UPSC Prelims Practice Questions — The curious case of Kerala’s committed expenditure

Q1. In the context of state government finances, the term 'committed expenditure' is most precisely defined as which one of the following?

  • A. Non-discretionary, obligatory spending on salaries, pensions and interest payments that must be met before discretionary outlays
  • B. The total capital outlay earmarked for infrastructure and asset creation in the budget
  • C. Expenditure financed entirely through centrally sponsored scheme transfers from the Union
  • D. Spending that the state is legally barred from incurring without prior Finance Commission approval

Q2. As per PRS's State of State Finances (October 2025), how many Indian states are estimated to spend more than 60% of their revenue receipts on committed expenditure in 2025-26?

  • A. Three
  • B. Five
  • C. Seven
  • D. Ten

Q3. The normal net borrowing limit of 3% of GSDP applicable to states (including Kerala) for the period 2023-24 to 2025-26, with an additional 0.5% linked to power-sector reforms, was set on the recommendation of which body?

  • A. The Fifteenth Finance Commission
  • B. The NITI Aayog Governing Council
  • C. The Reserve Bank of India
  • D. The GST Council

Q4. Under Article 293(3), the annual net borrowing ceiling within which Kerala and other states must contain their fiscal deficit is operationally communicated and monitored solely by which of the following?

  • A. The Department of Expenditure, Union Ministry of Finance
  • B. The Department of Economic Affairs, Union Ministry of Finance
  • C. The Reserve Bank of India
  • D. NITI Aayog