Quiz on Union Budget 2010-11 and Economic Survey 2009-10

1.      How many crores are allocated for National Ganga River Basin Authority (NGRBA) in the Union Budget 2010-11?

a)100 crore    b)250 crore    c)500 crore    d)1000 crore    e)2000 crore

2.      Which of the following is true regarding Income tax slabs in the Union Budget 2010-11?

a)No Income tax up to Rs. 1.8 lakh

b)10% for income above Rs. 1.8 lakh and up to Rs. 6 lakh

c) 20% for income above Rs. 6 lakh and up to Rs. 8 lakh

d)30% for income above Rs. 8 lakh.

e)All are true

3.      How many crores are allocated for Mahatma Gandhi National Rural Employment Guarantee Scheme in the Union budget 2010-11?

a)37,100 cr    b)40,100 cr    c)48,000 cr    d)32,000 cr    e)None of these

4.      The Minimum Alternate Tax(MAT) has been changed to ____ from 15% on book profits of Companies?

a)16%    b)12%    c)18%    d)14%    e)remain unchanged.

5.      In the Union Budget 2010-11, Rs. 16,500 crore are allocated for Public Sector Banks(PSB) in order to attain a minimum of ____ percent Tier-1 capital by March 31^st, 2011?

a)8%    b)6%     c) 11%     d)5%    e)10%

6.      How much amount is allocated for Mahila Kisan Sashatikaran pariyojajana to meet needs of women farmers in the Union Budget 2010-11?

a)50 crores     b)75 crore    c)100 crore   d)125 crore    e)200 crore

7.      What is the target set for agriculture credit flow for the year 2010-11?

a)3 lakh crore    b)3.25 lakh crore  c)3.5 lakh crore   d)3.75 lakh crore   e)none

8.      What is the proposed Fiscal Deficit for the year 2010-11?

a)4.8%    b)7.8%    c)5%    d)6.9%    e)5.5%

9.      To which of the following schemes there is a 700% increase in the Union Budget 2010-11 over the previous budget?

a)Rajiv Awas Yojana     b)Indira Awas Yojana    c)Pradhan Mantri Gram Adarsh Gram Yojana    d)National Social Assistance Programme   e)National Rural Health Mission

10. What is the Total amount used in the Union Budget 2010-11?

a)12akh crore    b)9 lakh crore    c)10 lakh crore    d)11 lakh crore   e)none

11. How many crores are allocated to the Unique Identification Authority of India (UIDAI) for 2010-11?

a)120 crore    b)500 crore    c)1,600 crore    d)1,000 crore    e)none of these

12. What is the expected GDP growth in the fiscal year 2009-10?

a)7.7%     b)6.9%    c)7.9%    d)7.5%    e)7.2%

13. Which of the following is true in the Union Budget 2010-11?

a) Government will raise Rs35,000 crore from divestment of its stake in state-owned firms.

b) Rs200 crore provided for climate-resilient agriculture initiative.

c) Rs1,73,552 crore provided for infrastructure development.

d) Rs500 crore allocated for solar and hydro projects for the Ladakh region in Jammu & Kashmir.

e)All are true

14. In the Union Budget 2010-11, Rs. 1,47, 344 crore are allocated for which of the following?

a)Rural Development     b)Defence    c)Infrastructure    d)Social Service   e)Energy

15. Government to give ______ for each National Pension Scheme account opened by workers in the unorganized sector?

a)Rs. 400    b)Rs. 500    c)Rs.800    d)Rs. 1000   e)Rs. 1500

16. Which of the following is not true in the Union Budget 2010-11?

a)Rs.2,600 crore allocated for ministry of minorities affair.

b) Banking facilities to be provided to all habitations with a population of 2,000 and more.

c) Central excise duty on all non-petroleum products raised to 10% from 8%.

d) Gross tax receipts pegged at Rs7,46,656 crore for 2010-11, non-tax revenues at Rs1,48,118 crore.

e)100%  percent hike in allocation for schemes for women and child development.

