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Economy & Business MCQs - 2026-04-02

31.
The target fiscal deficit of 4.5% of GDP by FY26 is significant for India primarily because it:
A Guarantees immediate economic growth of 10% annually.
B Signals fiscal discipline to investors and rating agencies.
C Eliminates the need for any government borrowing.
D Leads to a complete removal of indirect taxes.
32.
Which of the following is a key strategy for the Indian government to achieve its fiscal consolidation targets?
A Increasing non-essential government expenditure.
B Reducing tax compliance and revenue collection.
C Improving tax compliance and managing expenditure prudently.
D Increasing reliance on deficit financing without any revenue augmentation.
33.
A reduction in India's fiscal deficit is likely to lead to:
A Increased inflation and higher interest rates.
B Reduced government borrowing and potentially lower interest rates.
C Decreased foreign direct investment.
D Higher taxes on essential goods.
34.
What does a fiscal deficit represent?
A The total revenue of the government in a financial year.
B The difference between government expenditure and its total revenue (excluding borrowings).
C The amount of money borrowed by the government from foreign countries.
D The surplus generated by public sector undertakings.
35.
Which of the following is the primary objective of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003?
A To increase government spending on infrastructure.
B To reduce the fiscal deficit and manage government debt.
C To privatize loss-making public sector undertakings.
D To implement a Goods and Services Tax (GST).