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 61–70 of 76 questions
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q61. 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): The Rajasthan FRBM Act aims to ensure inter-generational equity in fiscal management. Reason (R): High public debt accumulation today forces future generations of the state to bear the burden of higher taxes and reduced developmental expenditure.
Explanation
The FRBM Act aims for inter-generational equity because heavy debt built up today forces future generations to bear higher taxes and lower development spending. R explains A.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q62. Which of the following is an incorrect statement regarding the provisions of the Rajasthan Fiscal Responsibility and Budget Management (FRBM) Act?
Explanation
The FRBM Act lays a Medium Term Fiscal Policy Statement, reduces the fiscal deficit step by step and enforces discipline and transparency. It does not prohibit all borrowing in disasters, since there is an escape clause, so A is incorrect.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q63. What is the primary mechanism through which the Government of India ensures that the State of Rajasthan complies with the FRBM borrowing limits?
Explanation
The Centre controls State borrowing through its consent under Article 293(3), which a State needs when it owes money to the Centre.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q64. In the context of Rajasthan’s public debt management, the term "Internal Debt" of the state comprises:
Explanation
The internal debt of a State consists of market loans, financial borrowings and securities issued within India. Foreign loans are not part of it.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q65. Select the correct sequence of the components of Rajasthan’s total outstanding public debt, generally ordered from largest share to smallest share:
Explanation
In Rajasthan’s public debt the largest component is internal debt (market borrowings), then public account liabilities and then loans from the Centre.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q66. Read the following statements: Statement I: State Development Loans (SDLs) are market borrowings raised by the Rajasthan government through RBI auctions. Statement II: Interest rates on SDLs are completely independent of market forces and are fixed permanently by the Finance Commission. Which of the statements given above is/are correct?
Explanation
State Development Loans are market borrowings raised through RBI auctions, so Statement I is correct. Their interest rates are set by market forces and not fixed by the Finance Commission, so Statement II is incorrect.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q67. Read the following statements regarding the management of guarantees given by the Rajasthan state government: I. Guarantees provided by the state to PSUs constitute a contingent liability, not a direct debt. II. If a PSU defaults on a guaranteed loan, the liability to repay falls on the State Government. III. The FRBM Act places no limits or regulations on the quantum of guarantees the state can provide. Which of the above statement(s) is/are correct?
Explanation
Guarantees given to PSUs are contingent liabilities, and if a PSU defaults the State has to repay. The FRBM Act does regulate the amount of guarantees, so III is wrong.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q68. Match the types of debt/liabilities of the Rajasthan government (List I) with their sources or instruments (List II):
Liability Type
Source/Instrument
A. Market Borrowings
i. Block loans for state plan schemes
B. Public Account Liabilities
ii. State Development Loans (SDLs)
C. Loans from Centre
iii. Guarantees given to State Electricity Boards
D. Contingent Liabilities
iv. State Provident Funds and Reserve Funds
Explanation
Market borrowings are State Development Loans, public account liabilities are provident and reserve funds, loans from the Centre include block loans for plan schemes and contingent liabilities are guarantees given to State Electricity Boards. This gives A-ii, B-iv, C-i, D-iii.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q69. Which Article of the Indian Constitution provides for the constitution of a State Finance Commission in Rajasthan to review the financial position of Panchayats and Municipalities?
Explanation
Articles 243-I and 243-Y provide for the State Finance Commission to review the financial position of Panchayats and Municipalities.
RAS PrelimsRajasthan Economy · Macro Overview of Rajasthan Economy and State Budget
Q70. What is the primary cause that necessitated the establishment of the Rajasthan State Finance Commission following the 73rd and 74th Constitutional Amendments?
Explanation
The State Finance Commission was set up after the 73rd and 74th Amendments to provide a mechanism for transferring revenues to local bodies.
Answer key for these questions
Q
Correct answer
61
(a) Both A and R are true and R is the correct explanation of A.
62
(a) Prohibition of all borrowing during disasters
63
(b) Centre’s consent for borrowing under Article 293(3)
64
(b) Market loans, financial borrowings, and securities
65
(b) Internal Debt (Market Borrowings), Public Account Liabilities, Loans from the Centre
66
(a) Only Statement I
67
(a) I and II
68
(a) A-ii, B-iv, C-i, D-iii
69
(b) Article 243-I and 243-Y
70
(d) Mechanism for transferring revenues to local bodies
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.
