29 Oct 2023 Test Ans

Test 28 - Solution
Q1. Answer: C
Explanation:
• Maldives is located both in the northern hemisphere and southern hemisphere i.e.,
Equator passes through it. Hence, statement 1 is not correct.
• Maldives is one of the seven founding members of SAARC that are Bangladesh,
Bhutan, India, Nepal, Pakistan, and Sri Lanka. The Maldives has been an active
member of the OIC (founded in 1969) since becoming a member in 1976. Hence,
statement 2 is not correct.
• The People's Majlis (Maldives Parliament) is the unicameral legislative body of
Maldives. Hence, statement 3 is correct.
• 8-degree channel separates India (Lakshadweep) and Maldives. Hence, statement 4
is not correct.
Hence, option C is correct.
Q2. Answer: C
Explanation:
• Delhi also helped Maldives to avert a coup attempt to oust Gayoom in 1988 and
protect its territorial integrity (Operation Cactus, 1988). Hence, pair 1 is correctly
matched.
• The Indian Navy has launched the 'Operation Vanilla' to assist the population of
Madagascar affected by Cyclone Diane. Hence, pair 2 is correctly matched.
• Operation Ajay was launched by Indian Government to evacuate Indian nationals
from Israel-Hamas conflict zone. Hence, pair 3 is correctly matched.
Q3. Answer: B
Explanation:
The Colombo Security Conclave was formed in 2011 as a trilateral maritime security
grouping of India, Sri Lanka and the Maldives. The roadmap of activities was later
expanded, with Mauritius joining as the fourth member and Bangladesh & Seychelles
participating as observer countries.
Hence, option B is correct.
Q4. Answer: A
Explanation:
• Interest rate growth rate differential (IRGRD) determines the rate at which a
country's public debt rises relative to its output, sometimes termed the “natural”
debt dynamics. A higher interest-growth differential means that a country must raise
Office Complex 6, 3rd Floor, Old Rajinder Nagar New Delhi 110060|
Ph: +91-8045248491, +91-7041021151, | Email: students@levelupias.com
Test 28 - Solution
larger surpluses in order to stabilize its debt-GDP ratio1. Hence, statement 1 is
correct.
• Positive IRGRD would mean that interest is higher and growth rate is lower. This isn't
taking us towards sustainability. Hence, statement 2 is not correct.
Hence, option A is correct.
Q5. Answer: A
Explanation:
Both Male (Maldives) [4.1755° N] and Malaysia [4.2105° N] share the 4°N parallel.
Q6. Answer: B
Explanation:
• The Global Food Security Index (GFSI) was designed and constructed by London-
based Economist Impact and is sponsored by Corteva Agriscience. It is an annually
published index with the 2022 GFSI is the 11th edition of the index. Hence,
• The Global Food Security Index (GFSI) measures food security through affordability,
availability, quality & safety and sustainability & adaptation. Hence, statement 2 is
correct.
• In 2022, Global Food Security Index ranked India at 68/113 major countries of the
world. Hence, statement 3 is not correct.
Q7. Answer: D
Explanation:
The 'State of Food Security and Nutrition in the World' released by FAO estimates that in
2021 around 74% of the population in India cannot afford a healthy diet.
Hence, option D is correct.
Q8. Answer: C
Explanation:
• National Food Security Act, 2013: It seeks to provide subsidized food grains to
approximately 2/3rd of India's population.
• Other than this, Mid-Day Meal Scheme, Integrated Child Development Program, and
the PDS system are focused on ensuring nutritional security.
Test 28 - Solution
Q9. Answer: C
Explanation:
Factors which threaten food security
• High Post harvest losses - due to inadequate infrastructure for storage and market
access.
• Increased dependency on wheat and rice has led to excess irrigation which has led
to water table going down and soil salination.
• 2023 Soil Health Survey shows that almost half of the cultivable land in India has
become deficient in organic carbon, which is an essential indicator of soil health.
Carbon-rich soil organic matter is essential as it retains the water, nitrogen and
phosphorus that are indispensable to agriculture. Hence, condition 4 is not correct.
• Biodiversity Loss for e.g., reduction in population of pollinators also has the
potential to impact large majority of food crops.
• Increase in number of days with extreme temperatures or rain has caused a decline
in quality and size of seeds across India, ex- wheat grain.
Q10. Answer: C
Explanation:
• NFSA covers up to 75% of the rural population and 50% of the urban population
(which come to 2/3rd of country's population) for subsidized grains under Targeted
Public Distribution System (TPDS) under Antyodaya Anna Yojana (AAY) and priority
households. Hence, statement 1 is correct.
• While AAY households, which constitute poorest of the poor are entitled to 35 kg of
foodgrains per family per month, priority households are entitled to 5 kg per person
per month.
• The Act is being implemented in all the States/UTs, and on an all-India basis. Hence,
statement 2 is correct.
