1. A government budget is:
A) An account of imports and exports
B) An annual statement of estimated revenue and expenditure
C) A monetary policy statement
D) A credit policy of banks
Answer: B
Explanation: Budget = annual financial statement of expected revenues and expenditures.
2. In India, the Union Budget is presented by:
A) Prime Minister
B) Finance Minister
C) President
D) RBI Governor
Answer: B
Explanation: Union Budget is presented by the Finance Minister in Parliament.
3. As per the Constitution, Union Budget is referred to as:
A) Financial Bill
B) Money Bill
C) Annual Financial Statement
D) Fiscal Responsibility Report
Answer: C
Explanation: Article 112 of Indian Constitution → Annual Financial Statement.
4. Budget is presented in which House of Parliament?
A) Rajya Sabha only
B) Lok Sabha only
C) Both Houses simultaneously
D) Joint Session
Answer: C
Explanation: Presented in Lok Sabha first, later discussed in Rajya Sabha (no voting power there).
5. The Union Budget in India is presented usually on:
A) 31st March
B) 1st April
C) Last working day of February
D) 1st February
Answer: D
Explanation: Since 2017, Budget is presented on 1st February.
6. Who prepares the Union Budget in India?
A) NITI Aayog
B) Finance Ministry
C) RBI
D) CAG
Answer: B
Explanation: Ministry of Finance (Department of Economic Affairs) prepares the Budget.
7. The budgetary year in India runs from:
A) Jan–Dec
B) April–March
C) July–June
D) Oct–Sept
Answer: B
Explanation: India follows April 1 to March 31 as financial year.
8. Which of the following is NOT a function of budget?
A) Allocating resources
B) Reducing inequality
C) Maintaining foreign exchange rate
D) Stabilizing economy
Answer: C
Explanation: Exchange rate is managed by RBI, not directly through budget.
9. A surplus budget means:
A) Revenue > Expenditure
B) Revenue < Expenditure
C) Revenue = Expenditure
D) Only capital receipts shown
Answer: A
Explanation: Surplus budget → government earns more than spends.
10. A deficit budget means:
A) Revenue = Expenditure
B) Revenue > Expenditure
C) Revenue < Expenditure
D) Capital expenditure only
Answer: C
Explanation: Deficit = expenditure exceeds receipts.
11. A balanced budget means:
A) Receipts = Expenditure
B) Receipts > Expenditure
C) Receipts < Expenditure
D) Expenditure excluded
Answer: A
Explanation: Balanced budget = expenditure equals receipts.
12. Which of the following is NOT a type of budget?
A) Surplus
B) Deficit
C) Balanced
D) Monetary
Answer: D
Explanation: Monetary policy is RBI’s domain, not a type of budget.
13. Which Article of the Indian Constitution deals with Annual Financial Statement (Budget)?
A) Article 110
B) Article 112
C) Article 265
D) Article 148
Answer: B
Explanation: Article 112 → Annual Financial Statement.
14. Railway Budget was merged with Union Budget in:
A) 2015
B) 2017
C) 2018
D) 2016
Answer: B
Explanation: Since 2017–18, Railway Budget merged with Union Budget.
15. The responsibility of auditing government accounts lies with:
A) RBI
B) SEBI
C) CAG
D) Finance Commission
Answer: C
Explanation: Comptroller and Auditor General (CAG) audits govt accounts.
16. A Finance Bill is:
A) A bill to authorize government expenditure
B) A bill to give effect to financial proposals of Budget
C) A money bill unrelated to budget
D) A bill passed by Rajya Sabha only
Answer: B
Explanation: Finance Bill → gives legal effect to taxation & budget proposals.
17. Which is NOT a revenue receipt in budget?
A) Tax revenue
B) Non-tax revenue
C) Borrowings
D) Interest receipts
Answer: C
Explanation: Borrowings = capital receipt, not revenue.
