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Economics · 2026 · 6 marks
Government Budget and the EconomyGovernment Budget – Meaning and its Components6 marksUnderstandlong answer
CBSE 2026 · Region 2 · Set 1 · Q17
Read the following text carefully :The government has allocated ₹ $\displaystyle 15.27$ lakh crore for major sectors, ranging from defence to rural development to social welfare to commerce and so on. Government expenditure goes to paying states’ share of taxes and duties. Around $\displaystyle 19$% is spent on interest payments and $\displaystyle 16$% on central sector schemes, with subsidies, pension and other payments contributing $\displaystyle 19$%. Government revenue is divided between borrowings and other liabilities, which account for massive $\displaystyle 27$% of the incoming cash, Income tax revenue of around $\displaystyle 19$% Goods and Services Taxes (GST) and other taxes of around $\displaystyle 18$%; Corporation taxes account for around $\displaystyle 17$%.The next highest provision on this list is ₹ $\displaystyle 2.66$ lakh crore for rural development. This will include expenditure on rural infrastructure project and increased outlay for the popular MGNREGA scheme.On the basis of given text and common understanding, answer the following questions :(i)Identify the major sources of government revenue and state what percentage does each one of them contribute.(ii)Discuss the need to allocate funds among different sectors of the economy.
Read the following text carefully :
The government has allocated ₹ $\displaystyle 15.27$ lakh crore for major sectors, ranging from defence to rural development to social welfare to commerce and so on. Government expenditure goes to paying states’ share of taxes and duties. Around $\displaystyle 19$% is spent on interest payments and $\displaystyle 16$% on central sector schemes, with subsidies, pension and other payments contributing $\displaystyle 19$%. Government revenue is divided between borrowings and other liabilities, which account for massive $\displaystyle 27$% of the incoming cash, Income tax revenue of around $\displaystyle 19$% Goods and Services Taxes (GST) and other taxes of around $\displaystyle 18$%; Corporation taxes account for around $\displaystyle 17$%.
The next highest provision on this list is ₹ $\displaystyle 2.66$ lakh crore for rural development. This will include expenditure on rural infrastructure project and increased outlay for the popular MGNREGA scheme.
On the basis of given text and common understanding, answer the following questions :
(i)
Identify the major sources of government revenue and state what percentage does each one of them contribute.
(ii)
Discuss the need to allocate funds among different sectors of the economy.
Marking-scheme solution
(i)
The major sources of government revenue as indicated in the text are borrowings and other liabilities, which account for a massive $\displaystyle 27$% of the incoming cash, Income tax revenue of around $\displaystyle 19$%, Goods and Services Taxes (GST) and other taxes of around $\displaystyle 18$% and Corporation taxes account for around $\displaystyle 17$%.
(ii)
The government has allocated ₹ $\displaystyle 15.27$ lakh crore across key sectors such as defence, rural development etc. This substantial allocation aims to strengthen national security, promote rural growth, enhance social welfare and boost economic activities. It reflects the government’s focus on balanced and comprehensive development with infrastructural upgradation, employment generation and overall economic growth in the country.
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