Classification of Public Revenue Question 1.
Observe the pictures given above. They are related to certain activities performed by the government. What are they ? Find out other activities of the government.
Answer:
- Distribution of drinking water
- Distribution of welfare pension
- Protection of environment
- Protection of the country
- Road construction
- Health centers
- Center for distributing food
Vehicle Tax Kerala Question 2.
Given below is the graph showing the public expenditure of India from 2010-11 to 2016-17.
Answer:
The public expenditure of the year 2010-ll was 1197328 Crore. In the year 2011-12 it increased by 107037 Crore and became 130463 Crore. In 2012-13 it increased by 106007 Crore and became 141037 Crore. In 2013 -14, it increased by 149075 Crore and became 1559447 Crore.
In 2014-15 the public expenditure increased by 121711 Crore and became 1681158 Crore. In 2015-16 the public expenditure increased by 96319 Crores and became 1777477 Crores. In 2016-17 the public expenditure increased by 197717 Crores and became 1975194 Crores.
Types of Public Revenue Question 3.
Find out of the government expenditure in your ward and classify them into developmental and non-developmental expenditure.
Answer:
| Developmental Expenditure | Non-developmental Expenditure |
| Construction of Roads | Disaster management |
| Industrial expense | Eradication of wastes |
| Setting up educational institutions | Giving loans with subsidy |
| Farming | Welfare pension |
Standard Social Question 4.
Discuss how these factors lead to an increase in public expenditure and make inferences.
Answer:
Government undertakes welfare activities in the form of education, health, infrastructure, food, urbanization which leads to increase in public expenditure automatically. Natural calamities makes more expenditures and unemployment also rise the expenditure that is to control unemployment and to attain economic, development industrialization must be encouraged. Thus starting new industries and protecting industries increase Public expenditure.
What is Public Revenue Question 5.
Can you identify the receipt given? Where do we remit land tax? (Textbook page no. 75)
Answer:
Land tax remitted receipt.
Land tax will remit at their own village offices.
10th Public Question 6.
Discuss whether direct or indirect tax seriously affect common people.
Hints – Tax burden, rise price, income inequality.
Answer:
In direct tax payer bears the burden himself. So the tax payer known the burden of tax. But indirect tax collected by raising the price of commodities. Tax payer is ignorant of the tax. Evading a tax means giving up the wants. Direct tax is based on the principle of the ability to pay.
But indirect tax will not ensure social justice as it falls upon the rich and to poor alike. The rate of increase in the direct tax j may cause increase in the price of commodities. Thus we can assess that direct tax affects common man more public debt.
Public Finance Syllabus Question 7.
With the help of reading material, find out the main taxes of the state government.
Answer:
- Land tax
- Vehicle tax
- Excise duty
- Entertainment tax
Define Public Revenue Question 8.
Calculate the annual per capital debt of India.
Answer:
We get annual percapita debt of India by dividing total debt of a year with population of the year. According to 2011 population census our population is 1, 21, 01, 93, 422.
Public debt of 2015 = 5, 50, 36, 75
Per capita debt = 1, 21, 01, 93, 422 – 5503675
= 00, 45, 47, 76 crores
Question 9.
Statistics shows that India’s public debt is increasing. Discuss the advantages and disadvantages of this and report the findings?
Answer:
Under development and increase in population results increase of public debt. If the public debt is increased, major portion of the public income will be allocated to interest and repayment. As a result allotment to welfare schemes will below and it adversely affect the economic 1 development of a country.
Public Revenue Question 10.
Prepare a note by analyzing the major items of the central govt.
Items — Expenditure
Interest and repayments — 456145
Defense — 246727
Subsidies — 243811
Grants to state and union territories — 108552
Pension — 88521
Police — 51791
Social service — 29143
Economic service — 28984
Grants to foreign govt — 4342
Other public services — 30936
Answer:
- The largest amount is spent on interest and repayment.
- The least amount is spent on grants to foreign government.