18. Fiscal deficit in budget represents:
A) Total borrowings of government
B) Excess of expenditure over receipts excluding borrowings
C) Excess of revenue expenditure over revenue receipts
D) Excess of capital expenditure over capital receipts
Answer: B
Explanation: Fiscal deficit = expenditure – (revenue + non-debt receipts).
19. Primary deficit is:
A) Fiscal deficit – Interest payments
B) Revenue deficit – Capital expenditure
C) Borrowings – Expenditure
D) Expenditure – Borrowings
Answer: A
Explanation: Primary deficit = Fiscal deficit – Interest payments.
20. Revenue deficit is:
A) Revenue expenditure – Revenue receipts
B) Revenue receipts – Revenue expenditure
C) Capital expenditure – Capital receipts
D) Total expenditure – Revenue receipts
Answer: A
Explanation: Revenue deficit arises when revenue expenditure > revenue receipts.
21. Effective revenue deficit =
A) Revenue deficit – Grants for capital creation
B) Fiscal deficit – Borrowings
C) Capital receipts – Capital expenditure
D) Primary deficit – Interest payments
Answer: A
Explanation: Introduced in 2012 → ERD = Revenue deficit – Grants for capital assets.
22. Zero-based budgeting means:
A) Budget starts from zero every year
B) Budget without deficit
C) Budget without borrowings
D) Budget of zero receipts
Answer: A
Explanation: In ZBB, each expense must be justified afresh, starting from zero.
23. Gender budgeting refers to:
A) Budget for women employees only
B) Gender-based taxation
C) Integrating gender perspective into budget allocation
D) Separate women’s budget
Answer: C
Explanation: Gender budgeting = ensuring gender equality in policy allocation.
24. Outcome budgeting emphasizes:
A) Inputs only
B) Financial planning only
C) Results and outcomes of expenditure
D) Borrowings management
Answer: C
Explanation: Outcome budgeting focuses on performance/results of govt spending.
25. The first budget of independent India was presented by:
A) R.K. Shanmukham Chetty
B) John Mathai
C) C.D. Deshmukh
D) Morarji Desai
Answer: A
Explanation: R.K. Shanmukham Chetty presented first Union Budget on 26th Nov, 1947.
26. The two main components of a government budget are:
A) Receipts and Payments
B) Revenue and Expenditure
C) Revenue Budget and Capital Budget
D) Fiscal and Monetary
Answer: C
Explanation: Union Budget = Revenue Budget + Capital Budget.
27. Revenue receipts include:
A) Taxes and non-tax revenues
B) Borrowings
C) Disinvestment
D) Recovery of loans
Answer: A
Explanation: Revenue receipts = tax + non-tax income (not creating liabilities).
28. Capital receipts include:
A) Taxes
B) Non-tax revenue
C) Borrowings and disinvestment
D) Interest receipts
Answer: C
Explanation: Capital receipts = those creating liabilities or reducing assets.
29. Which of the following is NOT a revenue receipt?
A) Corporate tax
B) Dividends from PSUs
C) Borrowings
D) Customs duty
Answer: C
Explanation: Borrowings are capital receipts, not revenue.
30. Which of the following is NOT a capital receipt?
A) Market borrowings
B) Disinvestment proceeds
C) Recovery of loans
D) Income tax
Answer: D
Explanation: Income tax is a revenue receipt.
31. Revenue expenditure includes:
A) Salaries, subsidies, interest payments
B) Investment in infrastructure
C) Loan repayments
D) Acquisition of assets
Answer: A
Explanation: Revenue expenditure = recurring expenses, not creating assets.
32. Capital expenditure includes:
A) Salaries and pensions
B) Construction of roads, dams, schools
C) Subsidies
D) Grants to states for maintenance
Answer: B
Explanation: Capital expenditure = asset creation or reduction of liabilities.
33. Which of the following is an example of non-tax revenue?
A) Excise duty
B) Dividends from PSUs
C) Income tax
D) Customs duty
Answer: B
Explanation: Non-tax revenue includes dividends, fees, interest, fines.