17. A/c to the Economic Survey 2009-10, India is the ____largest Gold holding nation at 557 tonnes in the World?

a)3^rd     b)8^th     c)5^th    d)10^th    e)11^th

18. A/c to the Economic Survey, India is placed at which place in Wireless Network mobile users in the World?

a)first    b)second     c)Third    d)fourth    e)fifth

19. As per the Economic Survey 2009-10, India is ranked fourth in the World in terms of foreign exchange reserves at $283. Billion. Which country having the world’s largest foreign exchange reserves?

a)China    b)US    c)Japan    d)Russia    e)none of these

20. Which of the following is true regarding Economic Survey 2009-10?

a)Gradual roll back of stimulus steps unveiled in the wake of the global financial meltdown.

b) 4.34 crore households have been provided employment under the National Rural Employment Guarantee Scheme (NREGS) in the fiscal year 2009-10.

c) Infant mortality rate (IMR) is expected to fall below 30 in every 1,000 live births by 2012

d) The Indian pharmaceutical industry has become the third largest in world in terms of volume.

e)All are true

Note: 

2 Q: For correct tax slabs visit this link.

11 Q: 1900 crores

16 Q: Only 50% hike.

Highlights of the Union budget 2010-11

The Union Budget of India, referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is the annual budget of the Republic of India, presented each year on the last working day of February by the Finance Minister of India in Parliament. The budget has to be passed by the House before it can come into effect on April 1, the start of India's financial year(1^st April – March 31^st).

Ø  Total expenditure pegged at Rs 11.08 lakh crore, an increase of 8.6 per cent over 2009-10 Union Budget.

Ø  Plan expenditure pegged at Rs 3,73,092 crore and Non-Plan expenditure at Rs 7,35,657 crore in budget estimates. 6 per cent increase in plan expenditure and 15 per cent in non-plan expenditure.

Ø  The Gross Tax Receipts are estimated at Rs. 7,46,651 crore and Non Tax Revenue Receipts are estimated at Rs. 1,48,118 crore for 2010-11.

Ø  Income tax slabs for individual taxpayers to be as follows:

o   Income up to Rs 1.6 lakh – nil.

o   Income above Rs 1.6 lakh and up to Rs 5 lakh - 10 per cent.

o   Income above Rs 5 lakh and up to Rs 8 lakh - 20 per cent.

o   Income above Rs 8 lakh - 30 per cent.

Ø  Fiscal deficit pegged at 6.9 per cent in 2009-10 as against 7.8 per cent in the previous fiscal. Fiscal deficit seen at 4.8 per cent and 4.1 per cent in 2011-12 and 2012-13 respectively.

Ø  Banks have been consistently meeting the targets set for agriculture credit flow in the past few years. For the year 2010-11, the target has been set at Rs.3,75,000 crore.

Ø  Allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme stepped up to Rs.40,100 crore in 2010-11.

Ø  An amount of Rs.48,000 crore allocated for rural infrastructure programmes under Bharat Nirman.

Ø  Unit cost under Indira Awas Yojana increased to Rs.45,000 in the plain areas and to Rs.48,500 in the hilly areas. Allocation for this scheme increased to Rs.10,000 crore.

Ø  A 700% increase of Rs.1,270 crore allocated for Rajiv Awas Yojana as compared to Rs.150 crore last year.

Ø  Rs 1,900 crore allocated to the Unique Identification Authority of India (UIDAI) for 2010-11.

Ø  Defence allocation pegged at Rs 1,47,344 crore in 2010-11 against Rs 1,41,703 crore in the previous year.

Ø  Allocation for National Ganga River Basin Authority (NGRBA) doubled in 2010-11 to Rs.500 crore.

Ø  Rs.16,500 crore provided to ensure that the Public Sector Banks are able to attain a minimum 8 per cent Tier-I capital by March 31, 2011.

Ø  Allocation to Backward Region Grant Fund enhanced by 26 per cent from Rs.5,800 crore in 2009-10 to Rs 7,300 crore in 2010-11.

Ø  Allocation for Housing and Urban Poverty Alleviation raised from Rs.850 crore to Rs.1,000 crore in 2010-11.

Ø  Rs 500 crore allocated for solar and hydro projects for Ladakh region.

Ø  One-time grant of Rs 200 crore provided to Tirupur textile cluster in Tamil Nadu.

Ø  Rs.200 crore provided as a Special Golden Jubilee package for Goa to preserve the natural resources of the State, including sea beaches and forest cover.

Ø  A new initiative, “Swavalamban” will be available for persons who join New Pension Scheme (NPS), with a minimum contribution of Rs.1,000 and a maximum contribution of Rs.12,000 per annum during the financial year 2010-11, wherein Government will contribute Rs.1,000 per year to each NPS account opened in the year 2010-11. Allocation of Rs.100 crore made for this initiative.

