APPSC Group-I Prelims 2017

182 questions from the 2017 papers, each with the official answer and an explanation.

A question repeated across years is listed once, under one of the years it appeared.

41. Q41India's foreign policy and international relations

    The MOU to be signed by the Bay of Bengal initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) (approved by Union Cabinet in April 2017) is on cooperation in?

    • aOil & Petroleum sector
    • bInformation Technology sector
    • cTsunami warning system
    • dPower SectorAnswer
    ›Explanation

    Option D is correct because the Union Cabinet approved the signing of the BIMSTEC Memorandum of Understanding on the Establishment of the BIMSTEC Grid Interconnection in April 2017, which relates to the power sector. Date of Cabinet approval: April 2017 MOU objective: BIMSTEC Grid Interconnection for electricity trade Sector: Power Option A: The 2017 cabinet approval did not concern the oil and petroleum sector. Option B: Information technology cooperation was not the subject of the regional grid pact approved in April 2017. Option C: Tsunami early warning cooperation falls under disaster management, not the April 2017 Cabinet-approved MOU.

42. Q42Polity in the news: new committees, commissions of inquiry and cases in the courts

    For which of the following reasons was the FCRA licence of Public Health Federation of India recently cancelled by the Government of India?

    • aMisutilization of Government grants
    • bMoney laundering activities
    • cTaking bribes from hospitals
    • dLobbying with parliamentariansAnswer
    ›Explanation

    Option D is correct because the Union Ministry of Home Affairs cancelled the Foreign Contribution Regulation Act registration of the Public Health Foundation of India on grounds that foreign funds were diverted to lobby parliamentarians and the media on public health issues like tobacco control. Option A: Misutilization of Government grants was not the formal finding under the Foreign Contribution Regulation Act violations cited for cancellation. Option B: Money laundering activities fall under the Prevention of Money Laundering Act and were not cited in the cancellation order. Option C: Taking bribes from hospitals is an offense under anti-corruption statutes and was not the reason for the license cancellation.

43. Q43STATE POLITY: how the state itself is governed

    After reorganization of Andhra Pradesh, which of the following organizations is established to act as a catalyst to facilitate economic growth and investment in Andhra Pradesh ?

    • aAP Economic Development BoardAnswer
    • bAP Invest
    • cAP First
    • dAP Infrastructure Corporation
    ›Explanation

    Option A is correct because following the bifurcation of the state, the Government of Andhra Pradesh constituted the Andhra Pradesh Economic Development Board (APEDB) to drive sustainable economic growth, mobilize investments, and facilitate industrial development. Option B: AP Invest is not the statutory board established for broad economic steering post-reorganization. Option C: AP First is a slogan or initiative related to local employment, not the comprehensive investment promotion board. Option D: AP Infrastructure Corporation refers to existing infrastructure agencies like APIIC, not the dedicated post-bifurcation economic development board.

44. Q44STATE POLITY: how the state itself is governed

    Which number does one have to call in Andhra Pradesh to utilise the services of Talli Bidda Express?

    • a108
    • b106
    • c104
    • d102Answer
    ›Explanation

    Option D is correct because 102 is the dedicated toll-free helpline number designated in Andhra Pradesh for the Talli Bidda Express, which provides safe, free drop-back transportation for postnatal mothers and their newborns from government hospitals to their homes. 108: Emergency response service for critical trauma, medical, and accident emergencies 104: Fixed-day mobile medical delivery and tele-health information helpline 102: Dedicated referral and drop-back transport service for maternal and neonatal care Option A: Incorrect because 108 is the emergency ambulance service for life-threatening medical situations. Option B: Incorrect because 106 is not the toll-free healthcare transport line operated by the state health department. Option C: Incorrect because 104 is assigned to mobile medical units delivering health advisories and monthly rural checkups.

45. Q45STATE POLITY: how the state itself is governed

    What is the objective of the “Badikosta” scheme started by the Government of Andhra Pradesh?

    • aTo minimise dropout rate of girl students from high school.Answer
    • bTo promote bicycle as a mode environmentally-friendly transport for students
    • cTo provide bicycles at low cost to girl students
    • dTo provide incentive to teachers for getting girl students enrolled in school
    ›Explanation

    Option A is correct because the Badikosta initiative was launched by the Andhra Pradesh government to supply free bicycles to girl students in government schools, removing travel hurdles and reducing high school dropout rates. Option B: The core objective is retaining adolescent girls in education, not promoting green transit modes. Option C: The bicycles are supplied completely free of cost rather than sold at a subsidised or low cost. Option D: The initiative supports students directly through mobility assets and offers no incentive payouts to teachers.

