Public Finance and Budget Class 10 Questions and Answers KSEEB 10th Social Science
I. Fill in the blanks with suitable answers:
Question 1.
The government manages the public finance through ______________ policy
Answer:
Fiscal policy
Question 2.
When the government’s revenue is more than its expenditure, it is called ______________ budget
Answer:
surplus
Question 3.
The person who presents the Central Government Budget in the Lok Sabha is ______________
Answer:
Finance Minister
Question 4.
GST came into effect from ______________
Answer:
1st July 2017
II. Answer the following in one sentence each
Question 1.
What is meant by Public Finance?
Answer:
The study of public finance helps in the analysis and evaluation of a country’s ‘Budget’.
Question 2.
What do you mean by Budget?
Answer:
The statement of estimated income and expenditure of a year prepared by the Government is called ‘Budget’.
Question 3.
Give the meaning of Deficit Budget.
Answer:
A budget which hasT expenditure more than the revenue is a ‘Deficit Budget’.
Question 4.
What are Direct Taxes?
Answer:
The tax paid by an individual on whom it is levied its Direct Tax’ ex: Income tax, Stamp duty etc.,
Question 5.
Write the formula for calculation of fiscal deficit.
Answer:
Fiscal Deficit = (Revenue receipts + Won debt capital receipts) – Total expenditure.
III. Answer the following in five to six sentences each
Question 1.
Explain the reasons for increase in public expenditure.
Answer:
The expenditure incurred by public authorities like cental, state and local governments to satisfy the collective social wants of the people is known as public expenditure. It is incurred on various activities for the welfare of the people and also for the economic development, especially in developing countries.
Question 2.
What types of taxes are imposed by the government?
Answer:
The taxes imposed by the central government are of two types :
a) Direct Taxes: When the tax is paid by an individual on whom it is levied, it is called direct tax. The burden of this tax is not transferable to others. The important direct taxes are personal income tax, corporate tax, wealth tax, stamp duty etc.
b) Indirect Taxes: If the burden of tax imposed by the government is transferable to others, it is called Indirect Tax. Generally, indirect taxes are imposed on goods and services. For example the government imposes tax on the manufacturer of goods and services at the time of producing such goods and services. The manufacturer transfers this burden to the trader. The trader transfers this burden to the consumer.
This means that if the government imposes tax on the producer, the tax is ultimately paid by the consumer. The main forms of indirect taxes are central excise duty, value added tax (VAT), import-export taxes and service tax etc. However, with effect from 1st July 2017, a single goods and service tax (GST) has been introduced.
Question 3.
What is the percent expenditure on interest payments in 2017-18 budget?
Answer:
The expenditure on Interest payments in 2017-18 budget was Rs. 5, 23,078 crores.
Question 4.
Explain the aspects of non-tax revenue of the central government.
Answer:
The ‘Non-Tax Revenue’ of the Government are –
- Profit earned by the Reserve Bank of India;
- Profit generated by the Indian Railways”
- Revenue generated by the Departments of Post and Telecommunications’
- Revenue generated by the public sector industries;
- Revenue generated by the coins and mints
- Various types of fees and penalties; etc.
Question 5.
What is deficit? Mention the types of deficits.
Answer:
Deficit is the gap between income and expenditure of the government The concepts of deficit are
- Fiscal deficit
- Revenue deficit
- Primary deficit
- Budget deficit
Additional Questions and Answers
Question 1.
What is ‘Public expenditure’?
Answer:
The expenditure incurred by public authorities like central, state and local governments to satisfy the collective social wants of the people is known as public expenditure. It is incurred on various activities for the welfare of people and also for the economic development, especially in developing countries.
Question 2.
What is ‘Public Revenue’?
Answer:
‘Public Revenue’ is the income mobilized by the Government for purposes of financing Governments activities.
Question 3.
Explain ‘Tax Revenue’
Answer:
Tax is described a compulsory payment by citizens to the government without expecting any direct benefit in return. The Central Government imposes several types of taxes. Taxes are the major sources of revenue for the government. The government imposes higher rate of taxes on high- income group and lower rate of taxes of low-income group.
The poor are exempted from income tax. Similarly, a higher tax is imposed on luxury goods and services used by the rich; and a lower tax on goods and services used by the common people. This is called as progressive taxation.
Question 4.
What is ‘Capital Revenue’?
Answer:
Capital revenue refers to thosereceipts which either create a liability or cause a reduction in the assets of the government. For example, borrowings lead to an increase in the liability for the government; Similarly receipts from sale of shares of public enterprises leads to reduction in assets of the governments; hence, they are called as capital receipts.
Question 5.
What is ‘Public Debt’?
Answer:
The government borrows money from internal and external sources. The loan obtained from citizens of the country, banks, financial institutions and industries is called internal debt. The loan obtained from foreign governments, foreign financial institutions and international financial institutions is called foreign or external debt.
Question 6.
What is Revenue deficit? Write the formula to calculate Revenue deficit?
Answer:
Revenue deficit is excess of total revenue expenditure of the government over its total revenue receipts. It is calculated as :
Revenue Deficit = Revenue receipts – Revenue – Revenue Expenditure
Question 7.
What is primary deficit? Write the formula to calculate primary deficit?
Answer:
Primary deficit is defined as fiscal deficit of current year minus interest payments on previous borrowings. It is calculated as:
Primary Deficit is the = Fiscal Deficit – Interest Payment
Question 8.
What is Budget deficit? Write the formula to calculate Budget deficit?
Answer:
Budget deficit is the overall gap between revenue and expenditure during a given year. It is calculated as:
Budget Deficit = Total Revenue – Total Expenditure.
Question 9.
Deficits are a disadvantage for the economy of a country. Explain.
Answer:
High amount of deficits are not goods for the economy as they create liabilities and uncontrolled deficit and indicates financial indiscipline on the part of the government. It also increases inflation. That is why to check such practices of the governments, the Fiscal Responsibility and Budget Management Act (FRBMA) was passed in 2003. It seeks to instill financial discipline, reduce fiscal deficit, improve macroeconomic management and the overall management of the public funds by moving towards a balance budget.
Multiple Choice Questions and Answers
Question 1.
In India deficit financing is used d) for raising resources for
(a) Economic development
(b) To pay public debt
(c) To reduce revenue deficit
(d) To reduce external debt 3.
Answer:
(a) Economic development
Question 2.
Fiscal deficit in the budget is
(a) Excess of Governments expenditure over its revenue receipts
(b) Excess . of total revenue expenditure over total revenue receipts
(c) Capital deficit plus revenue deficit
(d) Total revenue minus total expenditure.
Answer:
(a) Excess of Governments expenditure over its revenue receipts
Question 3.
The revenue generated by the Government through taxes and non-tax sources is
(a) Capital revenue
(b) Tax revenue
(c) non-tax revenue
(d) external borrowing
Answer:
(b) Tax revenue GST Means
Question 4.
GST Means
(a) General State Tax
(b) General Sales Tax
(c) Goods and Service Tax
(d) Government Sales Tax
Answer:
(c) Goods and Service Tax
Question 5.
Tax paid by an individual is
(a) Revenue receipt
(b) Indirect tax
(c) Direct tax
(d) Non-tax revenue
Answer:
(c) Direct Tax.