Important Union Budget 2016-17 Quiz With Explanation

1)    Which of the following are pillars for transforming India mentioned in the Union budget for 2016-17? 1) Double farm income 2) Fiscal discipline 3) Tax Reforms 4) Urban Governance a. Only 1, 2 and 4 b. Only 2, 3 and 4 c. Only 1, 2 and 3 d. All of the above Answer  Explanation ANSWER: Only 1, 2 and 3 Explanation:  The nine pillars are –1. Agriculture and Farmers’ Welfare: with focus on doubling farmers’ income in five years; 2. Rural Sector: with emphasis on rural employment and infrastructure; 3. Social Sector including Healthcare: to cover all under welfare and health services; 4. Education, Skills and Job Creation: to make India a knowledge based and productive society; 5. Infrastructure and Investment: to enhance efficiency and quality of life; 6. Financial Sector Reforms: to bring transparency and stability; 7. Governance and Ease of Doing Business: to enable the people to realize their full potential; 8. Fiscal Discipline: prudent management of Government finances and delivery of benefits to the needy; and 9. Tax Reforms: to reduce compliance burden with faith in the citizenry.

2)   Which of the following are the dairying projects? 1) Pashudhan Sanjivani 2) Gau-Maata Sanjivani 3) E-Pashudhan Haat a. 1 and 2 b. 1 and 3 c. 2 and 3 d. All of the above Answer  Explanation   ANSWER: 1 and 3 Explanation:  To make dairying more remunerative to the farmers, four new projects will be taken up. First, the ‘Pashudhan Sanjivani’, an animal wellness programme and provision of Animal Health Cards (‘Nakul Swasthya Patra’) Second, an Advanced breeding technology Third, Creation of ‘E-Pashudhan Haat’, an e market portal for connecting breeders and farmers Fourth, a National Genomic Centre for indigenous breeds.

3)   Which of the following is/are true? 1) Clean energy Cess has been renamed Green Environment Cess. 2) Its rate is increased from Rs.200 per tonne to Rs.300 per tonne. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Neither 1 nor 2 Explanation:  ‘Clean Energy Cess’ levied on coal, lignite and peat renamed to ‘Clean Environment Cess’. Its rate is increased from Rs.200 per tonne to Rs.400 per tonne.

4)   The Niramaya Health Insurance Scheme is for a. Persons with Autism, etc. b. Women c. Senior Citizens d. Old women in rural areas Answer  Explanation  ANSWER: Persons with Autism, etc. Explanation:  It is a Health Insurance Scheme for the welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities. There will be exemption of Service tax on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability. Niramaya is conceived with the following objectives. 1. To provide affordable Health Insurance to persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities. 2. To encourage health services seeking behaviour among persons with developmental disability. 3. To improve the general health condition & quality of life of persons with developmental disability Contribution Payable for Enrolment/ renewal (i) Rs.250/- if family monthly income is up to Rs.15000/- pm. OR (ii) Rs.500/- if family monthly income is above Rs.15000/- pm. (iii) Only Renewal is free for BPL category.

5)   Which of the following is/are true? 1) Ek Bharat, Shrestha Bharat scheme draws inspiration from the life of Mahatma Gandhi. 2) It will be launched to link States and Districts economically. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Neither 1 nor 2 Explanation:  The "Ek Bharat, Shrestha Bharat" scheme draws inspiration from the life of India's freedom fighter Sardar Vallabhbhai Patel. “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism. According to the scheme, two states will undertake a unique partnership for one year which would be marked by cultural and student exchanges.

6)   Direct Benefit Transfer is expected to be rolled out on a pilot basis for a. Kerosene b. Fertilizer c. LPG d. Ration (Food) Answer  Explanation ANSWER: Fertilizer Explanation:  With success of DBT for LPG, there is proposal to introduce it on a pilot basis for fertilizers, with a view to improving the quality of service delivery to farmers. The fertilizers to be included among others are domestic urea, imported urea and decontrolled phosphoric and potassic fertilizers.

7)   Which of the following is/are true? 1) Plan / Non-Plan classification to be done away with from 2016-17 i.e. the current year. 2) Every new scheme sanctioned will have a sunset date and outcome review. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Only 2 Explanation:  Successive committees have questioned the merit in having Plan and Non-Plan classification of Government expenditure. A broad understanding over the years has been that Plan expenditures are good and Non-Plan expenditures are bad. This results in skewed allocations in the Budget. There is need to give greater focus to Revenue and Capital classification of Government expenditure. Therefore, decided that the Plan-Non-Plan classification will be done away with from fiscal 2017-18. To improve the quality of Government expenditure, every new scheme being sanctioned by Government will have a sunset date and outcome review.