- The expenditure on welfare schemes and defense is more or less same.
- Rs. 29143 crores, Rs 28984 crores and Rs 30936 crores are allotted social economic service and to public services respectively.
Question 11.
Observe the diagram related to the major income sources of the central budget 2017-18.
Find out the following after observing the diagram.
a. From which item does the central government receive maximum tax revenue?
Answer:
Corporate tax
b. Which is the source of non tax revenue that yields maximum income to the central government?
Answer:
Profit
c. Which source yields more income to the central government – tax revenue or non tax revenue?
Answer:
444631
Question 12.
What are the goals of the fiscal policy ?
Answer:
- Attain economic stability
- Create employment opportunities
- Control unnecessary expenditure
- Increase the aggregate output of the economy
- Keep prices and wages stable
- Used to curtail inflation, increase aggregate demand and other macroeconomic issues
Question 13.
How do public expenditure, public income and public debt benefit a country? Discuss.
Answer:
Public expenditure is the governmental expenditure for social welfare. Public expenditure is very important for the development of a country. Under Govt taken various initiation on welfare activities public expenditure increases.To meet this expenditure govt mobilizes income from various sources.
This income is called public revenue. It includes both tax revenue and non tax revenue. In a developing and under developed nation budget will be deficit budget became they have to undertake various developmental activities.
Public Expenditure and Public Revenue Let Us Assess
Question 1.
Compare developmental and non -develop-mental expenditure and give examples for each.
Answer:
Public expenditure can be classified into developmental and non developmental expenditure. Any expenditure that creates assets for the future is called developmental expenditure.
Examples :- construction of roads, bridges, and harbors, setting up of educational institutions, starting up new enterprises etc.
Expenditures that does not create any assets are called non-developmental expenditure.
Examples :- expenditure incurred by way of war. interest, pension etc.
Question 2.
Describe the features of direct tax and indirect tax.
Answer:
Taxes are the main source of income of’the government. The amount to be compulsorily paid by the public to the government is called tax. There are two types of taxes. Direct tax and indirect tax.
| Direct tax | Indirect tax |
| Tax is paid by the person on whom it is imposed. | Tax is imposed on one person and paid by another. |
| Tax burden is felt by the tax payer | Tax burden is not felt by the tax payer |
| Comparatively low expenditure is incurred for tax collection. | Comparatively high expenditure is incurred for tax collection. |
Question 3.
What are the important functions of GST council.
Answer:
- Taxes, cess and surcharges that are to be merged into GST.
- The goods and services that are to be brought under GST.
- Determining GST rates.
- The time frame for including the excluded items into GST.
- Determining the tax exemption limit on the basis of total turnover.
Question 4.
Explain with examples Public revenue and Public expenditure.
Answer:
Public Revenue:
Income of the government is known as Pub- lie revenue. The government earns income primarily from two sources. They are tax revenue and non-tax revenue. Tax revenue are of two types: Direct tax and indirect tax. Tax is paid by the person on whom it is imposed is called direct tax.
Examples:- Personal income tax, Corporate tax etc. While tax is imposed on one person and paid by another is called Indirect tax. Exam pie:- Value added tax, Excise duty, Sales tax, Customs duty, Service tax etc. Along with tax government receives in from two other sources such as surcharge and cess. Additional tax imposed on tax is called surcharge. Additional tax imposed by the government for certain specific purposes is called Cess
Public Expenditure:
Expenditure incurred by the government for various development and non-developmental activities are called Public expenditure. Examples for developmental expenditure are construction of roads, railways, bridges, harbors, setting up of new enterprises, educational institutions and medical institutions. Examples for non-developmental expenditure are expenditure on war, pension, interest etc. India’s public expenditure is increasing because when population increases, facilities for education, health, shelter etc for more people have to be given. For this, the government has to spend more money. There are various reasons for the increase in expenditure.
