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Public Finance - Budget and Taxation PYQs – Economics, SSC & Railway

236 Public Finance - Budget and Taxation (Economics) questions asked in recent SSC and Railway exams, newest first, with exam, date & shift, answers and solutions – page 2 of 3.

📚 236 questionsSSC 134 · Railway 102
123
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 2 · Union Budget - latest highlights

Q101. The Union Budget 2025-26 announced a new initiative inspired by the 'Stand Up India' scheme, targeting first-time entrepreneurs from which categories?

  1. (a) SC, ST, and OBC communities
  2. (b) Women, SC, and ST categories
  3. (c) Minority communities and women
  4. (d) Economically Weaker Sections (EWS) and SC categories
Answer & solution

Answer: (b) Women, SC, and ST categories

The Union Budget 2025-26 announced an initiative inspired by the Stand Up India scheme, aimed at supporting first-time entrepreneurs from Women, SC, and ST categories. The original Stand Up India scheme (2016) provides bank loans between Rs 10 lakh and Rs 1 crore to SC/ST and women entrepreneurs for setting up greenfield enterprises.
(a) Incorrect: OBC communities are not specifically mentioned in the Stand Up India-inspired initiative; the focus is on Women, SC, and ST.
(c) Incorrect: Minority communities are not the primary target group for this initiative.
(d) Incorrect: EWS is not the focus of this scheme; Stand Up India targets Women, SC, and ST categories.
Delhi Police Constable (Exe) 2025-26 – 24 December 2025 Shift 1 · Indirect taxes and GST

Q102. What was the goal of introducing GST in India?

  1. (a) Raise tax rates for all sectors
  2. (b) Create a unified tax system and single market
  3. (c) Impose higher taxes on businesses
  4. (d) Centralize all tax policies
Answer & solution

Answer: (b) Create a unified tax system and single market

The correct answer is Create a unified tax system and single market (Option 2).
The primary goal of introducing the Goods and Services Tax (GST) in India (from July 1, 2017) was to replace the complex, fragmented system of multiple central and state taxes with a single unified tax system. This created a common national market, eliminated the cascading effect of taxes (tax on tax), and simplified compliance.
Option 1 - Raise tax rates: GST was not introduced to raise rates; it rationalized rates and in many cases reduced the overall tax burden by eliminating double taxation.
Option 3 - Impose higher taxes on businesses: GST was meant to reduce the hidden tax burden on businesses by allowing input tax credits and eliminating cascading taxes.
Option 4 - Centralize all tax policies: GST is administered by the GST Council, a cooperative federal body with both central and state representation; it does not centralize tax policy exclusively.
Delhi Police Constable (Exe) 2025-26 – 24 December 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q103. What is Primary deficit?

  1. (a) Revenue deficit minus grants
  2. (b) Fiscal deficit minus interest payments
  3. (c) Fiscal deficit plus interest payments
  4. (d) None of these
Answer & solution

Answer: (b) Fiscal deficit minus interest payments

The correct answer is Fiscal deficit minus interest payments (Option 2).
Primary Deficit is defined as the Fiscal Deficit minus the interest payments made by the government on its borrowings. It reflects the government's borrowing needs excluding interest obligations, indicating the extent to which current expenditure (other than interest) exceeds revenue.
Formula: Primary Deficit = Fiscal Deficit - Interest Payments
Option 1 - Revenue deficit minus grants: This is not the standard definition of Primary Deficit; Revenue Deficit = Revenue Expenditure - Revenue Receipts.
Option 3 - Fiscal deficit plus interest payments: Adding interest payments to the fiscal deficit would give a larger number, not the Primary Deficit.
Option 4 - None of these: This is incorrect because Option 2 correctly defines Primary Deficit.
Delhi Police Constable (Exe) 2025-26 – 24 December 2025 Shift 3 · FRBM Act and fiscal policy

Q104. Which of the following is NOT part of fiscal policy?

  1. (a) Tax rates
  2. (b) Open market operations
  3. (c) Subsidies
  4. (d) Government spending
Answer & solution

Answer: (b) Open market operations

The correct answer is Open market operations (Option 2).
Fiscal policy involves government decisions on taxation, subsidies, and public expenditure to influence the economy. Open market operations (buying and selling of government securities by the central bank to control money supply) is a monetary policy tool used by the Reserve Bank of India (RBI), not fiscal policy.
Option 1 - Tax rates: Tax rates are a core fiscal policy instrument — changes in tax rates directly affect government revenue and consumer spending.
Option 3 - Subsidies: Subsidies are government expenditures that reduce the cost of goods or services for consumers; they are part of fiscal policy.
Option 4 - Government spending: Government spending on infrastructure, welfare, and public services is a primary fiscal policy tool for stimulating economic activity.
Delhi Police Constable (Exe) 2025-26 – 22 December 2025 Shift 1 · Indirect taxes and GST

Q105. Why was VAT (2005) introduced by states?

  1. (a) Enhance custom duties
  2. (b) Increase central revenue
  3. (c) Remove cascading effects of sales tax
  4. (d) Promote imports
Answer & solution

Answer: (c) Remove cascading effects of sales tax

Value Added Tax (VAT) was introduced by Indian states from April 1, 2005, to replace the complex and fragmented state sales tax systems. The primary purpose was to remove the cascading effect of taxes (tax being levied on previously taxed amounts) by allowing input tax credit — businesses pay tax only on the value they add. Option 3 is correct.
Option 1 is wrong: Custom duties are levied at the central (Union) level on imports and exports; VAT is a state-level tax on domestic transactions and has no connection to custom duties.
Option 2 is wrong: VAT was a state-level tax that increased state revenues (not central revenue) by broadening the tax base and improving compliance; it was not introduced to increase central government revenue.
Option 4 is wrong: Promoting imports was not the objective of VAT; VAT applied to domestic trade within India. Import promotion would be addressed through trade policy, tariff reductions, or customs duty changes.
Delhi Police Constable (Exe) 2025-26 – 22 December 2025 Shift 3 · FRBM Act and fiscal policy

Q106. A policy that increases government spending or reduces taxes is called:

  1. (a) Fiscal contraction
  2. (b) Monetary contraction
  3. (c) Expansionary fiscal policy
  4. (d) Neutral policy
Answer & solution

Answer: (c) Expansionary fiscal policy

The correct answer is Expansionary fiscal policy (Option 3).
Expansionary fiscal policy involves increasing government expenditure or reducing taxes (or both) to stimulate economic growth, increase aggregate demand, and reduce unemployment.
Option 1 - Fiscal contraction: The opposite of expansionary policy; involves reducing government spending or increasing taxes to cool down an overheated economy.
Option 2 - Monetary contraction: A central bank policy of reducing money supply and raising interest rates; distinct from fiscal policy.
Option 4 - Neutral policy: A stance where fiscal policy neither stimulates nor restricts economic activity, maintaining the current level of spending and taxes.
Delhi Police Constable (Exe) 2025-26 – 20 December 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q107. When does crowding out occur?

  1. (a) Fiscal expansion lowers interest rates.
  2. (b) Government borrowing raises interest rates and reduces private investment.
  3. (c) Tax cuts decrease public spending.
  4. (d) Government spending reduces private consumption directly.
Answer & solution

Answer: (b) Government borrowing raises interest rates and reduces private investment.

Crowding out occurs when increased government borrowing (to finance fiscal deficits) raises interest rates in financial markets, making borrowing more expensive for private firms and households, thereby reducing private investment. This is the classic definition of crowding out. Option 2 is correct.
Option 1 is wrong: Fiscal expansion typically raises (not lowers) interest rates due to increased government borrowing, which is precisely how crowding out works.
Option 3 is wrong: Tax cuts generally increase disposable income and private spending; they don't describe the crowding out mechanism, which relates to government borrowing and interest rates.
Option 4 is wrong: While government spending can reduce private consumption through taxation, the crowding out effect specifically refers to the interest rate channel reducing private investment — not a direct reduction of private consumption.
Delhi Police Constable (Exe) 2025-26 – 19 December 2025 Shift 1 · Indirect taxes and GST

Q108. What was the most important impact of the Goods and Services Tax (2017)?

  1. (a) Privatization of Public Sector Undertakings
  2. (b) Reduced direct taxes
  3. (c) Creation of a unified national market with destination-based indirect taxation
  4. (d) Abolition of customs duties
Answer & solution

Answer: (c) Creation of a unified national market with destination-based indirect taxation

The Goods and Services Tax (GST), implemented on July 1, 2017, created a unified national market by replacing multiple Central and State indirect taxes (VAT, Service Tax, Central Excise, Entry Tax, etc.) with a single comprehensive tax. It introduced destination-based taxation (tax goes to the state where goods/services are consumed, not where they are produced), eliminating the cascading effect of taxes.
Option 1 is incorrect: GST is a tax reform; it has nothing to do with privatization of Public Sector Undertakings.
Option 2 is incorrect: GST is an indirect tax reform; it did not reduce direct taxes like income tax or corporate tax.
Option 4 is incorrect: GST did not abolish customs duties; customs duties on imports are a separate category and were not subsumed under GST.
Delhi Police Constable (Exe) 2025-26 – 19 December 2025 Shift 2 · Revenue and capital receipts and expenditure

Q109. Which of the following is NOT included in the government's revenue expenditure?

  1. (a) Capital infusion in public sector banks
  2. (b) Grants given to state governments
  3. (c) Subsidies on fertilizers
  4. (d) Interest payments on public debt
Answer & solution

Answer: (a) Capital infusion in public sector banks

Capital infusion in public sector banks (PSBs) is NOT a revenue expenditure — it is a CAPITAL expenditure. When the government injects capital into PSBs (e.g., bank recapitalization), it acquires equity shares/assets in return, which increases the government's asset holdings. This meets the definition of capital expenditure (creates or acquires assets). Revenue expenditure, by contrast, includes all day-to-day operational expenses that do not create assets.
Option 2 is incorrect (it IS revenue expenditure): Grants given to state governments are revenue expenditure when used for current purposes; they are classified as transfer payments under revenue expenditure.
Option 3 is incorrect (it IS revenue expenditure): Subsidies on fertilizers are recurring, non-asset-creating payments — they are squarely classified as revenue expenditure.
Option 4 is incorrect (it IS revenue expenditure): Interest payments on public debt are recurring, non-asset-creating payments — they are a major component of the government's revenue expenditure.
Delhi Police Constable (Exe) 2025-26 – 18 December 2025 Shift 1 · Deficits (fiscal, revenue, primary)

Q110. What occurs when the government spends more than it earns in revenue?