8)   Which of the following is/are true? 1) The road transport sector in passenger segment will be strictly monitored to reduce private players and boost public transport. 2) The necessary amendments in the Motor Vehicles Act will lead to greater public convenience, new investment in this sector. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Only 2 Explanation:  Government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment. An enabling eco-system will be provided for the States which will have the choice of adopting the new legal framework. Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms. The major benefits of this game changing initiative will be provision of more efficient public transport facilities, greater public convenience, new investment in this moribund sector, creation of new jobs for our youth, growth of start-up entrepreneurs and other multiplier effects. These measures will take us faster down the road to development.

9)   Which scheme has been proposed for enabling Panchayat Raj Institutions to deliver on the Sustainable Development Goals? a. Rashtriya Gram Swaraj Abhiyan b. Gram Rajya Abhiyan c. National Panchayat Governance programme d. None of the above Answer  Explanation  ANSWER: Rashtriya Gram Swaraj Abhiyan Explanation:  Panchayat Raj Institutions need to develop governance capabilities to deliver on the Sustainable Development Goals. It is, therefore, proposed to launch a new restructured scheme, namely, Rashtriya Gram Swaraj Abhiyan, Rashtriya Gram Swaraj Abhiyan has been proposed to speedup the overall rural development along with other budget allocations for Rural development.

10)   Which of the following are considered challenges to Indian economy in this fiscal year? 1) Risk of further global Slowdown 2) Fiscal Burden due to 7th Central pay Commission 3) Fiscal Burden due to OROP a. 1 and 2 b. 1 and 3 c. 2 and 3 d. All of the above Answer  Explanation  ANSWER: All of the above Explanation:  The risks of further global slo wdown and turbulence are mounting. It has three serious implications for us. First, we must strengthen our firewalls against these risks by ensuring macro-economic stability and prudent fiscal management Second, since foreign markets are weak, we must rely on domestic demand and Indian markets to ensure that India’s growth does not slow down. And third, we must continue with the pace of economic reforms and policy initiatives to change the lives of our people for the better. The 14th Finance Commission has reduced the Central share of taxes to 58% from the 68%. In the financial year 2015-16, we managed to improve upon the budgeted expenditure due to revenue buoyancy, notwithstanding the steep reduction in the Central share of taxes. The next financial year 2016-17 will cast an additional burden on account of the recommendations of the 7th Central Pay Commission and the implementation of Defence OROP.

11)   Which of the following is/are true regarding organic farming in India? 1) The ‘Parmparagat Krishi Vikas Yojana’ will focus on organic farming of North-East region. 2) Organic Value Chain Development in North East Region will focus on export of the organic produce. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Only 2 Explanation:  To increase crop yields in rain fed areas, which account for nearly 55% of the country’s arable land, organic farming is being promoted. Towards this end, the Government has launched two important schemes. First, the ‘Parmparagat Krishi Vikas Yojana’ which will bring 5 lakh acres under organic farming over a three year period. This will be all over India. Second, the Government has launched a value chain based organic farming scheme called “Organic Value Chain Development in North East Region”. The emphasis is on value addition so that organic produce grown in these parts find domestic and export markets.

12)   Which of the following is/are true regarding Deen Dayal Upadhyaya Antyodaya Yojana? 1) Deen Dayal Upadhyaya Antyodaya Yojana is for urban poor only and is managed by Ministry of Housing and Urban Poverty Alleviation. 2) It is for skill development. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Only 2 Explanation:  Deen Dayal Upadhyaya Antyodaya Yojana is an overarching scheme for uplift of urban and rural poor through enhancement of livelihood opportunities through skill development and other means. SGSY has been renamed to NRLM which in turn is renamed as Aajeevika. Aajeevika has a subcomponent for skill Development which is renamed as Deen Dayal Upadhyaya Grameen Kaushalya Yojana. Rural Development Ministry will handle the scheme in rural areas. People of 15 years and above are eligible for this in rural areas. In the earlier Aajeevika skill Development subcomponent, the eligibility was 18 years. It aims to train 10 lakh people by 2017. Since there is an urgent need to focus on areas of drought and rural distress, from this year every block in these distress areas will be taken up as an intensive Block under the Deen Dayal Antyodaya Mission. The urban area scheme is managed by Ministry of Housing and Urban Poverty Alleviation.

