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Chapters
1: Microeconomics and Macroeconomics: Introduction
2: Demand and Law of Demand
3: Theory of Consumer Behaviour: Marginal Utility and Indifference Curve Analysis
4: Elasticity of Demand
5: Supply - Law of Supply and Price Elasticity of Supply
6: Market Mechanism: Equilibrium Price and Quantity in a Competitive Market
7: Laws of Returns - Returns to a Factor and Returns to Scale
8: Cost and Revenue Analysis
9: Forms of Market
10: Producer's Equilibrium
11: Determination of Equilibrium Price and Output Under Perfect Competition
SECTION 2: THEORY OF INCOME AND EMPLOYMENT
12: Theory of Income and Employment
SECTION 3: MONEY AND BANKING
13: Money: Meaning and Functions
14: Banks: Commercial Bank and Central Bank
SECTION 4: BALANCE OF PAYMENTS AND EXCHANGE RATE
15: Balance of Payments and Exchange Rate
SECTION 5: PUBLIC FINANCE
16: Fiscal Policy
▶ 17: Government Budget
SECTION 6: NATIONAL INCOME
18: National Income and Circular Flow of Income
19: National Income Aggregates
20: Methods of Measuring National Income
SECTION 7: PROJECT WORK
21: Project Work
22: Model Short Answer Questions
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Solutions for Chapter 17: Government Budget
Below listed, you can find solutions for Chapter 17 of CISCE Frank for इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी.
Frank solutions for इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी 17 Government Budget TEST YOURSELF QUESTIONS [Pages 369 - 374]
Select the correct option for each of the following questions: (1 mark each)
Which of these is not a non-tax revenue?
Interest receipts
Dividends and profit of public sector enterprises
Central excise duty
Revenue from services provided by the government
Which of the following is a non-tax revenue?
Export duty
Import duty
Dividends from the public sector enterprises
GST
Which of these revenue are examples of revenue from administrative services provided by the government:
fines and penalties
receipt from license fees
receipt from commercial services of Doordarshan
income from tourism
Which of the following is not a revenue receipt?
Recovery of loans
GST
Grants-in-aid from foreign countries
Corporation tax
Which of the following is a source of capital receipts?
Foreign donation
Disinvestment
Dividends
Indirect taxes
Capital receipts include ______.
dividends from public sector enterprises
recovery of loans only
market borrowings only
both recovery of loans and market borrowings
Which of the following sources of receipts in government budget increase its liability?
Direct taxes
Recovery of loans
Market borrowings
Profits from public sector enterprises
Which one of these is not capital receipt?
Disinvestment proceeds
Market loans
Service tax
Receipt from provident fund
Revenue expenditure does not include ______.
salaries and pensions
subsidies
investment expenditure by the public sector undertakings
interest on government loans
Which of these expenditure of the government is not capital expenditure?
Expenditure incurred in undertaking investment.
Expenditure incurred on land and buildings.
Purchase of shares
Interest payment on market loan.
Total expenditure on national defence in India is categorised as ______.
revenue expenditure
capital expenditure
partly revenue expenditure and partly capital expenditure
none of these
Purchase of shares by the government is related to ______.
revenue receipt
revenue expenditure
capital receipt
capital expenditure
Subsidies and expenditure on scholarships are examples of ______.
revenue expenditure
capital expenditure
both revenue expenditure and capital expenditure
neither revenue expenditure nor capital expenditure
The difference between the revenue receipts and revenue expenditure of the government is known as ______.
revenue deficit
budget deficit
fiscal deficit
primary deficit
Fiscal deficit equals ______.
total budgetary expenditure − total receipts
total budgetary expenditure − revenue receipts
total budgetary expenditure − capital receipts
total budgetary expenditure − revenue receipts − capital receipts (excluding borrowings)
Primary deficit will be equal to fiscal deficit when ______.
net interest payment is zero
revenue deficit is zero
fiscal deficit is zero
none of these
From the statements given in Column I and Column II, match the correct pair of items.
| Column I | Column II |
|---|---|
| A. Revenue Expenditure | 1. Which creates no liabilities of the government |
| B. Capital Expenditure | 2. Which creates liabilities of the government |
| C. Revenue Receipt | 3. Which do not create assets of the government |
| D. Capital Receipt | 4. Which lead to creation of assets of the government |
A - 3, B - 4, C - 2, D - 1
A - 1, B - 2, C - 3, D - 4
A - 4, B - 1, C - 3, D - 2
A - 3, B - 4, C - 1, D - 2
Match the correct pair of items from the items given in Column I and Column II.
| Column I | Column II |
|---|---|
| A. Dividends and profits of public sector enterprises | 1. Capital Receipt |
| B. Borrowing by the government | 2. Revenue Receipt |
| C. Expenditure incurred on maintaining law and order | 3. Capital Expenditure |
| D. Expenditure in building Metro rail | 4. Revenue Expenditure |
A - 2, B - 1, C - 4, D - 3
A - 2, B - 1, C - 3, D - 4
A - 1, B - 2, C - 3, D - 4
A - 1, B - 2, C - 4, D - 3
Given below are two statements marked as Assertion (A) and Reason (R). Read the statements carefully and choose the correct option.