Ø  Mahila Kisan Sashaktikaran Pariyojana to meet the specific needs of women farmers to be launched with a provision of Rs 100 crore as a sub-component of the National Rural Livelihood Mission.

Ø  Rate of Minimum Alternate Tax (MAT) increased from the current rate of 15 percent to 18 per cent of book profits.(Inputs from :Rediff.com)

Download the Key features of Union Budget 2010-11.

From where the Rupee Comes from and the Rupee Goes to:

What is a Budget

The Union Budget is the annual report of India as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March 31.

The Union Budget is the most extensive account of the government's finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It comprises the revenue budget and the capital budget. It also contains estimates for the next fiscal year.

What is a revenue budget?

The revenue budget consists of revenue receipts of the government (revenues from tax and other sources), and its expenditure.

Revenue receipts are divided into tax and non-tax revenue.

Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies.

In non-tax revenue, the government's sources are interest on loans and dividend on investments like PSUs, fees, and other receipts for services that it renders.

Revenue expenditure is the payment incurred for the normal day-to-day running of government departments and various services that it offers to its citizens.

The difference between revenue receipts and revenue expenditure is usually negative. This means that the government spends more than it earns. This difference is called the revenue deficit.

What is a capital budget?

The capital budget is different from the revenue budget as its components are of a long-term nature.
The capital budget consists of capital receipts and payments.

Capital receipts are government loans raised from the public, government borrowings from the Reserve Bank and treasury bills, loans received from foreign bodies and governments, divestment of equity holding in public sector enterprises, securities against small savings, state provident funds, and special deposits.

Capital payments are capital expenditures on acquisition of assets like land, buildings, machinery, and equipment. Investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties.

What are direct taxes?

These are the taxes that are levied on the income of individuals or organizations. Income tax, corporate tax, inheritance tax are some instances of direct taxation.

Income tax is the tax levied on individual income from various sources like salaries, investments, interest etc.

Corporate tax is the tax paid by companies or firms on the incomes they earn.

What are indirect taxes?

These are the taxes paid by consumers when they buy goods and services.

These include excise and customs duties.

Customs duty is the charge levied when goods are imported into the country, and is paid by the importer or exporter.

Excise duty is a levy paid by the manufacturer on items manufactured within the country.

Usually, these charges are passed on to the consumer.

What is plan and non-plan expenditure?

There are two components of expenditure -- plan and non-plan.

Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission.

Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.

Non-plan capital expenditure mainly includes defence, loans to public enterprises, loans to States, Union Territories and foreign governments.

What is the Central Plan Outlay?

It is the division of monetary resources among the different sectors in the economy and the ministries of the government.

What is fiscal policy?

Fiscal policy is a change in government spending or taxing designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy.

Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.

What is a fiscal deficit?

This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.

What is the Finance Bill?

The government proposals for the levy of new taxes, alterations in the present tax structure or continuance of the current tax structure beyond the period approved by the Parliament, are laid down before the Parliament in this bill.

The Parliament approves the Finance Bill for a period of one year at a time, which becomes the Finance Act.

Source: Rediff.

Simple Definitions of Taxes in India

       1. Direct Tax: Direct Tax is the tax paid to the government directly by the assessee like the Income Tax or the Capital Gains Tax. All the collections of the direct taxes in India like the Corporate Tax, Personal Income Tax, Securities Transaction Tax, Banking Cash Transaction Tax, and the Fringe Benefit Tax have been going through a healthy ascent.

       2. Indirect Tax: Indirect Tax or the tax that is levied on goods or services rather than on persons or organizations are of different types in India like Excise Duty, Customs Duty, Service Tax (VAT), and Securities Transaction Tax.

       3. Income Tax: It is a tax imposed by the Government of India on any body who earns income in India. Income Tax in India includes all income except the agricultural income that is levied and collected by the central government. Any Individual or group of Individual or artificial bodies who/which have earned income during the previous years are required to pay Income tax on it. When Companies pay taxes under the Income tax Act it is called Corporate tax.

      4. Excise Tax: An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to custom duties, charged on goods from outside the country). It is a tax on the production or sale of a good. Typical examples of excise duties are taxes on gasoline tobacco and alcohol(sometimes referred to as sin taxes).

       5. Value Added Tax: This is the tax that a manufacturer needs to pay while purchasing raw materials and a trader needs to pay while purchasing goods. VAT is eventually expected to replace Sales Tax. All goods and services provided by business individuals and companies come under the ambit of VAT.