• Direct Cash Transfer in food was started in UTs of Chandigarh and Puducherry from
the month of September, 2015 and part of Dadra & Nagar Haveli from March, 2016.
In these UTs, NFSA is being implemented in cash transfer mode under which cash
equivalent of subsidy is being transferred directly into the Bank accounts of eligible
households to enable them to purchase foodgrains from open market. Hence,
• For pregnant and lactating mothers, the act provides for free meal at the local
Anganwadi (during pregnancy and up to six months after child birth) as well as
maternity benefits of Rs.6,000 in instalments. Hence, statement 4 is not correct.
Test 28 - Solution
Q11. Answer: D
Explanation:
• Project Udbhav is an initiative set in motion by Indian Army to rediscover the
profound Indic heritage of statecraft and strategic thoughts derived from ancient
Indian texts of statecraft, warcraft, diplomacy and grand strategy.
• Army Training Command, who after delving into the ancient Indian Scriptures such as
Arthashastra, Nitisara by Kamandaki and Mahabharata compiled the ‘Compendium
of 75 Stratagems’.
• The wisdom of Tirukkural, the classical Tamil text authored by Thiruvalluvar, the
Tamil philosopher, advocates ethical conduct in all endeavours, including warfare.
This aligns with modern military codes of ethics of just war and principles of Geneva
Convention.
Q12. Answer: C
Explanation:
• Cricket, squash, baseball/softball, lacrosse and flag football have been included as
part of 2028 LA Olympics. With this Cricket will be returning to Olympics after 128
years. Hence, statement 1 is not correct. (A variant of American football or gridiron,
flag football has never previously appeared at an Olympic Games. Also, squash has
never been in the Olympics despite decades of trying.)
• Los Angeles was elected as host city for the 2028 Summer Olympics at the 131st IOC
Session in Lima, Peru on September 13, 2017. Hence, statement 2 is not correct.
(Note: 2032 Summer Olympics and Paralympics [also known as Games of the XXXV
Olympiad] will be held in Brisbane, Queensland, Australia.)
Q13. Answer: A
Explanation:
• The International Olympic Committee (IOC) has "accepted" the recommendation to
include T20 cricket (for both men and women) at the 2028 Los Angeles Summer
Olympics. Hence, statement 1 is correct.
• With this Cricket will be returning to Olympics after 128 years. It will be played in 20-
20 format and will be a six-team affair. IOC or the ICC is yet to decide on the qualifier
format. Hence, statement 2 is not correct.
• While there were plans to include cricket in the Olympics at the inaugural Athens
1896 Games, it didn’t manage to gather adequate participation and so it was
Test 28 - Solution
scrapped. However, the sport made its debut four years later in Paris, 1900. Hence,
Q14. Answer: C
Explanation:
• Scientists have recently discovered a new fish species from Milak River, Nagaland. It
has been named Badis limaakumi, after Limaakun, assistant professor and head of
the zoology department at Fazl Ali College, Nagaland. Hence, statement 1 is not
correct.
• It belongs to family Badidae, a small freshwater fish found in streams with slow or
moderate water flow. These are edible fish and are also found in ponds and stagnant
water. Hence, statement 2 is not correct.
• Fish from the Badis family are also known as chameleon fish for their ability to
change color. This helps them blend with the surrounding when under stress. Hence,
Q15. Answer: B
Explanation:
Constitutional provisions with respect to Children:
• Article 21 A: The State shall provide free and compulsory education to all children of
the age 6- 14 years. Hence, statement 1 is correct.
• Article 24: Prohibits employment of Children below the age of 14 years in any factory
or mine or in any other hazardous activity.
• Article 39(f): Directs that children are given opportunities and facilities to develop in
a healthy manner and in conditions of freedom and dignity and that childhood and
youth are protected against exploitation and against moral and material
abandonment.
• Article 45: The State shall endeavour to provide early childhood care and education
for all children until they complete the age of six years. Hence, statement 2 is
correct.
• Article 243G: Provides for institutionalisation of childcare by seeking to entrust
programmes of women and child development to Panchayat (item 25 of Schedule
XI). Hence, statement 3 is not correct.
Test 28 - Solution
Q16. Answer: C
Explanation:
• Arthashastra is a treatise on statecraft. It is a branch of learning that deals with the
means of acquisition and protection of earth, which is the source of people's
livelihood. It’s written by Kautilya. Hence, pair 1 is correctly matched.
• Kamandaka’s Nitisara is an Ancient Indian Treatise on Politics and Statecraft. Hence,
pair 2 is not correctly matched.
• Kural (or Tirukkural) by Tiruvalluvar is a classic Tamil language text consisting of
1330 short couplets, or kurals of seven words each. It is considered as one of the