- Increase in the defense expenditure
- Welfare activities
- Urbanization
- Increase in population
Question 5.
What are the sources of non tax revenue?
Answer:
Fees, fines and penalties, grants, interest and profit are the various sources of non tax revenue.
Question 6.
Rewrite if required
Deficit budget → Income = Expenditure
Surplus budget → Income < Expenditure
Balanced budget → Income > Expenditure
Answer:
Balanced budget → Income = Expenditure
Deficit budget → Income < Expenditure
Surplus budget → Income > Expenditure
Question 7.
What is fiscal policy? Explain its aims.
Answer:
Governments policy regarding public revenue, public expenditure and public debt is called fiscal policy.
There are various aims of fiscal policy.
- Attain Economic stability
- Create employment opportunities
- Controls unnecessary expenditure
- It helps to maintain price stability
- For efficient resource allocation.
Question 8.
Public finance and fiscal policy determines a country’s progress. Substantiate.
Answer:
Public finance and fiscal policy determines a country’s progress. Public finance is the branch of economics that relates to public income, public expenditure and public debt. It is presented through the budget. Fiscal policy is the government policy regarding public revenue, public expenditure and public debt.
These policies are implemented through the budget. Fiscal policy influences a countries progress. A sound fiscal policy helps in nourishing the developmental activities and to attain growth.
Fispal policy controls inflation and deflation which affect economic security. The tax rate is increased when there is inflation. As a result of this, the purchasing power of the people falls. Similarly tax is reduced at the time of deflation. That will increase purchasing power of the people. As a result the demand for products increases. This results in an increase in the price of the products. The timely application of fiscal policy helps the government to over-come such situations.
Public Expenditure and Public Revenue Orukkam Questions and Answers
Question 1.
Complete the chart.
Answer:
a. By government,
b. Non-developmental,
c. For constructing road,
c. Agriculture,
d. interest, pension.
Question 2.
One of the factors which is responsible for the increase in government expenditure has been given. Find out and write some other factors.
1. Population increase
Answer:
- Increase in defense expenditure
- Welfare activities
- Urbanization
- Inflation.
Question 3.
In the above activity you found out the factors responsible for the increase in public expenditure in India. Prepare a small write up using these points.
Answer:
Government undertakes welfare activities in the form of education, health, infrastructure, food, urbanization which leads to increase in public expenditure automatically. Natural calamities makes more expenditures and unemployment also rise the expenditure that is to control unemployment and to attain economic development industrialization must be encouraged. Thus starting new industries and protecting industries increase Public expenditure.
Question 4.
Complete the flow chart, connected with ‘different types of taxes’.
Answer:
a. Indirect Tax,
b. Personal income tax,
c. Tax imposed on the net income or profit of a company,
d. Land tax,
e. Excise duty,
f. Imposed on import and export of products,
g. Service Tax,
h. Taxes imposed on services.
Question 5.
The names of different types of taxes are given below. Categorize them, and fill the tables.
Answer:
Central government taxes
- Corporate tax
- Personal income tax
- Union excise duty
State government taxes
- Land tax
- Stamp duty
- Value Added Tax
- State Excise Duty
Local Self Government Taxes
- Property tax
- Professional tax
- Entertainment tax
Question 6.
Complete the picture.
Answer:
a. Grants
b. Fees
c. Interest
d. Profit
Question 7.
You have successfully found out the main sources of non-tax revenue, in the above activity. Now clarify each of them. An example is given for you.
Interest: Interest is the amount received for the loans provided by the government
Answer:
Fees: Reward collected for the government’s services.
Eg: License fees, Tuition fees, Registration fees etc.
Fines and penalties:Punishments for violating the laws.
Grants: Financial aid provided by one government to another.
For example, grants are provided by central and state government to local self governments.
Interest: Amount received for loans provided by the government to various enterprises, agencies and countries.
Profit: Income received from the enterprises operated by the government.
Eg. Profit from Indian Railways.
Question 8.
