Budgeting

Question 1

Laffer curve

Answer 1

• It is a graphical representation of the relationship between possible rates of taxation and the resulting levels of government revenue.
• revenue displayed on the vertical axis and the tax rates on the horizontal axis.
• The relationship suggests that revenues decline beyond a tax rate, suggesting that government revenue will increase with tax rate only up to a certain point of time.
• Hence, a government wanting to maximize its tax revenues must ascertain its optimal tax rate

Question 2

Does the Indian constitution mention the word Budget

Answer 2

No. It says annual financial statement

Question 3

Financial year starts and ends on

Answer 3

1st April to 31st March

Question 4

What are Ways and Means advances (WMA)

Answer 4

Short term lending by RBI to govt only for meeting certain liquidity mismatch.

The govt shouldn’t present budget in deficit but a balanced one, in case the balanced budget requires any immediate liquidity the RBI will give Ways and Means Advances.

Special and normal WMA.

Question 5

First Budget of Free India 1947 presented by

Answer 5

R Shanmukham Chetty.
Targeted revenue of 171 cr.

Question 6

Dream budget of, presented by, features

Answer 6

1997, presented by P Chidambaram.

Reduced income tax rates and corporate tax rates and introduced VDIS Voluntary Disclosure of Income Scheme.

Question 7

Epochal budget of, presented by, features.

Answer 7

1991, Dr Manmohan Singh.

liberalisation, reduced customs duty from 220% to 150%

Question 8

Name and year of the Budget that attempted to end licence raj, feature

Answer 8

Carrot and Stick budget of 1986, presented by VP Singh.
Introduced MODVAT.

Question 9

Black budget of, and why

Answer 9

1973, 550 cr deficit.