       6. Sales Tax: A sales tax is a consumption tax charged at the point of purchase for certain goods and services. The tax is usually set as a percentage by the government charging the tax.

       7. Fringe Benefit Tax: Fringe benefit tax will apply to foreign companies if it has employees based in India. Fringe benefit tax will apply to liaison offices of foreign companies in India if the liaison offices have employees based in India - CBDT Circular No. 8/2005 dated 29-8-2005.

       8. Minimum Alternative tax: The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the Govt by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.

       9. Goods and service Tax: Goods and Service Tax is a tax on goods and services, which is leviable at each point of sale or provision of service, in which at the time of sale of goods or providing the services the seller or service provider can claim the input credit of tax which he has paid while purchasing the goods or procuring the service.GST is an indirect tax and ultimate burden of the GST has to be taken by the last customer.

Highlights of Union Budget 09-10

1. Total budget expenditure for 2009-10 will be Rs 10, 28,032 cr.

2. For Non-plan expenditure Rs.6, 95,689 cr and for Plan expenditure Rs.3, 25,149 cr registering an increase of 37% in non-plan and 34% in Plan expenditure over 2008-09.
3. Total expenditure increased by 36% in 2009-10 over 2008-09.
4. Fiscal deficit in 2009-10 is proposed at 6.8% of GDP.
5. Revenue deficit in 2009-10 is proposed at 4.8% of GDP.
6. Personal income tax exemption limit for senior citizens raised by Rs 15,000, from Rs 2, 25,000 to Rs 2, 40,000.
7. The exemption limit for income tax for women raised by Rs 10,000, from 1, 80,000 to Rs 190,000.
8. For all others, exemption limit for income tax raised by Rs 10,000 from Rs 150,000 to 1, 60,000.
9. No change in corporate tax.
10. Fringe Benefit Tax abolished.
11. Commodities Transaction Tax abolished.
12. Goods and Services Tax to be introduced from April 1, 2010.
13. To lead economy to high GDP growth rate of 9% per annum at the earliest, which is dipped from an average of over 9% in the previous three fiscal years to 6.7% during 2008-09.
14. Aim to create 12 million jobs.
15. Govt took 3 stimulus packages to fight slowdown.
16.Defence gets Rs 1,41,703 cr for 2009-10,a 34% hike from 200-09 budgetary allocation.

17. Allocation to National Highways Authority of India (NHAI) for the National
Highway Development Programme (NHDP) increased by 23 per cent.
18. Allocation under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) stepped up by 87% to Rs.12, 887 cr.
19. Allocation under Rashtriya Krishi Yojana (RKVY) stepped up by 30%.
20. Allocation under NREGS increased by 144% to 39,100 cr.
21. National Food Security Act to be brought in to ensure entitlement of 25 kilo of rice or wheat per month at Rs.3/kg to every BPL families in rural or urban areas.
22. Allocation for Bharat Nirman increased by 45%.
23. Allocation under Pradhan Mantri Gram Sadak yojana (PMGSY) increased by 59% amounting to 12,000 crore.
24. Allocation under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) increased by 27% to Rs.7000cr.
25. Allocation under Indira Awaas Yojana (IAY) increased by 63% to 8,800 cr.
26. Allocation under National Rural Health Mission (NRHM) increased by Rs.2,057 cr amounting 14,064 crore in 2009-10.
27. New Scheme Pradhan Mantri Adarsh Gram Yojana (PMAGY) with an allocation of Rs.100 cr for integrated development of 1000 villages having population of Scheduled castes above 50%.
28. Overall plan budget for higher education is to be increased by Rs.2,000 cr.
29. Rs.2, 113 cr allocated for IITs and NITs which includes a provision of Rs.450 cr for new IITs and NITs.
30. Rs.827 cr allocated for opening one Central University in each uncovered state.
31. National unique identification numbers to start rolling out in 12-18 months with a provision of Rs.120 cr.
32. Allocation for Commonwealth Games, 2010 raised to Rs.3, 472 cr from Rs.2, 112cr.
33. Rs.500 cr allocated for rehabilitation of internally displaced persons and reconstruction of the Northern and eastern areas of Srilanka.
34. Rs.1, 000 cr allocated for rebuilding the damaged infrastructure caused due to cyclone Aila in West Bengal.