Q21. Which of the following statements differentiating the Revenue Account and Capital Account of the Rajasthan State Budget is incorrect?
Macro Overview of Rajasthan Economy and State Budget: RAS Prelims MCQs
76 RAS Prelims MCQs on the macro overview of the Rajasthan economy and its State budget cover the size of the economy, regional divides, the budget structure, the FRBM Act and public debt. Revenue and fiscal deficit, State Development Loans, guarantees, the State Finance Commission and the structural problems of the State are asked as definitions and statements.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
Showing 21–30 of 76 questions
Q22. Read the following statements regarding components of the Rajasthan State Budget:
I. State’s Own Tax Revenue
II. Recovery of Loans and Advances
III. Grants-in-Aid from the Centre
IV. Public Debt Borrowings
V. State’s share in Central Taxes
Which combination correctly identifies the elements of Revenue Receipts?
I. State’s Own Tax Revenue
II. Recovery of Loans and Advances
III. Grants-in-Aid from the Centre
IV. Public Debt Borrowings
V. State’s share in Central Taxes
Which combination correctly identifies the elements of Revenue Receipts?
Explanation
Revenue receipts in the state budget are composed of income that does not create liabilities. This includes the state’s own tax revenue, grants-in-aid provided by the central government, and the state’s mandatory share in central taxes. Items like the recovery of loans and public debt borrowings are classified as capital receipts because they involve asset reduction or the creation of liabilities.
Q23. Match the budgetary deficit concepts (List I) with their corresponding formulas (List II):
| Deficit Concept | Formula |
|---|---|
| A. Revenue Deficit | i. Total Expenditure minus Total Receipts (excluding borrowings) |
| B. Fiscal Deficit | ii. Revenue Expenditure minus Revenue Receipts |
| C. Primary Deficit | iii. Fiscal Deficit minus Interest Payments |
| D. Budgetary Deficit | iv. Total Expenditure minus Total Receipts (including borrowings) |
Explanation
Different deficit concepts provide varied insights into a state’s financial health.
Q24. Identify the odd one out among the following sources of revenue for the Rajasthan State Government, based on its classification as a tax or non-tax revenue.
Explanation
State excise duty is a tax levied on the manufacture and sale of alcoholic liquors and narcotics, making it a major component of tax revenue. In contrast, royalties from mines, interest receipts on loans, and dividends from public sector undertakings are all classified as non-tax revenues. This distinction is based on whether the income is derived from taxation or other sources.
Q25. Which of the following is traditionally the largest source of Non-Tax Revenue for the Government of Rajasthan?
Explanation
Rajasthan is exceptionally rich in mineral resources, and the royalties collected from mining and metallurgical activities traditionally constitute its largest source of non-tax revenue. These payments from private and public mining operators provide a significant and steady stream of income to the state exchequer. This revenue source reflects the state’s dominant national position in the production of various minerals.
Q26. The following question consists of two statements, one labeled as Assertion (A) and the other as Reason (R). Examine these two statements carefully and select the correct answer.
Assertion (A): Non-tax revenues form a relatively smaller proportion of the total revenue receipts of Rajasthan compared to tax revenues.
Reason (R): Many State Public Sector Enterprises operate at sub-optimal profitability, thereby limiting dividend income, and user charges for public utilities are often kept low for welfare reasons.
Assertion (A): Non-tax revenues form a relatively smaller proportion of the total revenue receipts of Rajasthan compared to tax revenues.
Reason (R): Many State Public Sector Enterprises operate at sub-optimal profitability, thereby limiting dividend income, and user charges for public utilities are often kept low for welfare reasons.
Explanation
Non-tax revenues typically form a smaller portion of Rajasthan’s total receipts compared to taxes. This is partly because many state public sector enterprises have low profitability, limiting dividend income. Additionally, the government often keeps user charges for essential public utilities low to ensure social welfare. These factors combined restrict the growth of non-tax revenue despite the state’s vast mineral wealth.
Q27. Which of the following is NOT classified as a Non-Tax Revenue receipt in the State Budget of Rajasthan?
Explanation
Stamp duty and registration fees are classified as tax revenue because they are mandatory charges levied by the state on the execution of legal documents and property transfers. On the other hand, interest receipts and income from general or economic services are categorized as non-tax revenues. Distinguishing between these categories is essential for understanding the diverse ways the state generates income.
