Daily Static Quiz Prelims Practice 2027
Primary deficit = Fiscal deficit − Interest payments, showing the government’s borrowing requirement excluding the burden of past debt. Option (a) is wrong because interest payments are deducted from the fiscal deficit, not the revenue deficit, and option (c) gives a figure related to capital expenditure net of non-debt capital receipts. Option (d) ignores non-debt capital receipts and matches no standard deficit measure.
- It is a constitutional body established under Article 279A, inserted by the 101st Constitutional Amendment Act, 2016.
- The Union Finance Minister is its Chairperson, and the Union Minister of State in charge of Revenue or Finance is a member.
- Every decision is taken by a majority of not less than three-fourths of the weighted votes of members present and voting.
- The Central Government has a weightage of two-thirds of the total votes cast, and all States together have one-third.
Statements 1, 2 and 3 are correct — Article 279A creates the Council, chaired by the Union Finance Minister, and decisions need a three-fourths weighted majority, with a quorum of one-half of the total members. Statement 4 is incorrect — the weightage is reversed: the Centre has one-third and all States together have two-thirds. So neither the Centre nor the States can pass anything without the other.
- Article 112 — Annual Financial Statement (Budget)
- Article 266 — Consolidated Fund of India
- Article 267 — Public Account of India
- Article 114 — Vote on Account
Pairs 1 and 2 are correct — Article 112 requires the President to lay the Annual Financial Statement before Parliament, and Article 266 covers the Consolidated Fund and the Public Account. Pair 3 is incorrect — Article 267 provides for the Contingency Fund of India, while the Public Account is dealt with in Article 266(2). Pair 4 is incorrect — Article 114 deals with Appropriation Bills, while a Vote on Account falls under Article 116.
- Assertion (A): When the primary deficit of the Government is zero, its borrowing in that year equals its interest payments.
- Reason (R): Primary deficit is obtained by subtracting interest payments from the fiscal deficit.
R is correct — Primary deficit = Fiscal deficit − Interest payments. A is correct and follows from R — if the primary deficit is zero, the fiscal deficit equals interest payments, and since the fiscal deficit equals net borrowing, all borrowing goes to service past debt and none finances current programmes. Hence R correctly explains A.
The Committee recommended debt as the medium-term anchor, with ceilings of 40% for the Centre and 60% for the General Government (20% for States), along with a 3% fiscal deficit and an independent Fiscal Council. The other options shift one or both ceilings by 5–10 percentage points, a typical close-call distractor. Note that the Union Budget 2025–26 announced a shift of the anchor to a debt-to-GDP ratio of about 50 ± 1% by March 2031, so check the date a question refers to.
