UPSC Prelims Practice Questions — INDIA ON TRACK TO REACH DEBT-TO-GDP RATIO OF 50±1 PERCENT BY 2030-31

Q1. With reference to the targets prescribed by the FRBM (Amendment) Act, 2018, consider the following statements. Which of the above is/are correctly identified?

1. General government debt to be brought down to 60% of GDP by 2024-25.
2. Central government debt to be brought down to 40% of GDP by 2024-25.
3. An operational fiscal deficit target of 3% of GDP.
4. The revenue deficit to be eliminated entirely by 2024-25.

• A. 1, 2 and 3
• B. 2 and 4 only
• C. 1 and 3 only
• D. 1, 2, 3 and 4

Q2. The Union Government's power to borrow upon the security of the Consolidated Fund of India — the borrowing that the debt-to-GDP glide path seeks to regulate — is derived from which one of the following Articles of the Constitution of India?

• A. Article 292
• B. Article 112
• C. Article 266
• D. Article 280

Q3. In the fiscal framework reaffirmed in the Union Budget 2026-27, which one of the following now serves as the primary fiscal anchor for the Central Government?

• A. Debt-to-GDP ratio
• B. Fiscal deficit
• C. Revenue deficit
• D. Primary deficit

Q4. With reference to the debt-anchored fiscal framework continued in the Union Budget 2026-27, consider the following statements. Which of the above is/are NOT correct?

1. The debt-to-GDP ratio has replaced the fiscal deficit as the primary fiscal anchor.
2. The fiscal deficit now functions as the operating lever within the debt-anchored framework.
3. The debt glide path was introduced as the fiscal anchor from the Union Budget 2024-25.
4. The debt glide path targets a Central Government debt of about 40% of GDP by 2030-31.

• A. 1 only
• B. 3 only
• C. 4 only
• D. 2 and 3

Q5. With reference to the fiscal figures presented in the Union Budget 2026-27, consider the following statements. Which of the above is/are correctly identified?

1. The fiscal deficit in BE 2026-27 is estimated at 4.3% of GDP.
2. The debt-to-GDP ratio in BE 2026-27 is estimated at 55.6%.
3. The debt-to-GDP ratio in RE 2025-26 is estimated at 56.1%.
4. The fiscal deficit in RE 2025-26 is estimated at 4.6% of GDP.

• A. 1 and 2 only
• B. 1, 2 and 3
• C. 2, 3 and 4
• D. 1 and 4 only

Q6. The preparation of the Union Budget and the operationalisation of the Central Government's debt-to-GDP glide path is carried out primarily by which one of the following?

• A. Budget Division, Department of Economic Affairs, Ministry of Finance
• B. Department of Expenditure, Ministry of Finance
• C. NITI Aayog
• D. Department of Revenue, Ministry of Finance

Q7. With reference to the Central Government's debt trajectory around the COVID-19 pandemic, consider the following statements. Which of the above is/are correctly identified?

1. The Centre's debt rose to about 61% of GDP in 2020-21.
2. The Centre's debt declined to about 58% of GDP by 2022-23.
3. The 2020-21 spike was driven by higher borrowing and a contraction in GDP.
4. The Centre's debt fell below the 40% FRBM ceiling by 2022-23.

• A. 1 and 2 only
• B. 1, 2 and 3
• C. 2, 3 and 4
• D. 1, 3 and 4

Q8. The following statements compare the Central Government's debt-to-GDP position in 2020-21 and 2022-23. Which of the statements given above is/are correct?

1. The Centre's debt-to-GDP ratio was higher in 2020-21 than in 2022-23.
2. The decline from 2020-21 to 2022-23 was entirely due to a reduction in the absolute stock of debt.
3. In both years the Centre's debt-to-GDP ratio exceeded the 40% ceiling prescribed by the 2018 FRBM amendment.

• A. 1 only
• B. 1 and 3 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q9. With reference to the Revised Estimates (RE) for 2025-26 in the Union Budget 2026-27, consider the following statements. Which of the above is/are correctly identified?

1. Total expenditure is about ₹49.6 lakh crore.
2. Capital expenditure is about ₹11 lakh crore.
3. The Centre's net tax receipts are about ₹26.7 lakh crore.
4. Non-debt receipts are about ₹40 lakh crore.

• A. 1, 2 and 3
• B. 2, 3 and 4
• C. 1 and 4 only
• D. 1, 2, 3 and 4

Q10. The fiscal consolidation glide path announced in the Union Budget for FY 2021-22, reported as fulfilled in RE 2025-26, committed the Government to bringing the fiscal deficit below which one of the following levels of GDP by 2025-26?

• A. 4.5%
• B. 3.0%
• C. 4.0%
• D. 5.0%

Q11. The following statements compare the fiscal deficit with the debt-to-GDP ratio as fiscal measures. Which of the statements given above is/are correct?

1. The fiscal deficit is a flow measured within a single financial year, whereas the debt-to-GDP ratio is a stock of accumulated liabilities relative to output.
2. The fiscal deficit, being a flow, does not add to the outstanding stock of government debt.
3. The debt-to-GDP ratio can decline even in a year in which the government runs a fiscal deficit, if nominal GDP grows fast enough.

• A. 1 and 2 only
• B. 1 and 3 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q12. With reference to the distinction between general government debt and Central Government debt under the FRBM framework, consider the following statements. Which of the above is/are NOT correct?

1. General government debt comprises the combined debt of the Centre and the States.
2. General government debt is computed net of inter-governmental debt.
3. The 2018 FRBM amendment set the general government debt ceiling at 60% of GDP.
4. The 2018 FRBM amendment set the Central Government debt ceiling at 50% of GDP by 2024-25.

• A. 1 only
• B. 4 only
• C. 3 and 4
• D. 2 only