46. Q46STATE POLITY: how the state itself is governed

    Which number does one have to call in Andhra Pradesh to utilize the services of Talli Bidda Express ?

    • a108
    • b106
    • c104
    • d102Answer
    ›Explanation

    Option D is correct because the toll-free helpline 102 is dedicated across Andhra Pradesh to operate the Talli Bidda Express for providing free transportation to pregnant women, post-delivery mothers, and infants. Option A: 108 is the emergency medical ambulance service for general and trauma emergencies. Option B: 106 is not designated as a maternal health transit helpline in the state. Option C: 104 operates as the fixed-day mobile medical service and health advice helpline.

47. Q47STATE POLITY: how the state itself is governed

    Out of the options below, which types of activities are taken up under the Neeru Chettu programme by Government of AP ?

    • aTree plantation in government buildings
    • bDesiltation of minor irrigation tanks and channelsAnswer
    • cDevelopment of parks and community groves
    • dVana Mahotsav
    ›Explanation

    Option B is correct because the Neeru Chettu programme was initiated to make Andhra Pradesh a drought-proof state primarily through extensive desiltation of minor irrigation tanks, repair of supply channels, and excavation of farm ponds alongside afforestation. Option A: Incorrect because tree plantation in government office campuses is a routine departmental civic activity rather than the core operational mandate of this watershed management mission. Option C: Incorrect because the creation of urban public parks and community recreation groves falls under municipal administration and urban forestry projects. Option D: Incorrect because Vana Mahotsav is an annual national tree-planting festival observed pan-India, not a specific state water and soil conservation work.

48. Q48Economic thought: the thinkers, the schools and the Nobel prize

    The debate between Bhagwati and Sen on the economic policy of India revolves on?

    • aIndustry versus Agriculture
    • bEconomic Growth first versus Investment in Social Infrastructure firstAnswer
    • cRural versus Urban
    • dPrivate Investment Venus Public Investment
    ›Explanation

    Option B is correct because the famous Bhagwati-Sen debate centered on whether India should prioritize rapid GDP growth via deregulation and private enterprise to generate state resources (Bhagwati model) or directly prioritize social infrastructure, healthcare, and education to build human capabilities (Sen model). Option A: Industry versus Agriculture relates to early planning models like Mahalanobis versus Vakil-Brahmananda, not the Bhagwati-Sen debate. Option C: Rural versus Urban mischaracterizes their debate, which addressed broad development philosophy rather than spatial allocation. Option D: Private Investment Venus Public Investment describes an element of their discussion rather than the core philosophical divide between growth-led development and capability-led development.

49. Q49Economic thought: the thinkers, the schools and the Nobel prize

    The debate between Bhagawati and Sen on the economic policy of India revolves on

    • aIndustry versus Agriculture
    • bEconomic Growth first versus Investment in Social Infrastructure firstAnswer
    • cRural versus Urban
    • dPrivate Investment versus Public Investment
    ›Explanation

    Option B is correct because the famous Bhagwati-Sen debate centers on growth-led redistribution versus entitlement-led human capability development. Jagdish Bhagwati argued that accelerated market-driven economic growth must come first to generate public revenues, whereas Amartya Sen maintained that upfront investment in health, education, and social infrastructure is vital for long-term growth and human freedom. Option A: Industry versus agriculture refers to early development planning debates such as the Mahalanobis strategy versus the wage-goods model, not the Bhagwati-Sen discourse. Option C: Rural versus urban disparities concern spatial development and migration debates rather than the core ideological dispute between these two scholars. Option D: Private versus public investment is a broader ownership controversy rather than the specific social capability versus growth sequencing debate.

50. Q50Planning, reform and the shape of policy

    Which of the following could be one of the reasons for pruning of development targets of the second five-year plan?

