Q451. Which Constitutional provision mandates the State Finance Commission to review the financial position of the Municipalities (Urban Local Bodies)?
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.
Showing 451–460 of 721 questions
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Q452. Consider the following statements regarding the composition and appointment of the State Finance Commission:
Statement I: The State Finance Commission is constituted by the Chief Minister of the State.
Statement II: The composition of the Commission, the qualifications requisite for appointment as members thereof, and the manner of their selection are determined by the State Legislature by law.
Which of the above statements is/are correct?
Statement I: The State Finance Commission is constituted by the Chief Minister of the State.
Statement II: The composition of the Commission, the qualifications requisite for appointment as members thereof, and the manner of their selection are determined by the State Legislature by law.
Which of the above statements is/are correct?
Explanation
The Governor, not the Chief Minister, is the constitutional authority responsible for constituting the State Finance Commission. However, the state legislature is empowered to determine the commission’s composition, member qualifications, and selection methods through statutory laws. This legal framework ensures that the commission operates with professional expertise and administrative transparency while fulfilling its mandate to review local finances.
Q453. Which of the following best describes the terms of reference of the Rajasthan State Finance Commission?
Explanation
The Rajasthan State Finance Commission is primarily tasked with establishing the criteria for sharing the state’s tax revenues with local institutions. It formulates principles for the distribution of taxes, duties, and tolls between the state and local bodies, as well as among the bodies themselves. These recommendations ensure that local governments have the necessary funds for developmental activities.
Q454. In the context of fiscal devolution, what does the term "vertical devolution" refer to?
Explanation
Vertical devolution in state-local fiscal relations refers to the top-down allocation of financial resources. It specifically involves determining the total percentage share of the state’s divisible tax pool that should be transferred to local self-government institutions. This process ensures that local bodies receive a predictable and significant stream of revenue from state-level collections to fund their essential services.
Q455. Consider the following statements regarding devolution:
I. Vertical devolution determines the aggregate share of state taxes to be transferred to local bodies.
II. Horizontal devolution decides the allocation formula among individual Panchayats and Urban Local Bodies.
III. The State Finance Commission has no role in horizontal devolution.
Which of the above statement(s) is/are correct?
I. Vertical devolution determines the aggregate share of state taxes to be transferred to local bodies.
II. Horizontal devolution decides the allocation formula among individual Panchayats and Urban Local Bodies.
III. The State Finance Commission has no role in horizontal devolution.
Which of the above statement(s) is/are correct?
Explanation
Vertical devolution determines the total share of state resources moving to local bodies collectively. In contrast, horizontal devolution establishes the formula for dividing that pool among individual units based on specific criteria like population or area. Both processes are essential functions of the State Finance Commission, ensuring that funds are distributed both adequately from the state and equitably among districts.
Q456. Horizontal devolution among Panchayats and Urban Local Bodies is typically based on certain weighted criteria. Which of the following is most commonly used as a primary criterion by State Finance Commissions?
Explanation
State Finance Commissions often prioritize population as the primary criterion for horizontal devolution because it reflects the relative scale of demand for basic civic services. A higher population indicates a greater need for infrastructure maintenance and public amenities. Using this metric ensures that funds are distributed based on the number of residents served, promoting fairness among different local government units.
Q457. The following question consists of two statements, Assertion (A) and Reason (R). Answer the question using the options given below.
Assertion (A): The State Finance Commission recommends principles for grants-in-aid to Panchayats from the Consolidated Fund of the State.
Reason (R): Grants-in-aid are primarily designed to eliminate all own-source revenue collection requirements for local bodies.
Assertion (A): The State Finance Commission recommends principles for grants-in-aid to Panchayats from the Consolidated Fund of the State.
Reason (R): Grants-in-aid are primarily designed to eliminate all own-source revenue collection requirements for local bodies.
Explanation
The State Finance Commission recommends grants-in-aid from the Consolidated Fund of the State to support the financial needs of Panchayats. However, these grants are meant to bridge fiscal gaps rather than eliminate the requirement for own-source revenue. Local bodies are still encouraged to generate their own funds through local taxes to maintain autonomy and ensure sustainable financial management.
Q458. What is the primary purpose of grants-in-aid recommended by the State Finance Commission to local bodies?
Explanation
Grants-in-aid recommended by the State Finance Commission are essential for addressing the difference between a local body’s expenditure requirements and its own revenue generation. These funds are primarily used to support the delivery of basic civic services like sanitation, water supply, and lighting. They ensure that local governments can function effectively despite limited direct taxation powers or varying economic conditions.
Q459. Which of the following represents the correct chronological sequence of Chairpersons of the Rajasthan State Finance Commission?
Explanation
The Rajasthan State Finance Commission has seen several chairpersons since its inception. K.K. Goyal led the first commission, followed by Hira Lal Devpura for the second. Manik Chand Surana chaired the third commission, and B.D. Kalla served as the chairman of the fourth. This chronological sequence reflects the historical development and periodic review of local body finances in Rajasthan.
Q460. Who was the Chairman of the First State Finance Commission of Rajasthan?
Explanation
K.K. Goyal was appointed as the Chairman of the First State Finance Commission of Rajasthan following the 73rd and 74th Constitutional Amendment Acts. The commission was established to review the financial health of local bodies and recommend the first formal framework for the devolution of state tax revenues. His leadership set the foundation for subsequent fiscal relations between the state and local governments.Answer key for these questions
| Q | Correct answer |
|---|---|
| 451 | (d) Article 243Y |
| 452 | (b) Only Statement II is correct |
| 453 | (d) To recommend principles for distributing state taxes between the State and local bodies, and among local bodies |
| 454 | (d) The allocation of the state’s divisible tax pool share from the State Government to the local bodies |
| 455 | (a) I and II |
| 456 | (c) Population of the local body |
| 457 | (c) A is true but R is false. |
| 458 | (d) To bridge the fiscal gap and support basic civic service delivery |
| 459 | (a) K.K. Goyal - Hira Lal Devpura - Manik Chand Surana - B.D. Kalla |
| 460 | (c) K.K. Goyal |
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.