  1. (a) Budget surplus
  2. (b) Fiscal deficit
  3. (c) Trade deficit
  4. (d) Current account deficit
Answer & solution

Answer: (b) Fiscal deficit

A Fiscal Deficit occurs when the government's total expenditure exceeds its total revenue receipts (excluding borrowings). It represents the amount the government needs to borrow to meet its expenses. Fiscal deficit = Total Expenditure - Total Revenue (excluding borrowings).
Option (a) is incorrect: Budget surplus is the opposite situation — when government revenue exceeds expenditure.
Option (c) is incorrect: Trade deficit occurs when a country's imports of goods exceed its exports; it relates to external trade, not government finances.
Option (d) is incorrect: Current account deficit relates to the balance of payments (trade in goods, services, and transfers); it is not specifically about government spending exceeding revenue.
SSC CPO Paper-1 2025 – 12 December 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q111. Excluding borrowings, the excess of total expenditure over total receipts signifies which of the following?

  1. (a) Fiscal deficit
  2. (b) Revenue deficit
  3. (c) Budgetary deficit
  4. (d) Overall deficit
Answer & solution

Answer: (a) Fiscal deficit

Correct: Fiscal Deficit.
Fiscal Deficit = Total Expenditure − Total Receipts (excluding borrowings). It shows how much the government borrows to meet its expenditure gap. Revenue Deficit = Revenue Expenditure − Revenue Receipts. Budgetary Deficit = Total Expenditure − Total Receipts (including borrowings). Overall Deficit is not a standard Indian budget term.
Note: This question was Not Answered by the candidate.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · Revenue and capital receipts and expenditure

Q112. The capital account in the government budget deals with:

  1. (a) Only interest payments
  2. (b) Current subsidies and salaries
  3. (c) Assets and liabilities of the government
  4. (d) Tax collections and customs duties
Answer & solution

Answer: (c) Assets and liabilities of the government

Correct Answer: Assets and liabilities of the government (Option 3)
The Capital Account in the government budget deals with changes in assets and liabilities of the government. It includes capital receipts (borrowings, recovery of loans, disinvestment proceeds) and capital expenditure (creation of assets like infrastructure, repayment of loans, lending to states). The capital budget captures transactions that affect the government's net worth.
Interest payments are part of the Revenue Account (Revenue Expenditure) — not the Capital Account.
Current subsidies and salaries are Revenue Expenditure items — not Capital Account.
Tax collections and customs duties are Revenue Receipts — part of the Revenue Account.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q113. Read the following statements and select the appropriate option:
Statement 1: A budget deficit is encountered when the total expenditure of the government is greater than its total revenue, excluding borrowings.
Statement 2: A budget deficit is faced when the total revenue of the government is greater than its expenditure in a fiscal year.

  1. (a) Only Statement 1 is correct
  2. (b) Only Statement 2 is correct
  3. (c) Both Statement 1 and Statement 2 are correct
  4. (d) Neither Statement 1 nor Statement 2 is correct
Answer & solution

Answer: (a) Only Statement 1 is correct

Correct Answer: Only Statement 1 is correct (Option 1)
Statement 1 is CORRECT: A budget deficit occurs when the government's total expenditure exceeds its total revenue (excluding borrowings). This is the standard definition of a fiscal/budget deficit. The government must borrow to cover this gap.
Statement 2 is INCORRECT: Statement 2 describes the opposite — when revenue is greater than expenditure, that would be a BUDGET SURPLUS, not a deficit. A deficit means spending more than earning, not the reverse.
Therefore, only Statement 1 correctly defines a budget deficit.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · Direct taxes

Q114. Which of the following is an indirect tax?

  1. (a) Income Tax
  2. (b) Corporation Tax
  3. (c) Excise Duty
  4. (d) Wealth Tax
Answer & solution

Answer: (c) Excise Duty

Correct Answer: Excise Duty (Option 3)
Excise Duty is an indirect tax levied on the manufacture of goods within the country. It is called 'indirect' because it is first paid by the manufacturer but is ultimately passed on to the consumer through higher prices. The manufacturer acts as a tax collector, not the final bearer of the tax.
Income Tax is a direct tax — it is levied directly on a person's income and paid directly to the government by the taxpayer.
Corporation Tax is a direct tax — levied directly on the profits of companies.
Wealth Tax (now abolished in India) was a direct tax — levied on the net wealth of individuals above a threshold.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 1 · Revenue and capital receipts and expenditure

Q115. What is the impact of PSU disinvestment on the government's financial structure?

  1. (a) It increases government's liabilities
  2. (b) It reduces government's financial assets
  3. (c) It increases the government's earnings permanently
  4. (d) It does not affect finances at all
Answer & solution

Answer: (b) It reduces government's financial assets

Correct Answer: It reduces government's financial assets
When the government divests (sells its stake) in Public Sector Undertakings (PSUs), it reduces its ownership/equity stake in those enterprises. This means the government's financial assets (equity/shareholding) decrease. The disinvestment proceeds are a one-time capital receipt, not permanent earnings.
Option 1: Incorrect. Disinvestment reduces liabilities in the sense of reducing management burden; it doesn't increase liabilities.
Option 3: Incorrect. Disinvestment proceeds are non-recurring one-time receipts, not permanent earnings.
Option 4: Incorrect. It significantly affects the government's financial structure by changing its asset composition.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 2 · Union Budget - components and process

Q116. What does the Finance Bill presented in the Budget mainly contain?

  1. (a) Details of government borrowing plans
  2. (b) Proposals related to tax changes or rules
  3. (c) Estimates of state-level expenditure only
  4. (d) Monetary policy statements of RBI
Answer & solution

Answer: (b) Proposals related to tax changes or rules

Correct Answer: Proposals related to tax changes or rules
The Finance Bill is a Money Bill presented in Parliament alongside the Union Budget. It contains proposals for changes in taxation — new taxes, modifications to existing tax rates, and amendments to tax laws. It requires approval of Parliament and implements the taxation proposals in the Budget Speech.
Option 1 (Borrowing plans): Incorrect. Borrowing is mentioned in the Budget but not the core of the Finance Bill.
Option 3 (State expenditure): Incorrect. State expenditure is in State Budgets.
Option 4 (RBI monetary policy): Incorrect. RBI's monetary policy is set independently in its MPC meetings.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 2 · Revenue and capital receipts and expenditure

Q117. Which of the following is an example of a capital receipt for the Indian government?

  1. (a) Income tax collection
  2. (b) Dividends received from Public Sector Undertakings (PSUs)
  3. (c) Disinvestment proceeds from selling shares of PSUs
  4. (d) Goods and Services Tax (GST) collection
Answer & solution

Answer: (c) Disinvestment proceeds from selling shares of PSUs

Correct Answer: Disinvestment proceeds from selling shares of PSUs
Capital receipts are those that create a liability or reduce an asset for the government. Disinvestment proceeds (selling government's share in PSUs) reduce the government's financial assets — hence it is a capital receipt.
Option 1 (Income tax): Incorrect. Tax revenue is a revenue receipt.
Option 2 (PSU dividends): Incorrect. Dividends are revenue receipts (non-tax revenue).
Option 4 (GST): Incorrect. GST is a revenue receipt (tax revenue).
SSC CPO Paper-1 2025 – 9 December 2025 Shift 1 · Union Budget - components and process

Q118. The Union Budget of India is presented for which period?

  1. (a) Calendar year
  2. (b) Financial year from Jan to Dec
  3. (c) Financial year from April to March
  4. (d) Financial year from July to June
Answer & solution

Answer: (c) Financial year from April to March

Answer: (c) Financial year from April to March
Solution:
TheUnion Budget of Indiais presented for thefinancial year.
India’s financial year starts on1 Apriland ends on31 March.
So, the correct period isApril to March.
SSC CPO Paper-1 2025 – 9 December 2025 Shift 2 · Revenue and capital receipts and expenditure

Q119. Which of the following is a typical example of Revenue Expenditure?

  1. (a) Construction of a railway terminal
  2. (b) Purchase of land for a PSU facility
  3. (c) Interest paid on a government loan
  4. (d) Funding a national highway project
Answer & solution

Answer: (c) Interest paid on a government loan

Correct Answer: Interest paid on a government loan
Revenue Expenditure is the expenditure that does not create assets or reduce liabilities. Interest paid on government loans is a recurring expense that does not create any new asset — it is a classic example of revenue expenditure.
Option 1 (Construction of railway terminal): Capital Expenditure — creates a long-term asset.
Option 2 (Purchase of land): Capital Expenditure — acquisition of an asset.
Option 4 (Funding highway project): Capital Expenditure — infrastructure creation.
SSC Stenographer 2025 – 8 December 2025 Shift 1 · FRBM Act and fiscal policy

Q120. What was the main purpose behind the enactment of the FRBM (Fiscal Responsibility and Budget Management) Act?

  1. (a) To increase fiscal deficit
  2. (b) To reduce government borrowing
  3. (c) To promote foreign trade
  4. (d) To regulate private sector investments
Answer & solution

Answer: (b) To reduce government borrowing

The FRBM Act (2003) was enacted to ensure fiscal discipline, reduce fiscal deficit, and limit overall government borrowing. Its objective was to create a stable macroeconomic environment by controlling excessive government debt and ensuring responsible public finance management. It also aimed to promote transparency in fiscal operations and set targets for reducing fiscal deficit and revenue deficit over time.
SSC Stenographer 2025 – 8 December 2025 Shift 3 · FRBM Act and fiscal policy

Q121. In what way did fiscal discipline reforms affect center-state financial relations post-1991?

  1. (a) States had to adhere to fiscal targets
  2. (b) Centralized control over agriculture pricing
  3. (c) Increased state autonomy in tax policy
  4. (d) Reduced tax sharing
Answer & solution

Answer: (a) States had to adhere to fiscal targets

The correct answer is Option 1: States had to adhere to fiscal targets . After the 1991 economic reforms, India adopted a policy framework that emphasized fiscal discipline to stabilize the economy and ensure sustainable growth. This required both the central and state governments to maintain fiscal responsibility and reduce budgetary deficits. Mechanisms such as the Fiscal Responsibility and Budget Management (FRBM) Act were introduced, making states accountable for controlling excessive borrowing and adhering to set fiscal targets. The reforms did not centralize agricultural pricing or increase tax autonomy; rather, they emphasized coordinated fiscal discipline. This strengthened financial accountability but also limited the states' flexibility in expenditure and borrowing.
SSC Stenographer 2025 – 7 December 2025 Shift 1 · FRBM Act and fiscal policy

Q122. Which of the following best describes the primary objective of a government’s fiscal policy?

  1. (a) To regulate the stock market and financial institutions.
  2. (b) To promote international trade and maintain a favorable balance of payments.
  3. (c) To influence aggregate demand and economic activity through government spending and taxation.
  4. (d) To control the money supply and interest rates.
Answer & solution

Answer: (c) To influence aggregate demand and economic activity through government spending and taxation.

Fiscal policy is the policy used by the government to manage the economy by adjusting government spending and taxation . The primary aim of fiscal policy is to influence the aggregate demand in the economy and thereby ensure economic stability, employment generation, and sustainable growth.For example, during a recession, the government may increase spending on infrastructure projects and reduce taxes to boost demand and create jobs. Conversely, during high inflation, the government may reduce spending or increase taxes to control excessive demand. Options 1 and 4 relate more to monetary policy , which is controlled by the central bank (like RBI in India) to regulate money supply and interest rates. Option 2 relates to external trade policies. Hence, the correct answer is: To influence aggregate demand and economic activity through government spending and taxation (Option 3).
SSC Stenographer 2025 – 7 December 2025 Shift 2 · FRBM Act and fiscal policy

Q123. What is the role of the finance minister under the FRBM Act?

