable.
  • c)
    The percentage of the working-age population that is employed or actively seeking employment.
  • d)
    The percentage of the working-age population that is part of formal sector.
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • According to the CMIE (Centre for Monitoring Indian Economy), the labour force consists of people who are 15 years or older, and belong to either of the following two categories:
    • Are Employed
    • Are unemployed and are willing to work and are actively looking for a job.
  • These two categories have people “demanding” jobs. This demand is what LFPR refers to. Hence, option C is correct.

Which of the following Budget is India's first Paperless Budget Presentation?
  • a)
    Budget 2020-2021
  • b)
    Budget 2019-2020
  • c)
    Budget 2021-2022
  • d)
    Budget 2018-2019
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • The Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman presented the Union Budget 2021-22 in Parliament on February 1, 2021, which is the first budget of this new decade and also a digital one in the backdrop of the unprecedented COVID-19 crisis.
  • Minister stated that Budget proposals will further strengthen the Sankalp of Nation First, Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good Governance, Opportunities for youth, Education for All, Women Empowerment, and Inclusive Development among others.
  • This is the First Paperless Budget in India.

The allocation towards health and well-being was increased by ______ over the previous year in Union Budget 2021-22.
  • a)
    140%
  • b)
    125%
  • c)
    137%
  • d)
    100%
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • The allocation towards health and well-being was increased by 137% over the previous year in Union Budget 2021-22. 
  • According to analysts, one of the sectors that have continually been neglected is "health."
  • However, in her Budget 2021-22, Union Finance Minister Nirmala Sitharaman announced a 137 percent increase in the allocation for health from the previous year's budget estimate of over Rs. 94,000 crore (Rs. 94,452 crore) and a 118 percent increase from the previous year's revised budget of over Rs. 1.02 lakh crore (Rs. 1,02,873 crore).

What is the revised estimate of the fiscal deficit as a percentage of GDP in Budget 2024?
  • a)
    4.2%
  • b)
    5.8%
  • c)
    6.5%
  • d)
    7.1%
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Revised Estimate of Fiscal Deficit in Budget 2024


  • Original Estimate: The original estimate of the fiscal deficit as a percentage of GDP in Budget 2024 was 5.8%.

  • Revised Estimate: The revised estimate of the fiscal deficit as a percentage of GDP in Budget 2024 is 6.5%.

  • Reason for Revision: The fiscal deficit was revised upwards due to increased government spending and lower than expected revenue collections.

  • Impact: A higher fiscal deficit can lead to concerns about the government's ability to meet its financial obligations and may put pressure on inflation and interest rates.

  • Policy Implications: The government may need to implement measures to control spending, boost revenue generation, and manage the fiscal deficit to ensure economic stability.

Which of the following can be a reason for rising Bond Yield?
  1. Increase in interest rate.
  2. Decrease in bond prices.
Select the correct answer using the code given below:
  • a)
    1 only
  • b)
    2 only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • Most bonds pay a fixed interest rate that becomes more attractive if interest rates fall, driving up demand and the price of the bond.
  • Conversely, if interest rates rise, investors will no longer prefer the lower fixed interest rate paid by a bond, resulting in a decline in its price.
  • Thus, bonds have an inverse relationship to interest rates. When the cost of borrowing money rises (when interest rates rise), bond prices usually fall, and vice-versa. Further, Decrease in Bond prices causes the yield to increase. Hence, option C is correct.

India is expected to grow between 6.5 and 7.0% in FY23. Which of the following have been India’s growth drivers in FY23 according to Economic survey?
  1. Rebound in domestic consumption.
  2. Thrust on Public Capital expenditure.
  3. It is due to advantage of ‘Base effect’.
Select the correct answer using the code given below:
  • a)
    1 and 2 only
  • b)
    2 and 3 only
  • c)
    1 only
  • d)
    1, 2 and 3
Correct answer is option 'A'. Can you explain this answer?