Q28. Which of the following statements regarding the State’s Own Tax Revenue (OTR) of Rajasthan is correct?
Explanation
The state’s own tax revenue is primarily driven by the State Goods and Services Tax and the Value Added Tax collected on items like petroleum and alcohol. These sources provide the most significant contributions to the exchequer. While other taxes like stamp duty and vehicle taxes are important, they contribute relatively less compared to the broad-based consumption taxes currently in place.
Q29. Arrange the following components of Rajasthan’s Own Tax Revenue in typically descending order of their contribution to the state exchequer in recent years:
I. Taxes on Vehicles
II. State Goods and Services Tax (SGST)
III. State Excise
I. Taxes on Vehicles
II. State Goods and Services Tax (SGST)
III. State Excise
Explanation
In recent years, the State Goods and Services Tax has emerged as the largest contributor to Rajasthan’s own tax revenue. This is typically followed by state excise duties on liquor and narcotics. Taxes on vehicles, while significant, generally contribute a smaller share to the state exchequer compared to the revenue generated from broad consumption taxes and regulated excise goods.
Q30. Read the following statements:
Statement I: Petroleum products like crude oil, high-speed diesel, and motor spirit are currently outside the purview of the GST in Rajasthan.
Statement II: The state government continues to levy Value Added Tax (VAT) on petroleum products to generate significant tax revenue.
Which of the statements given above is/are correct?
Statement I: Petroleum products like crude oil, high-speed diesel, and motor spirit are currently outside the purview of the GST in Rajasthan.
Statement II: The state government continues to levy Value Added Tax (VAT) on petroleum products to generate significant tax revenue.
Which of the statements given above is/are correct?
Explanation
Petroleum products such as crude oil, diesel, and petrol currently remain outside the Goods and Services Tax framework in Rajasthan. Because they are excluded, the state government continues to exercise its authority to levy Value Added Tax on these items. This arrangement allows the state to generate substantial tax revenue independently, which is vital for maintaining its overall fiscal health.Answer key for these questions
| Q | Correct answer |
|---|---|
| 21 | (b) Capital expenditure is purely meant for the day-to-day running of government departments. |
| 22 | (b) I, III and V |
| 23 | (a) A-ii, B-i, C-iii, D-iv |
| 24 | (d) Revenue from State Excise Duties |
| 25 | (c) Mining and metallurgical royalties |
| 26 | (a) Both A and R are true and R is the correct explanation of A. |
| 27 | (d) Stamp Duty and Registration Fees |
| 28 | (c) State Goods and Services Tax (SGST) and Sales Tax/VAT on specific items constitute the major portion of OTR. |
| 29 | (b) II, III, I |
| 30 | (c) Both Statement I and Statement II |
Key facts from Macro Overview of Rajasthan Economy and State Budget
- In terms of GSDP at current prices, Rajasthan typically ranks between 5th and 10th among States.
- The arid west grows bajra, moth bean and guar and relies on dryland farming and livestock; the east is fertile.
- The Rajasthan FRBM Act sets a fiscal deficit target of 3 per cent of GSDP and a debt-to-GSDP target of about 20 to 25 per cent.
- Revenue deficit is revenue expenditure minus revenue receipts; a persistent one means borrowing to meet routine expenses.
- State Development Loans are market borrowings raised through RBI auctions; the Centre’s consent under Article 293(3) controls State borrowing.
- The Indira Gandhi Canal Project helped the shift from subsistence to commercial farming; workforce dependence on low-yield agriculture is a structural challenge.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Macro Overview of Rajasthan Economy and State Budget?
This page has 76 practice MCQs on Macro Overview of Rajasthan Economy and State Budget (Rajasthan Economy). Each has the correct answer, and most have an explanation.
What is the fiscal deficit target under the Rajasthan FRBM Act?
About 3 per cent of GSDP. The Act also aims at inter-generational equity, requires medium-term policy statements to be placed before the Legislature and sets a glide path for the revenue deficit.
What is the Revenue Deficit?
Revenue expenditure minus revenue receipts. A persistent revenue deficit means that the government is borrowing to meet its day-to-day expenses, instead of building assets, and it adds to the State’s debt and interest burden.
What are State Development Loans?
Market borrowings raised by a State government through auctions held by the RBI. Their interest rates are decided by the market and not fixed by the Finance Commission, so they move with the market.