  1. (a) To present fiscal policy statements to Parliament
  2. (b) To regulate the stock market
  3. (c) To manage foreign trade policies
  4. (d) To oversee disinvestment strategies
Answer & solution

Answer: (a) To present fiscal policy statements to Parliament

Under the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 , the Finance Minister is required to present three important fiscal policy statements to Parliament every year : (a) Medium-Term Fiscal Policy Statement, (b) Fiscal Policy Strategy Statement, and (c) Macro-Economic Framework Statement. These statements ensure transparency, accountability, and fiscal discipline in the government’s financial management. The main objective is to reduce fiscal deficit and ensure long-term economic stability.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 1 · Union Budget - components and process

Q124. In India's gender budget, _____ includes schemes where the budgetary allocation for women and girls is below 30% of the total provision.

  1. (a) Part A
  2. (b) Part D
  3. (c) Part B
  4. (d) Part C
Answer & solution

Answer: (d) Part C

Correct Answer: Option 4 – Part C
In India's Gender Budget Statement, Part C (introduced in Union Budget 2024-25) includes schemes where the budgetary allocation for women and girls is below 30% of the total provision. Previously the Gender Budget had two parts: Part A (100% allocation for women) and Part B (30% or more allocation for women). Part C was added to capture partial allocations below 30%.
Why other options are wrong:
Option 1 (Part A): Part A includes schemes that have 100% allocation for women/girls.
Option 2 (Part D): There is no Part D in India's Gender Budget Statement.
Option 3 (Part B): Part B includes schemes where at least 30% allocation is for women/girls.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 2 · Direct taxes

Q125. Which of the following is known as the Paper tax in India?
I. Wealth tax
II. Goods and Services tax

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (a) Only I

Correct Answer: Option 1 – Only I
Wealth Tax (I) is known as the 'Paper Tax' in India, because it was levied on the declared (paper) value of assets owned by individuals. It was seen as a tax that existed largely on paper with limited actual collection, and was abolished in 2015.
GST (II) is not called a Paper Tax; it is a comprehensive indirect tax on goods and services.
Why other options are wrong:
Option 2 (Only II): GST is not known as Paper Tax.
Option 3 (Both I and II): Only Wealth Tax qualifies as Paper Tax; the candidate incorrectly selected this.
Option 4 (Neither I nor II): Incorrect; Wealth Tax is indeed called Paper Tax.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 2 · Revenue and capital receipts and expenditure

Q126. Which of the following relates to those expenses incurred for the normal functioning of the government departments?

  1. (a) Revenue expenditure
  2. (b) Capital expenditure
  3. (c) Revenue receipt
  4. (d) Capital receipt
Answer & solution

Answer: (a) Revenue expenditure

Correct Answer: Option 1 – Revenue expenditure
Revenue expenditure refers to government expenses incurred for the normal day-to-day functioning of government departments and various services. It includes salaries, pensions, subsidies, interest payments, and maintenance costs. It does not create assets and is recurring in nature.
Why other options are wrong:
Option 2 (Capital expenditure): Capital expenditure is for creating long-term assets like infrastructure, buildings, and machinery.
Option 3 (Revenue receipt): Revenue receipts are government earnings (taxes, fees) — not expenses.
Option 4 (Capital receipt): Capital receipts are government borrowings and disinvestment proceeds — not operational expenses.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 3 · Union Budget - latest highlights

Q127. The Union Finance Minister in Budget 2025-26 announced to set up _____ Atal Tinkering Labs in Government schools in next 5 years.

  1. (a) 21000
  2. (b) 50000
  3. (c) 75000
  4. (d) 100000
Answer & solution

Answer: (b) 50000

Correct Answer: Option 2 – 50000
In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced the setting up of 50,000 Atal Tinkering Labs (ATLs) in Government schools across India over the next 5 years. ATLs are innovation workspaces for students designed to promote creativity, problem-solving, and scientific thinking.
Why other options are wrong:
Option 1 (21000): Incorrect; the announced target was 50,000 ATLs.
Option 3 (75000): Higher than the announced figure of 50,000.
Option 4 (100000): Incorrect; the budget announcement was specifically for 50,000 ATLs.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 3 · Revenue and capital receipts and expenditure

Q128. Which of the following statement is correct regarding money received by the government from loans and the sale of its own assets?

  1. (a) Loans create liability but sale of asset do not
  2. (b) Sale of asset create liability but loans do not
  3. (c) Loans are part of revenue receipts and sale of assets are part of capital receipts
  4. (d) Loans and sale of assets both do not reduces or increases the total amount of government financial assets
Answer & solution

Answer: (a) Loans create liability but sale of asset do not

Correct Answer: Option 1 – Loans create liability but sale of asset do not
When the government borrows money (loans), it creates a liability — the government must repay the loan with interest. However, when the government sells its assets (like disinvestment of PSUs), it receives money but does NOT create a new liability — it simply converts one asset (shares/property) into cash.
Why other options are wrong:
Option 2: Incorrect; it is loans (not asset sales) that create liabilities.
Option 3: Loans are capital receipts (not revenue receipts); both loans and asset sales are capital receipts.
Option 4: Incorrect; loans increase liabilities and asset sales reduce assets — both affect the financial position.
SSC CHSL Tier-1 2025 – 29 November 2025 Shift 2 · Union Budget - latest highlights

Q129. In April 2025, Union Minister of Commerce & Industry, Shri Piyush Goyal announced that Second Fund of Funds for Startups worth Rs. _____ crore to boost deep-tech and early-stage innovation has been approved.

  1. (a) 10000
  2. (b) 5000
  3. (c) 8000
  4. (d) 3000
Answer & solution

Answer: (a) 10000

In April 2025, Union Minister Shri Piyush Goyal announced that the Second Fund of Funds for Startups worth Rs. 10,000 crore has been approved. This fund aims to boost deep-tech and early-stage innovation in India by providing capital to venture capital funds that in turn invest in startups.
Rs. 5,000 crore , Rs. 8,000 crore , and Rs. 3,000 crore are incorrect amounts.
SSC CHSL Tier-1 2025 – 29 November 2025 Shift 2 · Union Budget - latest highlights

Q130. In the Union Budget 2025-26, there has been a plan to establish _____ Day Care Cancer Centres in 2025-26.

  1. (a) 200
  2. (b) 500
  3. (c) 350
  4. (d) 750
Answer & solution

Answer: (a) 200

In the Union Budget 2025-26, the government announced a plan to establish 200 Day Care Cancer Centres in district hospitals across India in 2025-26. This initiative aims to improve cancer care accessibility at the grassroots level, especially for patients who need chemotherapy without overnight hospitalisation .
500, 350, and 750 are incorrect numbers for this initiative.
SSC CHSL Tier-1 2025 – 29 November 2025 Shift 1 · Direct taxes

Q131. In 2002-2003, the Government of India set up a committee to review the fiscal reforms both in respect of Direct and Indirect taxes under the chairmanship of _____.

  1. (a) Vijay Kelkar
  2. (b) Chakravarthi Rangarajan
  3. (c) Abid Hussain
  4. (d) Deepak Parekh
Answer & solution

Answer: (a) Vijay Kelkar

The Vijay Kelkar Committee was set up in 2002-2003 by the Government of India to review fiscal reforms for both Direct and Indirect taxes. Its recommendations significantly influenced India's tax reform framework.
Chakravarthi Rangarajan, Abid Hussain, and Deepak Parekh led different committees. Hence, Vijay Kelkar is correct.
SSC CHSL Tier-1 2025 – 29 November 2025 Shift 3 · FRBM Act and fiscal policy

Q132. Fiscal Responsibility and Budget Management Act was enacted in which year?

  1. (a) 2007
  2. (b) 2001
  3. (c) 2003
  4. (d) 2005
Answer & solution

Answer: (c) 2003

Correct Answer: Option 3 – 2003
The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003 and came into force on 5 July 2004. The Act was introduced to ensure fiscal discipline by the Government, setting targets for reducing fiscal and revenue deficits to maintain macroeconomic stability.
Why other options are wrong:
Option 1 (2007): Incorrect; the act was enacted four years earlier in 2003.
Option 2 (2001): Incorrect; this was before the act was passed.
Option 4 (2005): Incorrect; the FRBM Act was enacted in 2003, though it came into force in 2004.
SSC CHSL Tier-1 2025 – 28 November 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q133. The gross fiscal deficit as a ratio to GDP in India had climbed to _____ per cent by 1990-91.

  1. (a) 10
  2. (b) 25
  3. (c) 30
  4. (d) 45
Answer & solution

Answer: (a) 10

The gross fiscal deficit as a ratio to GDP in India had climbed to approximately 10 per cent by 1990-91. This was a period of severe fiscal stress and balance of payments crisis in India, which led to the landmark economic reforms of 1991 under Prime Minister P.V. Narasimha Rao and Finance Minister Dr. Manmohan Singh.
25%, 30%, and 45% are incorrect figures for this period.
SSC CHSL Tier-1 2025 – 28 November 2025 Shift 3 · Union Budget - latest highlights

Q134. The " Aatmanirbharta in Pulses" campaign, launched in Union Budget 2025, is a government mission spanning _____ years to achieve self-sufficiency in pulse production.

  1. (a) 3
  2. (b) 4
  3. (c) 5
  4. (d) 6
Answer & solution

Answer: (d) 6

The " Aatmanirbharta in Pulses" campaign was launched in the Union Budget 2025 as a 6-year government mission aimed at achieving self-sufficiency in pulse production. India is one of the largest producers and consumers of pulses globally, yet relies on imports. This mission aims to bridge the demand-supply gap domestically.
3, 4, and 5 years are incorrect durations for this mission.
SSC CHSL Tier-1 2025 – 28 November 2025 Shift 1 · Union Budget - latest highlights

Q135. The Union Budget 2025-26 states that total number of students in 23 IITs has increased 100 per cent from 65,000 to 1.35 lakh in the past _____ years.

  1. (a) 10
  2. (b) 8
  3. (c) 20
  4. (d) 5
Answer & solution

Answer: (a) 10

As per the Union Budget 2025-26, the total number of students across 23 IITs increased 100 per cent from 65,000 to 1.35 lakh over the past 10 years. This highlights the significant expansion of IIT capacity and intake under various government initiatives.
Options 8, 20, and 5 years are incorrect. Hence, 10 is correct.
SSC CHSL Tier-1 2025 – 27 November 2025 Shift 2 · Union Budget - latest highlights

Q136. In the Union Budget 2025-26, a Maritime Development Fund of Rs. _____ crore over 10 years has been announced.

