12 + Interview Questions in PUBLIC FINANCE IN GENERAL AWARENESS Page 1 InterviewSolution

1.	What are Direct Taxes?
Answer» Direct Taxes are Personal Income Tax, Corporate tax. Wealth Tax, Stamp Duty etc.

Discussion

2.	Write the formula for calculation of fiscal deficit.
Answer» The formula of fiscal deficit is (Revenue receipts + Non-debt Capital Receipts) – Total Expenditure.

Discussion

3.	The government manages public finance through …………… policy.
Answer» The government manages public finance through fiscal policy.

Discussion

4.	What do you mean by Budget?
Answer» The statement of estimated income and expenditure of a year prepared by the government is called ‘Budget’.

Discussion

5.	Give the meaning of ‘Deficit Budget’.
Answer» If the expenditure more than income, it is called a deficit Budget.

Discussion

6.	What types of taxes are imposed by the government?
Answer» The taxes imposed by the Central government are of two types: (a) Direct Taxes: When the tax is paid by an individual on whom it is levied, it is called a direct tax. The burden of this tax is not transferable to others. The important direct taxes are personal income tax. the corporate tax, wealth tax, stamp duty, etc. (b) Indirect Taxes: If the burden of tax imposed by the government is transferable to others, it is called Indirect Tax. Generally, indirect taxes are imposed on goods and services. For example, the government imposes a tax on the manufacturer of goods and services at the time of producing such goods and services. The manufacturer transfers this burden to the trader. The trader transfers this burden to the consumer. This means that if the government imposes a tax on the producer, the tax is ultimately paid by the consumer. The main forms of indirect taxes are central excise duty, value-added tax (VAT), import-export taxes and service tax etc. However, with effect from 1st July 2017, a single good and service tax (GST) has been introduced.

6.

What types of taxes are imposed by the government?

Answer»

The taxes imposed by the Central government are of two types:

(a) Direct Taxes: When the tax is paid by an individual on whom it is levied, it is called a direct tax. The burden of this tax is not transferable to others. The important direct taxes are personal income tax. the corporate tax, wealth tax, stamp duty, etc.

(b) Indirect Taxes: If the burden of tax imposed by the government is transferable to others, it is called Indirect Tax. Generally, indirect taxes are imposed on goods and services. For example, the government imposes a tax on the manufacturer of goods and services at the time of producing such goods and services. The manufacturer transfers this burden to the trader. The trader transfers this burden to the consumer.

This means that if the government imposes a tax on the producer, the tax is ultimately paid by the consumer. The main forms of indirect taxes are central excise duty, value-added tax (VAT), import-export taxes and service tax etc. However, with effect from 1st July 2017, a single good and service tax (GST) has been introduced.

Discussion

7.	Explain the reasons for an increase in public expenditure.
Answer» The expenditure incurred by public authorities like central, state and local governments to satisfy the collective social wants of the people is known as public expenditure. In the 20th century, the role and scope of the governments has expanded and public expenditure also increased. Public expenditure has to create and maintain conditions conducive to economic development. It should provide incentives to save, invest and innovate. It should also help in the acceleration of economic growth and ensure economic stability.

Discussion

8.	What is the percent expenditure on interest payments in the 2017-18 budget?
Answer» In 2017-18 Budget, 20% expenditure on interest payments.

Discussion

9.

Distinguish between following concepts :Special assessment and Special levy.

Answer»

Special Assessment	Special Levy
(a) The charges paid by the citizens for getting certain special facilities by authorities are called special assessment.	(a) Special Levy are the charges levied on those commodities, whose consumption is harmful to human health.
(b) The objective behind taking special assessment is to provide extra special facilities to people.	(b) The objective behind charging special levy is to discourage the consumption of harmful commodities.
(c) Special assessment is taken from residents of a particular area.	(c) Special levy is taken from consumers of particular commodities.
(d) E.g. Special assessment is paid for the provision of special facilities like roads, water supply, etc.	(d) Special levy is paid for using commodities like wine, opium and other intoxicants, etc.

Discussion

10.

Distinguish between following concepts :Developmental expenditure and Non developmental expenditure.

Answer»

Developmental Expenditure	Non-developmental Expenditure
(a) The government expenditure which gives productive impact is called developmental expenditure.	(a) The government expenditure which does not yield any direct productive impact, is called non-developmental expenditure.
(b) Developmental expenditure results in the generation of employment, an increase in production, etc.	(b) Non-developmental expenditure does not help to increase employment or production level.
(c) Expenditure on education, industrial developmental expenditure.	(c) Administration cost, war expenses, etc. are examples of non-developmental expenditure.
(d) They are productive in nature.	(d) They are unproductive in nature.

Discussion

11.	GST came into effect from ………
Answer» GST came into effect from 2017 July 1st.

Discussion

12.	State with reasons whether you agree or disagree with the following statement :The goods and services tax (GST) has replaced almost all indirect taxes in India.
Answer» Yes, I agree with this statement. The Goods and Service Tax (GST) came into effect in India on 1st July, 2017. GST is an indirect tax used in India, on the supply of goods and services. GST simplified the tax system in a country. GST is different from an excise or sales tax imposed on the manufacture or sale of ; a product. GST is a tax levied on supply of goods and services. GST replaced almost all indirect taxes like central excise duty, service tax, entry tax, entertainment tax, etc. Because, GST is a comprehensive tax base with nationwide coverage of goods and services.

12.

State with reasons whether you agree or disagree with the following statement :The goods and services tax (GST) has replaced almost all indirect taxes in India.

Answer»

Yes, I agree with this statement. The Goods and Service Tax (GST) came into effect in India on 1st July, 2017.

GST is an indirect tax used in India, on the supply of goods and services.

GST simplified the tax system in a country. GST is different from an excise or sales tax imposed on the manufacture or sale of ; a product. GST is a tax levied on supply of goods and services.

GST replaced almost all indirect taxes like central excise duty, service tax, entry tax, entertainment tax, etc.

Because, GST is a comprehensive tax base with nationwide coverage of goods and services.

Discussion

Explore topic-wise InterviewSolutions in .

What are Direct Taxes?

Write the formula for calculation of fiscal deficit.

The government manages public finance through …………… policy.

What do you mean by Budget?

Give the meaning of ‘Deficit Budget’.

What types of taxes are imposed by the government?

Explain the reasons for an increase in public expenditure.

What is the percent expenditure on interest payments in the 2017-18 budget?

Distinguish between following concepts :Special assessment and Special levy.

Distinguish between following concepts :Developmental expenditure and Non developmental expenditure.

GST came into effect from ………

State with reasons whether you agree or disagree with the following statement :The goods and services tax (GST) has replaced almost all indirect taxes in India.