Sushil Kumar answered
  • Despite the downward revision, the growth estimate for FY23 is higher than for almost all major economies and even slightly above the average growth of the Indian economy in the decade leading up to the pandemic.
  • IMF estimates India to be one of the top two fast-growing significant economies in 2022. Despite strong global headwinds and tighter domestic monetary policy, if India is still expected to grow between 6.5 and 7.0%, and that too without the advantage of a base effect, it is a reflection of India’s underlying economic resilience. Hence, statement 3 is not correct.
  • The rebound in consumption has also been supported by the release of “pent-up” demand, a phenomenon not again unique to India but nonetheless exhibiting a local phenomenon influenced by a rise in the share of consumption in disposable income. Hence, statement 1 is correct.
  • Capex thrust in the last two budgets of the Government of India was not an isolated initiative meant only to address the infrastructure gaps in the country. It was part of a strategic package aimed at crowding-in private investment into an economic landscape broadened by the vacation of non-strategic PSEs (disinvestment) and idling public sector assets. Hence, statement 2 is correct.

The Union Budget is presented in which house of the Parliament?
  • a)
    Lok Sabha 
  • b)
    Rajya Sabha
  • c)
    Both
  • d)
    None
Correct answer is option 'A'. Can you explain this answer?

Sushil Kumar answered
Union Budget Presentation


  • House of the Parliament: Lok Sabha


Detailed Explanation


  • The Union Budget, also known as the Annual Financial Statement, is presented in the Lok Sabha by the Finance Minister of India.

  • It is one of the most important events in the parliamentary calendar and outlines the government's revenue and expenditure for the upcoming financial year.

  • The Finance Minister presents the budget, which includes details of taxes, allocations for various sectors, and overall economic policies.

  • After the budget is presented in the Lok Sabha, it is then debated and discussed by Members of Parliament before it is approved.

  • Once approved by the Lok Sabha, the budget is then sent to the Rajya Sabha for further discussion and approval.

  • Ultimately, the Union Budget needs to be passed by both houses of Parliament before it becomes law.

Which of the following can be a reason for widening Current Account Deficit?
  1. Increased fossil fuel imports
  2. Growth in FDI inflows
  3. Decrease in exports
Select the correct answer using the code given below:
  • a)
    1 and 2 only
  • b)
    2 and 3 only
  • c)
    1 and 3 only
  • d)
    1, 2 and 3
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • A current account deficit occurs when the total value of goods and services a country imports exceeds the total value of goods and services it exports. Increasing imports and decreasing exports contribute to rising Current Account Deficit. Hence, statement 1 and 3 are correct.
  • The balance of exports and imports of goods is referred to as the trade balance. Trade Balance is a part of ‘Current Account Balance’. According to an earlier report of 2021, High Oil Imports, High Gold Imports are the major driving force, widening the CAD. Whereas FDI inflows promote exports thus it does not contribute to Current Account deficit. Hence, statement 2 is not correct.

The Government of India has set a target of achieving how much solar power capacity by the year 2022?
  • a)
    20 Giga watt
  • b)
    40 Giga watt
  • c)
    80 Giga watt
  • d)
    100 Giga watt
Correct answer is option 'D'. Can you explain this answer?

Sushil Kumar answered
  • The data regarding the generation of power from various renewable energy projects is consolidated by the Central Electricity Authority. 
  • As per the Ministry of New and Renewable Energy (MNRE), the solar projects require around 4 to 5 acres of land per MW.
  • All the commissioned and upcoming renewable energy projects are monitored by MNRE.

The Finance Minister’s Budget speech usually begins with which traditional Indian salutation?
  • a)
    Vande Mataram
  • b)
    Jai Hind
  • c)
    Om Shanti
  • d)
    Satyameva Jayate 
Correct answer is option 'D'. Can you explain this answer?

Sushil Kumar answered
Traditional Indian Salutation in Finance Minister's Budget Speech


  • Introduction: The Finance Minister's Budget speech is an important event in India's political calendar where the government outlines its financial plans for the upcoming year.


  • Traditional Indian Salutation: The Finance Minister's Budget speech usually begins with the traditional Indian salutation "Satyameva Jayate."


