Test: Bihar Specific (Economy - I) - Software Development MCQ

The correct answer is Option 4.

Key Points

The total expenditure (excluding debt repayment) in the 2024-25 Bihar budget is expected to decrease slightly by 12% compared to the revised estimates of the previous year (2023-24). This shift towards fiscal prudence aligns with the government's goal of managing the state's finances responsibly.

Here are some other notable aspects of the Bihar Budget 2024-25:

• Capital Outlay: This budget allocation, crucial for creating long-term assets and infrastructure, also experiences a reduction of 26% compared to the 2023-24 revised estimates. While this might raise questions about prioritizing infrastructure development, other areas like agriculture and social welfare initiatives seem to be receiving increased focus.
• Debt Repayment: The state plans to repay ₹22,393 crore of its existing debt, signifying a commitment to managing the debt burden and improving the state's financial health.
• Revenue and Receipts:
  • While the total expenditure is expected to decrease, the budget projects revenue (excluding borrowings) to increase by approximately 5.7% compared to the previous year's estimates.
  • The government aims to achieve this through various measures, including improved tax collection efficiency and exploring new avenues for revenue generation.
• Focus Areas: Even with the overall decrease in expenditure, the budget prioritizes specific sectors, allocating funds for:
  • Social Sector: This remains a significant focus area, accounting for nearly 48% of the total expenditure, with continued emphasis on education, healthcare, and social welfare programs.

The correct answer is 1 and 2 only.

Key Points

• If the price of the good increases, producers are likely to supply more of it to take advantage of the higher prices. So, the market supply for the good will increase.
• If the price of its factors of production decreases, the cost of producing the good will decrease. This would make it more profitable for producers to supply more of the good, hence increasing the market supply.
• The price of other goods decreasing may or may not affect the market supply of the good.
  • For example, if the price of a substitute good decreases, producers might shift their resources to produce more of that substitute good, potentially decreasing the supply of the original good.
  • So, this statement is not universally true.

The correct answer is Establishing a centre of excellence

Key Points

•  A centre of excellence will be established for groundwater conservation in Bihar in 2023-24
• Bihar has allocated 17.9% of its expenditure towards education in 2023-24. 
• This is higher than the average allocation for education by states in 2022-23 (14.8%).
• Bihar has the highest budget provision i.e Rs 42,381 crore for the development of education.
• Rs 17,789 crore has been allocated as grants towards assistance to schools for salaries. 
• Rs 6,397 crore has been allocated towards salaries and allowances for the Education Department.
• Bihar has allocated 10.7% of its budget towards rural development in 2023-24.  This is significantly higher than the average allocation by states (5.7%).
• The Gross State Domestic Product (GSDP) of Bihar for 2023-24 (at current prices) is projected to be Rs 8.59 lakh crore, amounting to growth of 8.9% over 2022-23 (Rs 7.89 lakh crore).
• Fiscal deficit in 2023-24 is targeted at 3% of GSDP (Rs 25,568 crore). 

The correct answer is 5.1% of the GDP.

Key Points

• The projected fiscal deficit for 2024–2025 is 5.1% of GDP, in line to bring it below 4.5% by 2025–2026.
• It is projected that in 2024–25, gross and net market borrowings through dated securities will total Rs 14.13 and 11.75 lakh crore, respectively.

The correct answer is 2.56 Lakh Crore.

Key Points

• Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 2.56 lakh crore.
• This is a decrease of 12% over the revised estimates for 2023-24.
• This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,27,238 crore and net borrowings of Rs 29,295 crore.
• Total receipts for 2023-24 (other than borrowings) are expected to register an increase of 5.7% over the revised estimates for 2023-24.

The correct answer is 13.9%

Key Points

• The unemployment in Bihar for the 15-29 years age group was 13.9%.
• It is higher than the national level (10%).

Additional Information

• Bihar is one of the lowest GDP states in India with a contribution of only about 3.1% to India’s overall GDP .
• Maharashtra has the highest GDP among Indian states, contributing about 15.7% to India's overall GDP.
• Bihar CM : Shri Nitish Kumar. (Feb, 2024)
• Governor : Shri Rajendra Vishwanath Arlekar. (Feb, 2024)

The correct answer is 9.76 Lakh Crore.

Key Points

• The Gross State Domestic Product (GSDP) of Bihar for 2024-25 (at current prices) is projected to be Rs 9.76 lakh crore.
• It is a growth of 13.5% over the previous financial year of 2023-24.
• The Finance Minister of Bihar, Mr Samrat Chaudhary, presented the Budget for the state for the financial year 2024- 25 on February 13, 2024.

Additional Information

• Bihar is one of the lowest GDP states in India with a contribution of only about 3.1% to India’s overall GDP .
• Maharashtra has the highest GDP among Indian states, contributing about 15.7% to India's overall GDP.
• Bihar CM : Shri Nitish Kumar. (Feb, 2024)
• Governor : Shri Rajendra Vishwanath Arlekar. (Feb, 2024)

The correct answer is Revenue deficit state.

Key Points

• In 2021-22, the state is estimated to observe a revenue deficit of 5.48% of GSDP, as compared to a revenue surplus of 1.21% of GSDP estimated at the budget stage.
  • Fiscal deficit for 2022-23 is targeted at Rs 25,885 crore (3.47% of GSDP). 
  •  In 2021-22, as per the revised estimates, fiscal deficit is expected to be 11.31% of GSDP, significantly higher than the budget estimate of 2.97% of GSDP.

Additional Information

•  Revenue Surplus means the excess of revenue receipts over revenue expenditure.
• Revenue neutral rate(RNR) is a structure of different rates established in order to match the current revenue generation with revenue under GST.
• State with a negative growth rate is Nagaland.

The correct answer is 1121 Crore.

Key Points

• The revenue surplus in 2024-25 is estimated to be Rs 1,121 crore (0.1% of GSDP).
• In comparison, in 2023-24, the state is expected to observe a revenue deficit of Rs 35,530 crore (4.1% of GSDP).
• Fiscal deficit for 2024-25 is targeted at 3% of GSDP (Rs 29,095 crore), which is within the limit of 3.5% of GSDP permitted by the central government (of which 0.5% of GSDP becomes available upon undertaking power sector reforms). 

The correct answer is 2.25 Lakh Crore.

Key Points

• Revenue expenditure for 2024-25 is proposed to be Rs 2,25,677 crore, a decrease of 10% over the revised estimates for 2023-24.
• This includes the expenditure on salaries, pensions, interest, grants, and subsidies. In 2023-24, revenue expenditure is estimated to be 20% higher than the budget estimates.

Additional Information

• Bihar is one of the lowest GDP states in India with a contribution of only about 3.1% to India’s overall GDP .
• Maharashtra has the highest GDP among Indian states, contributing about 15.7% to India's overall GDP.
• Bihar CM : Shri Nitish Kumar. (Feb, 2024)
• Governor : Shri Rajendra Vishwanath Arlekar. (Feb, 2024)