Assertion (A): Fiscal deficit is measured in terms of the amount of borrowing.
Reason (R): External borrowing increases the fiscal deficit.
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.
Revenue receipts in the government’s budget ______.
create liability
reduce liability and create assets
reduce assets
keep liability and assets unaltered
Very Short Answer Questions (2 marks each)
Define or explain the following concept.
Government budget.
State two objectives of government budget.
Name the two parts of government budget.
What is the financial/fiscal year?
What is meant by Union budget?
Distinguish between the Union budget and State budget.
What is Supplemetary Budget?
What is a performance budget?
What is Revenue budget?
Define capital budget.
Name the two types of budget receipts.
What are revenue receipts?
Give two sources of revenue receipts.
Define Capital receipts.
Give two examples of Capital receipts.
Give two examples of non-tax revenue.
Name any two types of capital receipts.
What is plan expenditure?
What is non-plan expenditure?
Explain the term revenue expenditure of the government.
Explain the term capital expenditure of the government.
Differentiate between plan and non-plan expenditure.
Distinguish between the following concepts:
Developmental expenditure and non-developmental expenditure.
Define surplus budget.
What is deficit budget?
What is meant by balanced budget?
What is deficit budget?
What is meant by balanced budget?
Explain the meaning of fiscal deficit.
What is meant by revenue deficit?
Explain the implications of a revenue deficit.
What is a primary deficit?
State different operations involved in the budgetary procedure.
How does the Parliament exercise control over the Government?
What are the committees of the Parliament exercising control over the government budget?
What is a vote-on-account budget?
A government budget shows a primary deficit of ₹ 4,400 crore. The revenue expenditure on interest payment is ₹ 400 crore. How much is the fiscal deficit?
A large amount of fiscal deficit proves to be counter productive. Give any two reasons in support of this statement.
Short Answer Questions (3 marks each)
Explain the need of government budget.
Explain four important features of a government budget.
Explain the major components of government budget.
Distinguish between revenue budget and capital budget.
What is the basis of classifying government receipts into revenue receipts and capital receipts? Give one example of each.
What is the basis of classifying government expenditure into revenue expenditure and capital expenditure?
What is the basis of classifying government expenditure into plan expenditure and non-plan expenditure.
Write any two differences between capital and revenue Receipts.
Distinguish between revenue expenditure and capital expenditure.
What is meant by budget of the government?
Distinguish between revenue expenditure and capital expenditure.
What is a performance budget?
Differentiate between revenue and capital expenditure. (Three points)
What is the basis of classifying government expenditure into development-expenditure and non-development expenditure. Give two examples of each.
How is fiscal deficit different from primary deficit?
Explain one implication of fiscal deficit.
Long Answer Questions (6 marks each)
What is government budget?
Explain the need of government budget.
Explain the major components of government budget.
Distinguish between Surplus budget and Deficit budget.
How do surplus budget influence the level of economic activity in an economy.
How do a deficit budget influence the level of economic activity in an economy?
What are various measures of budgetary deficit used in India? Explain them briefly along with their implications.
Distinguish between revenue deficit, fiscal deficit and primary deficit.
Explain the implications of a revenue deficit.
Explain one implication of fiscal deficit.
What are various measures of budgetary deficit used in India? Explain them briefly along with their implications.
Explain briefly various steps involved in the budgetary procedure.
Explain briefly various steps involved in the budgetary procedure.
How does the parliament control budget finances?
Passage Based Questions (8 marks each)
Read the passage below and answer the questions that follow.
| Over the last two years, fiscal policy has remained a significant tool for addressing the economic fallout of pandemic. The revenue receipts of the central government have shown a large increase during 2011-2012. Tax collections of both direct and indirect taxes have contributed to the increase in the revenue pool. Personal taxes and corporate taxes have registered a large increase. The monthly GST collections have crossed the 1 lakh crore mark. The revenue from excise duties has also increased non-tax revenue has also contributed to the increase in revenue of the government. The expenditure policy of the central government during 2021-22 has a strong emphasis on capital expenditure focus on infrastructure like roads, railways and housing. |
- What do you understand by fiscal policy? [1]
- Differentiate between direct taxes and indirect taxes. [2]
- What is GST? [1]
- What do you mean by capital expenditure? [1]
- Give two examples of non-tax revenue. [1]
- What are revenue receipts? Give two examples. [2]
Read the passage below and answer the questions that follow.
