Budget 2024: Important MCQs For Competitive Examinations

The Budget 2024 will be presented by the Union Finance Minister Nirmala Sitharaman on 1 February 2024.?

Sitharaman is set to present the Budget for the sixth time, marking a historic achievement after becoming India's first full-time female Finance Minister in 2019.?

PTI

However, this time the budget presented will be an interim budget, instead of a full union budget as normal. The Finance Minister from the party or coalition that establishes the new government following the 2024 elections will present the complete Union Budget for 2024 in July.?

Important questions on Budget for competitive examinations?

Here are some MCQs on Budget that students can expect in competitive examinations:

Q1. Which of the following statement is correct about 'Budget'??

I. It is a projection of financial status for an upcoming period, outlining planned expenditures and the corresponding methods of financing.?

II. The Constitution refers to the budget as an 'annual financial statement' in Article 111.?

Select correct one:?

A. Only I
B. Only II
C. Both I & II
D. Neither I nor II?

Ans 1: A?

The Budget, which is a statement of the estimated receipts and expenditure of the government for a particular year, is referred to in Article 112 of the Indian Constitution as the annual financial statement.?

Q2. Consider the following statements on Union Budget

1. The word 'Budget' is not mentioned in the Constitution.?
2. The Lok Sabha cannot vote on the expenditure charged on the Consolidated Fund of India, but can only discuss it.?

Which of the above statements is/are correct?
A. Only 1
B. Only 2
C. Both
D. None?

Constitution of India

Ans 2: C

The Union Budget of India is referred to as the Annual financial statement in the Article 112 of the Constitution of India.?

It is presented each year on the last working day of February by the Finance Minister of India in Parliament.?

Q3. Under the Union Budget, what does the fiscal deficit refer to??

A. Taxes shortfall
B. Disinvestment shortfall
C. Borrowings requirement
D. Disinvestment requirement?

Ans 3: C

A fiscal deficit represents the overall borrowings required by a government for a fiscal (financial) year.?

Q4. Which economic concept is directly linked to the primary deficit in the Union Budget??

A) Gross Domestic Product (GDP).?

B) Consumer Price Index (CPI).?

C) Current Account Balance.?

D) Fiscal Policy Index.?

Ans 4: C

The economic concept directly linked to the primary deficit in the Union Budget is the Current Account Balance, which indicates "fiscal sustainability."?

Fiscal sustainability is the ability of a government to maintain its current spending, tax, and other policies in the long run without threatening government solvency or defaulting on its obligations.?

Q5. What does the term "primary deficit" refer to in the context of the Union Budget??

A) The difference between total revenue and total expenditure.?
B) The fiscal gap after accounting for interest payments on past debt.
C) The surplus generated from non-tax revenue sources.
D) The total amount allocated for developmental projects.?

Ans 5: B

The term primary deficit refers to the fiscal gap after accounting for interest payments on past debt.??

Q6. What is an interim budget??

A) A budget presented during an economic crisis.?
B) A budget that outlines the government's long-term financial plan.
C) A temporary budget presented in an election year when a new government is likely to take charge.?
D) A budget exclusively focused on defense expenditures.?

Ans 6: C

The Interim Budget acts as a framework for handling temporary expenditures over a brief period, typically spanning a few months, until a new government assumes office later in the fiscal year.

Q7. In an interim budget, what kind of expenditure does the government usually avoid making changes to??

A) Capital expenditure
B) Revenue expenditure
C) Defense expenditure
D) Social welfare expenditure.?

Ans 7: A

In an interim budget, the government usually avoids making changes to capital expenditure, because capital expenditure involves long-term investments in assets such as infrastructure, machinery, and construction projects.?

This is done to ensure continuity in essential developmental projects, provide stability and avoid disruptions that could arise from significant alterations in long-term investment plans.?

Q8. Choose the capital expenditures from the following:

A. Subsidies
B. Share purchases
C. Defence purchases
D. Interest payments?

Ans 8: B?

Capital expenditures may enhance assets or decrease liabilities.?

Q9. Who was India's first finance minister to present the Budget??

A. Shanmukham Chetty
B. John Mathai
C. Deshmukh
D. Liaquat Ali Khan?

Ans 9: A?

Shanmukham Chetty/indiaconstitution

India's first Finance Minister to present the budget was R. K. Shanmukham Chetty. He presented the budget on November 26, 1947.?

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