    • aNon-availability of foreign collaborators to set up heavy industries
    • bDeflationary situation in the economy
    • cAcute shortage of foreign exchangeAnswer
    • dFailure of bureaucracy to implement developmental schemes
    ›Explanation

    Option C is correct because the Second Five Year Plan experienced an unexpected balance of payments crisis in 1957-1958 due to massive imports of heavy machinery and foodgrains, which depleted foreign exchange reserves and compelled the government to prune the plan down to its core. Option A: Non-availability of foreign collaborators to set up heavy industries is incorrect because several foreign partners successfully collaborated on major projects such as the steel plants at Bhilai, Rourkela, and Durgapur. Option B: Deflationary situation in the economy is incorrect because the period was characterized by rising inflation and deficit financing, not deflation. Option D: Failure of bureaucracy to implement developmental schemes is incorrect because the primary constraint that forced target reduction was financial and external, not administrative failure.

51. Q51Planning, reform and the shape of policy

    Out of the options below, what was the issue of emphasis in the Sixth five-year plan put forward for 1978—83 by the Government of the Janata Party?

    • aEmploymentAnswer
    • bIndustrialization
    • cGrowth with stability
    • dSectoral allocation
    ›Explanation

    Option A is correct because the draft Sixth Five Year Plan (1978-1983) formulated by the Janata Party government prioritized employment generation, aiming to eradicate unemployment and underemployment within a ten-year timeframe primarily through rural development and village industries. Option B: Heavy industrialization was the focus of earlier plans, particularly the Second Plan, whereas the Janata government shifted emphasis to rural and small-scale sectors. Option C: Growth with stability was the guiding objective of the Fourth Five Year Plan. Option D: Sectoral allocation is a general planning method used across all plans, not the defining policy priority of the 1978-83 plan.

52. Q52Planning, reform and the shape of policy

    From which five year plan was the system of setting 'monitorable targets' for key indicators of development introduced?

    • aEighth Plan
    • bNinth Plan
    • cTenth PlanAnswer
    • dEleventh Plan
    ›Explanation

    Option C is correct because the Tenth Five Year Plan (2002-2007) broke new ground by setting state-wise, monitorable targets for eleven key developmental indicators, including reduction of poverty, infant mortality rate, and maternal mortality ratio. Option A: The Eighth Plan focused on human development and structural reforms without a formalized monitorable targets framework. Option B: The Ninth Plan focused on growth with social justice and equity without breaking targets into monitorable state-level metrics. Option D: The Eleventh Plan continued and expanded monitorable targets, but the system was first instituted in the Tenth Plan.

53. Q53Planning, reform and the shape of policy

    Which of the following is NOT one of the subjects on which a sub group of chief ministers is constituted by NITI Aayog as part of Cooperative Federalism?

    • aCentrally sponsored schemes
    • bSkill development
    • cSwachh Bharat
    • dDigital paymentsAnswer
    ›Explanation

    Option D is correct because digital payments was taken up by a committee of chief ministers constituted after demonetisation in 2016, rather than one of the initial three formal sub-groups of chief ministers set up by NITI Aayog. Sub-groups of Chief Ministers constituted in 2015: Sub-Group on Rationalisation of Centrally Sponsored Schemes Sub-Group on Swachh Bharat Abhiyan Sub-Group on Skill Development Option A: Centrally sponsored schemes was one of the three original sub-groups. Option B: Skill development was one of the three original sub-groups. Option C: Swachh Bharat was one of the three original sub-groups.

54. Q54Planning, reform and the shape of policy

    What was the immediate cause for loss of foreign reserves triggering the financial crisis in 1991?

    • aPolitical instability and uncertainty
    • bIncrease in non oil imports
    • cSharp rise in value of imports of oil and Petroleum productsAnswer
    • dStoppage of rupee trade by the Soviet Bloc
    ›Explanation

    Option C is correct because the outbreak of the Gulf War caused an immediate and dramatic surge in international crude oil prices, drastically inflating India's import expenditure and draining its foreign exchange reserves. August 1990: Gulf War erupted following Iraq's invasion of Kuwait World crude oil prices surged, sharply raising India's petroleum import bill Remittances from Indian workers in West Asia dried up suddenly June 1991: Foreign exchange reserves dropped to barely enough for two weeks of imports Option A: Political instability weakened policy response and investor confidence, but it was an internal domestic factor rather than the immediate balance of payments trigger. Option B: Non-oil imports did not witness an abnormal spike; the acute shock came directly from oil and petroleum products. Option D: The disruption of the Soviet trade network affected bilateral trade over time, but was not the sudden shock that triggered the 1991 liquidity crisis.

