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Karnataka State Syllabus Class 10 Social Science Economics Chapter 4 Public Finance and Budget
Class 10 Social Science Public Finance and Budget Textbook Exercise Questions and Answers
I. Fill In The Blanks With Suitable Answers:
Question 1.
The government manages the public finance through _______________ policy.
Answer:
Fiscal policy
Question 2.
When the government’s revenue is more than its expenditure, it is called _______________ budget
Answer:
Surplus
Question 3.
The person who presents the Central Government Budget in the Lok Sabha is _______________.
Answer:
Finance Minister
Question 4.
GST came into effect from _______________.
Answer:
I” July 2017
II. Answer The Following In One Sentence Each:
Question 1.
What is meant by Public Finance?
Answer:
Public finance deals with how a government raises revenues to meet its expenditure.
Question 2.
What do you mean by Budget?
Answer:
The statement of estimated income and expenditure of a year prepared by the government is called a budget.
Question 3.
Give the meaning of the Deficit Budget.
Answer:
If the expenditure is more than the revenue is called a deficit budget.
Question 4.
What are Direct Taxes?
Answer:
When the tax is paid by an individual on whom it is levied, it is called Direct tax.
Question 5.
Write the formula for the calculation of fiscal deficit.
Answer:
Fiscal deficit :(Revenue receipts + Non-debt capital receipts) – Total expenditure.
III. Answer The Following In Five To Six Sentences Each:
Question 1.
Explain the reasons for the increase in public expenditure.
Answer:
Public expenditure is incurred on various activities for the welfare of the people and also for economic development, especially in developing countries.
- In the 20th century, the role and scope of the governments have expanded and public expenditure also increased.
- Public expenditure has to create and maintain conditions conducive to economic development
- It has to improve the climate for investment.
- It should provide incentives to save, invest, and innovate. It should also help in the acceleration of economic growth and ensure economic stability.
Question 2.
What types of taxes are imposed by the government?
Answer:
The taxes imposed by the central government are of two types.
a) Direct Taxes: The important direct taxes are Personal income tax, corporate tax, wealth tax, stamp duty etc
b) Indirect Taxes: The main forms of indirect taxes are central excise duty, value-added tax, import-export taxes, and service tax, etc
Question 3.
What is the percent expenditure on interest payments in the 2017-18 budget?
Answer:
1. Total expenditure – 21,46,735
2. Interest payments – 5,23,078
\(\text { Percentage }=\frac{\text { Interest payments }}{\text { Total expenditure }}=\frac{5,23,078}{21,46,735} \times 100=24.36 \%\)
Question 4.
Explain the aspects of non-tax revenue of the central government.
Answer:
- Profit earned by the Reserve Bank of India.
- Profit generated by the Indian Railways. Revenue generated by the Departments of Post and Telecommunication.
- Revenue generated by the public sector industries.
- Various types of fees and penalties etc
Question 5.
What is a deficit? Mention the types of deficits.
Answer:
Public expenditure is usually higher than the public revenue this is called a Deficit.
Types of Deficits:
- Fiscal Deficit
- Revenue Deficit
- Primary Deficit
- Budget Deficit
Class 10 Social Science Public Finance and Budget Additional Questions and Answers
Multiple Choice Questions
Question 1.
“Concerned with the income and expenditure of public authorities and with the adjustment of one to the other” said by _______________.
a) Adam smith
b) Amarthgasen
c) Marshal
d) Dalton
Answer:
d) Dalton
Question 2.
The financial year starts from _______________ and ends on _______________.
a) March 1st to April 31st
b) March 1st to April 31st
c) Jan 1st to Dec 31st
b) April 1st to March 31st
Answer:
b) April 1M to March 31st
Question 3.
In developing countries normally prepare _______________ budget.
a) Deficit
b) Surplus
c) Balance
d) Progressive
Answer:
a) Deficit
Question 4.
The major sources of revenue for the government is _______________.
a) Revenue receipts
b) Taxes?
c) Indirect tax
d) Loans
Answer:
b) Taxes
Question 5.
The trader transfer this burden to the consumer it is a feature of _______________.
a) Direct tax;
b) Tax revenue
c) State tax
d) Indirect tax
Answer:
d) Indirect tax
Question 6.
“Progressive Taxation” refers to _______________.
a) Higher tax is imposed on luxury goods
b) Higher tax on high-income groups
c) Lower tax on common people
d) All the above points
Answer:
d) All the above points
Question 7.