Complete the chart
Answer:
a. Loans taken by the government,
b. External Debts,
c. Loans availed by the government from individuals and institutions within the country.
Question 9.
Complete the world wheel.
increase in population.
Answer:
- Increase in Import
- Developmental activities
- Increased Defense expenditure
- Social Welfare Activities.
Question 10.
Find out correct answers from the box given below the table.
Answer:
a. Budget
b. Expenditure = Revenue
c. Surplus Budget
d. Expenditure Revenue
e. Deficit Budget
Question 11.
Fill the blank parts, suitably.
1. Government policy regarding public revenue, public expenditure and public debt is called ……………….
2. There policies are implemented through ………………..
3. Attainment of economic stability is one of its goals. Two other goals are ………….
Answer:
1. Fiscal Policy
2. Budget
3. Create employment opportunities
4. Control Unnecessary expenditure
Question 12.
Put the symbols ↓ or ↑ appropriately, in the blanks.
1. During inflation the tax rate ………….
2. As a result, the purchasing power of the people …………..
3. During deflation the tax rate …………..
4. As a result the purchasing power of the people ……………..
Answer:
1. During inflation the tax rate ↑
2. As a result, the purchasing power of the people ↓
3. During deflation the tax rate ↓
4. As a result the purchasing power of the people ↑
Question 13.
As a following up activity of the former, prepare a short note on ‘Timely application of the fiscal policy during Inflation and Deflation’, by the government.
Answer:
The tax rate is increased when there is inflation. As a result of this the purchasing power of the people falls.Tax is reduced at the time of deflation. This will increase the purchasing power of the people. As a result the demand for products increases. This results in an increase in the price of products.The timely application of fiscal policy helps the government to overcome such situations.
Public Expenditure and Public Revenue Evaluation Questions
Question 1.
What is Public expenditure? Which are its two divisions?
Answer:
Public Expenditure: Expenditure incurred by the government is known as Public expenditure. Developmental Expenditure and Non Developmental Expenditure.
The Expenditure incurred by the government for constructing roads, bridges and harbors starting up new enterprises, setting up educational institutes etc are considered as Developmental expenditure. Expenditure incurred by the way of war, interest, pension etc are considered as Non developmental expenditure
Question 2.
Why does India’s, public expenditure in-crease?
Answer:
Welfare Activities, Urbanization, Increase in Defense expenditure.
Question 3.
What is public revenue? Which are its main sources?
Answer:
The income of the government is known as Public revenue.There are two types of public revenue.
- Tax Revenue
- Non Tax Revenue
Question 4.
What is the differences between Direct tax and Indirect tax?
Answer:
Direct Tax:
- Tax is paid by the person on whom it is imposed
- Tax burden is felt by the tax payer
- Comparatively high expenditure is incurred for tax collection.
Indirect Tax:
- Tax is imposed on one person and paid by another
- Tax burden is not felt by the tax payer
- Comparatively low expenditure is incurred for tax collection.
Question 5.
What is Corporate tax?
Answer:
It is the tax imposed on the net income or profit of a company.
Question 6.
Differentiate ‘Surcharge and ‘Cess’
Answer:
Additional tax imposed on tax is called surcharge. Generally surcharge is imposed for a specific period. Additional tax is imposed by the government for certain specific purposes is called Cess. Cess will be discontinued when enough money is received.
Question 7.
Who imposes Entertainment tax?
Answer:
Entertainment tax is imposed by Local self government.
Question 8.
Increase is defence expenditure is one of the reasons for the increase in India’s pub-lic debt. Find out 3 other for the same.
Answer:
- Increase in population
- Social Welfare Activities
- Developmental activities.
Question 9.
What is ‘budget’? Which are its three types?
Answer:
Budget is the financial statement showing the expected income and expenditure of the government during a financial year. Three types of budget are Balanced Budget, Surplus Budget, Deficit budget.
Question 10.
What is fiscal policy? What is the merit of a sound fiscal policy?
