Q21. Which of the following statements differentiating the Revenue Account and Capital Account of the Rajasthan State Budget is incorrect?
Rajasthan Economy: RAS Prelims MCQs
721 RAS Prelims practice MCQs on the economy of Rajasthan are on this page, in 11 chapters. They cover the macro overview and State budget, agriculture, industry, the service sector, energy and transport infrastructure, rural development and Panchayati Raj, the State Finance Commission, education, health and the major welfare schemes. Each question has an answer and an explanation.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
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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 Rajasthan Economy
- The RPSC syllabus lists the economy of Rajasthan as the second part of the Economy paper.
- Many questions ask for a Rajasthan-specific fact: a scheme, a year, a district or an institution.
- The State budget chapter tests terms such as revenue deficit and fiscal deficit through the FRBM Act and the State’s debt.
- Infrastructure chapters cover solar and wind energy, DISCOM finances, highways, the DMIC and the Jaipur Metro.
- The national economy chapters are on the Indian Economy page.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Rajasthan Economy?
This page has 721 practice MCQs on Rajasthan Economy. Each has the correct answer, and most have an explanation.
Which chapters does the Rajasthan economy set cover?
Eleven chapters: macro overview and State budget; agriculture; industry; the service sector; energy infrastructure; transportation and communication; rural development and Panchayati Raj; State Finance Commission and fiscal devolution; education; health; and the major welfare schemes of the Rajasthan Government.
Is the Rajasthan economy in the RAS Prelims syllabus?
Yes. RPSC lists the economy of Rajasthan as the second part of the Economy paper, after economic concepts and the Indian economy, so both parts are examined in the same paper.
How can I prepare the Rajasthan economy chapters?
Keep a list of schemes with their year, objective and target group, and a list of district-wise crops and industries. Attempt each chapter, read the explanation of every miss and revise the list a few days later.