greatest works ever written on ethics and morality, and is widely acknowledged for
its universal values. Hence, pair 3 is not correctly matched.
• The Mahabharata was written by a renowned sage named Vyasa, who was the
grandfather of the Pandavas and Kauravas. Hence, pair 4 is correctly matched.
Q17. Answer: A
Explanation:
The Justice J. S. Verma Committee, which was constituted in 2013 in the aftermath of the
Nirbhaya
case, was constituted to recommend amendments to the Criminal Law so as to provide for
quicker trial and enhanced punishment for criminals accused of committing sexual assault
against women.
Q18. Answer: D
Explanation:
• Several expert committees on development of corporate bond markets in India are:
o R. H. Patil Committee (2005)
o High Powered Committee on Making Mumbai an International Financial
Centre in 2007 (Percy Mistry Committee)
o H.R Khan Committee on Corporate Bond Market
(Note: Shanta Kumar committee was formed to suggest reforms in FCI. It recommended
that the coverage of TPDS should be reduced from 67% of the population to 40%.)
Test 28 - Solution
Q19. Answer: C
Explanation:
The “Chip 4” or “Fab 4” alliance includes four of the world's top producers of
semiconductors: the U.S., Japan, Taiwan, and Korea. The group of four nations reflects a
new global consensus that geographically diversified supply chains are preferable to
concentration in one region, especially when the local government is not always friendly.
Q20. Answer: D
Explanation:
• All legislative, executive and financial powers are divided between the centre and the
states according to the Indian constitution in the context of Centre-State Relations,
for example Article 245 to 255 of the constitution deals with the legislative relation
between the centre and states. Hence, factor 1 is correct.
• Doctrine of pith and substance: the idea that the law is the basis for the
implementation of the pith and substance doctrine that is enforced across common
law systems in some major judgments by the Supreme Court of India. The doctrine
shall be used to decide whether the law falls within the legislative power of Articles
246 of the Constitution. Hence, factor 2 is correct.
• Article 263 empowers the President to establish the Inter-State Council, promoting
dialogue on national policies between the Centre and states. Hence, factor 3 is
correct.
Q21. Answer: A
Explanation:
• Zonal Councils are statutory bodies as they have been established under the
provisions of Parliamentary act. Five Zonal Councils were established in the year
1957 under Section 15-22 of the States Reorganization Act, 1956. Hence, mechanism
1 is not correct.
• The provision related to Inter-state Council is enumerated in Article 263 of the
Indian Constitution. Hence, mechanism 2 is not correct.
• The National Integration Council (NIC) is a non-constitutional and non-legal
mechanism that promotes coordination between the center and states in matters
related to national integration. It is a consultative body that discusses and suggests
measures to address issues pertaining to communal harmony, national security, and
socio-economic development. Hence, mechanism 3 is correct.
• The University Grants Commission (UGC) is a statutory body established by an Act of
Parliament (University Grants Commission Act, 1956). It is responsible for the
Test 28 - Solution
coordination, determination, and maintenance of standards of higher education in
India. Hence, mechanism 4 is not correct.
Q22. Answer: C
Explanation:
The Inter-state council was established under Article 263 of the constitution of India through
a Presidential order dated 28th May, 1990. The council consists of-
• Prime Minister – Chairman
• Chief Ministers of all states – Members
• Chief Ministers of Union Territories having a Legislative Assembly and Administrators
of UTs not having a Legislative Assembly – Members
• Six ministers of Cabinet rank in the Union council of Ministers to be nominated by
the Prime Ministers – Members
Q23. Answer: A
Explanation:
• Article 249: If the Rajya Sabha passes a resolution by a majority of two-thirds of its
members requesting Parliament to make law on a subject of State List. Hence,
• Article 252: If two or more States’ legislatures request Union Parliament through a
resolution to make a law on a particular subject mentioned in the State List. Hence,
• Article 253: Parliament to make law for the whole or any part of India’s territory for
implementing any treaty, international agreement or convention with any other
country. Hence, statement 3 is correct.
Q24. Answer: C
Explanation:
The 42nd Amendment Act of 1976 transferred five subjects to Concurrent List from State
List, that is,
(a) education, (b) forests, (c) weights and measures, (d) protection of wild animals and
birds, and (e) administration of justice; constitution and organisation of all courts except
the Supreme Court and the high courts.
Test 28 - Solution
Q25. Answer: A
Explanation:
• The Government of India Act of 1935 provided for a three-fold enumeration, viz.,
