Q71. Which of the following is NOT a mandate or function of the Rajasthan State Finance Commission?
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 71–76 of 76 questions
Q72. Read the following statements regarding recommendations typically made by the Rajasthan State Finance Commission regarding devolution to local bodies:
I. A specific percentage of the State’s Own Net Tax Revenue is recommended for devolution.
II. The devolved amount is distributed vertically between Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) based on population.
III. Horizontal distribution among PRIs (Zila Parishad, Panchayat Samiti, Gram Panchayat) heavily weights the Gram Panchayats.
IV. Local bodies are strictly barred from generating their own non-tax revenues.
Which of the above statement(s) is/are correct?
I. A specific percentage of the State’s Own Net Tax Revenue is recommended for devolution.
II. The devolved amount is distributed vertically between Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) based on population.
III. Horizontal distribution among PRIs (Zila Parishad, Panchayat Samiti, Gram Panchayat) heavily weights the Gram Panchayats.
IV. Local bodies are strictly barred from generating their own non-tax revenues.
Which of the above statement(s) is/are correct?
Explanation
The State Finance Commission recommends a percentage of State own net tax revenue, shares it between PRIs and ULBs on population and weights the Gram Panchayats in horizontal distribution. Local bodies are not barred from raising own non-tax revenue, so IV is wrong.
Q73. Which of the following statements correctly identifies a key detail regarding the 6th State Finance Commission of Rajasthan?
Explanation
The 6th State Finance Commission of Rajasthan was constituted under the chairmanship of Shri Pradyuman Singh. Its recommendations are not binding on the Legislature in the way described in the other options.
Q74. Which of the following represents a major structural macroeconomic challenge for the Rajasthan economy?
Explanation
A major structural challenge for the Rajasthan economy is its workforce’s dependence on agriculture, which contributes little to the State’s output per worker.
Q75. Read the following statements:
Statement I: The drought dependency of Rajasthan causes severe inter-annual volatility in agricultural GSDP growth.
Statement II: The volatility in agriculture cascades into the secondary sector by disrupting agro-based raw material supply and reducing rural demand.
Which of the statements given above is/are correct?
Statement I: The drought dependency of Rajasthan causes severe inter-annual volatility in agricultural GSDP growth.
Statement II: The volatility in agriculture cascades into the secondary sector by disrupting agro-based raw material supply and reducing rural demand.
Which of the statements given above is/are correct?
Explanation
Rajasthan’s dependence on rain makes agricultural GSDP growth swing from year to year, so Statement I is correct. This volatility spreads to industry by disturbing the supply of agro-based raw materials and cutting rural demand, so Statement II is correct.
Q76. How does the historically low rate of large-scale industrialization in Rajasthan primarily impact its economic demographics?
Explanation
Low large-scale industrialisation leaves too few formal jobs, so many young people migrate to other States for formal employment.Answer key for these questions
| Q | Correct answer |
|---|---|
| 71 | (a) Recommending the horizontal distribution of central taxes among different states of India |
| 72 | (a) I, II and III |
| 73 | (a) It was constituted under the chairmanship of Shri Pradyuman Singh. |
| 74 | (d) Workforce dependence on low-contributing agriculture |
| 75 | (c) Both Statement I and Statement II |
| 76 | (c) It forces a large segment of the youth to migrate to other states for formal employment. |
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.