55. Q55Planning, reform and the shape of policy

    Which move helped to tide over the balance of payment crisis in 1991?

    • aSale of gold in international markets
    • bEmergency loan from IMF by pledging gold reservesAnswer
    • cEmergency loan from World Bank
    • dQuick realisation of expatriate payments
    ›Explanation

    Option B is correct because the Reserve Bank of India pledged gold reserves to foreign central banks to secure emergency foreign exchange credit from international lenders and the International Monetary Fund, averting a sovereign debt default. May 1991: RBI pledged 20 tonnes of gold to State Bank of India to raise foreign currency July 1991: RBI airlifted 46.91 tonnes of gold to the Bank of England and Bank of Japan Emergency financing secured under IMF standby and compensatory financing arrangements Option A: Gold was pledged as collateral under repurchase agreements rather than sold outright in international markets. Option C: The immediate balance of payments emergency liquidity was arranged primarily through the International Monetary Fund, not the World Bank. Option D: Expatriate remittances from the Gulf were disrupted by the Gulf War, making realization of expatriate payments unfeasible.

56. Q56Planning, reform and the shape of policy

    Which of the following sectors was not much affected by the reforms after 1991?

    • aCivil Aviation
    • bBanking
    • cTelecommunications
    • dRailwaysAnswer
    ›Explanation

    Option D is correct because Indian Railways remained a state-owned department reserved exclusively under public sector control, leaving it largely insulated from the initial wave of deregulation and private entry. Option A: civil aviation was opened up to private domestic carriers through the repeal of the Air Corporations Act in 1994. Option B: banking witnessed extensive reforms following the Narasimham Committee recommendations, including the entry of private and foreign banks. Option C: telecommunications underwent rapid liberalization starting with the National Telecom Policy of 1994 and private sector participation.

57. Q57Planning, reform and the shape of policy

    What could be the main reason for jobless growth in the reform period after 1991?

    • aReforms were mainly confined to the formal sectorAnswer
    • bMajority of the labour force was already employed and hence there was no need for jobs
    • cThe informal sector opposed the reforms and new industries could not be opened
    • dPeople were not willing to do menial jobs
    ›Explanation

    Option A is correct because the post-1991 reforms predominantly targeted the organized formal sector, which is capital-intensive and employs less than ten percent of India's labor force, resulting in output growth without commensurate growth in overall employment. Option B: The majority of the labor force was not fully employed; extensive disguised unemployment and underemployment prevailed in agriculture. Option C: The informal sector did not actively block reforms or industry creation; rather, it lacked access to formalized capital, infrastructure, and markets. Option D: Jobless growth stemmed from structural and technological factors within the economy, not from workers refusing menial jobs.

58. Q58Population, poverty and work

    As per census 2011, between 2001 and 2011?

    • afarmers increased and farm labourers decreased
    • bfarmers increased and farm labourers increased
    • cfarmers decreased and farm labourers decreased
    • dfarmers decreased and farm labourersAnswer

    Explanation coming soon.

59. Q59Population, poverty and work

    What is the all India participation rate of Women in MNREGA (Mahatma Gandhi National Rural Employment Guarantee Agency) Scheme in 2016 – 17?

    • a36%
    • b46%
    • c56%Answer
    • d66%
    ›Explanation

    Option C is correct because the all-India female participation rate in the MGNREGA scheme reached approximately 56% during the financial year 2016-17, surpassing the statutory minimum requirement of 33%. Option A: 36% is close to the statutory minimum requirement of 33% but significantly underestimates the actual participation in 2016-17. Option B: 46% was the approximate participation rate in the initial years of the scheme (around 2007-08). Option D: 66% is far higher than the actual recorded national average for 2016-17.

60. Q60Population, poverty and work

    Which of the following programmes of the Government of India does not provide the opportunity for urban rejuvenation?

    • aAMRUT
    • bRurban MissionAnswer
    • cHRIDAY
    • dSwachh Bharat Mission
    ›Explanation

    Option B is correct because the Shyama Prasad Mukherji Rurban Mission is targeted at developing rural clusters by providing urban-like infrastructure, rather than rejuvenating existing urban areas. Option A: focuses directly on urban renewal by enhancing water supply, sewerage, and green spaces in cities. Option C: focuses specifically on heritage city development and heritage-linked urban rejuvenation. Option D: includes a dedicated urban component aimed at urban sanitation and solid waste management.