Answer:
Government’s policy regarding public revenue, public expenditure and public debt is called a Fiscal policy. A sound fiscal policy helps in nourishing the developmental activities and to attain growth.
Public Expenditure and Public Revenue SCERT Questions And Answers
Question 1.
Some of the activities performed by welfare governments are given below.Complete the table by incorporating other two activities.
1. Distribution of welfare pension
2. Empowering General education
3. a ……………………..
4. b ………………….
Answer:
a. Public health care protection
b. Environment protection.
Question 2.
What is meant by public expenditure?
Answer:
Expenditure of the government for public welfare.
Question 3.
Which are the two main sources of public revenue of the government?
Answer:
- Tax revenue
- Non-tax revenue
Question 4.
What is the major difference between direct tax and indirect tax.
Answer:
- Tax is paid by the person on whom it is imposed
- Tax is imposed on one and paid by another.
Question 5.
List down the main features of direct tax and indirect tax.
Answer:
Direct tax:
- Tax paid by the tax payer
- Tax burden is felt by the tax payer
- Comparatively expensive
Indirect tax:
- Tax is imposed on one and paid by another
- Tax burden is not felt by the tax payer
- Comparatively low expenditure.
Question 6.
Two major direct taxes are given below. Explain them.
1. Personal income tax
2. Corporate tax
Answer:
1. Tax imposed on the income of the individuals
2. Tax imposed on the net income or profit of a company.
Question 7.
Prepare a description about the indirect taxes in India.
Answer:
Describe value added tax, excise duty, customs duty and service tax.
Question 8.
Classify the taxes given below as direct tax and indirect tax.
a. Personal income tax,
b. Excise duty,
c. Corporate income tax
d. Value added tax
Answer:
a. Direct tax – Personal income tax,
b. corporate tax
c. Indirect tax – Excise duty,
d. Value added tax
Question 9.
Classify the following taxes properly as mentioned in the table.
1. Entertainment tax
2. Value added tax
3. Property tax
4. Personal income tax
5. Corporate tax
6. tamp duty
7. and tax
8. Professional tax
Answer:
- Central Government: Corporate tax, Personal Income tax.
- State Government: Value added tax, Stamp duty, Land tax.
- Local Self Government: Property tax, Entertainment tax, Professional tax.
Question 10.
Prepare a note on the different sources of income of the state government.
Answer:
Describes the tax income of the state government such as value added tax, stamp duty, state excise duty, land tax.
Question 11.
Write your opinion about the taxes that affect ordinary people.
Answer:
Write about indirect tax and your opinion on price hike, economic inequality.
Question 12.
Some non-tax income are given below. Ex-plain them.
1. Fees
2. Grant
3. Interest
4. Profit
Answer:
Explain fees, grant, interest and profit.
Question 13.
Prepare a short note on the impact of public debt in India.
Answer:
Write and explain the negative result of in-creasing public debt.
Question 14.
Table showing the internal and external debt of India from 2010 -11 to 2015 -16 is given below. Observe the table and answer the following.
a. When compared to 2010 -11 how much was the increase in public debt in 2015-16
b. What conclusions do you arrive at by comparing the internal and external debt?
c. What might be the reasons for increasing public debt in India?
Answer:
a. Debt doubled
b. Internal debt is more than external debt
c. Expenses for Defense, Increase in population, Social welfare activities, Development activities.
Question 15.
What is meant by public finance?
Answer:
A branch of Economics that deals with public income, public expenditure and public debt.
Question 16.
How do you think that the payment and nonpayment of tax with affect the development of a nation?
Answer:
- Explains the advantages of paying tax
- Explains the disadvantages of not paying tax.
Question 17.
What is budget? What is the importance of budget in economic activities of the government?
Answer:
- An economic document that shows the income and expenditure of the government in a financial year.
- Explains the importance of the budget.
Question 18.
How do you differentiate direct tax from in¬direct tax?
