What is the primary objective of a government budget?

To manage public finances by allocating resources for various sectors such as health, infrastructure, and technology to promote economic growth and social welfare.

Fill in the blank: The government budget aims to reduce disparities in ___ and ___ among different sections of society.

Income and wealth

True or False: Non-tax revenue is derived solely from taxes imposed by the government.

False. Non-tax revenue comes from all sources other than taxes.

What are the two main categories of tax revenue?

Direct tax and Indirect tax.

Riddle: I am a payment made to the government, but I can be direct or indirect. What am I?

Tax.

Fill in the blank: The government encourages the setting up of production units in economically backward regions by providing ___ and other benefits.

Tax holidays

What role does the government budget play in regional equality?

It encourages economic development in backward regions by providing financial assistance and incentives, thereby promoting regional equality.

Short answer: What are the key components of government budget receipts?

Government budget receipts are categorized into Revenue Receipts and Capital Receipts.

What are the primary sources of non-tax revenue for the government?

Profits and dividends from public sector investments, fines and penalties for law enforcement, service fees, license fees, gifts and grants from foreign governments, borrowings, and recovery of loans.

Fill in the blank: Recovery of a loan by the state and union territory to the government is classified as a ___ receipt.

Capital

True or False: Revenue expenditure creates assets for the government.

False. Revenue expenditure does not create assets nor reduce liabilities.

Riddle: I am a fee charged to grant permission, often required for business activities. What am I?

License fee

What distinguishes capital expenditure from revenue expenditure in government budgeting?

Capital expenditure creates assets or reduces liabilities, while revenue expenditure does neither.

Multiple Choice: Which of the following is considered a source of non-tax revenue? A) Income Tax B) License Fee C) Corporate Tax D) Sales Tax

B) License Fee

What is the formula for calculating Revenue Deficit?

Revenue Deficit = Revenue Expenditure - Revenue Receipts

True or False: A Fiscal Deficit indicates that the government is spending within its means.

False. A Fiscal Deficit indicates that the government is spending beyond its means.

Fill in the blank: The Revenue Deficit shows that the government is using ___ to meet its expenditures.

Savings

What are the main measures to reduce Revenue Deficit?

The government should reduce its expenditures and increase revenue receipts while controlling tax evasion.

Riddle: I represent the excess of total expenditure over total receipts excluding borrowings. What am I?

Fiscal Deficit

What implication does a Revenue Deficit have on government assets?

It signifies that the government will have to meet its deficit from capital receipts, which can reduce assets or increase liabilities.

Fill in the blank: Capital expenditure either creates assets or reduces the ___ of the government.

Liability

What does a government experiencing a Revenue Deficit imply about its earnings?

It implies that the government's own earnings are insufficient to cover the day-to-day operations of its departments.

The process of borrowing by the government to meet fiscal deficit is referred to as ___ financing.

Deficit financing

True or False: An increase in interest payments due to government borrowing can lead to a revenue surplus.

False. It leads to a revenue deficit.