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Home Questions EDP6FFGTEE
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Receipts and Expenditure of the Central Government, 2020-21

 

(As per cent of GDP)

1. Revenue Receipts (a+b)

(a) Tax revenue (net of states share)

(b) Non-tax revenue

9.0

7.3

1.7

2. Revenue Expenditure of which

(a) Interest payments

(b) Major Subsidies

(c) Defence expenditure

11.7

3.1

1.0

0.9

3. Revenue Deficit (2-1)

2.7

4. Capital Receipts (a+b+c)

(a) Recovery of loans

(b) Other receipts (mainly PSU disinvestment)

(c) Borrowings and other liabilities

4.5

0.1

0.9

3.5

5. Capital Expenditure

1.8

6. Non-debt Receipts [2+5=7(a)+7(b)]

10.0

7. Total Expenditure [2+5=7(a)+7(b)]

(a) Plan expenditure

(b) Non-plan expenditure

13.5

-

-

8. Fiscal deficit [7-1-4(a)-4(b)]

3.5

Primary Deficit [8-2(a)]

0.4

Non-tax revenue of the Central Government consists of:

A. Interest receipts on loans given by the Central Government
B. Recovery of loans by Central Government
C. Collection of direct and indirect taxes by the Central Government
D. Dividends and profits on investment made by the Central Government
E. Cash grants in aid from foreign countries

Choose the correct answer from the options given below:

Options:

A and E only

B and C only

A, D and E only

B, C and D only

Correct Answer:

A, D and E only

Explanation:

The correct answer is Option (3) → A, D and E only

Non-tax revenue of the central government mainly consists of interest receipts on account of loans by the central government, dividends and profits on investments made by the government, fees and other receipts for services rendered by the government. Cash grants-in-aid from foreign countries and international organisations are also included.

Here's why the other options are incorrect:

B. Recovery of loans by Central Government: This is a capital receipt. It's a return of money that the government loaned out earlier, so it doesn't represent new income.

C. Collection of direct and indirect taxes by the Central Government: This is a separate category - tax revenue.

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