Answer:
In direct tax, tax is imposed one and another person pays the tax
Question 19.
What are the features of public income and public expenditure?
Answer:
The features of public expenditure and public revenue. Explain different type of budgets.
Question 20.
Explain different type of budgets.
Answer:
- Balanced budget : Income and expenditure are equal.
- Surplus budget : Income is more than expenditure.
- Deficit budget: Expenditure is more than income
Question 21.
What are the major features of the fiscal policy?
Answer:
The features of fiscal policy
Question 22.
Which are the major sources of income in Central budget?
Answer:
Corporate tax, Personal income tax, Customs duty, Excise duty.
Question 23.
What are the features of internal debt and external debt.
Answer:
The features of internal debtapd external debt.
Question 24.
Compare developmental expenditure and non-developmental expenditure.
Answer:
Write and explains developmental expenditure and non-developmental expenditure.
Question 25.
Public finance and fiscal policy determines the development of nation. Substantiate.
Answer:
Write and substantiates public finance and fiscal policy.
Question 26.
Explain what is fiscal policy and what are its objectives.
Answer:
Write and explains fiscal policy
- Economic stability
- Employment opportunity
- Control unnecessary expenses
- Control inflation and deflation
- Economic discipline
Question 27.
Analyse the pie diagram given below and answer the following.
a. Through which tax did government get more income?
b.How much income is received through service tax?
c. Which is the highest source of non tax revenue to the Central Government?
d Does tax revenue or non-tax revenue bring more income to the government?
Answer:
a. Corporate tax,
b. 209774 crores,
c. Profit,
d. Tax income.
Public Expenditure and Public Revenue Exam Oriented Questions and Answers
Question 1.
Who collects professional tax ?
Answer:
Local self government institutions.
Question 2.
The government servants in a Panchayat area pay tax to the Panchayat. Which type of tax is this ?
Answer:
This is professional tax
Question 3.
Give some examples for direct taxes in India.
Answer:
Personal income tax, Corporate tax.
Question 4.
What are the source of Non- tax revenue ?
Answer:
Fees, fines and penalties. Grants, interest, Profit.
Question 5.
What are the two types of customs duty?
Answer:
Export duty and import duty.
Question 6.
a. For what purpose, the government spend money ?
b. Identify the areas where local self government under takes expenditure ?
Answer:
a.The government money for undertaking public institution and for attaining social welfare.
b. Education sector, Health sector, Social welfare, Public work, Drinking water.
Question 7.
Complete the following table based on the institutions which collects the different types of taxes given below.
Answer:
Question 8.
What is public revenue ? What are the two source of public revenue ?
Answer:
The income of the Govt is known as public revenue. Tax revenue and non-tax revenue are the two sources of public revenue.
Question 9.
What is public expenditure? What are the two source of public expenditure ?
Answer:
The expenditure incurring by the government is known as public expenditure. Developmental and non-developmental expenditures are the two sources of public expenditure.
Question 10.
Why does India’s Public expenditure in-creases ? Suggest some reasons.
Answer:
- Increase in the defense expenditure
- Welfare activities
- Urbanization
- Increasing Population
- Various developmental activities.
Question 11.
Give a brief account on Taxes ?
Answer:
Taxes are the main source of income for the Government. The amount to be compulsorily paid by the public to the government for expenditure such as welfare activities, developmental activities etc incurred in public interest is called tax. The person who pays tax is called tax payer. Taxes are of two types. Direct tax and indirect taxes.
Question 12.
What is personal income tax and corporate tax.
Answer:
The tax imposed on the income of individuals is called income tax. Tax rate increases with income. Tax is imposed on income beyond a certain limit. It is the tax imposed on the net income or profit of a company.
Question 13.
What are the major indirect taxes in India.
Answer:
Value added tax, Excise duty, Customs duty, Service tax.
Question 14.
What is Value added tax ? Write its advantages and disadvantages ?