34. Which tax is the largest source of revenue for Government of India?
A) Income tax
B) Corporate tax
C) GST
D) Customs duty
Answer: C
Explanation: Currently, GST is the largest revenue source.
35. Which of the following is a direct tax?
A) GST
B) Customs duty
C) Income tax
D) Excise duty
Answer: C
Explanation: Direct tax = paid directly by individuals/firms (e.g., income tax).
36. Which of the following is an indirect tax?
A) Income tax
B) Corporate tax
C) GST
D) Wealth tax
Answer: C
Explanation: GST is collected indirectly via goods/services.
37. Revenue deficit indicates:
A) Govt unable to meet capital expenditure
B) Govt unable to meet revenue expenditure from revenue receipts
C) Govt unable to borrow funds
D) Govt spends more on defence
Answer: B
Explanation: Revenue deficit = Revenue expenditure – Revenue receipts.
38. Fiscal deficit shows:
A) Total borrowings of government
B) Excess of expenditure over receipts excluding borrowings
C) Excess of revenue receipts over expenditure
D) Excess of imports over exports
Answer: B
Explanation: Fiscal deficit = expenditure – (revenue + non-debt receipts).
39. Primary deficit =
A) Fiscal deficit – Revenue deficit
B) Fiscal deficit – Interest payments
C) Revenue deficit – Grants
D) Fiscal deficit + Borrowings
Answer: B
Explanation: Primary deficit excludes interest payments.
40. Effective revenue deficit =
A) Revenue deficit – Grants for capital creation
B) Fiscal deficit – Borrowings
C) Capital expenditure – Revenue receipts
D) Fiscal deficit – Subsidies
Answer: A
Explanation: Introduced in 2012–13 → subtracts capital grants from revenue deficit.
41. In India, disinvestment proceeds are treated as:
A) Revenue receipts
B) Capital receipts
C) Revenue expenditure
D) Revenue deficit
Answer: B
Explanation: Disinvestment = capital receipt (reduces govt asset holding).
42. Interest payments by government are classified as:
A) Capital expenditure
B) Revenue expenditure
C) Capital receipts
D) Revenue receipts
Answer: B
Explanation: Interest = recurring liability → revenue expenditure.
43. Which of the following is NOT part of revenue expenditure?
A) Subsidies
B) Pensions
C) Construction of highways
D) Salaries
Answer: C
Explanation: Highways = capital expenditure.
44. Grants given by Union Government to states for creation of capital assets are:
A) Revenue expenditure
B) Capital expenditure
C) Revenue receipts
D) Capital receipts
Answer: B
Explanation: Grants for asset creation = capital expenditure.
45. Which of the following is included in capital receipts?
A) Taxes
B) Borrowings
C) Dividends
D) Interest on loans
Answer: B
Explanation: Borrowings = capital receipts (liabilities).
46. A higher revenue deficit indicates:
A) Govt is overspending on capital projects
B) Govt is overspending on current consumption
C) Govt is borrowing more for asset creation
D) Govt has zero deficit
Answer: B
Explanation: Revenue deficit = excess of current consumption expenditure.
47. Borrowings are shown in budget as:
A) Revenue receipts
B) Revenue expenditure
C) Capital receipts
D) Revenue deficit
Answer: C
Explanation: Borrowings = capital receipts (create liability).
48. Tax revenue is classified into:
A) Direct and Indirect taxes
B) Revenue and Capital taxes
C) Local and National taxes
D) Planned and Unplanned taxes
Answer: A
Explanation: Tax revenue = direct + indirect taxes.
49. Corporate tax is levied on:
A) Salaried employees
B) Profits of companies
C) Partnership firms
D) Importers
Answer: B
Explanation: Corporate tax = profits of companies.
50. The share of GST in total tax revenue of India is roughly:
A) 10–15%
B) 20–25%
C) 40–45%
D) 55–60%
Answer: C
Explanation: GST contributes around 40–45% of tax revenue (varies yearly).
51. Which of the following is NOT a type of government budget?
A) Surplus Budget
B) Balanced Budget
C) Deficit Budget
D) Credit Budget
Answer: D
Explanation: Surplus, deficit, and balanced are standard types; “credit budget” is not.