  1. (a) 20000
  2. (b) 25000
  3. (c) 30000
  4. (d) 35000
Answer & solution

Answer: (b) 25000

In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced a Maritime Development Fund of Rs. 25,000 crore over 10 years to boost India's maritime sector, port infrastructure, and strengthen India's presence in global maritime trade.
The amounts of Rs. 20,000 crore , Rs. 30,000 crore , and Rs. 35,000 crore are incorrect.
SSC CHSL Tier-1 2025 – 25 November 2025 Shift 1 · Union Budget - latest highlights

Q137. In the Union Budget 2025, which of the following has been announced for Gig Workers in India?
I. e-Shram registration
II. Healthcare security under PM Jan Arogya Yojana

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (c) Both I and II

In Union Budget 2025, both announcements were made for Gig Workers:
I. e-Shram registration: Gig workers were to be registered on the e-Shram portal for identity and benefits.
II. Healthcare security: Gig workers were to be covered under PM Jan Arogya Yojana (Ayushman Bharat) for health insurance.
Hence, Both I and II are correct.
SSC CHSL Tier-1 2025 – 25 November 2025 Shift 1 · Direct taxes

Q138. Who was the chairman of the Tax Reforms Committee 1991?

  1. (a) Manmohan Singh
  2. (b) P. Chidambaram
  3. (c) Raja J. Chelliah
  4. (d) Shakti Kant Das
Answer & solution

Answer: (c) Raja J. Chelliah

Raja J. Chelliah (Dr. Raja Jagannathan Chelliah) was the chairman of the Tax Reforms Committee (TRC) set up in 1991. Known as the 'Chelliah Committee', it recommended sweeping changes to India's direct and indirect tax structure as part of the 1991 economic liberalisation reforms.
Manmohan Singh was Finance Minister; P. Chidambaram chaired other financial committees; Shakti Kant Das is a former RBI Governor. None of them chaired the 1991 TRC.
SSC CHSL Tier-1 2025 – 25 November 2025 Shift 1 · Revenue and capital receipts and expenditure

Q139. In the context of Budget, which of the following statement is correct regarding capital expenditure?
I. It does not create physical or financial assets.
II. Acquisition of machinery is an example of capital expenditure.

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (b) Only II

Statement I is INCORRECT: Capital expenditure does create physical or financial assets (e.g., roads, buildings, machinery, equity investments). That is precisely what distinguishes it from revenue expenditure.
Statement II is CORRECT: Acquisition of machinery is a classic example of capital expenditure, as it creates a productive physical asset with long-term benefits.
Hence, Only Statement II is correct.
SSC CHSL Tier-1 2025 – 25 November 2025 Shift 2 · Union Budget - latest highlights

Q140. Finance Minister during her budget speech 2025-26 has announced extension of Jal Jeevan Mission until _____.

  1. (a) 2035
  2. (b) 2034
  3. (c) 2028
  4. (d) 2029
Answer & solution

Answer: (c) 2028

In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced the extension of the Jal Jeevan Mission until 2028. The mission, launched in 2019, aims to provide piped drinking water to every rural household under the 'Har Ghar Jal' initiative.
Options 2035, 2034, and 2029 are incorrect.
SSC CHSL Tier-1 2025 – 25 November 2025 Shift 2 · Direct taxes

Q141. In _____, government of India set up a committee to review the fiscal reforms and suggest appropriate framework under the chairmanship of Vijay Kelkar.

  1. (a) 2000-01
  2. (b) 2002-03
  3. (c) 2004-05
  4. (d) 2006-07
Answer & solution

Answer: (b) 2002-03

The Government of India set up the Vijay Kelkar Committee (Task Force on Direct and Indirect Taxes) in 2002-03 to review fiscal reforms and recommend a suitable framework. The committee submitted two reports (on direct taxes and indirect taxes) which formed the basis of significant tax reforms in India.
The candidate incorrectly selected 2004-05. Years 2000-01 and 2006-07 are incorrect.
SSC CHSL Tier-1 2025 – 25 November 2025 Shift 3 · Indirect taxes and GST

Q142. Which of the following tax (now replaced by GST) was levied by Central government?
I. Entertainment tax
II. Entry tax

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (d) Neither I nor II

Both statements are incorrect regarding Central government levying:
I. Entertainment tax was levied by State governments, not the Central government. It was subsumed under GST.
II. Entry tax was also levied by State governments on goods entering local areas. It too was subsumed under GST.
Both Entertainment tax and Entry tax were state-level taxes before GST. Hence, Neither I nor II were Central government taxes.
SSC CHSL Tier-1 2025 – 24 November 2025 Shift 1 · Union Budget - latest highlights

Q143. Bharatiya Bhasha Pustak Scheme has been launched in Budget 2025. Which ministry is implementing it?

  1. (a) Ministry of Culture
  2. (b) Ministry of Education
  3. (c) Ministry of Information and Broadcasting
  4. (d) Ministry of Home Affairs
Answer & solution

Answer: (b) Ministry of Education

Correct Answer: Ministry of Education (Option 2)
The Bharatiya Bhasha Pustak Scheme was announced in Union Budget 2025 to provide digital Indian-language books and reading material for students in higher education. It is implemented by the Ministry of Education. The scheme aims to promote Indian languages in technical and higher education.
Ministry of Culture handles heritage, arts, and museums — not educational book schemes.
Ministry of Information and Broadcasting handles media and broadcasting, not educational books.
Ministry of Home Affairs handles internal security and administration, not education schemes.
SSC CHSL Tier-1 2025 – 24 November 2025 Shift 1 · Public debt

Q144. If the government continues to borrow year after year, it leads to ___.

  1. (a) accumulation of debt
  2. (b) accumulation of foreign direct investment
  3. (c) accumulation of foreign institutional investment
  4. (d) contraction of the monetary policy
Answer & solution

Answer: (a) accumulation of debt

Correct Answer: accumulation of debt (Option 1)
When the government continues to borrow year after year to finance its expenditure (deficit financing), it leads to the accumulation of debt (public debt). The total outstanding borrowings of the government keep rising, increasing the debt burden on the nation. This is a fundamental concept of fiscal policy.
Accumulation of foreign direct investment (FDI) results from business investment decisions by foreign companies — not from government borrowing.
Accumulation of foreign institutional investment (FII) results from foreign portfolio investors buying Indian securities — independent of government borrowing.
Contraction of monetary policy is a central bank action (raising interest rates, reducing money supply) — it is not a direct consequence of government borrowing.
SSC CHSL Tier-1 2025 – 24 November 2025 Shift 3 · Revenue and capital receipts and expenditure

Q145. In the context of Budget, which of the following is NOT an example of capital expenditure of government?

  1. (a) Acquisition of land
  2. (b) Investment in shares
  3. (c) Building for development
  4. (d) Subsidies
Answer & solution

Answer: (d) Subsidies

Correct Answer: Subsidies (Option 4)
Subsidies are NOT capital expenditure — they are revenue expenditure of the government. Revenue expenditure is money spent on day-to-day functioning and does not create assets (e.g., salaries, subsidies, interest payments). Capital expenditure, on the other hand, creates or acquires assets or reduces liabilities.
Acquisition of land — is capital expenditure as it creates a physical asset.
Investment in shares — is capital expenditure as it creates financial assets.
Building for development — is capital expenditure as construction creates durable physical assets.
SSC CHSL Tier-1 2025 – 22 November 2025 Shift 1 · Revenue and capital receipts and expenditure

Q146. In the context of Budget, the salaries, pensions, defence services comes under _____.

  1. (a) revenue expenditure
  2. (b) revenue receipts
  3. (c) capital receipts
  4. (d) capital expenditure
Answer & solution

Answer: (a) revenue expenditure

Correct Answer: revenue expenditure (Option 1)
Revenue expenditure refers to the government's spending on day-to-day operations that do not create long-term assets. Salaries and wages of government employees, pensions, and expenditure on defence services (operational costs) are all classified as revenue expenditure because they are recurring in nature and do not result in the creation of capital assets.
Why other options are wrong:
Option 2 - revenue receipts: These are incomes of the government (taxes, non-tax revenues) — not expenditure.
Option 3 - capital receipts: These refer to government income that creates liabilities or reduces assets (borrowings, disinvestment proceeds).
Option 4 - capital expenditure: This involves spending on long-term assets like infrastructure, buildings, and machinery.
SSC CHSL Tier-1 2025 – 22 November 2025 Shift 1 · FRBM Act and fiscal policy

Q147. The Fiscal Responsibility and Budget Management Act-2003 mandates the central government to reduce fiscal deficit to not more than _____ of GDP.

  1. (a) 1%
  2. (b) 2%
  3. (c) 3%
  4. (d) 8%
Answer & solution

Answer: (c) 3%

Correct Answer: 3% (Option 3)
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 mandates that the central government reduce and maintain the fiscal deficit to not more than 3% of GDP. This was set as a medium-term fiscal consolidation target. The act was enacted to ensure fiscal discipline, reduce fiscal deficit, and promote macroeconomic stability in India.
Why other options are wrong:
Option 1 - 1%: This is too strict a target and not what the FRBM Act specifies.
Option 2 - 2%: This is also stricter than the 3% FRBM mandate.
Option 4 - 8%: This is far higher than the prescribed FRBM limit and represents a high deficit level.
SSC CHSL Tier-1 2025 – 22 November 2025 Shift 3 · Revenue and capital receipts and expenditure

Q148. The disinvestment of a public sector unit leads to _____.

  1. (a) reduction in financial assets of the government
  2. (b) increase in the financial assets of the government
  3. (c) creation of liability of the government
  4. (d) increase in the tax revenue of the government
Answer & solution

Answer: (a) reduction in financial assets of the government

Correct Answer: reduction in financial assets of the government (Option 1)
Disinvestment refers to the government selling its ownership stake (shares) in a Public Sector Undertaking (PSU). When the government sells its shares in a PSU, it reduces its ownership (financial assets) in that company. Therefore, disinvestment leads to a reduction in the financial assets of the government. Though the government receives cash in exchange, the shares (equity holdings) it holds reduce.
Why other options are wrong:
Option 2 - increase in financial assets: While the government receives cash, its equity stake (financial asset) decreases — overall financial assets reduce.
Option 3 - creation of liability: Disinvestment is selling existing assets, not creating liabilities.
Option 4 - increase in tax revenue: Disinvestment proceeds are non-tax revenue (capital receipts), not tax revenue.
SSC CHSL Tier-1 2025 – 21 November 2025 Shift 1 · Revenue and capital receipts and expenditure

Q149. Which of the following statement is correct regarding the government budget?
I. Subsidies are an important policy instrument which aim at increasing welfare.
II. D efence expenditure, is committed expenditure in the sense that given the national security concerns, there exists little scope for drastic reduction.