13)   Which of the following is/are true regarding Deen Dayal Upadhyaya Antyodaya Yojana? 1) Deen Dayal Upadhyaya Antyodaya Yojana plans to develop vendor markets besides promotion of skills of vendors. 2) Deen Dayal Upadhyaya Antyodaya Yojana is a flagship programme of the newly created Skill Development ministry. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Only 1 Explanation:  The programme comes under the Ministry of Housing and Urban Poverty Alleviation (urban part of the scheme) The urban component of Deen Dayal Upadhyaya Antyodaya Yojana will focus on - Imparting skills with an expenditure of Rs.15,000 – Rs.18,000 on each urban poor; Promotion of self-employment through setting up individual micro-enterprises and group enterprises with interest subsidy for individual projects costing Rs.2.00 lakhs and Rs.10.00 lakhs for group enterprises. Subsidized interest rate will be 7%; Training urban poor to meet the huge demand from urban citizens by imparting market oriented skills through City Livelihood Centres. Each Centre would be given a capital grant of Rs.10.00 lakhs. Enabling urban poor form Self-Help Groups for meeting financial and social needs with a support of Rs.10,000/- per each group who would in turn would be helped with bank linkages; Development of vendor markets besides promotion of skills of vendors; and Construction of permanent shelters for urban homeless and provision of other essential services.

14)   Which of the following are for ensuring equitable benefit of MSP? 1) Encouraging centralization of procurement to keep tight tab on corruption and pilferage 2) Online Procurement through FCI 3) Effective arrangements for pulses procurement a. 1 and 2 b. 1 and 3 c. 2 and 3 d. All of the above Answer  Explanation ANSWER: 2 and 3 Explanation:  Three specific initiatives will be taken up in 2016-17 to ensure that the benefit of MSP reaches farmers in all parts of the country First, the remaining States will be encouraged to take up decentralized procurement. Second, an online Procurement System will be undertaken through the Food Corporation of India. This will usher in transparency and convenience to the farmers through prior registration and monitoring of actual procurement. Third, effective arrangements have been made for pulses procurement.

15)   Which of the following charges are meant for welfare of farmers? a. Krishi Kalyan Cess b. Krushak Kalyan Cess c. Farmer Welfare Cess d. Agriculture and Farmer Cess Answer  Explanation ANSWER: Krishi Kalyan Cess Explanation:  There will be a Cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The proceeds of this would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with effect from 1st June 2016. Input Tax credit of this cess will be available for payment of this cess. The effective rate of the Krishi Kalyan Cess, however, will be lower than 0.5 per cent as the government will provide input tax credit for the cess, as against no input tax credit for Swachh Bharat Cess.

16)   Who will lead the committee for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes? a. District Collector b. Senior most Lok Sabha MP from District c. Senior most MLA from the District d. Zilla Parishad Head. Answer  Explanation  ANSWER: Senior most Lok Sabha MP from District Explanation:  District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes. Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation.

17)   The following Cess are mentioned in the Budget 2016-17. Which of the following Cess are newly introduced? 1) Infrastructure Cess 2) Clean Environment Cess 3) Krishi Kalyan Cess a. 1, 2, 3 b. 2, 3 c. 1, 3 d. All of the above Answer  Explanation  ANSWER: 1, 3 Explanation:  Government proposes to levy an infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. The Cess will be primarily used for funding pollution reduction and improve the traffic situation in the Indian cities. Krishi Kalyan Cess, @ 0.5% will be levied on all taxable services, proceeds would be exclusively used for financing initiatives for improvement of agriculture and welfare of farmers Clean Environment Cess is nothing but Clean Energy Cess which was there already. It was just renamed and not newly introduced.

18)   Krishi Kalyan Surcharge will be levied on a. Services Sector b. Undisclosed Income c. Food Processing Industries d. Agricultural markets Answer  Explanation  ANSWER: Undisclosed Income Explanation:  Domestic tax payers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions. Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan Surcharge to be used for agriculture and rural economy. The compliance window is of 4 months. From 1st June 2016 to 30th September 2016.

19)   Who are ineligible as per the Income declaration Scheme (IDS)? a. Those already under scrutiny b. Those with pending cases c. Those with pending appeals d. None. All are eligible. Answer  Explanation  ANSWER: Those already under scrutiny Explanation:  Tax payers, whose returns were picked for random scrutiny by the authorities in recent years, would not be eligible to turn concealed income into ‘white’ under the Income Declaration Scheme (IDS), announced in the Union Budget to bring black money into the tax net. The scheme also shuts out ‘innocent’ taxpayers who filed returns on time but whose cases were chosen for scrutiny to verify claims. This could be a dampener for the scheme as it would exclude potential disclosures from people who received notices seeking a regular explanation on the returns they had filed. Under the income declaration scheme, people who have received notices under Sections 142 (1), 143 (2), 148, 153A or 153C of the Income Tax Act are not eligible to disclose previously concealed income. Separately, as per the explanatory memorandum to the budget, it won’t be open to cases “where a search or survey has been conducted and the time for issuance of notice under the relevant provisions of the Act has not expired, or where information is received under an agreement with foreign countries regarding such income, cases covered under the Black Money Act, 2015, or persons notified under Special Court Act, 1992, or cases covered under Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, and the Prevention of Corruption Act, 1988.