| When the government spends more than its income (revenue) such a situation is called budgetary deficit. It is calculated by subtracting government total income from its expenditure. The government needs to borrow money for spending beyond its earnings. A high budgetary deficit hints that the government is spending beyond its means. Persistent budgetary deficit can lead to accumulation of debt and potential inflation. Most economies of the world, including India, run into a budgetary deficit. In India budgetary deficit has been a significant concern for many years. Union Budget of India takes mainly three measures of budgetary deficit namely Fiscal Deficit, Revenue Deficit and Primary Deficit. Despite efforts to reduce budgetary deficit, all the three types of deficits remain high and continue to pose challenges for the Indian economy. During the pandemic year 2020–2021, these deficits were very high, but have gradually declined since then. Fiscal deficit, Revenue deficit and Primary deficit stood at 6.4%, 4.1% and 3.9% of GDP respectively in the year 2022–2023. |
- What is Fiscal deficit? [2]
- Define Revenue deficit. [2]
- What do you understand by Primary deficit? [2]
- State the implications of budgetary deficit. [1]
- Why was budgetary deficit high in 2020–2021? [1]
Thinking Beyond...
A perpetual topic of political debate is the magnitude of budget deficit. How does the government finance its budgetary deficit? What are their implications?
Explain the balanced budget multiplier.
Solutions for 17: Government Budget
Frank solutions for इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी chapter 17 - Government Budget
Shaalaa.com has the CISCE Mathematics इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी CISCE solutions in a manner that help students grasp basic concepts better and faster. The detailed, step-by-step solutions will help you understand the concepts better and clarify any confusion. Frank solutions for Mathematics इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी CISCE 17 (Government Budget) include all questions with answers and detailed explanations. This will clear students' doubts about questions and improve their application skills while preparing for board exams.
Further, we at Shaalaa.com provide such solutions so students can prepare for written exams. Frank textbook solutions can be a core help for self-study and provide excellent self-help guidance for students.
Concepts covered in इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी chapter 17 Government Budget are Introduction to Public Finance, Public Revenue, Nature and Significance of Taxes, Tax and Fee, Canons of Taxation, Types of Taxes, Merits of Direct Taxes, Demerits of Direct Taxes, Merits of Indirect Taxes, Demerits of Indirect Taxes, Direct Taxes vs Indirect Taxes, Kinds of Tax System > Proportional tax, Kinds of Tax System > Progressive Tax, Kinds of Tax System > Regressive Tax, Kinds of Tax System > Degressive Tax, Kinds of Tax System > Digressive Tax, Sources of Central Government Revenue, Sources of State Government Revenues, Value-Added Tax (VAT), Modified Value-Added Tax (MODVAT), MODVAT to CENVAT, Public Expenditure, Reasons for the Growth of Public Expenditures in India for Recent Times, Importance of Public Expenditure in a Developing Country, Public Debt, Structure (Types) of Public Debt, Reasons Behind Internal Public Debt, Reasons Behind External Public Debt, Methods of Redemption of Public Debt, The Burden of Public Debt, Main Sources of Internal & External Debt of the Government of India, Distinction Between Internal Debt and External Debt, Effects of Government Borrowings on the Indian Economy, Fiscal Policy, Objectives of Fiscal Policy, Role of Fiscal Policy, Instruments of Fiscal Policy, Fiscal Measures for Stabilisation, Effective Role of Fiscal Policy for Underdeveloped or Developing Country, Limitations of Fiscal Policy, Role of Fiscal Policy to Control Inflationary Situation, Deficit Financing, Reason for Deficit Financing, Effects of Deficit Financing, Limits of Deficit Financing, Introduction to Budget, Government Budget, Need and Importance of Government Budget, Objectives of Government Budget, Types of Government Budget in India, Modern Classification of Budget, Balanced and Unbalanced Budget, Unbalanced/Deficit - Surplus Budget, Zero-Base Budgeting (ZBB), Zero-Base Budgeting in India, Components (Structure) of the Government Budget, Budget Receipts, Revenue Receipts, Tax Receipts, Non-Tax Receipts, Capital Receipts, Budget Expenditure, Revenue Expenditure and Capital Expenditure, Plan Expenditure and Non-plan Expenditure, Budget Deficits, Budgetary Procedure, Developmental and Non-developmental Expenditures, Balanced Budget vs Deficit or Surplud Budget.
Using Frank इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी solutions Government Budget exercise by students is an easy way to prepare for the exams, as they involve solutions arranged chapter-wise and also page-wise. The questions involved in Frank Solutions are essential questions that can be asked in the final exam. Maximum CISCE इकॉनॉमिक्स [इंग्रजी] इयत्ता १२ आईएससी students prefer Frank Textbook Solutions to score more in exams.
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