Answer:
It was introduced in France in 1954. A product reaches the consumers through different stages. Value is added at each stage. Taxes which are imposed on such value is called Value Added Tax (VAT).
Advantages:
- Can avoid conceding effect
- As tax is paid at different stages, malpractices can be minimized.
- Help to collect correct information on production and trade
- As there are chances for giving tax subsidy it promotes exports.
- Easy to introduce tax is not concentrated in a place alone.
Disadvantages:
- Tax collection is expensive
- Not a simple tax system, especially for developing countries.
- Success depends on the co-operation of tax collectors.
- Chance of small purchase exist.
- Difficult for small traders as they have to keep correct accounts.
- Everybody has to keep correct accounts.
Question 15.
Give a brief accounts on non- tax re venue ?
Answer:
Fees Fees is the reward collected for the governments services. License fee, registration fee, tuition fee, etc. are the examples.
Fine and penalties :- Fines and penalties are punishments for violating the laws.
Grants:- Grants are the financial aid provided by one government to another. For example grants are provided by central and state goveminent to local self Governments.
Interest:- Interest is the amount received for the loans provided by the government to various enterprises, agencies and countries.
Profit:- Profit is the income received from the enterprises operated by the government.
For example profit from the Indian railways.
Question 16.
Explain about various indirect taxes in India?
Answer:
Excise duty :- Tax imposed at the production stage of a commodity.
Customs duty :- Imposed on import and export of products.
Service tax :- The tax imposed on services called service tax.
Question 17.
What is surcharge?
Answer:
Additional tax imposed on tax is called surcharge. Generally surcharge is imposed for a specific period.
Question 18.
What do you mean by Cess?
Answer:
Additional tax imposed by the government for certain specific purpose is called Cess. Cess will be discontinued when enough money is received.
Question 19.
Give a brief account on taxes imposed by the central, the state, and the local self government
Answer:
Central Government:
- Corporate tax
- Personal income tax
- Union excise duty
State Government:
- Value added tax
- Stamp duty
- State excise duty
- Land tax
Local Self Government:
- Property tax
- Professional tax
- Entertainment tax.
Question 20.
Increase in tax rate leads to increase in the price of commodities. Which of the following will you recommend for tax imposition ? Why ? Gold jeweler, Diamond jeweler, Life saving medicines, Petroleum products, Salt, Luxury cars.
Answer:
I will recommend to impose tax on gold jeweler, Diamond jeweler and luxury cars. I will not recommend to impose tax on petroleum product, salt, life saving medicines etc because they are essential commodities. The price of there will increase as a result of tax imposition and it will affect the standard of living of the common people. .
Question 21.
Classify the following taxes into Direct and Indirect taxes.
1. Agricultural tax,
2. Entertainment tax,
3. Profes-sional tax,
4. Income tax,
5. Customs duty,
6. Excise duty – Land tax,
7. Property tax,
8. Vehicle tax.
Answer:
Direct tax :-
Income tax, Agricultural tax, Professional tax, Land tax, Property tax, Vehicle tax.
Indirect tax :-
Customs duty, Excise duty, Entertainment tax, Service tax.
Question 22.
High rate is imposed on liquor and drugs, What is the objective behind this ?
Answer:
By imposing high tax on liquor and drug the government get high income, and spend it for social welfare. Now a days the number of ; people, using drugs are increased. Through , imposing high tax on liquor and drug the government brings a social control, that is the j aim of the government is social welfare with j increased income.
Question 23.
Grant is an example of non- tax revenue to government. Identify the other non-tax sources of Income to a government ?
Answer:
Profit :- Central government gets profits from public sector undertakings like Railways, BSNL etc. The state government receives pro fit from state enterprises like KSFE, KEL- TRONetc.
Income from public property :- It includes rent for government owned land and rent for govt buildings.
Payments for government service :- Tuition fee registration fee and license fee etc.
