UPSC Combined Section Officer Archives

31. Which one of the following is not charged on the Consolidated Fund of

Which one of the following is not charged on the Consolidated Fund of India ?

Salary of CAG

Grants for Railways

Administrative expenses of the Supreme Court

Pensions of the judges of High Courts

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Expenditure charged on the Consolidated Fund of India does not require annual parliamentary vote, although it can be discussed. Voted expenditure requires parliamentary vote.
A) Salary of CAG: Charged on the Consolidated Fund of India (Article 148(6)).
B) Grants for Railways: Expenditures related to running ministries and departments, including specific grants for Railways (which used to have a separate budget but now merged with the general budget), are typically voted upon by Parliament through the demand for grants.
C) Administrative expenses of the Supreme Court: Charged on the Consolidated Fund of India (Article 146(3)).
D) Pensions of the judges of High Courts: Charged on the Consolidated Fund of India (Article 112(3)(d)). (Salaries of High Court judges are charged on the Consolidated Fund of the respective State).
Therefore, Grants for Railways are not charged on the Consolidated Fund of India but are voted expenditures.

– Charged Expenditure: Discussed but not voted in Parliament. For constitutional functionaries/essential services to ensure financial independence.
– Voted Expenditure: Discussed and voted by Parliament. Represents discretionary government spending.
– Examples of Charged Expenditure: President’s emoluments, salaries/pensions of SC/HC judges (pensions only for HC judges), CAG, UPSC Chairman/members, debt charges, sums required to satisfy judgments of courts/tribunals.

The distinction between charged and voted expenditure is important for parliamentary control over government finances. Charged expenditure ensures that essential constitutional offices and obligations are funded without being subject to annual political fluctuations in voting.

32. Consider the following statements : The term ‘budget’ has nowhere be

Consider the following statements :

The term ‘budget’ has nowhere been used in the Constitution.
Article 112 of the Constitution of India deals with the budget.

Which of the above statements is/are correct ?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Both statements are correct. Statement 1 is correct because the term ‘Budget’ is not explicitly used in the Constitution of India. Instead, Article 112 refers to the ‘Annual Financial Statement’. Statement 2 is also correct as Article 112 of the Constitution deals with the presentation of the Annual Financial Statement (which is commonly referred to as the Budget) to both Houses of Parliament.

The Constitution uses the term ‘Annual Financial Statement’ in Article 112, not ‘Budget’. Article 112 outlines the procedure for presenting the government’s estimated receipts and expenditures for the coming financial year.

Article 112 requires the President to cause to be laid before both Houses of Parliament an annual financial statement showing the estimated receipts and expenditure of the Government of India for the financial year. This statement is divided into two parts: revenue budget and capital budget.

33. Which one of the following pairs is correctly matched ?

Which one of the following pairs is correctly matched ?

Supplementary Grant - Granted for a special purpose

Excess Grant - Voted by the Lok Sabha after the financial year

Vote of Credit - Funds can be made available by re-appropriation

Token Grant - Blank cheque

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Let’s evaluate each option:
A) Supplementary Grant – Granted for a special purpose. Incorrect. Supplementary grants are sought when the amount authorized by Parliament through the annual Appropriation Act for a particular service for the current financial year is found to be insufficient.
B) Excess Grant – Voted by the Lok Sabha after the financial year. Correct. If the money spent on any service during a financial year is in excess of the amount granted for that service in that year, the excess expenditure is brought to the notice of Parliament by the Comptroller and Auditor General (CAG). The Lok Sabha then votes on the excess grant *after* the financial year has concluded.
C) Vote of Credit – Funds can be made available by re-appropriation. Incorrect. A Vote of Credit is granted to meet an unexpected demand upon the resources of India when, due to the magnitude or the indefinite character of the service, the demand cannot be stated with the details ordinarily given in a budget. It is a fresh grant by Parliament, not funds made available through re-appropriation (transferring funds between heads within an approved grant).
D) Token Grant – Blank cheque. Incorrect. A Token Grant is sought when funds are needed for a new service not previously contemplated in the budget, but funds can be made available by re-appropriation from savings in other approved grants. Only a token amount (like Re 1) is voted to allow Parliament to discuss and approve the introduction of the new service; it signifies Parliamentary approval for the principle of the expenditure, not a blank cheque.

