Economic Survey & Budget — Indian Economy

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Economic Survey & Budget

2 questions

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Q.1

WBCS prelims 2023

The major share of expenditure in the Union budget 2023-24 goes to —

A. Interest payments

B. States’ share of taxes and duties

C. Centrally sponsored schemes

D. Subsidies

Explanation

Why Correct: In the Union Budget 2023-24, the largest component of total expenditure is the States' share of taxes and duties (devolution to states), accounting for about 21% of total expenditure, which is higher than interest payments (19%), centrally sponsored schemes (15%), and subsidies (8%). Distractor Analysis: Interest payments form the second largest component. Centrally sponsored schemes are significant but not the largest. Subsidies are a relatively small share due to rationalization. Takeaway: In recent budgets, devolution to states has been the single largest expenditure head, reflecting the increased share of states in central taxes under the Finance Commission recommendations.

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Q.2

WBCS prelims 2009

The largest expenditure head in the Revenue Account of the last Union Budget is

A. Defence

B. Interest Payment

C. Social Service

D. Subsidy

Explanation

Why Correct: Interest payments on government debt consistently form the largest expenditure item in the Revenue Account of the Union Budget, exceeding defence, social services, and subsidies.
Distractor Analysis: Defence expenditure is a major revenue item but lower than interest payments. Social services include education and health but are smaller. Subsidies have been reduced in recent budgets and are not the largest.
Takeaway: In Indian budgets, interest payments account for about 20-25% of total revenue expenditure, the largest single head.

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