Budget Flashcards
A receipt that does not create a liability or reduce an asset.
Revenue receipt
Profits are a form of
Non tax revenue receipts
Penalty imposed by court for non compliance of orders
Forfeitures
Recovery of loans is a capital expenditure- true or false
False- it is a capital receipt
Non recurring expenses of the government that adds to the capital stock of the economy.
Capital expenditure
Payment of salaries to staff of government hospitals is a
Revenue expenditure
Revenue deficit can be beneficial for a country- true or false
False
If the borrowings of the government are Rs 23 lakhs and Primary deficit is Rs 10 lakhs, what is the fiscal deficit?
Rs 23 lakhs
A tax where the impact and incidence lie on the same individual.
Direct tax
Does a revenue deficit necessarily imply a fiscal deficit?
No
An expenditure that does not lead to an increase in assets or a decrease in liabilities.
Revenue expenditure
Why are National Savings certificates treated as a capital receipt?
They lead to an increase liabilities
Recovery of loans is a capital receipt because
It leads to a decrease in assets
When the government gives a grant to another government it is a form of _____________expenditure.
Revenue
Claim of the government on the property of a person who dies without leaving a legal heir.
Escheat
GST is a form of ___________tax
Indirect
Progressive taxation is used to reduce ____________in the economy
Inequalities
Should the government increase or decrease its expenditure during deflation to bring stability?
Increase
What should the government do to the tax rate to discourage consumption of tobacco?
Increase it
Should the government remove subsidies granted to Khadi products to increase their consumption?
No
Why is Entertainment tax an indirect tax?
Because its burden can be transferred
Why is sale of a PSU a capital receipt?
Because it leads to a decrease in assets
What kind of expenditure is repayment of loan? Why?
Capital- leads to decrease in liabilities
Why does borrowing increase the revenue deficit?
Because it increases revenue expenditure in the form of interest payments.
If primary deficit is Rs 12000 crores and interest payments are Rs 7000 crores, what is the fiscal deficit?
Rs 19000 crores
If revenue expenditure is Rs 70000, borrowings are Rs 15000, revenue receipts are Rs 50000 and interest payments are 25% of revenue deficit, calculate fiscal deficit and primary deficit.
Fiscal deficit =Rs 15000
Primary deficit =Rs 10000