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (c) Both I and II

Both statements are correct regarding the government budget: Statement I: Subsidies are indeed important policy instruments used by governments to increase welfare by reducing the cost of goods and services for targeted groups (e.g., food subsidies, fertilizer subsidies). Statement II: Defence expenditure is classified as committed expenditure because national security requirements mean that it cannot be drastically reduced without compromising security. Both statements correctly describe aspects of government budgeting. Why other options are wrong: Option 1 (Only I): Incorrect; Statement II is also correct. Option 2 (Only II): Incorrect; Statement I is also correct. Option 4 (Neither): Both statements are factually correct.
SSC CHSL Tier-1 2025 – 21 November 2025 Shift 3 · Indirect taxes and GST

Q150. Which of the following has amalgamated a large number of central and state taxes and cesses ?

  1. (a) 1. Goods and Services Tax
  2. (b) 2. Customs duty
  3. (c) 3. Minimum Alternate Tax
  4. (d) 4. Corporate tax
Answer & solution

Answer: (a) 1. Goods and Services Tax

The Goods and Services Tax (GST), implemented on July 1, 2017, amalgamated numerous central taxes (Central Excise Duty, Service Tax, Central Sales Tax, etc.) and state taxes (VAT, Entry Tax, Entertainment Tax, etc.) and various cesses into a single comprehensive indirect tax system. Customs duty, Minimum Alternate Tax (MAT), and Corporate tax are standalone taxes that did not subsume multiple other taxes.
SSC CHSL Tier-1 2025 – 20 November 2025 Shift 1 · Union Budget - components and process

Q151. The estimates of revenue receipts take into account the effects of tax proposals made in the _____.

  1. (a) Finance bill
  2. (b) Appropriation bill
  3. (c) Constitution amendment bill
  4. (d) Demand for grant bill
Answer & solution

Answer: (a) Finance bill

The Finance Bill contains all proposals related to tax changes (direct and indirect taxes). When the Union Budget is presented, the Finance Bill outlines new tax proposals or changes to existing taxes, which directly affect the estimates of revenue receipts for the government. Why other options are wrong: Option 2 - Appropriation Bill: This authorizes the government to withdraw funds from the Consolidated Fund of India for government expenditure; it does not deal with tax proposals. Option 3 - Constitution amendment bill: This is used to amend the Constitution and is not related to annual revenue receipt estimates. Option 4 - Demand for grant bill: This deals with the expenditure side of the budget, not with tax proposals affecting revenue receipts.
SSC CHSL Tier-1 2025 – 20 November 2025 Shift 2 · Union Budget - latest highlights

Q152. The Union Budget 2025-26 announced to set up a Centre of Excellence in Artificial Intelligence for education with a total outlay of Rs _____ crores.

  1. (a) 200
  2. (b) 100
  3. (c) 300
  4. (d) 500
Answer & solution

Answer: (d) 500

Correct Answer: Rs. 500 crores
In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced the establishment of a Centre of Excellence in Artificial Intelligence for Education with a total outlay of Rs. 500 crores. This Centre of Excellence aims to leverage AI to improve educational outcomes, develop AI-based learning tools, and train teachers in using AI technologies in education.
Why other options are wrong:
- Rs. 200 crore: Lower than the actual announced outlay.
- Rs. 100 crore: Much lower than the actual announced outlay.
- Rs. 300 crore: Not the announced figure for this scheme.
SSC CHSL Tier-1 2025 – 20 November 2025 Shift 2 · Union Budget - latest highlights

Q153. Prime Minister Dhan-Dhaanya Krishi Yojana approved in July 2025 aims to benefit how many (in crores) farmers initially?

  1. (a) 1.7
  2. (b) 2.5
  3. (c) 1.2
  4. (d) 2.0
Answer & solution

Answer: (a) 1.7

Correct Answer: 1.7 crore farmers
The PM Dhan-Dhaanya Krishi Yojana, approved in July 2025, aims to initially benefit 1.7 crore (17 million) farmers. The scheme focuses on improving agricultural productivity in 100 low-productivity districts across India through district-level interventions including better seeds, crop insurance, credit facilities, and post-harvest infrastructure.
Why other options are wrong:
- 2.5 crore: Higher than the initially targeted beneficiary count.
- 1.2 crore: Lower than the announced initial target.
- 2.0 crore: Not the announced initial beneficiary figure.
SSC CHSL Tier-1 2025 – 19 November 2025 Shift 2 · Revenue and capital receipts and expenditure

Q154. In the context of Budget, which of the following is included in the revenue expenditure?
I. Salaries of government employees
II. Pensions of government employees

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (c) Both I and II

Correct Answer: Both I and II (Option 3)
Both salaries and pensions of government employees are included in Revenue Expenditure in the Union Budget. Revenue Expenditure refers to recurring expenses that do not result in the creation of assets.
Statement I is correct: Salaries paid to government employees are a regular recurring expenditure and are classified as revenue expenditure.
Statement II is correct: Pensions paid to retired government employees are also recurring payments and form part of revenue expenditure.
Hence, both I and II are correct.
SSC CHSL Tier-1 2025 – 19 November 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q155. What is the traditional belief about the effect of a government cutting taxes and running a budget deficit?

  1. (a) It promotes consumers spend more
  2. (b) It promotes consumers spend less
  3. (c) It promotes foreign investors to opt out from economy rapidly
  4. (d) It shows government irresponsive behaviour
Answer & solution

Answer: (a) It promotes consumers spend more

Correct Answer: It promotes consumers spend more (Option 1)
The traditional (Keynesian) belief about a government cutting taxes and running a budget deficit is that it stimulates consumer spending. When taxes are cut, consumers have more disposable income, which leads to increased spending (consumption). Running a budget deficit (expansionary fiscal policy) injects money into the economy, boosting aggregate demand — this is the traditional view known as fiscal stimulus.
Why others are wrong:
Option 2 - It promotes consumers spend less: This is the opposite of what tax cuts and deficit spending are intended to achieve.
Option 3 - It promotes foreign investors to opt out: This is not the traditional belief; if anything, stimulus can attract investment through economic growth.
Option 4 - It shows government irresponsive behaviour : This is a normative judgment, not the traditional economic belief about fiscal policy.
SSC CHSL Tier-1 2025 – 18 November 2025 Shift 1 · Union Budget - latest highlights

Q156. In Budget 2025, the Union Finance Minister announced to set up fifty thousand Atal Tinkering Labs in Government schools in next _____ years.

  1. (a) 2
  2. (b) 3
  3. (c) 4
  4. (d) 5
Answer & solution

Answer: (d) 5

In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced the establishment of 50,000 Atal Tinkering Labs in Government schools over the next 5 years. Atal Tinkering Labs (ATL) are innovation workspaces for students to develop STEM (Science, Technology, Engineering, Mathematics) skills under the Atal Innovation Mission. Why other options are wrong: Option 1 (2 years): Too short a timeframe for such a large-scale rollout. Option 2 (3 years): Incorrect; the announced timeline is 5 years. Option 3 (4 years): Incorrect; the budget announcement specified 5 years.
SSC CHSL Tier-1 2025 – 18 November 2025 Shift 1 · Revenue and capital receipts and expenditure

Q157. Interest payment on debt incurred by the government is part of the _____.

  1. (a) Revenue receipt
  2. (b) Revenue expenditure
  3. (c) Capital receipt
  4. (d) Capital expenditure
Answer & solution

Answer: (b) Revenue expenditure

Interest payments on government debt are classified as Revenue Expenditure in the Union Budget. Revenue expenditure is the government's spending on items that do not create assets or reduce liabilities — such as salaries, interest payments, subsidies, and pensions. Since interest payments are recurring and do not create any productive asset, they fall under revenue expenditure. Why other options are wrong: Option 1 - Revenue receipt: Revenue receipts are inflows (taxes, non-tax revenue), not payments. Option 3 - Capital receipt: Capital receipts include borrowings and asset sales; interest payments are not capital receipts. Option 4 - Capital expenditure: Capital expenditure creates assets or reduces liabilities (e.g., building infrastructure); interest payment does neither.
SSC CHSL Tier-1 2025 – 18 November 2025 Shift 2 · Union Budget - components and process

Q158. Which of the following bill provides details on the imposition, abolition, or regulation of taxes proposed in the budget?

  1. (a) Finance bill
  2. (b) Private member bill
  3. (c) Constitution amendment bill
  4. (d) Ordinary bill
Answer & solution

Answer: (a) Finance bill

Correct Answer: Finance bill (Option 1)
The Finance Bill is presented along with the Union Budget and contains proposals for the imposition of new taxes, modification of the existing tax structure, or continuation of the existing tax structure beyond the period approved by Parliament. It provides details on the imposition, abolition, remission, alteration, or regulation of taxes proposed in the budget. As per Article 110, the Finance Bill is typically categorized as a Money Bill.
Private member bill is introduced by a non-minister MP. Constitution amendment bill is for amending the Constitution. Ordinary bill covers any non-financial legislation.
SSC CHSL Tier-1 2025 – 18 November 2025 Shift 2 · FRBM Act and fiscal policy

Q159. As per the Fiscal Responsibility and Budget Management Act-2003, the actual deficits may exceed the targets only on which of the following ground?
I. National security
II. National calamity

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (c) Both I and II

Correct Answer: Both I and II (Option 3)
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 mandates the central government to maintain fiscal discipline by reducing fiscal deficit. However, under the escape clause of the FRBM Act, the actual deficits may exceed the prescribed targets under two grounds:
I. National Security — situations arising due to war or national security imperatives
II. National Calamity — situations arising due to natural or man-made disasters
Both grounds are recognized under the FRBM Act, making 'Both I and II' the correct answer. Options 'Only I' and 'Only II' are incomplete answers.
SSC CHSL Tier-1 2025 – 17 November 2025 Shift 3 · Union Budget - latest highlights

Q160. In July 2025, which scheme was launched to boost agricultural productivity across 100 districts with district-level interventions?

  1. (a) PM Surya Ghar Muft Bijli Yojana
  2. (b) PM Dhan-Dhaanya Krishi Yojana
  3. (c) Mission for Aatmanirbharta in Pulses
  4. (d) Krishi Samruddhi Yojana
Answer & solution

Answer: (b) PM Dhan-Dhaanya Krishi Yojana

Correct Answer: PM Dhan-Dhaanya Krishi Yojana
The PM Dhan-Dhaanya Krishi Yojana was launched in 2025 to boost agricultural productivity across 100 districts with low agricultural productivity through district-level interventions. The scheme focuses on improving crop yields, providing better inputs, and strengthening agricultural infrastructure in identified districts.
Why other options are wrong:
- PM Surya Ghar Muft Bijli Yojana: A rooftop solar scheme for free electricity; not agricultural.
- Mission for Aatmanirbharta in Pulses: Focused on pulse production and self-reliance in pulses.
- Krishi Samruddhi Yojana: Not the scheme described in the question.
SSC CHSL Tier-1 2025 – 15 November 2025 Shift 2 · Union Budget - latest highlights

Q161. As per the Union Budget 2025-26, a revamped UDAN initiative will be launched to further enhance regional connectivity, adding ________ new destinations.