52. A surplus budget is generally recommended during:
A) Recession
B) Inflation
C) Depression
D) Low employment
Answer: B
Explanation: Surplus budget reduces demand → controls inflation.
53. A deficit budget is generally recommended during:
A) Inflation
B) Boom
C) Depression or slowdown
D) Balance of payments surplus
Answer: C
Explanation: Deficit budget boosts demand → useful during depression/slowdown.
54. A balanced budget is when:
A) Revenue = Expenditure
B) Revenue > Expenditure
C) Revenue < Expenditure
D) Revenue excludes borrowings
Answer: A
Explanation: Balanced = expenditure = receipts.
55. Which type of budget is rarely used in modern economies?
A) Surplus
B) Deficit
C) Balanced
D) Gender
Answer: C
Explanation: Balanced budgets are impractical → most countries use deficit financing.
56. Deficit financing means:
A) Government borrows from public
B) Government prints new currency
C) Government cuts expenditure
D) Government raises direct taxes
Answer: B
Explanation: Deficit financing = meeting deficit by printing new currency.
57. Fiscal deficit means:
A) Total borrowings
B) Revenue expenditure – Revenue receipts
C) Total expenditure – (Revenue receipts + Non-debt receipts)
D) Revenue deficit + Capital deficit
Answer: C
Explanation: Fiscal deficit = expenditure – (revenue + non-debt receipts).
58. Revenue deficit means:
A) Revenue expenditure – Revenue receipts
B) Capital expenditure – Capital receipts
C) Fiscal deficit – Primary deficit
D) Borrowings – Interest payments
Answer: A
Explanation: When revenue expenditure > revenue receipts.
59. Primary deficit =
A) Fiscal deficit – Interest payments
B) Revenue deficit – Subsidies
C) Fiscal deficit – Borrowings
D) Fiscal deficit + Grants
Answer: A
Explanation: Primary deficit excludes interest burden.
60. Effective revenue deficit =
A) Revenue deficit – Capital grants to states
B) Fiscal deficit – Subsidies
C) Primary deficit – Borrowings
D) Revenue receipts – Borrowings
Answer: A
Explanation: ERD = Revenue deficit – grants for asset creation.
61. Monetized deficit refers to:
A) Borrowings from foreign banks
B) Borrowings from commercial banks
C) Borrowings from RBI (currency printing)
D) Borrowings from IMF
Answer: C
Explanation: Monetized deficit = financing deficit by RBI printing money.
62. Budgetary deficit means:
A) Total expenditure > Total receipts (including borrowings)
B) Total expenditure > Total receipts (excluding borrowings)
C) Fiscal deficit – Interest payments
D) Capital deficit – Revenue deficit
Answer: A
Explanation: Budgetary deficit is broader but now replaced by fiscal deficit as official measure.
63. Zero-based budgeting (ZBB) was first introduced in India in:
A) 1960
B) 1980s
C) 1990s
D) 2000s
Answer: B
Explanation: ZBB introduced in India in 1980s (7th Plan).
64. Gender budgeting was introduced in India in:
A) 2000–01
B) 2003–04
C) 2005–06
D) 2008–09
Answer: B
Explanation: First gender budget statement in 2003–04 Union Budget.
65. Outcome budgeting was introduced in India in:
A) 2000–01
B) 2002–03
C) 2005–06
D) 2007–08
Answer: C
Explanation: Outcome budgeting introduced in 2005–06 to link spending with results.
66. Which of the following deficits indicates borrowing requirement of govt?
A) Revenue deficit
B) Fiscal deficit
C) Primary deficit
D) Effective revenue deficit
Answer: B
Explanation: Fiscal deficit = total borrowing requirement of govt.
67. If fiscal deficit is ₹10,000 crore and interest payments are ₹4,000 crore, primary deficit =
A) ₹6,000 crore
B) ₹10,000 crore
C) ₹14,000 crore
D) ₹4,000 crore
Answer: A
Explanation: Primary deficit = Fiscal deficit – Interest = 10,000 – 4,000 = ₹6,000 crore.