20)   Which of the following are true regarding taxing the rich? 1) Additional 10% tax on dividends in excess of Rs. 10 lakh per annum 2) Surcharge on persons decreased to 12% from 15% 3) TDS at 1% on purchase of luxury cars exceeding value of Rs. 10 lakhs. a. 1, 2, 3 b. 2, 3 c. 1, 3 d. None of the above Answer  Explanation  ANSWER: 1, 3 Explanation:  Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs. 10 lakh per annum. Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above RS. 1 crore. Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs. ten lakh and purchase of goods and services in cash exceeding Rs. two lakh. These fall under additional resource mobilization for agriculture, rural economy and clean environment

21)   Which of the following is/are true? 1) National Dialysis Services Programme plans to provide dialysis services in all community health care centers. 2) The government will fund the entire programme from its own money. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Neither 1 nor 2 Explanation:  The government proposes to start ‘National Dialysis Services Programme’. Funds will be made available through PPP mode under the National Health Mission, to provide dialysis services in all district hospitals. To reduce the cost, government will exempt certain parts of dialysis equipment from basic customs duty, excise/CVD and SAD. The government had last year imposed a heavier levy on consumables used in dialysis, spiking the procedure rates by 17 to 20 per cent. But the tax exemption announced in the budget applies only to dialysis equipment and not consumables.

22)   Which of the following is/are true regarding the FDI norms announced in Union Budget 2016-17? 1) 100% FDI to be allowed through automatic route in marketing of food products produced and manufactured in India. 2) The government will allow 49% FDI in Insurance and 26% FDI in Pension sector through automatic route. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation  ANSWER: Neither 1 nor 2 Explanation:  The government announced the policy of 100% FDI in marketing of food products produced and manufactured in India. This will provide impetus to the foreign investment in food processing sector, benefit farmers immensely and will create vast employment opportunities. This will help farmers get remunerative prices for their produce, transfer of technology and modern agricultural practices required for producing agricultural produce on a large scale to meet the requirements of organized marketing. The entry of FDI in food marketing will incentivize farmers to adopt correct agricultural practices and make internationally acceptable products. It will also address issue of crop wastage. Foreign investment will be allowed in the insurance and pension sectors in the automatic route up to 49% subject to the extant guidelines on Indian management and control to be verified by the Regulators. In the FY’15 Budget, the government had increased the composite cap (including FDI and foreign institutional investment) in the insurance sector (and automatically in the pension sector as well) to 49 per cent from the 26 per cent but with full Indian management and control and through the government approval (through Foreign Investment Promotion Board or FIPB) route. Investors had delayed new investments in the sectors citing ambiguity regarding the rider specifying that management and control should be in Indian hands.

23)   Which of the following is/are true regarding the FDI norms announced in Union Budget 2016-17? 1) Investment limit for foreign entities in Indian stock exchanges from five per cent to 15 per cent on par with domestic institutions. 2) The existing 24 per cent limit for investment by foreign portfolio investors (FPI) in CPSEs other than banks, listed in stock exchanges, will be increased to 49 per cent. a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation ANSWER: Both 1 and 2 Explanation:  The FY’17 Budget has also proposed to hike the investment limit for foreign entities in Indian stock exchanges from five per cent to 15 per cent on par with domestic institutions. This move is aimed at enhancing global competitiveness of Indian stock exchanges and accelerating adoption of best-in-class technology and global market practices, the government said. Also, the existing 24 per cent limit for investment by foreign portfolio investors (FPI) in CPSEs other than banks, listed in stock exchanges, will be increased to 49 per cent. The move is to obviate the need for prior approval of government for increasing the FPI investment.

24)   Which of the following is/are true regarding the health sector initiatives in Union Budget 2016-17? 1) New health protection scheme will provide health cover up to Rs. One lakh per family. 2) Senior Citizens will get additional top-up package up to Rs. 50,000 a. Only 1 b. Only 2 c. Both 1 and 2 d. Neither 1 nor 2 Answer  Explanation   ANSWER: Only 1 Explanation:  Severe illnesses push lakhs of households below the poverty line every year. New health protection scheme will provide health cover up to Rs. One lakh per family. For senior citizens an additional top-up package up to Rs. 30,000 will be provided.

25)   Department of Divestment is renamed as a. Department of Public Investment b. Department of Investment and Public Asset Management c. Department of Public Asset Management d. Department of Dis-investment Answer  Explanation ANSWER: Department of Investment and Public Asset Management Explanation:  The Department of Disinvestment is being renamed as the “Department of Investment and Public Asset Management (DIPAM)”. A new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale, has been approved. Government will leverage the assets of CPSEs for generation of resources for investment in new projects. Government will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects. The NITI Aayog will identify the CPSEs for strategic sale.

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