federal, provincial and concurrent. Hence, statement 1 is correct.
• The present Constitution follows the scheme of this act but with one difference, that
is, under this act, the residuary powers were given neither to the federal legislature
nor to the provincial legislature but to the Governor General of India. In this
respect, India follows the Canadian precedent. Hence, statement 2 is not correct.
Q26. Answer: D
Explanation:
I. Bills which must be reserved for President's consideration
In this category come Bills—
i. which so derogate from the powers of the High Court, as to endanger the position
which that
Court is by this Constitution designed to fill (Second Proviso to Article 200). Hence,
Bills in 3rd statement are correct.
ii. which relate to imposition of taxes on water or electricity in certain cases, and
attract the
provisions of Clause (2) of Article 288. Hence, Bills in 2nd statement are correct.
iii. which fall within clause (4) (a) (ii) of Article 360, during a Financial Emergency.
II. Bills which may be reserved for President's consideration and assent for specific purposes
i. To secure immunity from operation of Articles 14 and 19. These are Bills for—
a. acquisition of estates, etc. [First Proviso to Article 31A(I)];
b. giving effect to Directive Principles of State Policy (Proviso to Article 31C).
Hence, Bills in 4th statement are correct.
ii. A Bill relating to a subject enumerated in the Concurrent List, to ensure operation of
its
provisions despite their repugnancy to a Union law or an existing law, by securing
President's
assent in terms of Article 254(2).
iii. Legislation imposing restrictions on trade and commerce requiring Presidential
sanction under the Proviso to Article 304(b) read with Article 255. Hence, Bills in 1st
statement are correct.
Test 28 - Solution
Q27. Answer: D
Explanation:
• Article 258(1): Notwithstanding anything in this Constitution, the President may,
with the consent of the Government of a State, entrust either conditionally or
unconditionally to that Government or to its officers’ functions in relation to any
matter to which the executive power of the Union extends. Hence, statement 1 is
correct.
• Article 258A: Notwithstanding anything in this Constitution, the Governor of a State
may, with the consent of the Government of India, entrust either conditionally or
unconditionally to that Government or to its officers’ functions in relation to any
matter to which the executive power of the State extends. Hence, statement 2 is
correct.
Q28. Answer: C
Explanation:
Each Zonal Council has set up a Standing Committee consisting of Chief Secretaries of the
member States of their respective Zonal Councils. These Standing Committees meet from
time to time to resolve the issues or to do necessary ground work for further meetings of
the Zonal Councils. Senior Officers of the Planning Commission and other Central Ministries
are also associated with the meetings depending upon necessity. :
• Chairman - The union Home Minister is the Chairman of each of these Councils.
• Vice Chairman - The Chief Ministers of the States included in each zone act as Vice-
Chairman of the Zonal Council for that zone by rotation, each holding office for a
period of one year at a time.
• Members- Chief Minister and two other Ministers as nominated by the Governor
from each of the States and two members from Union Territories included in the
zone.
• Advisers- One person nominated by the Planning Commission for each of the Zonal
Councils, Chief Secretaries and another officer/Development Commissioner
nominated by each of the States included in the Zone
Q29. Answer: B
Explanation:
• During the operation of a national emergency (under Article 352), the Centre
becomes entitled to give executive directions to a state on ‘any’ matter. Thus, the
state governments are brought under the complete control of the Centre, though
they are not suspended. Hence, statement 1 is not correct.
Test 28 - Solution
• When the President’s Rule is imposed in a state (under Article 356), the President
can assume to himself the functions of the state government and powers vested in
the Governor or any other executive authority in the state. Hence, statement 2 is
correct.
Q30. Answer: A
Explanation:
The important conferences held either annually or otherwise to facilitate Centre-state
consultation on a wide range of matters are as follows:
(i) The Governors’ conference (presided over by the President), hence pair 2 is
not correctly matched.
(ii) The Chief Ministers’ conference (presided over by the Prime Minister), hence
pair 1 is not correctly matched.
(iii) The chief secretaries’ conference (presided over by the Cabinet Secretary),
hence pair 3 is not correctly matched.
Q31. Answer: B
Explanation:
• Public Account of India is defined under Article 266(2). Under Article 267, the
Contingency Fund of India is defined. Hence, statement 1 is not correct.
• All Public money received other than those included in Consolidated Fund of India