68. A situation where revenue deficit = 0 but fiscal deficit > 0 implies:
A) Govt is borrowing only for asset creation
B) Govt is overspending on revenue expenditure
C) Govt is printing money
D) Govt has balanced budget
Answer: A
Explanation: No revenue deficit → borrowings used for capital expenditure.
69. If fiscal deficit is fully financed by borrowing from RBI, it is called:
A) Revenue deficit
B) Primary deficit
C) Monetized deficit
D) Budgetary deficit
Answer: C
Explanation: RBI prints new currency to finance → monetized deficit.
70. Which deficit was removed from official usage in India after 1997?
A) Fiscal deficit
B) Budgetary deficit
C) Primary deficit
D) Effective revenue deficit
Answer: B
Explanation: Budgetary deficit is no longer used officially.
71. The FRBM Act (2003) mainly targets which deficit?
A) Revenue deficit
B) Fiscal deficit
C) Primary deficit
D) Monetized deficit
Answer: B
Explanation: FRBM Act aims at reducing fiscal deficit & revenue deficit.
72. The fiscal deficit target under FRBM was originally set at:
A) 3% of GDP
B) 4% of GDP
C) 2% of GDP
D) 5% of GDP
Answer: A
Explanation: Target = 3% of GDP.
73. Primary deficit is useful to measure:
A) Govt’s total borrowing
B) Fiscal health excluding interest payments
C) Effective capital expenditure
D) Current account balance
Answer: B
Explanation: Shows deficit due to current spending, excluding interest burden.
74. High revenue deficit indicates:
A) Govt is borrowing to fund consumption expenditure
B) Govt is borrowing only for investment
C) Govt has a surplus
D) Govt has no fiscal deficit
Answer: A
Explanation: Borrowing for consumption is unsustainable → high revenue deficit.
75. Which deficit concept is most relevant for assessing inflationary impact?
A) Fiscal deficit
B) Revenue deficit
C) Budgetary deficit
D) Effective revenue deficit
Answer: A
Explanation: Fiscal deficit reflects total borrowing → affects money supply & inflation.
76. The Union Budget is also known as:
A) Annual Economic Survey
B) Annual Financial Statement
C) Finance Bill
D) Fiscal Responsibility Report
Answer: B
Explanation: Article 112 of the Constitution calls the Union Budget the Annual Financial Statement.
77. In India, the Union Budget is presented before Parliament by:
A) Prime Minister
B) Finance Minister
C) President
D) RBI Governor
Answer: B
Explanation: The Finance Minister presents the Union Budget in Lok Sabha.
78. Who presented the first Union Budget of Independent India in 1947?
A) Morarji Desai
B) R.K. Shanmukham Chetty
C) John Mathai
D) C.D. Deshmukh
Answer: B
Explanation: R.K. Shanmukham Chetty presented the first budget on 26 Nov 1947.
79. The Railway Budget was merged with the Union Budget in:
A) 2014–15
B) 2015–16
C) 2017–18
D) 2018–19
Answer: C
Explanation: From 2017–18, a unified budget was presented.
80. Since 2017, the Union Budget is presented on:
A) 31st March
B) 1st April
C) 1st February
D) 15th March
Answer: C
Explanation: To ensure earlier fund allocation, budget date shifted to 1st February.
81. Economic Survey is presented:
A) Before the Union Budget
B) After the Union Budget
C) Along with the Union Budget
D) Only in Rajya Sabha
Answer: A
Explanation: Economic Survey is presented one day before Budget.
82. Which institution audits government accounts in India?
A) RBI
B) Finance Commission
C) CAG
D) SEBI
Answer: C
Explanation: Comptroller and Auditor General (CAG) audits government expenditure.
83. Fiscal Responsibility and Budget Management (FRBM) Act was passed in:
A) 1991
B) 1995
C) 2000
D) 2003
Answer: D
Explanation: FRBM Act, 2003 → targets fiscal discipline.
