Question

State whether the following statements are true or false.
1. The budget is a monthly statement.
2. Fiscal policy is related to public revenue and public expenditure.
3. Indirect taxes are paid directly by people to the government.
4. Financial year in India is from 1st March to 28th February.

Answer 1

1. The budget is a monthly statement. - False
Explanation:
The above statement is incorrect. In fact, the budget is an annual financial statement showing item-wise expected government receipts and government payments during a financial year.

2. Fiscal policy is related to public revenue and public expenditure. - True
Explanation:
Yes. The above statement is correct. Fiscal policy refers to the policy undertaken by the government to influence the economy through the process of public expenditure (government expenditure, subsidies and transfer payments) and public revenue collection (taxation). In other words, fiscal policy refers to a policy whereby the government alters its expenditure and revenue receipts.

3. Indirect taxes are paid directly by people to the government. - False
Explanation:
The above statement is incorrect. Indirect taxes are not paid directly the by people to the government. In fact, indirect taxes are paid indirectly by the people to the government. Example, sales tax, VAT

4. Financial year in India is from 1st March to 28th February. - False
Explanation:
The above statement is incorrect. The financial year in India starts from 1st April and ends on 31st March.