61. Q61Population, poverty and work

    Which of the following programmes of the Government of India does not provide opportunity for urban rejuvenation ?

    • aAMRUT
    • bRurban MissionAnswer
    • cHRIDAY
    • dSwachh Bharat Mission
    ›Explanation

    Option B is correct because the Shyama Prasad Mukherji Rurban Mission is an initiative designed to provide urban amenities and economic development to rural clusters, not urban rejuvenation. Option A: is dedicated to urban transformation through basic urban utility and infrastructure enhancement. Option C: targets the rejuvenation and conservation of designated heritage cities across India. Option D: contains an urban mission component focused on city-wide sanitation and waste processing infrastructure.

62. Q62Agriculture in the Indian economy

    Which of the following is not a component of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)?

    • aAccelerated Irrigation Benefits Programme (MBP)
    • bHar Khet ko Pani (HMG')
    • cPer Drop, More Crop
    • dNational Water GridAnswer
    ›Explanation

    Option D is correct because the National Water Grid is an overarching concept for interlinking rivers across India, not an operational component under PMKSY. PMKSY major components: Accelerated Irrigation Benefits Programme PMKSY major components: Har Khet Ko Pani PMKSY major components: Per Drop More Crop PMKSY major components: Watershed Development Option A: Accelerated Irrigation Benefits Programme is an integral component of PMKSY focused on completing major and medium irrigation projects. Option B: Har Khet Ko Pani is a core component aimed at creating new water sources and expanding the cultivable command area. Option C: Per Drop, More Crop is the micro-irrigation component of PMKSY.

63. Q63Agriculture in the Indian economy

    In the case of PDS schemes, which would be the probable relation between coverage and leakage?

    • aThe lower the coverage, the higher the leakageAnswer
    • bThe lower the coverage the lower the leakage
    • cThe higher the coverage, the higher the leakage
    • dThere is no relation between coverage and leakage
    ›Explanation

    Option A is correct because empirical studies on food security show that targeted schemes with narrow coverage face weak public scrutiny and high exclusion, leading to greater diversion and leakage into the open market, whereas near-universal coverage reduces leakage through collective community monitoring. Option B: The lower the coverage the lower the leakage contradicts evidence showing targeted systems suffer from severe diversion. Option C: The higher the coverage, the higher the leakage is false because broad entitlement programs create strong public demand and vigilance that check leakages. Option D: There is no relation between coverage and leakage ignores the documented administrative and political economy link between entitlement breadth and pilferage.

64. Q64Agriculture in the Indian economy

    As per the statistics of the National Crime Records Bureau (ADSI 2015), the biggest reason for suicide of farmers in India is

    • afamily and social problems
    • bbankruptcy or indebtednessAnswer
    • cfarming related issues
    • dillness, drug abuse and alcohol addiction
    ›Explanation

    Option B is correct because according to the NCRB Accidental Deaths and Suicides in India (ADSI) 2015 report, bankruptcy or indebtedness was recorded as the single largest cause of farmer suicides, accounting for over 38 percent of cases. Indebtedness/Bankruptcy: 3,097 suicides (38.7%) Farming related issues: 1,568 suicides (19.5%) Family problems: 933 suicides (11.7%) Illness: 840 suicides (10.5%) Option A: Incorrect because family problems ranked behind financial indebtedness in the ADSI 2015 findings for farmers. Option C: Incorrect because farming-related issues like crop failure constituted approximately 19.5 percent, roughly half the proportion attributed to debt. Option D: Incorrect because illness and substance abuse accounted for a considerably smaller percentage compared to financial debt.

65. Q65Industry in the Indian economy

    Which of the following is a demand side intervention in the UDAY (Ujjwal DISCOM Assurance Yojana) Scheme of the Central Government?

    • aCoal swapping
    • bAvailability of cheaper funds
    • cUsage of energy efficient LED bulbsAnswer
    • dReduction in transmission loss
    ›Explanation

    Option C is correct because promoting energy-efficient LED bulbs directly curtails electricity demand from consumers, representing a clear demand-side energy efficiency intervention under UDAY. Option A: Coal swapping is a supply-side measure aimed at rationalizing fuel transport and lowering generation costs. Option B: Availability of cheaper funds is a financial turnaround mechanism dealing with debt restructuring. Option D: Reduction in transmission loss is a technical, supply-side distribution efficiency measure.

