UPSC Prelims Practice Questions — What the new fiscal rule means for growth and spending

Question 1

Under which one of the following enactments are the Fiscal Policy Statements, through which the Government of India has now adopted the debt-to-GDP ratio as its medium-term fiscal anchor, mandatorily laid before Parliament?

Accepted Answer

Fiscal Responsibility and Budget Management Act, 2003

Answer

Public Debt Act, 1944

Answer

Reserve Bank of India Act, 1934

Answer

Government Securities Act, 2006

Question 2

In the context of India's fiscal framework, the 'primary deficit' is best defined as:

Accepted Answer

Fiscal deficit minus net interest payments of the Central Government

Answer

Revenue expenditure minus revenue receipts of the Central Government

Answer

Total expenditure minus total receipts including borrowings

Answer

Fiscal deficit minus capital expenditure of the Central Government

Question 3

Under the medium-term glide path notified with the Union Budget 2025-26, the Central Government's debt-to-GDP ratio is to be brought down to approximately what percentage of GDP by 31 March 2031?

Accepted Answer

50 per cent

Answer

40 per cent

Answer

57 per cent

Answer

60 per cent

Question 4

Within the Union Ministry of Finance, which department is responsible for preparing and laying before Parliament the Fiscal Policy Statements that operationalise the debt-to-GDP anchor under the FRBM framework?

Accepted Answer

Department of Economic Affairs

Answer

Department of Revenue

Answer

Department of Expenditure

Answer

Department of Financial Services

Question 5

With reference to the revised fiscal framework adopted from the financial year 2026-27, which one of the following has been designated as the primary medium-term fiscal anchor of the Central Government?

Accepted Answer

Outstanding liabilities (debt) of the Central Government as a percentage of GDP

Answer

Revenue deficit as a percentage of GDP

Answer

Gross fiscal deficit as a percentage of GDP

Answer

Primary deficit as a percentage of GDP

UPSC Prelims Practice Questions — What the new fiscal rule means for growth and spending

Q1. Under which one of the following enactments are the Fiscal Policy Statements, through which the Government of India has now adopted the debt-to-GDP ratio as its medium-term fiscal anchor, mandatorily laid before Parliament?

Q2. In the context of India's fiscal framework, the 'primary deficit' is best defined as:

Q3. Under the medium-term glide path notified with the Union Budget 2025-26, the Central Government's debt-to-GDP ratio is to be brought down to approximately what percentage of GDP by 31 March 2031?

Q4. Within the Union Ministry of Finance, which department is responsible for preparing and laying before Parliament the Fiscal Policy Statements that operationalise the debt-to-GDP anchor under the FRBM framework?

Q5. With reference to the revised fiscal framework adopted from the financial year 2026-27, which one of the following has been designated as the primary medium-term fiscal anchor of the Central Government?