Budget, Taxation and Planning MCQs

Solved MCQs on the Union Budget, GST, direct and indirect taxes, fiscal terms, the Finance Commission, NITI Aayog, five-year plans and major government schemes.

1. 1

   The Union Budget is called the "Annual Financial Statement" in which Article of the Constitution?

   AArticle 110BArticle 112CArticle 266DArticle 280

   Correct answer: B. Article 112

   Article 112 requires the President to lay an Annual Financial Statement before Parliament every year.

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2. 2

   The Goods and Services Tax (GST) came into effect on:

   A1 April 2017B1 July 2017C1 January 2018D8 November 2016

   Correct answer: B. 1 July 2017

   GST was launched on 1 July 2017, replacing many central and state indirect taxes.

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3. 3

   GST was introduced through the Constitution:

   A99th AmendmentB100th AmendmentC101st AmendmentD103rd Amendment

   Correct answer: C. 101st Amendment

   The Constitution (101st Amendment) Act, 2016 made GST possible and created the GST Council (Article 279A).

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4. 4

   The GST Council is chaired by the:

   APrime MinisterBRBI GovernorCUnion Finance MinisterDChairman of the Finance Commission

   Correct answer: C. Union Finance Minister

   The Union Finance Minister chairs the Council; state finance ministers are its members.

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5. 5

   Income tax is an example of a:

   Aindirect taxBcustoms dutyCcess on goodsDdirect tax

   Correct answer: D. direct tax

   A direct tax is paid by the person on whom it is levied. GST is indirect because it is passed on to the buyer.

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6. 6

   NITI Aayog replaced the Planning Commission on:

   A1 January 2015B1 April 2015C15 August 2014D26 January 2016

   Correct answer: A. 1 January 2015

   NITI (National Institution for Transforming India) Aayog was set up on 1 January 2015.

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7. 7

   Who is the chairperson of NITI Aayog?

   AThe Finance MinisterBThe Vice-PresidentCThe PresidentDThe Prime Minister

   Correct answer: D. The Prime Minister

   The Prime Minister chairs NITI Aayog; a Vice-Chairperson runs it day to day.

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8. 8

   India's First Five-Year Plan covered the period:

   A1947–52B1950–55C1951–56D1956–61

   Correct answer: C. 1951–56

   The First Plan (1951–56) focused on agriculture and irrigation, based on the Harrod–Domar model.

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9. 9

   The Planning Commission was set up in:

   A1947B1950C1951D1952

   Correct answer: B. 1950

   It was established in March 1950 by a resolution of the Government of India, with the Prime Minister as chairman.

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10. 10

    The Finance Commission is constituted under:

    AArticle 270BArticle 275CArticle 280DArticle 300

    Correct answer: C. Article 280

    Article 280 provides for a Finance Commission every five years to recommend how taxes are shared between the Union and the states.

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12. 11

    Since 2017, the Union Budget has usually been presented on:

    A1 AprilB1 FebruaryCthe last working day of FebruaryD1 March

    Correct answer: B. 1 February

    The date was moved to 1 February so that spending can begin when the financial year starts on 1 April.

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13. 12

    The separate Railway Budget was merged with the Union Budget in:

    A2014B2016C2017D2019

    Correct answer: C. 2017

    The 2017–18 Budget was the first combined budget, ending a practice that began in 1924.

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14. 13

    Fiscal deficit is best described as:

    Athe RBI's net profitBexports minus importsCthe government's total expenditure minus total receipts excluding borrowingsDrevenue receipts minus revenue expenditure

    Correct answer: C. the government's total expenditure minus total receipts excluding borrowings

    It shows how much the government must borrow in a year to meet its spending.

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15. 14

    Gross Domestic Product (GDP) measures:

    Athe value of a country's exports onlyBthe total value of final goods and services produced within a country in a yearCthe total money in circulationDthe government's annual income

    Correct answer: B. the total value of final goods and services produced within a country in a year

    GDP counts final goods and services produced inside the country's borders during a period, usually a year.

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16. 15

    Fiscal policy in India is decided mainly by the:

    ANITI AayogBSEBICMinistry of Finance (Government of India)DReserve Bank of India

    Correct answer: C. Ministry of Finance (Government of India)

    Fiscal policy covers government taxes and spending. Monetary policy (interest rates, money supply) is the RBI's job.

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17. 16

    Disinvestment means:

    Areducing the repo rateBthe government selling part or all of its stake in public sector enterprisesCforeign companies leaving IndiaDclosing loss-making banks

    Correct answer: B. the government selling part or all of its stake in public sector enterprises

    Through disinvestment the government raises money and reduces its ownership of public sector companies.

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18. 17

    The Blue Revolution is associated with:

    AfisheriesBoilseedsCmilkDeggs

    Correct answer: A. fisheries

    The Blue Revolution aims to raise fish production; the White Revolution concerns milk and the Yellow Revolution oilseeds.

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19. 18

    The "Make in India" initiative was launched in:

    A2012B2014C2016D2019

    Correct answer: B. 2014

    It was launched on 25 September 2014 to encourage manufacturing and investment in India.

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20. 19

    Under MGNREGA, every rural household is guaranteed wage employment for at least:

    A50 days a yearB100 days a yearC150 days a yearD200 days a year

    Correct answer: B. 100 days a year

    The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 guarantees 100 days of unskilled work a year to rural households.

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21. 20

    Which of these is an indirect tax?

    AIncome taxBCorporation taxCWealth taxDGoods and Services Tax

    Correct answer: D. Goods and Services Tax

    GST is collected by the seller and passed on to the buyer, so the burden shifts; that makes it indirect.

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