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Karnataka State Syllabus Class 10 Economics Solutions Chapter 4 Public Finance and Budget
Class 10 Social Science Public Finance and Budget Textual Questions and Answers
I. Fill in the blanks:
The government manages public finance through …………… policy.
When the government’s revenue is more than it’s an expenditure, it is called …………….
The person who presents the Central Government Budget in the Loksabha is …………….
GST came into effect from ……………
2017 July 1st.
II. Answer the following in one sentence each:
What is meant by Public Finance?
Public finance means the finances of the government, which gives a complete picture of the government’s income, expenditure, and debt management.
What do you mean by Budget?
The statement of estimated income and expenditure of a year prepared by the government is called ‘Budget’.
Give the meaning of ‘Deficit Budget’.
If the expenditure more than income, it is called a deficit Budget.
What are Direct Taxes?
Direct Taxes are Personal Income Tax, Corporate tax. Wealth Tax, Stamp Duty etc.
Write the formula for calculation of fiscal deficit.
The formula of fiscal deficit is (Revenue receipts + Non-debt Capital Receipts) – Total Expenditure.
III. Answer the following in five to six sentences each:
Explain the reasons for an increase in public expenditure.
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 have 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.
What types of taxes are imposed by the government?
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.
What is the percent expenditure on interest payments in the 2017-18 budget?
In 2017-18 Budget, 20% expenditure on interest payments.
Explain the aspects of non-tax revenue of the central government.
The main types of non-tax revenue are:
- Profit earned by the Reserve Bank of India;
- Profit generated by the Indian Railways;
- revenue generated by the Departments of Post and Telecommunications.
- Revenue generated by the public sector industries;
- Revenue generated by the coins and mints;
- Various types of fees and penalties; etc.
What is a deficit? Mention the types of deficits.
Deficit financing is defined as financing the budgetary deficit through loans from RBI and creation of new money.
Four concepts of a deficit are used and are calculated as shown below:
- Fiscal Deficit: The excess of government’s expenditure over its revenue receipts and non-debt capital receipts is the fiscal deficit. It is calculated as:
Fiscal deficit = (Revenue receipts + Non¬debt Capital Receipts) – Total Expenditure
- Revenue Deficit: It is an excess of total revenue expenditure of the government over its total revenue receipts. It is calculated as:
Revenue Deficit = Revenue receipt – Revenue Expenditure
- Primary deficit: It is defined as the fiscal deficit of current year minus interest payments on previous borrowings. It is calculated as:
Budget Deficit = Total Revenue – Total Expenditure.
Class 10 Social Science Public Finance and Budget Additional Questions and Answers
What is personal finance?
Management of income, expenditure, and debt of an individual is called as ‘Personal finance’.
Name the types of Budgets.
(iii) balanced budget.
What is Capital Revenue?
It refers to those receipts which either create liability or cause a reduction in the assets of the government.
Multiple Choice Questions
“Concerned with the income and expenditure of public authorities and with the adjustment of one to the other” said by _______________.
a) Adam smith
In developing countries normally prepare _______________ budget.
The trader transfer this burden to the consumer it is a feature of _______________.
a) Direct tax;
b) Tax revenue
c) State tax
d) Indirect tax
d) Indirect tax
G.S.T is a comprehensive _______________ Tax on manufacture.
a) Indirect tax
c) Direct tax
a) Indirect tax
The bank provides loans for deficit financing countries _______________.
a) Postal Banks of India
b) Co-operative Banks
c) Reserve Bank of India
d) Foreign Banks
c) Reserve Bank of India
Fiscal responsibility and budget management act implements in _______________.
Three Marks Questions
Write the importance of public finance.
The government’s activities of mobilizing revenue, incurring expenditure and raising loans are part of its fiscal policy.
- The objectives of fiscal policy are to achieve economic growth, maintain economic stability and achieve a fair distribution of income.
- The government usually spends the revenue collected through taxes or the money raised through borrowings for development activities.
- This increases the growth rate of the economy and benefits everyone.
- The government tries to regulate economic activities.
- The annual budget prepared by the government, the study of public finance also helps in the analysis and evaluation of budgets.
Write the goals of public expenditure.
The goals of public expenditure are.
- Promote faster economic development
- Promote industry trade and commerce
- promote agricultural and rural development
- Promote balanced regional growth.
- Build socio-economic overheads e.g. roadways, railways, dams, power etc
- Promote full employment
- Maximize social welfare.
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