66. Q66Money, banking and financial markets

    Which one of the following is the most effective financial inclusion programme?

    • aDemonetization
    • bAadhar
    • cPradhan Mantri Fasal Bima Yojana
    • dJan Dhan YojanaAnswer
    ›Explanation

    Option D is correct because Pradhan Mantri Jan Dhan Yojana is the flagship financial inclusion initiative of India, designed to provide universal and affordable access to banking services, basic savings accounts, remittance facilities, credit, and insurance. Option A: Demonetization was a monetary policy intervention aimed at curbing black money and counterfeit currency rather than a financial inclusion initiative. Option B: Aadhar is a biometric identification infrastructure that verifies individual identity, not a financial inclusion scheme itself. Option C: Pradhan Mantri Fasal Bima Yojana is an agricultural insurance scheme covering crop losses, not a universal financial inclusion program.

67. Q67Public finance and the budget

    Out of the options below, the most important disadvantage of a multiple tax rate structure is?

    • aDifficulty in remembering rates for different items
    • bCross-subsidization amongst the taxes on different items
    • cMisclassification of goods and servicesAnswer
    • dDifficulty in arriving at a tax rate for an item
    ›Explanation

    Option C is correct because having multiple tax rates creates strong incentives for businesses to engage in misclassification disputes and litigation to fit goods and services into lower tax slabs. Option A: Difficulty in remembering rates for different items is wrong because administrative automation and published rate schedules solve recall issues. Option B: Cross-subsidization amongst the taxes on different items is wrong because cross-subsidization is an intended policy objective rather than an administrative disadvantage. Option D: Difficulty in arriving at a tax rate for an item is wrong because setting initial tax rates is a legislative exercise rather than the primary operational drawback during execution.

68. Q68Public finance and the budget

    A large gap in the collection of property tax vis-a-vis the potential tax of Bengaluru city as shown in the Economic Survey for 2016 – 17 is estimated from?

    • aData gathered in household survey
    • bSatellite imageryAnswer
    • cFall in the number of existing taxpayers
    • dIncrease in the number of building per missions
    ›Explanation

    Option B is correct because the Union Economic Survey 2016–17 (Volume II, Chapter on Urban Local Governments) used satellite imagery and spatial data to compare built-up urban footprints with municipal property tax rolls in Bengaluru and Jaipur, exposing massive under-collection. Option A: The study did not rely on a nationwide or city-level household sample survey for estimating tax potential. Option C: The analysis focused on unassessed properties in built-up areas rather than looking merely at registered taxpayer attrition. Option D: Building permission records alone could not capture the vast informal and unpermitted constructions identified by spatial imagery.

69. Q69Public finance and the budget

    Under the Hydrocarbon Exploration licensing Policy (HELP), the revenue to the Government of India accrues through?

    • alease rent
    • bbiddable revenue sharing contractAnswer
    • cthe production sharing contract
    • dfixed percentage of price realised
    ›Explanation

    Option B is correct because the Hydrocarbon Exploration and Licensing Policy replaced the older profit-sharing mechanism with a biddable revenue sharing contract, where the government gets a share of gross revenue from the start of commercial production. Option A: lease rent is wrong because statutory lease rent is a nominal site charge, not the primary revenue accrual mechanism under HELP. Option C: the production sharing contract is wrong because this was the older model used under the New Exploration Licensing Policy which HELP deliberately replaced. Option D: fixed percentage of price realised is wrong because the government's share is determined through competitive bidding rather than a centrally fixed uniform percentage.

70. Q70Public finance and the budget

    A large gap in the collection of property tax vis-à-vis the potential tax of Bengaluru city as shown in the Economic Survey for 2016 - 17 is estimated from

    • aData gathered in household survey
    • bSatellite imageryAnswer
    • cFall in the number of existing taxpayers
    • dIncrease in the number of building permissions
    ›Explanation

    Option B is correct because the Economic Survey 2016-17 used spatial data derived from satellite imagery of Bengaluru to estimate the total built-up footprint and compared it with municipal tax rolls to uncover vast under-assessment and uncollected property tax. Option A: Data gathered in household survey is wrong because physical household sampling was not the method deployed by the Survey to calculate the property footprint. Option C: Fall in the number of existing taxpayers is wrong because the metric analyzed potential versus actual yield rather than taxpayer attrition. Option D: Increase in the number of building permissions is wrong because unapproved constructions formed a major part of the uncollected gap that formal permits could not capture.

