Read the passage given below and answer the following questions from 1 to 4. India has scaled back expenditure, including on productive assets that aid economic growth, as the government is confronted with the risk of its budget deficit blowing out. Capital expenditure-the money spent on creating, maintaining or improving fixed assets like roads and factories-Stood at 40% of the budgeted amount in the six months to September, down from 55.5% in the year-ago period, data from the government's Controller General of Accounts show. The overall spending during the period was 49% of the budget aim compared to 53% last year. That's despite Prime Minister Narendra Modi's Government outlining measures worth more than 21 trillion rupees (281 billion) to counter the economic and social fallout of the Covid-19 outbreak. A closer look at the numbers shows the bulk of the spending was directed towards the poor and the farmers, with crucial sectors such as coal, power, shipping and steel receiving less than a third of their annual budget allocation. Spending on capital assets has so far trailed the so-called revenue expenditure that includes interest payments and overheads such as salaries, the data released last week showed. Modi's Government placed spending curbs on some ministries from April through December to manage its cash flow. Source: Business Standard, Nov. 5, 2020

1. Capital expenditure of the government ............ the assets of the government:

1. Increases
2. Decreases
3. Both [a] and [b]
4. None of these

2. Expenditure on health due to Covid-19 is ............ expenditure of the government.

1. Direct
2. Revenue
3. Both [a] and [b]
4. None of these

3. The overall spending has......... as compared to last year.

1. Increased
2. Decreased
3. Both [a] and [b]
4. None of these

4. A closer look at the numbers shows the bulk of spending was directed towards the poor and the.............?

1. Farmers
2. Labour
3. Manager
4. None of these

 
 

Giving reasons categorise the following into revenue expenditure and capital expenditure:

1. Subsidies.
2. Grants given to State Governments.
3. Repayment of loans.
4. Construction of school buildings.

How are capital receipts different from revenue receipts? Discuss briefly.

Distinguish between ‘revenue expenditure’ and ‘capital expenditure’. Give two examples of each.

Name two sources each of non-tax revenue receipts.

Distinguish between ‘fiscal deficit’ and ‘revenue deficit’. What does fiscal deficit indicate?

Read the passage given below and answer the following questions from 1 to 4.
In the Government of India's budget for the year 2013 - 14, the Finance Minister proposed to raise the Goods and Services Tax (GST) on cigarettes. He also proposed to increase income tax on individual earning more than rupee one crore per annum.

1. Identify the taxes proposed to be increased by the Budget 2013 - 14. The taxes proposed are:

1. Goods and Services tax on cigarettes.
2. Income tax on individuals earning Rs. 1 crore or above.
3. Both [a] and [b]
4. None of the above

2. What was the objective(s) behind the proposals put forth in the Budget 2013 - 14?

1. Revenue generation
2. Social welfare
3. Both [a] and [b]
4. None of these

3. What welfare objective the government wishes to achieve by increasing GST on cigarettes?

1. This will discourage their cigarettes
2. This will encourage their cigarettes
3. Both [a] and [b]
4. None of the above

4. What would be the effect of increase in direct tax on the rich?

1. It will reduce the gap between rich and the poor, thereby reducing inequalities in income
2. It will increase the gap between rich and the poor
3. Both [a] and [b]
4. None of the above

If you were to be appointed as the Finance Minister of India, which taxes would you prefer: direct taxes or indirect taxes and why?

Distinguish between:

1. Capital expenditure and Revenue expenditure
2. Fiscal deficit and Primary deficit

From the following data about a Government budget, find out (a) Revenue deficit, (b) Fiscal deficit and (c) Primary deficit:

		(Rs. Arab)
(i)	Capital receipts net of borrowings	95
(ii)	Revenue expenditure	100
(iii)	Interest payments	10
(iv)	Revenue receipts	80
(v)	Capital expenditure	110