84. FRBM Act initially targeted fiscal deficit of:
A) 2% of GDP
B) 3% of GDP
C) 4% of GDP
D) 5% of GDP
Answer: B
Explanation: Fiscal deficit target = 3% of GDP.
85. Who prepares the Union Budget in India?
A) Finance Commission
B) Ministry of Finance
C) RBI
D) Planning Commission
Answer: B
Explanation: Department of Economic Affairs (Ministry of Finance) prepares the budget.
86. Finance Bill becomes law only after:
A) Approval by Lok Sabha
B) Approval by both Houses and President’s assent
C) Approval by Rajya Sabha
D) Approval by RBI
Answer: B
Explanation: Finance Bill → passed by both Houses → President’s assent → law.
87. Which of the following is NOT a direct tax in India?
A) Income tax
B) Corporate tax
C) GST
D) Wealth tax (abolished in 2015)
Answer: C
Explanation: GST is an indirect tax.
88. The largest component of revenue receipts in India is from:
A) Non-tax revenue
B) Borrowings
C) GST and other taxes
D) Disinvestment
Answer: C
Explanation: GST and income taxes contribute the largest share.
89. The largest item of revenue expenditure in India is:
A) Subsidies
B) Defence
C) Interest payments
D) Salaries
Answer: C
Explanation: Interest payments form the biggest revenue expenditure.
90. Capital expenditure of government includes:
A) Pensions
B) Construction of highways, dams
C) Interest payments
D) Subsidies
Answer: B
Explanation: Capital expenditure = asset creation or liability reduction.
91. Disinvestment proceeds are treated as:
A) Revenue receipts
B) Capital receipts
C) Revenue expenditure
D) Fiscal deficit
Answer: B
Explanation: Disinvestment reduces asset ownership → capital receipt.
92. Which of the following is a tool of fiscal policy in India?
A) Repo rate
B) Open market operations
C) Government spending and taxation
D) CRR
Answer: C
Explanation: Fiscal policy = tax & spending decisions.
93. During inflation, the government should follow:
A) Surplus budget policy
B) Deficit budget policy
C) Balanced budget policy
D) Expansionary policy
Answer: A
Explanation: Surplus budget reduces demand → controls inflation.
94. During recession, the government should follow:
A) Surplus budget policy
B) Deficit budget policy
C) Balanced budget policy
D) Neutral budget policy
Answer: B
Explanation: Deficit budget boosts demand → helpful in recession.
95. Which of the following is a qualitative tool of fiscal policy?
A) Subsidies
B) Public borrowing
C) Public expenditure allocation
D) Both A and C
Answer: D
Explanation: Targeted subsidies & expenditure are qualitative fiscal tools.
96. Which Finance Minister has presented the maximum number of Union Budgets?
A) Morarji Desai
B) P. Chidambaram
C) Pranab Mukherjee
D) Manmohan Singh
Answer: A
Explanation: Morarji Desai presented 10 budgets (including interim).
97. The Union Budget is classified into:
A) Revenue account and Current account
B) Revenue budget and Capital budget
C) Revenue deficit and Fiscal deficit
D) Central and State budget
Answer: B
Explanation: Union Budget = Revenue + Capital Budget.
98. The government borrows to meet which deficit primarily?
A) Revenue deficit
B) Fiscal deficit
C) Primary deficit
D) Trade deficit
Answer: B
Explanation: Govt borrowing = fiscal deficit financing.
99. The annual budget is presented in which form in Parliament?
A) Money Bill
B) Finance Bill and Appropriation Bill
C) Only Appropriation Bill
D) Demand for Grants
Answer: B
Explanation: Union Budget is presented as Finance Bill + Appropriation Bill.
100. In India, the first paperless Union Budget was presented in:
A) 2018–19
B) 2019–20
C) 2021–22
D) 2022–23
Answer: C
Explanation: 2021–22 Union Budget was fully paperless due to COVID-19.