1. Which of the following is a **revenue receipt** in the Union Budget?
A. Disinvestment proceeds
B. Borrowings from RBI
C. Taxes collected by the government
D. Loan from foreign institutions
Revenue receipts are those that do not create any liability or lead to a reduction in assets. Tax revenue, such as income tax or GST, is a key example.
2. Which of the following is a **capital receipt** of the government?
A. Excise duty collection
B. Borrowings from the public
C. Customs duty collection
D. Dividends from public sector enterprises
Capital receipts either create a liability or reduce assets. Borrowings from the public or institutions are typical capital receipts.
3. Which of the following is a **non-tax revenue receipt**?
A. Dividends from public sector companies
B. Income tax
C. GST collection
D. Customs duty
Non-tax revenue includes income earned by the government through dividends, profits, fees, or fines, which do not arise from taxation.
4. If the government receives ₹50,000 crore from disinvestment, under which category of receipts does it fall?
A. Tax revenue
B. Non-tax revenue
C. Grants from foreign countries
D. Capital receipts
Disinvestment proceeds are treated as capital receipts since they reduce government ownership in public sector enterprises or create no recurring revenue.
5. Which of the following statements is correct about revenue receipts?
A. They always lead to a reduction in government assets
B. They do not create any liability and are recurring in nature
C. They are always borrowed funds
D. They are one-time receipts
Revenue receipts include recurring income like taxes or fees that do not create liabilities for the government and are part of the normal budget cycle.
6. Which of the following is classified as **revenue expenditure** in the Union Budget?
A. Salaries of government employees
B. Construction of highways
C. Purchase of machinery
D. Repayment of loans
Revenue expenditure includes expenses that are recurring in nature and do not create assets, such as salaries, pensions, and subsidies.
7. Which of the following is considered **capital expenditure**?
A. Subsidy on food grains
B. Salaries of staff
C. Construction of new government buildings
D. Payment of interest on loans
Capital expenditure is incurred to create assets or reduce liabilities, such as building infrastructure or purchasing long-term machinery.
8. Which of the following statements about revenue expenditure is correct?
A. It results in creation of assets
B. It is always a one-time expenditure
C. It is mainly for capital projects
D. It is recurring in nature and maintains normal government functions
Revenue expenditure is used for running day-to-day operations of the government, such as salaries, subsidies, and maintenance costs.
9. Which of the following is an example of **developmental expenditure**?
A. Interest payments on loans
B. Spending on health and education programs
C. Subsidy on fuel
D. Administrative salaries
Developmental expenditure is meant to create assets and enhance economic growth, such as spending on infrastructure, health, and education.
10. If the government pays ₹2,00,000 crore as interest on its borrowings, this expenditure is classified as:
A. Revenue expenditure – non-developmental
B. Capital expenditure
C. Developmental expenditure
D. Contingency expenditure
Interest payments are part of revenue expenditure and are non-developmental, as they do not create assets or contribute to growth.
11. Which of the following is classified as **Plan Expenditure**?
A. Payment of interest on loans
B. Allocation for health and education schemes under Five Year Plan
C. Administrative salaries
D. Repayment of government borrowings
Plan expenditure is spending by the government on schemes and projects aimed at achieving planned economic development.
12. Which of the following is an example of **non-Plan Expenditure**?
A. Construction of new schools under a scheme
B. Grants to states for rural development projects
C. Investments in new technology research
D. Payment of salaries and pensions
Non-plan expenditure is recurring in nature and relates to maintenance of government machinery, interest payments, and subsidies, not linked to development plans.
13. If the government allocates funds for a new irrigation project under a Five Year Plan, it is classified as:
A. Plan Capital Expenditure
B. Revenue Expenditure
C. Non-Plan Capital Expenditure
D. Contingency Expenditure
Plan Capital Expenditure is spending on creating assets or infrastructure as part of planned economic development schemes.
14. Which of the following is a **Plan Revenue Expenditure**?
A. Construction of national highways
B. Purchase of machinery for factories
C. Subsidies for farmer support schemes under plan
D. Repayment of public debt
Plan Revenue Expenditure includes recurring expenses under development schemes, such as subsidies or grants under the plan, which do not create assets.
15. Which of the following statements is correct about Plan and Non-Plan Expenditure?
A. All Plan Expenditure is capital expenditure
B. Plan expenditure can be both revenue and capital; Non-plan is mainly for maintenance and debt servicing
C. Non-Plan expenditure includes development schemes
D. Plan expenditure is always recurring in nature
Plan expenditure includes both revenue and capital spending for development purposes; Non-plan expenditure is recurring, like salaries, pensions, subsidies, and interest payments.
16. Which of the following best defines **Revenue Deficit**?
A. Total expenditure exceeding total receipts
B. Capital expenditure exceeding capital receipts
C. Revenue expenditure exceeding revenue receipts
D. Borrowings exceeding repayment
Revenue Deficit occurs when the government’s revenue expenditure is higher than its revenue receipts, indicating the deficit in day-to-day operations.
17. **Fiscal Deficit** is defined as:
A. Revenue receipts minus revenue expenditure
B. Total expenditure minus total receipts excluding borrowings
C. Capital receipts minus capital expenditure
D. Total borrowings minus repayments
Fiscal Deficit represents the total borrowing requirements of the government; it is the gap between total expenditure and total receipts excluding borrowings.
18. **Primary Deficit** is calculated as:
A. Fiscal deficit minus interest payments
B. Revenue deficit minus capital expenditure
C. Total receipts minus total expenditure
D. Fiscal deficit plus borrowings
Primary deficit measures the fiscal deficit after excluding interest payments, indicating the borrowing requirement for new expenditure.
19. Which of the following is true regarding **fiscal deficit**?
A. It is always equal to revenue deficit
B. It represents only capital expenditure
C. It excludes borrowings and loans given
D. It indicates the total borrowing requirement of the government
Fiscal deficit shows the total borrowing needs of the government, as it is the difference between total expenditure and total receipts excluding borrowings.
20. If the government’s fiscal deficit is ₹10 lakh crore and interest payments are ₹2 lakh crore, the **primary deficit** is:
