Union Budget & Fiscal Deficit — Set 15

Correct Answer: B. B. Accuracy of government's budget estimates vs actual outcomes

Fiscal marksmanship refers to the accuracy and reliability of the government's Budget Estimates (BE) compared to final actuals. Good fiscal marksmanship means BE closely match actual revenue collections and expenditures. Consistently over-optimistic revenue estimates or underestimation of expenditure indicate poor fiscal marksmanship. RBI's reports regularly assess fiscal marksmanship of the Central Government in budget projections.

Correct Answer: B. B. January 1, 2004

The National Pension System (NPS) was introduced for new Central Government employees (except armed forces) joining from January 1, 2004. It replaced the earlier defined benefit pension system (Old Pension Scheme). Under NPS, employee contributes 10% and government contributes 14% of basic salary plus DA. NPS aims to reduce the growing pension liability of the Central Government over the long term.

Correct Answer: B. B. Is non-votable and automatically charged to the Consolidated Fund without Parliamentary vote

Charged expenditure includes items that are NOT put to vote in Parliament — they are automatically charged to the Consolidated Fund of India. These include: President's salary, Lok Sabha Speaker's salary, Supreme Court judges' salaries, CAG's salary, interest on public debt, and administrative expenses of Supreme Court. This ensures judicial and constitutional office independence from annual political appropriation process.

Correct Answer: C. C. July 23, 2024

The Union Budget for 2024-25 was the full (post-election) budget presented by Finance Minister Nirmala Sitharaman on July 23, 2024. An Interim Budget had been presented on February 1, 2024 (before the Lok Sabha elections). After the BJP-led NDA government returned to power following elections in May-June 2024, the full budget was presented in July, making it the earliest full post-election budget in recent history.

Correct Answer: B. B. Capital Receipts (disinvestment)

Proceeds from privatisation (strategic disinvestment — selling majority stake and management control in PSUs) are classified as Capital Receipts under disinvestment in the Union Budget. Like other disinvestment proceeds, they reduce government's equity holdings (assets). The government has a separate disinvestment target each year. Significant privatisations include Air India (2021) and others under the National Monetisation Pipeline.

Correct Answer: B. B. Reviews the economy's performance and provides analysis to inform policy decisions

The Economic Survey, released by the Chief Economic Adviser (CEA) a day before the Union Budget, provides a comprehensive review of India's economic performance during the past year — covering GDP growth, inflation, external sector, agriculture, industry, services, fiscal position, and social indicators. It also provides policy analysis and recommendations. It gives context for the Budget by explaining the economic backdrop.

Correct Answer: B. B. It gives 2 months for Parliament to pass budget before April 1, allowing schemes to start on time

Presenting the Budget on February 1 instead of the last day of February allows approximately 2 months (February-March) for Parliament to debate, amend, and pass the budget (Finance Bill and Appropriation Bill) before the financial year begins on April 1. Earlier, late approval meant departments could not start spending until May-June, wasting crucial months. The February 1 date improves budget implementation efficiency.

Correct Answer: B. B. Demands for grants of various ministries before Parliament votes on them

Parliamentary Standing Committees on Finance (and on other subjects) examine the Demands for Grants of various ministries in detail before Parliament votes on them as part of the Appropriation Bill. They scrutinise scheme allocations, performance, and priorities. The Public Accounts Committee (PAC) separately examines CAG audit reports on actual government expenditure. These committees strengthen parliamentary oversight of the budget.

Correct Answer: B. B. Pre-Budget leaks of tax changes can enable market manipulation and speculation

Budget documents, especially tax proposals in the Finance Bill, are maintained in absolute secrecy before presentation because any leak about tax rate changes (increase in customs duty, income tax changes, excise on specific goods) could enable market manipulation, speculation, and unfair gains. Leaks could cause panic buying or selling in commodity/stock markets before announcements. Budget secrecy protects market integrity and taxpayer fairness.

Correct Answer: B. B. Railway Capital Expenditure is now shown as part of the Union Budget's capital allocation

After the merger of the Railway Budget with the Union Budget from 2017-18, railway finances are now presented as part of the Union Budget. The Ministry of Railways' capital expenditure (station redevelopment, new lines, rolling stock) appears in the Capital Budget. However, the Railways still maintains its own internal accounting. The merger improved transparency and ended the politicisation of railway fare announcements in the Railway Budget.