G.S.T is a comprehensive _______________ Tax on manufacture.
a) Indirect tax
b) Higher
c) Direct tax
d) Consumer
Answer:
a) Indirect tax
Question 8.
Disinvestments means _______________.
a) Withdraws its investment
b) Provide free loans
c) Provide compensation to farmers
d) Withdraw the interest of loans
Answer:
a) Withdraws its investment
Question 9.
The bank provides loans for deficit financing countries _______________.
a) Postal Banks of India
b) Co-operative Banks
c) Reserve Bank of India
d) Foreign Banks
Answer:
c) Reserve Bank of India
Question 10.
The formula of primary budget is;
a) Primary deficit = Fiscal deficit + Total tax
b) Primary deficit = Fiscal deficit – Interest payment
c) Primary deficit = Fiscal deficit + Interest payment
d) Primary deficit = Fiscal deficit – Total tax
Answer:
b) Primary deficit = Fiscal deficit – Interest payment
Question 11.
Fiscal responsibility and budget management act implements in _______________.
a) 2002
b) 2005
c) 2003
d) 2006
Answer:
c) 2003
II. Answer The Following In One Sentence Each:
Question 1.
What is “Personal finance”?
Answer:
The management of Income expenditure and debt of an individual is called as “Personal finance”.
Question 2.
What is Public finance?
Answer:
Public Finance deals with how a government manage its income and expenditure, the study of which is called as Public finance.
Question 3.
What is Fiscal policy?
Answer:
The governments activities of mobilizing revenue incurring expenditure and raising loans are called as fiscal policy.
Question 4.
What is public expenditure?
Answer:
The expenditure incurred by public authorities like central, state and local government to satisfy to collective social wants to people is known as public expenditure.
Question 5.
What is Revenue Receipts?
Answer:
The revenue generated by the governinent through taxes and non tax sources is called as revenue receipts.
Question 6.
What is progressive taxation?
Answer:
A higher tax is imposed on luxury goods and services used by rich; and a lower tax on goods used by common people this is called as progressive taxation.
Question 7.
What is internal debt?
Answer:
The loan obtained from citizens of the country, banks, financial institutions and industries is called as internal debt.
Question 8.
What is fiscal deficit?
Answer:
The excess of government’s expenditure over its revenue receipts and non debt capital receipts is the fiscal deficit.
Question 9.
Expand the FRBMA
Answer:
Fiscal Responsibility and Budget Management Act
Question 10.
What is aim of FRBMA?
Answer:
The overall management of the public funds by moving towards a balanced budget is the main of the FRBMA.
Three Marks Questions
Question 1.
Write the importance of public finance.
Answer:
The governments activities of mobilizing revenue, incurring expenditure and raising loans are part of its fiscal policy.
- The objectives of fiscal policy are to achieve economic growth, maintain economic stability and achieve a fair distribution of income.
- The government usually spends the revenue collected through taxes or the money raised through borrowings for development activities.
- This increases the growth rate of the economy and benefits everyone.
- The government tries to regulate economic activities.
- Annual budget prepared by the government, the study of public finance also helps in analysis and evaluation of budgets.
Question 2.
Write the different types of budget. Write its meaning,
Answer:
Budgets can be of three types
a) Surplus budget
b) Deficit budget
c) Balanced budgets
a) Surplus budget: If the budget shows excess revenue as compared to expenditure, it is called a Surplus budget
b) Deficit budget: If the expenditure is more than the revenue, it is called a deficit budget.
c) Balanced budget: If both income and expenditure are equal, it is called a balanced budget.
Question 3.
Write the goals of public expenditure.
Answer:
The goals of public expenditure are.
- Promote faster economic development
- Promote industry trade and commerce
- promote agricultural and rural development
- Promote balanced regional growth.
- Build socio-economic overheads e.g. roadways, railways, dams, power etc
- Promote full employment
- Maximize social welfare.
Question 4.
Write the note on Goods and Services Tax.
Answer:
- GST is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, and has replaced the indirect taxes levied by the central and state government.
- GST will be levied and collected at each stage of sale or purchase of goods or services. The introduction of GST is a significant step in the reform of indirect taxation in India.
- It will mitigate cascading or double taxation and helps in creating a common national market.
- The simplicity of the tax should lead to easier administration and enforcement.