Debts :- Internal and external borrowings
Fines :- Government imposes a fine upon who violate some rules. This is a source of income of the government.
Question 24.
What are public debt? Write two types of public debt ?
Answer:
The loans taken by the government is called public debt. Internal debt and external debt are the two kinds of public debt.
Question 25.
Distinguish between Internal debt and external debt
Answer:
internal debt :- The loans availed by the government from individuals and institution with in the country.
External debt :- The loans availed from foreign governments and international institutions.
Question 26.
Given below is the table indicating the internal and external debt of India from 2010-11 to 2015-16.
Question 27.
How much did public debt increase in 2015-16 compared to 2010-11 ? What conclusion can be arrived at while comparing internal debt with external debt?
Answer:
- 2678921 crores.
- Internal debt is more than external debt.
Question 28.
What are the reason for the increase in Indian public debt ?
Answer:
- Increased defense expenditure.
- Expense on educator and other service. Social welfare activities
- Developmental activities
- Urbanization
- Increase in import
- Unemployment benefit
- Expenses for periodic elections.
- To meet loss caused by natural calamities.
Question 29.
Apart from internal and external debt what are the various kinds of debts ?
Answer:
Productive debt and unproductive debt :- If the borrowed amount is used for productive purposes it is known as productive debt. Unproductive debt includes expenses like war finance and covering budgetary deficit. Compulsory and voluntary debt Compulsory debt is done in times of war, inflation etc. If the people are free to buy or not to buy the bonds debentures issued by the government. It is voluntary debt.
Redeemable and Irredeemable debt :- Redeem able debts are repaid with in a specific period of time. It there is no time limit for repayment it is redeemable debt.
Funded and Unfunded debt :- Funded debts are taken for a long period and for specific purpose. Short term debts are called unfunded debts.
Question 30.
What is public finance ?
Answer:
Public finance is the branch of economics that relates to public income, public expenditure and public debt. Public finance is presented through the budget.
Question 31.
Define the term budget ?
Answer:
Budget is the financial statement showing the expected income and expenditure of the government during a financial year. In India, financial year is from April 1 to March 31.
Question 32.
What are the three types of Budget
Answer:
- Surplus budget
- Deficit budget
- Balanced budget
Question 33.
Fill in those aspects which are missing in facts related with budget
1. Budget deficit :- Total budget expenditure …………..
2. Revenue deficit :- Revenue expense ………………
3. Surplus Budget :- Expenditure ………………..
4. ………………. = Budget deficit+borrowing
Answer:
- Total budget income
- Revenue income
- Income
- Fiscal deficit
Question 34.
What are the various aims of budget?
Answer:
- To ensure accountability
- To serve as a tool of management for controlling administration.
- To help economic planning.
- To work as a method for collection public fund.
- To work as a basis for public welfare.
- As a tool for policy formulation to government.
- To work as a source of information to the public about government programmes.
Question 35.
Distinguish between inflation and deflation.
Answer:
A general rise in price of commodities is called inflation. A general fall in price of commodities is called deflation.
Question 36.
What is fiscal policy ? Explain is main goals. The policy relating to taxes, public expenditure and borrowings is known as fiscal policy.
Answer:
Goals:
- Attain economic stability
- Create employment opportunities.
- Control Unnecessary expenditure
- Economic development of a nation.
- Control monopoly.
- Increase employment opportunities
- Eradication of poverty
- Maintain equilibrium in international trade
- Reducing economic inequality
Question 37.
The following are the features related to certain taxes. Find out the type of taxes.
a. Taxes burden is not to the tax payer.
b. Tax payer himself bears the burden of tax
Answer:
a. Indirect tax
b. Direct tax
Question 38.
How do fiscal policy controls inflation and deflation of a country.
Answer:
The tax rate is increased when there is inflation as a result of this purchasing power of the people falls. Tax is reduced when there is deflation.This will increase purchasing power of the people. So the demand for the products increases. The timely application of fiscal policy helps the government.