71. Q71Public finance and the budget

    Under the new Central GST Bill, 2017, the mechanism to monitor and ensure that any reduction in tax rate should result in a commen surate reduction in the price of goods or servi ces is known as?

    • aAnti-evasion measure
    • bPrice reduction measure
    • cAnti-profiteering measureAnswer
    • dPrice neutralisation measure
    ›Explanation

    Option C is correct because Section 171 of the Central GST Act, 2017 provides for anti-profiteering measures to ensure that suppliers pass on the benefit of lower tax rates or enhanced input tax credit to buyers via reduced prices. Option A: Anti-evasion measures are aimed at checking tax leakage and non-compliance rather than retail price adjustments. Option B: Price reduction measure is not a legally defined concept under GST statutes. Option D: Price neutralisation measure is not a term used in the CGST Act.

72. Q72Public finance and the budget

    Under the scheme of new GST Bills, 2017, subject to a ceiling fixed under GST Act, the changes in GST rates can normally be effected by?

    • aGovernment through notificationAnswer
    • bGovernment with prior approval of President
    • cParliament through an ordinary Bill
    • dParliament through Constitutional Amendment
    ›Explanation

    Option A is correct because the respective GST Acts authorize the executive government to modify GST rates within statutory caps via administrative notifications issued on the recommendation of the GST Council. Option B: Prior approval of the President is required for introducing certain financial legislation in Parliament, not for issuing routine rate change notifications under delegated legislation. Option C: An ordinary Bill is not required for routine rate adjustments once the parent Act sets the ceiling limit and delegates rate-fixing power. Option D: Constitutional amendments are required to alter the Constitution itself, not for notifying changes in commodity tax slabs.

73. Q73Public finance and the budget

    Under the GST (Compensation to States) Bill, 2017, the unutilized money in the GST Compensation Fund at the end of five years would be?

    • aDistributed amongst States as per the formula prescribed by the Finance Commission for devolution of taxes
    • bShared equally between the Centre and States with apportionment amongst the States on the basis of SGST collection in the last year of transitionAnswer
    • cFully retained by the Centre
    • dShared equally between the Centre and States with appropriate amongst the states on the basis of the formula prescribed by the finance commission for devolution of taxes
    ›Explanation

    Option B is correct because Section 10 of the Goods and Services Tax (Compensation to States) Act, 2017 stipulates that any unutilized balance in the Compensation Fund at the end of the transition period must be shared equally between the Centre and States, with the States' half distributed in proportion to their SGST collections in the final transition year. Option A: The distribution formula of the Finance Commission applies to general net tax proceeds under Article 270, not to the remaining compensation fund balance. Option C: The law explicitly requires the remaining funds to be shared fifty-fifty between the Union and the States rather than fully retained by the Centre. Option D: The distribution among the states is based on SGST collection ratios of the final year, not the Finance Commission devolution formula.

74. Q74Public finance and the budget

    Under the new Central GST Bill, 2017, the mechanism to monitor and ensure that any reduction in tax rate should result in a commensurate reduction in the price of goods or services is known as

    • aAnti-evasion measure
    • bPrice reduction measure
    • cAnti-profiteering measureAnswer
    • dPrice neutralization measure
    ›Explanation

    Option C is correct because Section 171 of the Central GST Act, 2017 establishes the anti-profiteering mechanism to ensure that any benefit from a reduction in tax rates or input tax credit is passed on to consumers through a commensurate reduction in prices. Option A: Anti-evasion measures focus on preventing tax fraud and unaccounted transactions, not on ensuring price transmission to buyers. Option B: Price reduction measure is an informal descriptive phrase rather than a statutory mechanism under the Act. Option D: Price neutralization measure is not a legal or institutional mechanism recognized under GST law.

75. Q75Public finance and the budget

    Which of the following parameters had the highest weightage for calculating tax devolution from Centre to States as per the recommendations of the 14th Finance Commission?