  • Meaning of "Satyameva Jayate": This phrase is in Sanskrit and translates to "Truth alone triumphs." It is a mantra from the ancient Indian scripture Mundaka Upanishad, emphasizing the importance of truth and honesty.


  • Significance: By starting the Budget speech with "Satyameva Jayate," the Finance Minister is setting the tone for transparency, integrity, and accountability in the government's financial decisions.


  • Symbolism: This salutation symbolizes the government's commitment to upholding truth and righteousness in its economic policies and budget allocations.

How can investments in preventing foot and mouth diseases contribute to improving India’s milch animal yield?
  • a)
    By reducing the number of milch animals.
  • b)
    By increasing the global average milch animal yield.
  • c)
    By enhancing the quality of feed for milch animals.
  • d)
    By addressing a key factor limiting milch animal productivity.
Correct answer is option 'D'. Can you explain this answer?

Sushil Kumar answered
Investments in Preventing Foot and Mouth Diseases and Improving Milch Animal Yield in India


  • Addressing a Key Factor Limiting Milch Animal Productivity: Foot and mouth diseases can significantly impact the health and productivity of milch animals. By investing in preventing these diseases, it helps address a key factor that limits milch animal productivity.

  • Reducing the Number of Milch Animals: By preventing foot and mouth diseases, the number of milch animals affected by these diseases decreases, leading to a healthier population of milch animals overall.

  • Enhancing the Quality of Feed for Milch Animals: Investments in preventing diseases can also lead to improved animal health, which in turn can result in better absorption of nutrients from feed, ultimately contributing to higher milch animal yield.


Overall, investments in preventing foot and mouth diseases play a crucial role in improving India's milch animal yield by addressing key factors that limit productivity, reducing the number of affected animals, and enhancing the quality of feed for better health and performance.

What is the percentage increase in the Defence Outlay as announced in Budget 2024?
  • a)
    5.5%
  • b)
    8.9%
  • c)
    11.1%
  • d)
    14.5%
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered


  • Step 1: Calculate the percentage increase in Defence Outlay

  • Step 2: Identify the Defence Outlay in the previous year and the Defence Outlay in Budget 2024

  • Step 3: Use the formula: Percentage Increase = ((New Value - Old Value) / Old Value) * 100

  • Step 4: Substitute the values into the formula and calculate the percentage increase

  • Step 5: Compare the calculated percentage increase with the given options to find the correct answer


Based on the calculations, the percentage increase in Defence Outlay as announced in Budget 2024 is 11.1%. Therefore, the correct answer is option C: 11.1%.

Which document outlines the estimated receipts and expenditures of the government for a particular fiscal year?
  • a)
    Economic Survey
  • b)
    Annual Financial Statement 
  • c)
    Finance Bill
  • d)
    Monetary Policy
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Annual Financial Statement


  • Definition: The Annual Financial Statement is a document that outlines the estimated receipts and expenditures of the government for a particular fiscal year.

  • Importance: It provides a comprehensive overview of the government's financial plans and priorities for the upcoming year.

  • Contents: The statement includes details of revenue sources, planned expenditures, deficit projections, and other financial information.

  • Presentation: The Annual Financial Statement is usually presented by the Finance Minister during the budget session in the parliament.

  • Approval: Once presented, the statement needs to be approved by the parliament before it can be implemented.

Why does the statement suggest that the private sector will have to step in for maintaining growth momentum in the context of the 11.1% higher capex budgeted for infrastructure?
  • a)
    The government lacks the funds to support infrastructure projects.
  • b)
    The capex is insufficient to meet the growing demands of infrastructure development.
  • c)
    The private sector is traditionally responsible for funding infrastructure projects.
  • d)
    The higher capex is not aligned with the overall economic growth strategy.
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
Reasons why the private sector will have to step in for maintaining growth momentum:


  • Insufficient capex: The 11.1% higher capex budgeted for infrastructure may not be enough to meet the growing demands of infrastructure development. This gap in funding could lead to a need for private sector involvement to bridge the financial shortfall.