– Supplementary Grant: Insufficient funds for an approved service in the current year.
– Excess Grant: Expenditure exceeded the grant in the previous financial year; needs regularization.
– Vote of Credit: Unexpected demand, indefinite nature/magnitude.
– Token Grant: Funds for a new service available via re-appropriation.

Other types of grants include Additional Grant (for a new service not included in the budget), Exceptional Grant (for an unusual service), and Vote on Account (advance grant for a part of the financial year pending final budget approval).

34. Consider the following statements regarding various funds in India :

Consider the following statements regarding various funds in India :

Article 266 deals with Contingency Fund of India.
For operating Public Account of India and Contingency Fund of India, parliamentary approval is not needed.

Which of the above statements is/are correct ?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Statement 1: Article 266 deals with the Consolidated Fund and the Public Account of India (and of each State). The Contingency Fund of India is dealt with under Article 267. Therefore, statement 1 is incorrect.
Statement 2: For operating the Public Account of India and the Contingency Fund of India, parliamentary approval is not needed at the time of withdrawal or disbursement. The Public Account consists of funds held by the government in trust, and expenditures from it do not require appropriation by Parliament. Advances from the Contingency Fund are made to meet unforeseen expenditures pending authorization by Parliament, meaning the executive can withdraw funds without immediate parliamentary approval (though subsequent approval for replenishment is needed from the Consolidated Fund). In contrast, withdrawals from the Consolidated Fund require prior parliamentary appropriation. Therefore, statement 2 is correct in the context of distinguishing operations from these funds compared to the Consolidated Fund.

– Consolidated Fund (Article 266): All revenues received by the government, all loans raised, and all money received in repayment of loans. Expenditure requires parliamentary appropriation.
– Public Account (Article 266): All other public money (e.g., provident funds, small savings). Operated by executive action; no appropriation needed.
– Contingency Fund (Article 267): An imprest fund for meeting unforeseen expenditure. Operated by executive; requires subsequent parliamentary approval for replenishment.

The Public Account transactions do not enter the budget since they do not involve government expenditure or revenue in the strict sense. The Contingency Fund’s corpus is decided by Parliament (currently ₹30,000 crore).

35. Which one of the following is an example of optional money ?

Which one of the following is an example of optional money ?

Currency note

Coins

Cheque

Bond

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Optional money, also known as fiduciary money, is money that is accepted based on the trust between the payer and the payee. Unlike legal tender (currency notes and coins issued by the central bank/government), it is not legally compulsory for everyone to accept optional money in payment. A cheque is a classic example of optional money; a seller or creditor is not legally bound to accept a cheque, they can insist on payment in legal tender.

– Legal Tender: Currency (notes and coins) that a debtor is legally permitted to offer a creditor in payment of a debt, and the creditor is legally required to accept.
– Optional Money (Fiduciary Money): Money accepted based on trust, not legal compulsion.
– Examples of Optional Money: Cheques, Bank Drafts, Promissory Notes (in certain contexts).

While cheques are optional money, they form a crucial part of the modern payments system, facilitating large-value transactions and reducing the need for carrying large amounts of cash.

36. How does agriculture fuel Indian industrial development ? By opening

How does agriculture fuel Indian industrial development ?

By opening up market for industrial products
By providing food and clothing to labourers
By supplying raw materials

Select the correct answer using the code given below :

1 only

2 and 3 only

3 only

1, 2 and 3

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Agriculture fuels Indian industrial development in multiple ways:
1. **Market for industrial products:** A prosperous agricultural sector increases the income of the rural population, creating a demand for industrial goods such as textiles, consumer goods, fertilizers, pesticides, machinery, and tools.
2. **Food and clothing for laborers:** Agriculture provides essential food grains, vegetables, fruits, and raw materials like cotton and jute for clothing, which are necessary to sustain the labor force engaged in industries.
3. **Supply of raw materials:** Many key industries are agro-based, relying heavily on agricultural produce as raw materials, such as the textile industry (cotton, jute, silk), sugar industry (sugarcane), food processing industry (grains, fruits, vegetables), and vegetable oil industry (oilseeds).
All three statements correctly describe how agriculture supports industrial growth.

– Linkage between agriculture and industry: Demand, Supply of inputs (labor sustenance, raw materials), Capital formation (agricultural savings can be invested in industry).
– Agro-based industries are a significant part of the industrial sector in India.

This interdependency highlights the importance of balanced development between the agricultural and industrial sectors for overall economic growth in a country like India.