    • aPopulation
    • bArea
    • cIncome distanceAnswer
    • dDemographic change
    ›Explanation

    Option C is correct because the Fourteenth Finance Commission assigned the highest weightage of 50 percent to the income distance criterion in its horizontal devolution formula. Criteria and weights under Fourteenth Finance Commission: Income distance: 50% Population (1971): 17.5% Area: 15% Demographic change (2011 population): 10% Forest cover: 7.5% Option A: Population based on the 1971 Census was assigned a weight of only 17.5 percent. Option B: Area was assigned a weight of only 15 percent. Option D: Demographic change based on the 2011 Census was assigned a weight of only 10 percent.

76. Q76Public finance and the budget

    Which year is taken as the basis for resources for making recommendations by the 14th Finance Commission?

    • a2012—13
    • b2014—15Answer
    • c2015—16
    • dNo base year
    ›Explanation

    Option B is correct because the 14th Finance Commission used the financial year 2014-15 as the base year to assess state and central government finances and to project revenues and expenditures over its award period. Option A: 2012—13 is incorrect because it was used as an audited reference year for past performance rather than the baseline projection year. Option C: 2015—16 is incorrect because this was the first operative year of the commission recommendations, not the base year of assessment. Option D: No base year is incorrect because the Finance Commission explicitly established a base year to standardize revenue forecasts.

77. Q77Public finance and the budget

    Which of the following is one of the factors not considered by the 14th Finance Commission in vertical devolution of resources?

    • aSpirit of the Constitutional provisions
    • bConcerns of States and Centre on fiscal space
    • cDifferential levels of aspirations and expectations of the population of various StatesAnswer
    • dNeed for clarity on functional and expenditure responsibilities of States and Centre in the interest of sound federal fiscal relations
    ›Explanation

    Option C is correct because differential levels of aspirations and expectations among populations is a subjective, state-specific social aspect and was not an objective criterion evaluated by the commission to determine the vertical share of States in the divisible pool. Option A: Spirit of the Constitutional provisions was explicitly considered by the commission to maintain cooperative federalism and constitutional mandates. Option B: Concerns of States and Centre on fiscal space was directly evaluated to balance the resource needs and fiscal deficits of both tiers of government. Option D: Need for clarity on functional and expenditure responsibilities of States and Centre in the interest of sound federal fiscal relations was an explicit factor assessed to ensure untied transfers.

78. Q78Public finance and the budget

    Compositional shift from grants to tax devolution from Centre to State causes?

    • aadditional fiscal burden on the Centre
    • bincrease in share of unconditional transfers to StatesAnswer
    • cdemand from States to increase tax rates
    • dal lack of fiscal space to carry out specific purpose transfer to States
    ›Explanation

    Option B is correct because tax devolution transfers are completely untied and unconditional, meaning that increasing devolution while reducing central grants directly expands the proportion of unconditional funds at the disposal of state governments. Option A: additional fiscal burden on the Centre is incorrect because the shift represents a rebalancing of existing resources from tied grants to devolution rather than an automatic expansion of the total transfer envelope. Option C: demand from States to increase tax rates is incorrect because receiving larger unconditional shares reduces the immediate pressure on states to hike local tax rates. Option D: al lack of fiscal space to carry out specific purpose transfer to States is incorrect because the Centre retains the capacity to design and finance Centrally Sponsored Schemes alongside formulaic transfers.

79. Q79Public finance and the budget

    The relationship in India between redistributive resource transfers from the Centre to States and various economic outcomes like per capita consumption, growth in GDP, tax revenue effort. is?

    • anot determinable
    • bpositive
    • cneutral
    • dnegativeAnswer
    ›Explanation

    Option D is correct because the Economic Survey 2016-17 documented that redistributive resource transfers from the Centre to the States exhibit an inverse or negative relationship with various economic outcomes, including per capita consumption, economic growth, and the tax effort of recipient states. Option A: not determinable is incorrect because empirical analysis by the Ministry of Finance clearly established an identifiable negative correlation. Option B: positive is incorrect because the analysis showed that higher transfers did not correspond to higher per capita consumption or enhanced tax mobilization. Option C: neutral is incorrect because the redistributive transfers demonstrated a clear dampening effect on state-level tax effort and fiscal governance rather than zero impact.

80. Q80STATE ECONOMY: structure and public finance

    What was the percentage of debt outstanding to GSDP of Andhra Pradesh in 2014—15 after the reorganization of the State of Andhra Pradesh?

    • a28.19
    • b28.91
    • c29.36Answer
    • d29.63

    Official answer shown. The explanation is under review.