  • Lack of government funds: The statement suggests that the government lacks the funds to fully support infrastructure projects. In such a scenario, the private sector may need to contribute financially to ensure the continued progress of infrastructure development.

  • Traditionally funded by the private sector: Infrastructure projects are often funded by the private sector. Given the higher capex budget and the need for sustained growth momentum, it is likely that the private sector will play a significant role in financing and executing these projects.


Overall, due to the challenges posed by insufficient capex, lack of government funds, and the traditional role of the private sector in funding infrastructure projects, it is suggested that the private sector will need to step in to maintain growth momentum in the context of the 11.1% higher capex budgeted for infrastructure.

What was the approach adopted by the government in the last eight years to promote growth and development?
  • a)
    Focusing on product and capital market space
  • b)
    Adopting trust-based governance and public goods strategy
  • c)
    Emphasizing partnerships among various stakeholders in the development process
  • d)
    Catering to the private sector for development
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
  • The reforms were undertaken before 2014 primarily catered to product and capital market space. They were necessary and continued post-2014 as well.
  • The government, however, imparted a new dimension to these reforms in the last eight years. With an underlying emphasis on enhancing the ease of living and doing business and improving economic efficiency, the reforms are well placed to lift the economy’s potential growth.
  • The broad principles behind the reforms were creating public goods, adopting trust-based governance, co-partnering with the private sector for development, and improving agricultural productivity.
  • This approach reflects a paradigm shift in the growth and development strategy of the government, with the emphasis shifted towards building partnerships amongst various stakeholders in the development process, where each contributes to and reaps the development benefits (Sabka Saath, Sabka Vikaas).
Hence, option C is correct.

The Government announced what percent increase in the Pradhan Mantri Awas Yojana outlay in 2023-24?
  • a)
    66%
  • b)
    60%
  • c)
    75%
  • d)
    None of the above
Correct answer is option 'A'. Can you explain this answer?

Sushil Kumar answered
  • The Finance Minister announced that the outlay for PM Awas Yojana is being enhanced by 66 per cent to over Rs 79,000 crore.
  • The Defence Ministry has been allocated 5.94 lakh crore rupees in Budget 2023-24.
  • This is 13.18 percent of the total budget, and a jump of 13 percent over previous year.
  • The Government has also decided to continue the 50-year interest free loan to state governments for one more year to spur investment in infrastructure.

The Goods and Services Tax (GST), a major tax reform, was introduced in the Union Budget of which year?
  • a)
    2015-16
  • b)
    2016-17
  • c)
    2017-18
  • d)
    2018-19
Correct answer is option 'C'. Can you explain this answer?

Sushil Kumar answered
Introduction

The Goods and Services Tax (GST) is a major tax reform introduced in India to simplify the indirect taxation system. It was implemented to replace various indirect taxes levied by the central and state governments.

Year of Introduction


  • A: 2015-16

  • B: 2016-17

  • C: 2017-18

  • D: 2018-19


Answer and Explanation

The correct answer is C: 2017-18.


  • The GST was officially launched on July 1, 2017, by the Government of India.

  • It is a comprehensive indirect tax on the supply of goods and services throughout India.

  • GST subsumed various central and state taxes such as excise duty, service tax, VAT, and others.

  • The introduction of GST aimed to create a single, unified tax structure for the entire country, promoting ease of doing business and reducing tax evasion.

Among the following India is the largest exporter of
  • a)
    granite
  • b)
    textile
  • c)
    toys
  • d)
    None of the above
Correct answer is option 'B'. Can you explain this answer?

Sushil Kumar answered
  • India is the largest exporter of textiles in the world.
  • In FY 2021-22, India’s textile exports were valued at $44.4 billion, which is the highest-ever recorded value.

Chapter doubts & questions for Budget and Economic Survey - General Test Preparation for CUET UG 2025 is part of CUET Commerce exam preparation. The chapters have been prepared according to the CUET Commerce exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for CUET Commerce 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.

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