UPSC Prelims Practice Questions — Poll-bound States spent carefully while cutting debt

Q1. The annual publication 'State Finances: A Study of Budgets', which provides the empirical anchor for cross-state comparisons of outstanding liabilities and gross fiscal deficit referenced in the recent debate on poll-bound States' fiscal prudence, is brought out by which one of the following?

  • A. Reserve Bank of India
  • B. Comptroller and Auditor General of India
  • C. NITI Aayog
  • D. Finance Commission of India

Q2. In the context of the RBI's 'State Finances: A Study of Budgets', which one of the following best describes the term 'outstanding liabilities' of a State government?

  • A. The stock of total accumulated debt of the State government from all sources at a given point of time
  • B. The excess of total expenditure over total non-debt receipts in a financial year
  • C. The difference between revenue receipts and revenue expenditure in a financial year
  • D. Fresh market borrowings raised by the State during the financial year net of repayments

Q3. Among the five poll-bound States/UT facing assembly elections in 2026, which one had the highest ratio of outstanding liabilities to GSDP as per the 2025-26 Budget Estimates?

  • A. Kerala
  • B. Tamil Nadu
  • C. West Bengal
  • D. Assam

Q4. The statutory framework at the Union level which prescribes fiscal deficit and debt targets and which the States have subsequently mirrored through their own enactments capping fiscal deficit and outstanding liabilities derives from which one of the following Acts of Parliament?

  • A. Fiscal Responsibility and Budget Management Act, 2003
  • B. Public Debt Act, 1944
  • C. Government Securities Act, 2006
  • D. Reserve Bank of India Act, 1934