Q471. A persistent gap between State Finance Commission recommendations and actual implementation often leads to which of the following effects on 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 471–480 of 721 questions
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Q472. Match the following revenue sources in List I with the competent authority generally associated with them in List II:
| Revenue Source | Competent Authority |
|---|---|
| A. Corporate Income Tax | i. Union Government |
| B. Agricultural Land Revenue | ii. State Government |
| C. Property Tax (House Tax) | iii. Urban Local Bodies |
| D. Market Fees (Mandi/Haat) | iv. Panchayati Raj Institutions |
Explanation
Different government levels have specific revenue authorities. Corporate Income Tax is collected by the Union Government, while Agricultural Land Revenue falls under the State Government. Urban Local Bodies are typically responsible for Property Tax, and Panchayati Raj Institutions often manage fees from local markets and haats.
Q473. How does the State Finance Commission attempt to reduce inter-district fiscal disparities?
Explanation
To address fiscal inequalities among districts, the State Finance Commission uses a horizontal devolution formula that includes equity-based criteria. By giving more weight to factors like regional backwardness and the distance from the highest per capita income, the commission ensures that poorer regions receive more resources. This approach helps bridge the developmental gap and provides disadvantaged areas with the necessary financial support.
Q474. Consider the following major heads of expenditure for local bodies:
I. Payment of salaries and administrative expenses
II. Provision of core civic services like street lighting and sanitation
III. Defense procurement and border security
Which of the above identified expenditure heads are valid for local bodies?
I. Payment of salaries and administrative expenses
II. Provision of core civic services like street lighting and sanitation
III. Defense procurement and border security
Which of the above identified expenditure heads are valid for local bodies?
Explanation
Local bodies are responsible for administrative costs, including salaries, and the provision of essential civic amenities such as sanitation and street lighting. These constitute their primary expenditure heads. In contrast, national security and defense procurement are exclusive functions of the Union Government. Local government spending is strictly confined to the functions and duties devolved to them under the constitutional and state legal frameworks.
Q475. Performance grants for local bodies are best defined as:
Explanation
Performance grants are financial transfers designed to encourage local bodies to adopt better administrative and financial practices. These grants are not guaranteed; they are provided only when a local body meets specific benchmarks, such as maintaining up-to-date audited accounts or demonstrating an increase in tax collection. This mechanism promotes accountability and incentivizes local governments to improve their overall operational efficiency and transparency.
Q476. The following question consists of two statements, Assertion (A) and Reason (R). Answer the question using the options given below.
Assertion (A): Performance grants are designed to incentivize local bodies to improve their revenue collection and maintain audited accounts.
Reason (R): Performance grants are distributed equally among all Panchayats regardless of their financial management practices.
Assertion (A): Performance grants are designed to incentivize local bodies to improve their revenue collection and maintain audited accounts.
Reason (R): Performance grants are distributed equally among all Panchayats regardless of their financial management practices.
Explanation
Performance grants are specifically designed to incentivize local bodies to improve their financial management, such as maintaining audited accounts and increasing tax revenue. These grants are not distributed equally; they are earned based on meeting specific reform benchmarks. This targeted approach ensures that only those local bodies demonstrating improved efficiency and accountability receive additional financial support, encouraging better governance across all units.
Q477. Which of the following is a major challenge associated with the fiscal devolution framework to local bodies?
Explanation
A major challenge in the fiscal framework is the heavy reliance on tied grants, which are earmarked for specific central or state schemes. This dependency limits the ability of local bodies to prioritize projects based on immediate local needs. While these grants ensure funding for national priorities, they can undermine the functional autonomy of local governments and restrict their capacity for decentralized planning.
Q478. Arrange the following stages of the fiscal devolution process in the correct logical sequence:
I. Actual transfer of devolved funds to local bodies
II. Constitution of the State Finance Commission
III. Laying of the Action Taken Report before the State Legislature
IV. Determination of the divisible pool of state taxes by SFC
Which of the following is the correct sequence?
I. Actual transfer of devolved funds to local bodies
II. Constitution of the State Finance Commission
III. Laying of the Action Taken Report before the State Legislature
IV. Determination of the divisible pool of state taxes by SFC
Which of the following is the correct sequence?
Explanation
The fiscal devolution process begins with the constitution of the State Finance Commission by the Governor. The commission then determines the divisible pool and distribution formulas. After submitting its report, the state government presents an Action Taken Report to the legislature. Finally, the actual transfer of funds occurs based on the accepted recommendations, completing the cycle of financial resource allocation to local bodies.
Q479. In the context of 15th Finance Commission recommendations, the distribution of grants between Rural and Urban local bodies is generally based on:
Explanation
The 15th Finance Commission generally recommends distributing grants between rural and urban local bodies based on their relative population sizes. Some weightage is also given to the geographic area to account for the varying costs of service delivery in different regions. This demographic and spatial approach ensures that resources are allocated in proportion to the number of citizens served and the physical challenges involved.
Q480. Match the following terms in List I with their meaning in List II:
| Term | Meaning |
|---|---|
| A. Terms of Reference | i. The fund from which grants-in-aid are given to local bodies |
| B. Divisible Pool | ii. The scope and guidelines within which the SFC must operate |
| C. Consolidated Fund of State | iii. Government’s response to the SFC’s recommendations |
| D. Action Taken Report | iv. The total state tax revenue available for sharing |
Explanation
Fiscal devolution involves several key components. The Terms of Reference guide the commission’s scope, while the Divisible Pool represents the state tax revenue available for sharing. Grants-in-aid are disbursed from the Consolidated Fund of the State to support local needs. Finally, the Action Taken Report details the government’s response to the commission’s recommendations, ensuring legislative oversight of the entire devolution process.Answer key for these questions
| Q | Correct answer |
|---|---|
| 471 | (a) Fiscal stress and delayed delivery of civic services |
| 472 | (a) A-i, B-ii, C-iii, D-iv |
| 473 | (a) Assigning higher weightage to backwardness and per capita income distance in the horizontal devolution formula |
| 474 | (a) I and II |
| 475 | (c) Incentive-based transfers tied to reforms like audited accounts or improved tax collection efficiency |
| 476 | (c) A is true but R is false. |
| 477 | (a) Over-dependence on tied grants limiting local prioritization and autonomy |
| 478 | (a) II, IV, III, I |
| 479 | (a) Ratio of rural and urban population with some weightage for area |
| 480 | (a) A-ii, B-iv, C-i, D-iii |
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.