MCQ
upsc-p1-economy-public-finance-fc MCQ - Practice Questions with Answers
Solve 6 upsc-p1-economy-public-finance-fc questions for RAS/RPSC preparation.
Practice questions
Q1Consider the following statements about fiscal-transfer channels: 1. Under Article 268, certain duties are levied by the Union but collected and appropriated by the States. 2. Article 275 provides grants-in-aid of State revenues from the Consolidated Fund of India. 3. Grants under Article 282 are identical to Finance Commission grants under Article 275. Which of the statements given above are correct? Select the correct answer using the code given below.
Statements 1 and 2 are correct. Article 268 concerns assigned duties, while Article 275 concerns grants-in-aid of State revenues. Statement 3 is incorrect because Article 282 permits grants for any public purpose and is a distinct route from Article 275 grants and tax devolution.
Q2Arrange the following stages of the fiscal implementation chain in their correct order: 1. Budget provision 2. Union acceptance 3. Release of funds 4. Finance Commission recommendation Select the correct answer using the code given below.
A Finance Commission recommendation comes first, followed by Union acceptance, budget provision and release of funds. These are distinct stages; a recommendation does not instantly become expenditure. The correct sequence is 4-2-1-3.
Q3Consider the following statements: Statement I: State Finance Commissions recommend fiscal sharing between a State and its local bodies. Statement II: The Union Finance Commission replaces State Finance Commissions while augmenting resources for Panchayats and Municipalities. Which one of the following is correct? Select the correct answer using the code given below.
Statement I is correct and Statement II is incorrect. State Finance Commissions, constituted under Articles 243I and 243Y, recommend State-local body fiscal sharing. The Union Finance Commission does not replace them; it considers measures to augment State Consolidated Funds for local bodies on the basis of their recommendations.
Q4Match List I with List II: List I (Constitutional provision) 1. Article 270 2. Article 271 3. Article 279A 4. Article 280 List II (Subject) A. Finance Commission B. Surcharge for Union purposes outside the divisible pool C. Sharing of Union tax proceeds D. GST Council Select the correct answer using the code given below.
Article 270 concerns sharing of Union tax proceeds; Article 271 concerns surcharges for Union purposes outside the divisible pool; Article 279A creates the GST Council; and Article 280 provides for the Finance Commission. Thus, the correct matching is 1-C, 2-B, 3-D, 4-A.
Q5Arrange the following stages in the correct sequence for a Finance Commission report and its implementation: 1. The report is submitted to the President. 2. The President constitutes the Finance Commission. 3. Devolution flows through budget and accounting processes. 4. The recommendations and the explanatory memorandum are laid before Parliament. Select the correct answer using the code given below.
The President first constitutes the Finance Commission. The Commission submits its report to the President. The recommendations and the explanatory memorandum on action taken are then laid before Parliament under Article 281, after which devolution operates through budget and accounting processes. The correct sequence is 2-1-4-3.
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6With reference to the Finance Commission, consider the following statements: 1. The President constitutes it under Article 280. 2. It consists of a Chairperson and four other members. 3. Its recommendations become law automatically without being laid before Parliament. Which of the statements given above are correct? Select the correct answer using the code given below.