  1. (a) 120
  2. (b) 155
  3. (c) 95
  4. (d) 165
Answer & solution

Answer: (a) 120

As per the Union Budget 2025-26, the revamped UDAN (Ude Desh ka Aam Nagrik ) scheme will be launched to enhance regional air connectivity by adding 120 new destinations. UDAN is a regional connectivity scheme aimed at making air travel affordable and accessible to common citizens, especially in underserved regions. The other figures — 155, 95, and 165 — were not the number announced in the budget.
SSC CHSL Tier-1 2025 – 15 November 2025 Shift 1 · Union Budget - latest highlights

Q162. In Union Budget 2025-26, Jal Jeevan Mission has been extended until _____.

  1. (a) 2035
  2. (b) 2032
  3. (c) 2028
  4. (d) 2030
Answer & solution

Answer: (c) 2028

In the Union Budget 2025-26, the Jal Jeevan Mission (JJM) was extended until 2028. The mission, which aims to provide safe and adequate drinking water through individual household tap connections to all rural households, was originally set to end in 2024 but was extended to complete its remaining targets. Why others are wrong: - 2035: This is not the extended deadline for Jal Jeevan Mission. - 2032: Not the correct extension year. - 2030: Not the year announced in Budget 2025-26 for JJM extension.
SSC CHSL Tier-1 2025 – 15 November 2025 Shift 1 · FRBM Act and fiscal policy

Q163. As per the Fiscal Responsibility and Budget Management Act-2003, which of the following is NOT laid before both the house of parliament along with Annual Financial statement?

  1. (a) The medium term fiscal policy statement
  2. (b) The fiscal policy strategy statement
  3. (c) The macroeconomic framework statement
  4. (d) The monetary policy statement
Answer & solution

Answer: (d) The monetary policy statement

Under the FRBM Act, 2003, the following THREE statements are laid before Parliament along with the Annual Financial Statement: 1. Medium Term Fiscal Policy Statement 2. Fiscal Policy Strategy Statement 3. Macroeconomic Framework Statement The Monetary Policy Statement is issued by the Reserve Bank of India (RBI) under the RBI Act and is NOT a statement under the FRBM Act. Hence it is NOT laid before Parliament under this Act.
SSC CHSL Tier-1 2025 – 13 November 2025 Shift 3 · Union Budget - components and process

Q164. Child Budgeting was first time adopted by the Government of India in ________.

  1. (a) 2001-02
  2. (b) 2013-14
  3. (c) 1991-92
  4. (d) 2008-09
Answer & solution

Answer: (d) 2008-09

Child Budgeting (tracking budgetary allocations specifically for children across all ministries) was first introduced in India in the Union Budget 2008-09. This analysis helps in assessing the proportion of the national budget dedicated to children's welfare, health, education, and protection. The other years — 2001-02, 2013-14, and 1991-92 — do not mark the first adoption of Child Budgeting.
SSC CHSL Tier-1 2025 – 13 November 2025 Shift 3 · Deficits (fiscal, revenue, primary)

Q165. Which of the following deficits includes only such transactions that affect the current income and expenditure of the government?

  1. (a) Primary deficit
  2. (b) Revenue deficit
  3. (c) Trade deficit
  4. (d) Fiscal deficit
Answer & solution

Answer: (b) Revenue deficit

Revenue deficit refers to the shortfall when the government's revenue expenditure exceeds its revenue receipts. It includes only current income and expenditure — not capital transactions. Primary deficit = Fiscal deficit minus interest payments. Fiscal deficit = Total expenditure minus total receipts excluding borrowings (includes both capital and revenue). Trade deficit = Imports minus exports (relates to trade, not government accounts).
SSC CHSL Tier-1 2025 – 13 November 2025 Shift 1 · Direct taxes

Q166. In progressive income taxation _____.

  1. (a) higher income leads to a higher tax rate
  2. (b) everyone pays the same tax rate
  3. (c) lower income leads to a higher tax rate
  4. (d) higher income leads to a lower tax rate
Answer & solution

Answer: (a) higher income leads to a higher tax rate

Correct Answer: higher income leads to a higher tax rate
Progressive taxation is a tax system in which the tax rate increases as the taxable income increases. Those who earn more pay a higher percentage of their income as tax. India's income tax slabs follow a progressive structure - individuals earning higher incomes fall in higher tax brackets.
Why other options are wrong:
- Everyone pays the same tax rate: This describes a flat/proportional tax system, not progressive.
- Lower income leads to a higher tax rate: This describes a regressive tax system.
- Higher income leads to a lower tax rate: This is the opposite of progressive taxation.
SSC CHSL Tier-1 2025 – 13 November 2025 Shift 2 · Indirect taxes and GST

Q167. Which of the following tax are imposed on goods imported into and exported out of India?

  1. (a) Excise duty
  2. (b) Customs duty
  3. (c) Wealth tax
  4. (d) Estate duty
Answer & solution

Answer: (b) Customs duty

Customs duty is the tax levied on goods that are imported into or exported out of India. It is governed by the Customs Act, 1962, and is administered by the Central Board of Indirect Taxes and Customs (CBIC). Why others are wrong: - Excise duty: Levied on goods manufactured within India (now mostly replaced by GST). - Wealth tax: Was levied on net wealth of individuals; abolished in 2015. - Estate duty: Was levied on the transfer of property after death; abolished in India in 1985.
SSC CHSL Tier-1 2025 – 12 November 2025 Shift 2 · Union Budget - latest highlights

Q168. Announced in the Union Budget 2025-26, what is the primary objective of the National Geospatial Mission?

  1. (a) To create and manage an integrated geospatial infrastructure for governance and development
  2. (b) To promote satellite launch services for private companies
  3. (c) To provide free GPS services to rural areas
  4. (d) To monitor climate change patterns through satellite data
Answer & solution

Answer: (a) To create and manage an integrated geospatial infrastructure for governance and development

The National Geospatial Mission announced in Union Budget 2025-26 aims to create and manage an integrated geospatial infrastructure to support governance, planning, and development in India. It focuses on building foundational geospatial data layers for various sectors. The other options describe unrelated satellite or space-policy objectives.
SSC CHSL Tier-1 2025 – 12 November 2025 Shift 2 · Union Budget - latest highlights

Q169. Announced in the Union Budget 2025?26, what is the primary objective of the National Geospatial Mission?

  1. (a) To create and manage an integrated geospatial infrastructure for governance and development
  2. (b) To promote satellite launch services for private companies
  3. (c) To provide free GPS services to rural areas
  4. (d) To monitor climate change patterns through satellite data
Answer & solution

Answer: (a) To create and manage an integrated geospatial infrastructure for governance and development

Correct Answer: To create and manage an integrated geospatial infrastructure for governance and development
The National Geospatial Mission, announced in Union Budget 2025-26, aims to build an integrated geospatial data infrastructure to support evidence-based governance, urban/rural planning, and national development.
Why other options are wrong:
- Satellite launch for private companies: This is the goal of IN- SPACe / ISRO commercial policy, not this mission.
- Free GPS for rural areas: GPS is already freely available; this is not the mission's objective.
- Monitor climate change via satellite: This relates to environmental agencies like ISRO's climate programmes , not this specific mission.
SSC CHSL Tier-1 2025 – 12 November 2025 Shift 3 · Union Budget - latest highlights

Q170. In the Union Budget 2025-26, the government has allocated Rs. 20000 crores for an initiative aiming to develop at least _____ indigenously designed and operational SMRs by 2033.

  1. (a) 2
  2. (b) 5
  3. (c) 10
  4. (d) 8
Answer & solution

Answer: (b) 5

Correct Answer: 5
In the Union Budget 2025-26, the Government of India allocated Rs. 20,000 crores for the development of nuclear energy. The target is to develop at least 5 indigenously designed Small Modular Reactors (SMRs) that are fully operational by 2033. SMRs are advanced nuclear reactors with a power output of up to 300 MW(e), smaller and more flexible than conventional reactors.
Why other options are wrong:
- 2: Too few; the budget announcement specifically mentioned 5 SMRs.
- 10: Higher than the announced target.
- 8: Not the figure announced in Union Budget 2025-26.
SSC CHSL Tier-1 2025 – 12 November 2025 Shift 3 · Revenue and capital receipts and expenditure

Q171. Which of the following is correct regarding Sale of government assets like sale of shares in Public sector unit (PSU)?

  1. (a) It creates liability for the government
  2. (b) Amount comes from sale of shares are part of capital receipts
  3. (c) Amount comes from sale of shares are part of revenue receipts
  4. (d) It does not reduce the total assets of the government
Answer & solution

Answer: (b) Amount comes from sale of shares are part of capital receipts

Correct Answer: Amount comes from sale of shares are part of capital receipts
When the government sells shares of PSUs (disinvestment), the proceeds are classified as Capital Receipts in the government budget. Capital Receipts are funds that either create a liability (borrowings) or reduce an asset (disinvestment). Since disinvestment reduces the government's ownership in a PSU, it is recorded as a capital receipt.
Why other options are wrong:
- It creates liability: Disinvestment does not create liability; it reduces assets. Borrowings create liabilities.
- Part of revenue receipts: Revenue receipts come from taxes, fees, dividends; disinvestment proceeds are capital in nature.
- Does not reduce total assets: Selling PSU shares does reduce government assets (ownership stake in PSU).
SSC CHSL Tier-1 2025 – 12 November 2025 Shift 3 · Indirect taxes and GST

Q172. In 2001-02, excise duty structure was rationalized to a single rate of _____ per cent CENVAT (Central Value Add Tax).

  1. (a) 16
  2. (b) 25
  3. (c) 8
  4. (d) 32
Answer & solution

Answer: (a) 16

Correct Answer: 16
In 2001-02, the excise duty structure in India was rationalized to a single rate of 16% under CENVAT (Central Value Added Tax), which replaced the earlier Central Excise and Customs Act provisions. This was a major tax reform step aimed at simplifying the indirect tax structure before the eventual introduction of GST.
Why other options are wrong:
- 25%: Not the rate at which CENVAT was rationalized in 2001-02.
- 8%: This was a reduced rate applicable to certain goods, not the standard CENVAT rate.
- 32%: Too high; not the standard CENVAT rationalized rate.
SSC CGL Tier-1 2025 – 24 September 2025 Shift 2 · Revenue and capital receipts and expenditure

Q173. Which of the following best defines Capital Receipts?

  1. (a) Receipts that increase government revenue permanently
  2. (b) Receipts that reduce financial liabilities of the government
  3. (c) Receipts that create liability or reduce government assets
  4. (d) Receipts that do not impact government assets or liabilities
Answer & solution

Answer: (c) Receipts that create liability or reduce government assets

Capital Receipts are receipts that either create a liability for the government (e.g. borrowings) or reduce its assets (e.g. disinvestment, recovery of loans).
They differ from revenue receipts, which do not affect assets or liabilities.
SSC CGL Tier-1 2025 – 23 September 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q174. Why is revenue deficit a concern for the economy?