are held in Public Accounts of India. It mainly consists of money raised through small
saving schemes, provident fund schemes etc. The government is just custodian of
these. It has to be repaid in future (either on maturity or when people demand it).
Hence, statement 2 is correct.
Q32. Answer: A
Explanation:
Budget contains an account of expected receipts and expenditure of the government. It has
three components:
1. Actual figure for the previous year
2. Budgeted and Revised figure for the current year
3. Estimates for the upcoming year
Test 28 - Solution
Q33. Answer: C
Explanation:
• A positive growth-interest differential keeps the debt level sustainable. A positive
growth-interest differential means economic growth is higher than the interest
payment growth. This helps in keeping debt level sustainable. Hence, statement 1 is
not correct.
• In India, this differential has historically been positive. Hence, statement 3 is correct.
• Capex led growth leads to higher economic growth in future and thus will keep
growth-interest differential positive. Hence, statement 2 is correct.
Q34. Answer: B
Explanation:
• Capital Receipts results in either reduction in government assets (sale of shares,
disinvestment) or increase in some liability (government borrowings). It can be
divided into Debt-Capital Receipts and Non-Debt Capital Receipts.
o Debt Capital Receipts include the fresh borrowings by government, along
with other liabilities.
o Fresh Borrowing can be from within the country (Internal) or from outside
the country (external) Internal Loans include Market loans through bonds,
Treasury Bills issued to RBI & Banks, Ways and Means Advances by RBI etc.
o External Loans include bilateral loans and multilateral loans.
o Other Liabilities are those money which are not directly borrowed but are
available for government expenditure. It includes money deposited by people
in custody of government such as for Provident Fund, NSSF, Small Saving
Accounts etc. Further, under this government may also use reserve funds of
the Railways, Posts & Telegraph.
o Non-Debt Capital Receipts: These capital receipts don't create any liabilities.
They include Recovery of Loans and Disinvestment of Government Shares…
Q35. Answer: D
Explanation:
Revenue receipts consist of tax receipts (gift tax, sales tax, excise duty etc.) and non-tax
revenue receipts like interest receipts, dividend receipts, grant receipts, receipts from fiscal
services, police services etc.
Revenue Receipts examples include Sales invoices, Tax invoices, and Cash memos
Test 28 - Solution
Q36. Answer: A
Explanation:
• BE Capital receipt is around 19 lakh crores whereas revenue receipt is around 26 lakh
crores. Hence, statement 1 is
not correct.
• GoI's expenditure is higher
for central sector scheme
(14.68 lakh crores) as
compared to centrally
sponsored scheme 4.76 lakh
crores. Hence, statement 2 is
correct.
• Income tax and Corporate Tax
combined together is way higher than GST. Hence, statement 3 is not correct.
Q37. Answer: B
Explanation:
Capital Receipts results in either reduction in government assets (sale of shares,
disinvestment) or increase in some liability (government borrowings). It can be divided into
Debt-Capital Receipts and Non-Debt Capital Receipts. Hence, statement 1 and 2 are correct
and 3 and 4 are not correct.
Q38. Answer: D
Explanation:
• Dated Government Securities: Government of India's borrowing through dated
government securities is called Market Loan. They are long term (more than 1 year)
debt instruments. Generally, the tenure ranges from 5 years to 40 years. Hence, pair
1 is correctly matched.
• Treasury Bills: These are the securities issued by Government Treasury. They are
short term in nature and in this regard, they are different from market loans.
Treasury bills can be of different maturity. Till 1991-92, Treasury bills were only of 91
days maturity. This was also called ad-hoc treasury bills. Hence, pair 2 is correctly
matched.
• To replace it, Ways and Means advance were introduced. In 1998-99, 182-day
treasury bills were introduced. It was soon replaced by 364-day T Bills. Again, 182-
day treasury bills were introduced and later 14 days treasury bills were introduced in
1999-2000.
Test 28 - Solution
• Cash Management Bills: CMBs are short term money market instruments that help
the government to meet its temporary cash flow mismatch. Key features: Maturity
less than 91 days (this is the key difference between treasury bills and CMBs). Hence,
pair 3 is correctly matched.
• Generic characteristics of Treasury bills - issued at discount rate and redeemed at
face value at maturity. They are eligible for SLR securities.
• Ways and Means Advances( WMA): Government can get, immediate cash from RBI,
if required. But it has to be returned in 90 days. Interest rate is charged at the
existing repo rate. Hence, pair 4 is correctly matched.
Q39. Answer: C
Explanation:
• Loans (be it domestic or foreign [bilateral or multilateral]) will form part of Debt
creating capital receipt. Hence, 1 and 2 doesn’t form part of non-debt creating
