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Public Finance

Most of the questions from this section have been based on the concept of budget and deficits. Most of the questions have been asked from the standpoint of its relevance during the time of the exam. The logic here is simple; make yourself confident about all the concepts of deficits, subsidies, revenue and expenditures of a government.

  1. Budget-Types Of Budgets
  2. Revenue Receipts
  3. Revenue Expenditure
  4. Capital Receipts
  5. Capital Expenditure
  6. Revenue Deficit
  7. Primary Deficit
  8. Fiscal Deficit
  9. Budgetary Deficit
  10. Deficit Financing
  11. External Aid
  12. External Borrowing
  13. Market Borrowing
  14. Printing Currency
  15. Fiscal Stimulus
  16. Fiscal Consolidation
  17. Zero- Based Budgeting
  18. Gender Budgeting
  19. Charged And Non-Charged Expenditure
  • Sanjeev Verma –Chapter 12
  • NCERT Introduction to Macroeconomics Class 12 Chapter 5
  • Ramesh Singh 5th edition-Chapter 18
  • Read Union Budget and Relevant Chapters of Economic Survey Volume 1 and 2
  • Read Business line /Business Standard for other current developments.
  • Online paper Livemint gives analytical articles

[2011 Prelims]

1)Which one of the following statements appropriately describes the ‘fiscal stimulus’?

  1. It is a massive investment by the govt in the manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth.
  2. It is an intense affirmative action of the govt to boost economic activity in the country.
  3. It is govt’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation.
  4. It is an extreme affirmative action by the govt to pursue its policy of financial inclusion.

[2013 Prelims]

1)Which of the following is likely to be the most inflationary in its effect?

  1. Repayment of public debt
  2. Borrowing from the public to finance a budget deficit.
  3. Borrowing from banks to finance a budget deficit.
  4. Creating new money to finance a budget deficit.

[2014 Prelims]

1)With reference to Union Budget which of the following is/are covered under Non-Plan expenditure?

  1. Defence expenditure
  2. Interest payments
  3. Salaries and pensions
  4. Subsidies

Select the correct answer using the code given below.

  1. 1 only
  2. 2,3
  3. 1,2,34
  4. None.

[2015 Prelims]

1)There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit?

  1. Reducing revenue expenditure
  2. Introducing new welfare schemes
  3. Rationalizing subsidies
  4. Expanding industries.

Select the correct answer using the code given below.

  1. 1,3
  2. 2,3
  3. 1 only
  4. 1,2,3,4