  1. (a) It increases productive investment
  2. (b) It improves trade surplus
  3. (c) It indicates borrowing for current spending
  4. (d) It boosts capital creation
Answer & solution

Answer: (c) It indicates borrowing for current spending

Revenue deficit means that government's revenue expenditure exceeds revenue receipts, forcing it to borrow to meet current (non-capital) spending.
This is a concern because the borrowing does not create productive assets and adds to future repayment burden.
SSC CGL Tier-1 2025 – 23 September 2025 Shift 3 · Revenue and capital receipts and expenditure

Q175. Why are grants for asset creation still considered Revenue Expenditure?

  1. (a) They are spent through government loans
  2. (b) They are used only by private sector units
  3. (c) They do not create direct central assets
  4. (d) They are not included in any budget head
Answer & solution

Answer: (c) They do not create direct central assets

Grants given by the central government for the creation of capital assets at the state level are classified as Revenue Expenditure of the centre because the assets do not become central government property.
Hence option 3 is correct.
SSC CGL Tier-1 2025 – 22 September 2025 Shift 3 · Revenue and capital receipts and expenditure

Q176. Which of the following is an example of a capital receipt?

  1. (a) Income Tax collected
  2. (b) Dividend from PSUs
  3. (c) Loan taken from RBI
  4. (d) Sale proceeds of public services
Answer & solution

Answer: (c) Loan taken from RBI

A capital receipt either creates a liability or reduces an asset of the government.
A loan taken from the RBI creates a liability → it is a capital receipt.
Income tax, dividend and sale proceeds of public services are revenue receipts.
SSC CGL Tier-1 2025 – 21 September 2025 Shift 2 · Revenue and capital receipts and expenditure

Q177. Which of the following is another name for the revenue account of the government budget?

  1. (a) (a) Finance budget
  2. (b) (b) Expenditure budget
  3. (c) (c) Revenue budget
  4. (d) (d) Capital budget
Answer & solution

Answer: (c) (c) Revenue budget

The revenue account of the government budget is also called the Revenue budget.
It records revenue receipts (taxes, fees) and revenue expenditure.
Capital budget records capital receipts and capital expenditure — different from revenue account.
SSC CGL Tier-1 2025 – 20 September 2025 Shift 3 · Deficits (fiscal, revenue, primary)

Q178. How is revenue deficit calculated?

  1. (a) Revenue expenditure − Revenue receipts
  2. (b) Revenue receipts − Capital receipts
  3. (c) Total expenditure − Total receipts
  4. (d) Capital expenditure − Revenue expenditure
Answer & solution

Answer: (a) Revenue expenditure − Revenue receipts

Revenue Deficit = Revenue Expenditure − Revenue Receipts.
It shows the shortfall in the government's revenue account.
Total Expenditure − Total Receipts gives the fiscal deficit.
Hence, Option 1 is correct.
SSC CGL Tier-1 2025 – 16 September 2025 Shift 1 · Indirect taxes and GST

Q179. Arrange the following in chronological order:
1. GST Council constituted
2. Constitution (101st Amendment) Act enacted
3. GST launched
Choose the correct chronological sequence:

  1. (a) 1-2-3
  2. (b) 2-1-3
  3. (c) 3-2-1
  4. (d) 2-3-1
Answer & solution

Answer: (b) 2-1-3

Constitution (101st Amendment) Act enacted – 8 September 2016 (2).
GST Council constituted – 12 September 2016 (1).
GST launched – 1 July 2017 (3).
Correct order: 2-1-3.
RRB NTPC UG CBT-1 2024-25 – 4 September 2025 Shift 2 · Union Budget - components and process

Q180. The Appropriation Bill 2025, was introduced in the Lok Sabha by which Ministry?

  1. (a) Ministry of Defence
  2. (b) Ministry of Finance
  3. (c) Ministry of External Affairs
  4. (d) Ministry of Home Affairs
Answer & solution

Answer: (b) Ministry of Finance

RRB NTPC UG CBT-1 2024-25 – 3 September 2025 Shift 1 · Indirect taxes and GST

Q181. In which of the following years was the Central Goods and Services Tax Act enacted?

  1. (a) 2017
  2. (b) 2013
  3. (c) 2007
  4. (d) 2009
Answer & solution

Answer: (a) 2017

RRB NTPC UG CBT-1 2024-25 – 3 September 2025 Shift 2 · FRBM Act and fiscal policy

Q182. The Fiscal Responsibility and Budget Management (FRBM) Act set limits on the fiscal deficit and public debt. What was the fiscal deficit target under the original FRBM Act by 2008-09?

  1. (a) 4.5% of GDP
  2. (b) 6% of GDP
  3. (c) Zero deficit
  4. (d) 3% of GDP
Answer & solution

Answer: (d) 3% of GDP

RRB NTPC UG CBT-1 2024-25 – 2 September 2025 Shift 3 · Budget-announced schemes and missions

Q183. In which of the following budget sessions was the Mission Antyodaya, a convergence and accountability framework aiming to bring optimum use and management of resources, adopted?

  1. (a) Union Budget 2018-19
  2. (b) Union Budget 2017-18
  3. (c) Union Budget 2015-16
  4. (d) Union Budget 2016-17
Answer & solution

Answer: (b) Union Budget 2017-18

RRB NTPC UG CBT-1 2024-25 – 1 September 2025 Shift 3 · Indirect taxes and GST

Q184. Which tax was introduced in July 2017 to replace multiple indirect taxes in India as part of fiscal reforms?

  1. (a) GST
  2. (b) Excise Duty
  3. (c) Sales Tax
  4. (d) Income Tax
Answer & solution

Answer: (a) GST

SSC Selection Post 2025 (Phase XIII) – 29 August 2025 Shift 3 · Direct taxes

Q185. Which of the following is an example of an indirect tax?

  1. (a) Income Tax
  2. (b) Corporate Tax
  3. (c) Goods and Services Tax (GST)
  4. (d) Wealth Tax
Answer & solution

Answer: (c) Goods and Services Tax (GST)

Correct Answer: Option 3 – Goods and Services Tax (GST)
An indirect tax is one where the tax burden can be shifted to another person — typically the final consumer. GST is levied on the supply of goods and services; businesses collect it from consumers and remit it to the government. The tax burden is thus borne by the consumer, not the taxpayer (business). GST replaced multiple indirect taxes (VAT, Service Tax, Central Excise, etc.) in India on July 1, 2017.
Option 1 (Income Tax): A direct tax — levied directly on the income of individuals and cannot be shifted to another person. Taxpayer and tax-bearer are the same.
Option 2 (Corporate Tax): A direct tax — levied directly on the profits of companies; cannot be shifted (though it may influence pricing decisions).
Option 4 (Wealth Tax): A direct tax — levied on the net wealth of individuals above a threshold; abolished in India in 2015. Was a direct, non-shiftable tax.
SSC Selection Post 2025 (Phase XIII) – 29 August 2025 Shift 3 · Deficits (fiscal, revenue, primary)

Q186. What does the term 'crowding out' refer to in economics?

  1. (a) Decline in private investment due to high government borrowing
  2. (b) Increase in competition among businesses
  3. (c) Reduction in export demand
  4. (d) Rise in inflation due to excessive printing of money
Answer & solution

Answer: (a) Decline in private investment due to high government borrowing

Correct Answer: Option 1 – Decline in private investment due to high government borrowing
Crowding out is an economic phenomenon where increased government borrowing (to finance fiscal deficits) leads to a rise in interest rates, which in turn reduces private sector investment. The mechanism: Government borrows heavily → demand for loanable funds rises → interest rates increase → cost of borrowing for private firms rises → private investment falls. This is classical/financial crowding out. It is a key argument used by fiscal conservatives against large government deficits.
Option 2 (Increase in competition among businesses): This describes market competition, not the crowding out effect.
Option 3 (Reduction in export demand): Reduced export demand relates to trade economics (exchange rate effects, global demand) — not crowding out.
Option 4 (Rise in inflation due to excessive money printing): This describes monetization of deficit or seigniorage-driven inflation — a different economic concept.
RRB NTPC UG CBT-1 2024-25 – 21 August 2025 Shift 2 · Budget-announced schemes and missions

Q187. The 'National Mission on High Yielding Seeds' aims to:

  1. (a) promote organic farming practices
  2. (b) develop cold storage infrastructure
  3. (c) enhance irrigation facilities
  4. (d) increase production of high-quality seeds
Answer & solution

Answer: (d) increase production of high-quality seeds

RRB NTPC UG CBT-1 2024-25 – 19 August 2025 Shift 2 · FRBM Act and fiscal policy

Q188. In the post-reform era, fiscal prudence became central to macroeconomic stability. Which of the following Acts was enacted in 2003 to institutionalise fiscal discipline in India?

  1. (a) Fiscal Responsibility and Budget Management Act
  2. (b) FEMA Act
  3. (c) Banking Regulation Act
  4. (d) Companies Act
Answer & solution

Answer: (a) Fiscal Responsibility and Budget Management Act

RRB NTPC UG CBT-1 2024-25 – 8 August 2025 Shift 1 · Union Budget - latest highlights

Q189. What is the total worth of the Urban Challenge Fund (UCF) announced in the Union Budget 2025–26 to encourage innovative urban development?

  1. (a) ₹50,000 crore
  2. (b) ₹5 lakh crore
  3. (c) ₹1 lakh crore
  4. (d) ₹2 lakh crore
Answer & solution

Answer: (c) ₹1 lakh crore

SSC Selection Post 2025 (Phase XIII) – 2 August 2025 Shift 1 · Direct taxes

Q190. Which of the following is a direct tax collected by the government?

  1. (a) Goods and Services Tax (GST)
  2. (b) Income Tax
  3. (c) Customs Duty
  4. (d) Excise Duty
Answer & solution

Answer: (b) Income Tax

Correct Answer: Option 2 – Income Tax
Income Tax is a direct tax – it is levied directly on the income/earnings of an individual or company, and the burden cannot be shifted to another person. It is collected by the Central Board of Direct Taxes (CBDT).
Option 1 (GST): An indirect tax levied on the supply of goods and services; burden is passed on to the consumer.
Option 3 (Customs Duty): An indirect tax levied on imported/exported goods; collected at ports.
Option 4 (Excise Duty): An indirect tax levied on the manufacture of goods (now largely subsumed into GST).
SSC Selection Post 2025 (Phase XIII) – 1 August 2025 Shift 1 · Direct taxes

Q191. Fill in the blank:
Direct taxes are collected by the government from _______.

  1. (a) Individuals and companies
  2. (b) Importers
  3. (c) Consumers
  4. (d) Traders
Answer & solution

Answer: (a) Individuals and companies

The correct answer isIndividuals and companies.
Individuals and companies: Direct taxes are levied directly on an entity's income, salary, or corporate profit. Examples include Personal Income Tax and Corporate Income Tax. The burden of this tax cannot be shifted to anyone else.
Importers: Taxes on importers are usually Custom Duties, which fall under indirect taxes.
Consumers: Consumers typically pay indirect taxes, like Goods and Services Tax (GST) or Sales Tax, which are included in the price of goods and services.
Traders: Traders collect indirect taxes from consumers and remit them to the government, rather than paying direct income taxes on behalf of the customer
SSC Selection Post 2025 (Phase XIII) – 1 August 2025 Shift 2 · FRBM Act and fiscal policy

Q192. Fill in the blank:
The Government of India introduced the Fiscal Responsibility and Budget Management (FRBM) Act to decrease the issue of fiscal deficit and _______.