capital receipts.
• But when assets are divested, no debt is created. It is a non-debt creating capital
receipt.
• Similarly, when loans are recovered (for e.g., from states) it doesn’t create any debt
and is thus a non-debt creating capital receipt.
Q40. Answer: B
Explanation:
• Fiscal deficit is the difference between the revenue receipts plus Non debt creating
capital receipts and the total expenditure i.e.,
Fiscal Deficit = Revenue Receipt + Non-Debt Creating Capital Receipt – Total
Expenditure
(Hence, statement 1 is not correct.)
• Fiscal deficit increased both in FY20 and FY21. The increase in FY20 was due to
structural changes (reduction in corporate income tax) and in FY21, the Fiscal deficit
increased due to COVID-19 lockdown (reduce revenue) and huge expenditure by
government. Hence, statement 2 is not correct.
• In cases where Capital Account is in surplus, fiscal deficit may be lesser than revenue
deficit. Hence, statement 3 is not correct.
• Monetization of deficit happens when government’s deficit is filled by RBI providing
more money to government. Hence, statement 4 is correct.
Test 28 - Solution
Q41. Answer: C
Explanation:
Fiscal Deficit = Revenue Deficit + Capital Deficit
• So, if (Revenue Deficit)/(Capital Deficit) ratio is high, it means most of the borrowing
(i.e., fiscal deficit is being used for revenue expenditure [or current expenditure]).
Hence, statement 1 is correct.
• If the ratio is low, i.e., revenue deficit is low and fiscal deficit is high, it means very
less of the borrowing is being used for revenue expenses (current expenses). Hence,
Q42. Answer: B
Explanation:
• Fiscal deficit had increased drastically in FY21. Hence, statement 1 is not correct.
• Every year we have seen a positive fiscal deficit. Meaning government has borrowed
more money and thus debt has gone up. Hence, statement 2 is correct.
(Note: Debt as a percentage of GDP has been decreasing in some years.)
Q43. Answer: B
Explanation:
• After reaching a 15-year high of 31% of GDP at the end of FY21, they came down to
27.9% of GDP by the end of FY23. Hence, statement 1 is correct.
• It was highest in FY21, and it has been decreasing since then. Hence, statement 2 is
not correct.
Q44. Answer: C
Explanation:
In counter-cyclical fiscal policy, during slowdown, fiscal slippage occurs (not discipline),
government tends to spend more, reduces taxes etc. Hence, statement C is not correct.
Q45. Answer: A
Explanation:
A paper, titled “Fiscal Multipliers for India” by Sukanya Bose and N R Bhanumurthy shows,
the multiplier is less than 1 for revenue expenditure and over 2.5 for capital expenditure. In
Test 28 - Solution
other words, when the government spends Rs 100 on increasing salaries in India, the
economy grows by a little less than Rs 100. But, when the government uses that money to
make a road or a bridge, the economy’s GDP grows by Rs 250.
Q46. Answer: D
Explanation:
Objectives of Fiscal Responsibility and Budget Management Act:
• To introduce transparency in India's fiscal management systems. Hence, statement
1 is correct.
• Achieve inter-generational equity by ensuring equitable distribution of debt over the
years. Hence, statement 2 is correct.
• Ensure long term macro-economic stability through fiscal stability. Hence,
Q47. Answer: D
Explanation:
Tax Buoyancy is change in tax with the change in GDP.
• If tax administration improves, and if more tax is deducted at source, more people
will pay taxes and thus tax buoyancy will improve.
• Because of GST, tax base has increased. This also helps increasing the tax base of
Direct tax. So Direct tax buoyancy also improves.
Q48. Answer: B
Explanation:
• Liability of centre is around 56% of the GDP and liability of states combined together
is around 27% of the GDP. Hence, statement 1 is not correct.
• External liability consists of only around 5% of the public liability. Hence, statement 2
is correct.
Q49. Answer: B
Explanation:
• India's government debt has kept on increasing. COVID-19 pandemic led to huge
increase in debt in 2020-21. Hence, statement 1 is not correct.
Test 28 - Solution
• The general government liability as a
percentage of GDP increased steeply
during FY21. The ratio came off its
peak in FY22 (RE). Hence, statement 2
is correct.
The general government is expected to
follow the path of fiscal consolidation in the
medium term.
Q50. Answer: D
Explanation:
• In FY22, the total debt of Indian Government was 134.08 lakh crores which includes
(121.21 lakh crore of public debt of which 114 lakh crore is internal and 6.59 lakh
crore is external; 11.8 lakh crores of Public Accounts Liability and 1.39 lakh crores of
Extra Budgetary Liability) making total liability go to 134.08 lakh crores.
• Note: Share of external liability in public debt is only 4.9%. Thus, India’s public debt
profile is relative stable and is characterized by low currency risk. The debt profile is
also characterized by low interest rate risks Because public debt in India is primarily
contracted at fixed interest rate.