37. The purpose of land reforms was : Increase in production Increase t

The purpose of land reforms was :

Increase in production
Increase the purchasing power of the rural population
Ensure distributive justice with economic growth

Select the correct answer using the code given below :

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

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The purpose of land reforms in India was multi-faceted:
1. **Increase in production:** By abolishing intermediaries, providing security of tenure to tenants, and consolidating fragmented holdings, reforms aimed to give cultivators a direct stake in the land and encourage investment in inputs and technology, leading to increased productivity.
2. **Increase the purchasing power of the rural population:** Distributing land to the landless and providing security and fair rent to tenants improved their economic status and income, thereby increasing their purchasing power for goods and services.
3. **Ensure distributive justice with economic growth:** A primary goal was to reduce the stark inequalities in land ownership inherited from colonial and feudal systems, distributing land more equitably and empowering the marginalized sections of rural society, thus promoting economic growth that was more inclusive and just.
All three listed points accurately reflect the key objectives behind land reform measures implemented in India after independence.

– Key pillars of land reforms in India: Abolition of intermediaries, Tenancy reforms, Ceilings on landholdings, Consolidation of landholdings.
– Objectives: Equity, Productivity, Social justice, Poverty reduction.

While land reforms achieved partial success, implementation faced challenges such as legal hurdles, lack of political will, poor record-keeping, and resistance from powerful landholders.

38. The demand for which one of the following commodities will be almost p

The demand for which one of the following commodities will be almost perfectly inelastic ?

Gold

Cars

Dining out

Basic food grains

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UPSC Combined Section Officer – 2024

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Perfectly inelastic demand means the quantity demanded does not change at all when the price changes. Demand for basic necessities, especially staple food grains, tends to be highly inelastic because people need them for survival regardless of the price, particularly for low-income households where these form a significant portion of consumption. While demand is rarely perfectly inelastic in reality, basic food grains are the best example among the given options of a commodity with very low price elasticity of demand. Gold, cars, and dining out are generally considered luxury or discretionary items with relatively elastic demand.

– Elasticity of demand measures the responsiveness of quantity demanded to price changes.
– Inelastic demand: Quantity demanded changes little with price changes.
– Perfectly inelastic demand: Quantity demanded does not change with price changes (vertical demand curve).
– Necessities tend to have more inelastic demand than luxuries.

Examples of goods with highly inelastic demand include life-saving medicines, essential basic food items, and addictive substances (though the latter has ethical implications).

39. What is the shape of the short run marginal cost curve ?

What is the shape of the short run marginal cost curve ?

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The short-run marginal cost (MC) curve is typically U-shaped. Initially, as output increases, marginal cost falls due to increasing marginal returns from the variable input (e.g., labor). However, as output continues to increase, the firm encounters diminishing marginal returns to the variable input (due to fixed factors like capital), causing marginal cost to rise. This initial fall followed by a rise gives the MC curve its U-shape.

– Marginal Cost (MC) is the cost of producing one additional unit of output.
– Short-run costs are affected by fixed and variable factors.
– The U-shape is a result of the Law of Variable Proportions (or Diminishing Marginal Returns).

The short-run average variable cost (AVC) and average total cost (ATC) curves are also typically U-shaped. The MC curve intersects both the AVC and ATC curves at their minimum points.

40. National Investment and Infrastructure Fund is registered under which

National Investment and Infrastructure Fund is registered under which one of the following Acts ?

Companies Act, 2013

RBI Act, 1934

Indian Trusts Act, 1882

Cooperative Societies Act, 1912

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The National Investment and Infrastructure Fund (NIIF) is registered under the Indian Trusts Act, 1882. It was established by the Government of India as an investment vehicle for funding infrastructure projects. It operates as a fund manager and manages funds under SEBI (Alternative Investment Funds) Regulations, 2012. NIIF Limited, which is the investment manager of NIIF, is registered under the Companies Act, 2013, but the fund structure itself is often based on a trust or company structure depending on the category. NIIF Master Fund is registered as a Category II Alternative Investment Fund (AIF) under the SEBI AIF Regulations, structured as a trust under the Indian Trusts Act, 1882.

– NIIF is an investment vehicle focused on infrastructure.
– It is structured as a trust.
– Registered under the Indian Trusts Act, 1882.

NIIF manages three funds: Master Fund (Category II AIF), Fund of Funds (Category II AIF), and Strategic Opportunities Fund (Category II AIF). The Master Fund primarily invests in core infrastructure sectors like roads, ports, airports, power, etc.