  1. (a) Public debt
  2. (b) Agricultural subsidies
  3. (c) Foreign exchange reserves
  4. (d) Private investments
Answer & solution

Answer: (a) Public debt

Correct Answer: Option 1 – Public debt
The FRBM Act, 2003 was enacted to institutionalize fiscal discipline in India. Its primary objectives are to reduce the fiscal deficit and public debt of the government to sustainable levels, ensuring long-term macroeconomic stability.
Option 2 (Agricultural subsidies): FRBM does not specifically target agricultural subsidies.
Option 3 (Foreign exchange reserves): Foreign exchange management is handled by the RBI under FEMA, not FRBM.
Option 4 (Private investments): FRBM does not aim to reduce private investments; it actually aims to create fiscal space to encourage them.
SSC Selection Post 2025 (Phase XIII) – 1 August 2025 Shift 3 · Union Budget - components and process

Q193. What is the main objective of a government budget?

  1. (a) To increase unemployment
  2. (b) To allocate public funds
  3. (c) To decrease taxes
  4. (d) To promote private sector
Answer & solution

Answer: (b) To allocate public funds

Correct Answer: Option 2 – To allocate public funds
The primary objective of a government budget is to allocate public financial resources to various sectors such as defense, education, healthcare, infrastructure, and social welfare, based on national priorities. The budget also serves as a tool for fiscal policy.
Option 1 (Increase unemployment): No government budget aims to increase unemployment; employment generation is a key goal.
Option 3 (Decrease taxes): While budgets may adjust tax rates, the core objective is resource allocation, not tax reduction.
Option 4 (Promote private sector): Supporting the private sector can be a goal but is not the primary objective of a government budget.
SSC Selection Post 2025 (Phase XIII) – 31 July 2025 Shift 1 · Deficits (fiscal, revenue, primary)

Q194. What is the term used when government spending exceeds its revenue?

  1. (a) Surplus
  2. (b) Deficit
  3. (c) Investment
  4. (d) Expenditure
Answer & solution

Answer: (b) Deficit

Correct Answer: Option 2 – Deficit
A Budget Deficit (Fiscal Deficit) occurs when a government's total expenditure exceeds its total revenue in a given financial year. Fiscal Deficit = Total Expenditure − Total Revenue Receipts (excluding borrowings). It indicates the amount the government needs to borrow to finance its excess spending. India's Fiscal Responsibility and Budget Management (FRBM) Act, 2003 sets targets for reducing the fiscal deficit. A deficit can be financed through borrowings from RBI (monetization), market borrowings, or foreign borrowings.
Option 1 (Surplus): Budget Surplus is the opposite — when revenue exceeds expenditure.
Option 3 (Investment): Investment refers to capital formation/spending on productive assets — not the term for when spending exceeds revenue.
Option 4 (Expenditure): Expenditure is simply the amount spent — not the term for the condition when spending exceeds revenue.
SSC Selection Post 2025 (Phase XIII) – 31 July 2025 Shift 2 · Direct taxes

Q195. Which of the following is an example of a direct tax in India?

  1. (a) Goods and Services Tax (GST)
  2. (b) Excise Duty
  3. (c) Corporate Income Tax
  4. (d) Customs Duty
Answer & solution

Answer: (c) Corporate Income Tax

Correct Answer: Option 3 – Corporate Income Tax
Corporate Income Tax (also called Corporation Tax) is a direct tax — it is levied directly on the income/profits of companies and collected directly from them. The taxpayer (corporation) bears the tax burden themselves and cannot shift it to others. It is administered by the Central Board of Direct Taxes (CBDT) under the Income Tax Act, 1961.
Option 1 (GST): Goods and Services Tax is an indirect tax — it is levied on goods and services, collected by businesses, but the burden is passed on to the final consumer. GST replaced multiple indirect taxes (VAT, Service Tax, Excise Duty) from July 1, 2017.
Option 2 (Excise Duty): Excise Duty (now largely subsumed into GST except for petroleum products, alcohol, and tobacco) is an indirect tax on the manufacture of goods — the burden is passed on to consumers.
Option 4 (Customs Duty): Customs Duty is an indirect tax on imported (and sometimes exported) goods — also passed on to buyers/consumers.
SSC Selection Post 2025 (Phase XIII) – 30 July 2025 Shift 1 · Union Budget - components and process

Q196. Fill in the blank:
The annual financial statement presented by the Government of India is commonly known as the _______.

  1. (a) Budget
  2. (b) Economic Survey
  3. (c) Balance Sheet
  4. (d) Fiscal Policy
Answer & solution

Answer: (a) Budget

Correct Answer: Option 1 – Budget
The Union Budget (Annual Financial Statement) is the annual financial statement of the Government of India, presented under Article 112 of the Constitution. It sets out the government's estimated receipts (revenue and capital) and expenditures for the coming financial year (April 1 – March 31). The Budget is presented by the Finance Minister in Parliament, typically on February 1. It includes the Revenue Budget (current income/expenditure) and Capital Budget (long-term assets/liabilities). The Budget also incorporates Finance Bill and Appropriation Bill.
Option 2 (Economic Survey): The Economic Survey is a companion document to the Budget, prepared by the Ministry of Finance's Chief Economic Advisor — it reviews the economy's performance and outlook. It is presented the day before the Budget but is NOT the annual financial statement itself.
Option 3 (Balance Sheet): A balance sheet is a corporate accounting statement showing assets, liabilities, and equity at a point in time — not the government's annual financial statement.
Option 4 (Fiscal Policy): Fiscal policy refers to the government's use of taxation and expenditure to influence the economy — a policy framework, not a document.
SSC Selection Post 2025 (Phase XIII) – 29 July 2025 Shift 2 · Direct taxes

Q197. Which taxation system is commonly used for income tax in most countries?

  1. (a) Regressive taxation
  2. (b) Progressive taxation
  3. (c) Proportional taxation
  4. (d) No taxation system
Answer & solution

Answer: (b) Progressive taxation

Correct Answer: Option 2 – Progressive taxation
Progressive taxation is the system most commonly used for income tax worldwide. In a progressive tax system, the tax rate increases as the taxable income increases — higher income earners pay a higher percentage of their income as tax. This is based on the principle of ability to pay. Examples: India's income tax slabs (5%, 20%, 30% for different income brackets), US federal income tax, UK income tax. The rationale: higher-income individuals can afford to pay a larger share, and progressive taxation reduces income inequality.
Option 1 (Regressive taxation): A regressive tax takes a higher percentage from lower-income earners (e.g., indirect taxes like GST/VAT are regressive since everyone pays the same rate regardless of income). Not used for income tax.
Option 3 (Proportional taxation): A flat tax where everyone pays the same percentage regardless of income (e.g., 10% for all). Some countries use this but it is less common for income tax globally.
Option 4 (No taxation system): Every country with a functioning government has some taxation system; income with no taxation system is not a realistic option.
SSC Selection Post 2025 (Phase XIII) – 26 July 2025 Shift 2 · Deficits (fiscal, revenue, primary)

Q198. How does the Central Bank do debt monetization?

  1. (a) The central bank directly finances the government by purchasing its debt
  2. (b) The central bank increases interest rates to control inflation
  3. (c) The government borrows money from foreign countries
  4. (d) The central bank reduces the money supply in the economy
Answer & solution

Answer: (a) The central bank directly finances the government by purchasing its debt

Correct Answer: Option 1 – The central bank directly finances the government by purchasing its debt
Debt monetization (also called 'printing money' or 'monetary financing') occurs when a central bank (like RBI in India) directly purchases government bonds/securities/debt instruments — effectively financing government expenditure by creating new money. This increases the money supply in the economy. In India, the RBI's Ways and Means Advances (WMA) and Open Market Operations (OMO) involve purchasing government securities. Debt monetization can stimulate the economy but risks inflation if overdone.
Option 2 (Increasing interest rates): Raising interest rates is a contractionary monetary policy tool to reduce inflation; it is the opposite of debt monetization.
Option 3 (Government borrows from foreign countries): External borrowing involves foreign lenders (like IMF, World Bank, or foreign governments); not debt monetization.
Option 4 (Reducing money supply): Reducing money supply (through selling securities, raising CRR) is contractionary; debt monetization INCREASES money supply.
SSC Selection Post 2025 (Phase XIII) – 26 July 2025 Shift 3 · Indirect taxes and GST

Q199. The 'one nation, one tax' initiative in India refers to:

  1. (a) Income Tax
  2. (b) Corporate Tax
  3. (c) Goods and Services Tax (GST)
  4. (d) Import Duties
Answer & solution

Answer: (c) Goods and Services Tax (GST)

Correct Answer: Option 3 – Goods and Services Tax (GST)
Goods and Services Tax (GST), implemented on July 1, 2017, is officially described as the 'One Nation, One Tax, One Market' reform. It replaced over 17 indirect taxes and 23 cesses (Central Excise, Service Tax, VAT, CST, Entertainment Tax, etc.) with a unified tax structure applicable uniformly across India. GST is a destination-based, multi-stage consumption tax with seamless input tax credit.
Option 1 (Income Tax): A direct tax already in force nationally before GST; not the 'One Nation, One Tax' initiative.
Option 2 (Corporate Tax): Another pre-existing direct tax; not the 'One Nation, One Tax' reform.
Option 4 (Import Duties): Customs duties continue separately on imports; GST replaced domestic indirect taxes, not import duties.
SSC Selection Post 2025 (Phase XIII) – 25 July 2025 Shift 1 · FRBM Act and fiscal policy

Q200. Which of the following is an example of fiscal policy in India?

  1. (a) Adjusting repo rates
  2. (b) Government spending on infrastructure
  3. (c) Regulating foreign exchange rates
  4. (d) Controlling money supply
Answer & solution

Answer: (b) Government spending on infrastructure

Correct Answer: Option 2 – Government spending on infrastructure
Fiscal policy refers to the government's use of taxation and public expenditure (spending) to influence the economy. Government spending on infrastructure (roads, railways, bridges) is a classic example of expansionary fiscal policy — it directly injects money into the economy, creates jobs, and stimulates demand.
Option 1 (Adjusting repo rates): The repo rate is set by the Reserve Bank of India (RBI) — this is monetary policy, not fiscal policy.
Option 3 (Regulating foreign exchange rates): Foreign exchange management is handled by RBI under monetary/exchange rate policy; not fiscal policy.
Option 4 (Controlling money supply): Money supply management (through CRR, SLR, open market operations) is RBI's monetary policy tool, not fiscal policy.
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