29 Oct 2023 Test Ans

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

29 Oct 2023 Test Ans

Uploaded by

Copyright:

Available Formats

Test 28 - Solution

Hence, option C is correct.

Hence, option B is correct.

Hence, option A is correct.

Hence, option A is correct.

Hence, option B is correct.

Hence, option D is correct.

Hence, option C is correct.

Hence, option D is correct.

Hence, option C is correct.

Hence, option A is correct.

Hence, option C is correct.

Hence, option B is correct.

Hence, option C is correct.

Hence, option A is correct.

Hence, option D is correct.

Hence, option C is correct.

Hence, option D is correct.

Hence, option A is correct.

Hence, option C is correct.

Hence, option A is correct.

Hence, option C is correct.

Hence, option A is correct.

Hence, option D is correct.

Hence, option D is correct.

Hence, option C is correct.

Hence, option B is correct.

Hence, option A is correct.

Hence, option B is correct.

Hence, option A is correct.

Hence, option C is correct.

Hence, option B is correct.

Hence, option D is correct.

Hence, option B is correct.

Hence, option B is correct.

Hence, option D is correct.

Hence, option C is correct.

Hence, option B is correct.

Hence, option C is correct.

Hence, option B is correct.

Hence, option B is correct.

Hence, option C is correct.

Hence, option A is correct.

Hence, option D is correct.

Hence, option D is correct.

Hence, option B is correct.

Hence, option B is correct.

Hence, option D is correct.

You might also like