UPSC CSE Prelims
Question 45
Consider the following statements :
- Tax revenue as a percent of GDP of India has steadily increased in the last decade.
- Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct ?
View correct answer and explanation
Correct answer: D
Correct Option: D
Explanation: Neither tax revenue relative to GDP nor fiscal deficit relative to GDP increases monotonically through every year of a decade. Their ratios fluctuate with growth, policy and economic shocks.
Statement/Pair-wise Analysis:
Statement/Item 1: Incorrect - India’s tax-to-GDP ratio experienced year-to-year changes and did not steadily rise throughout the period.
Statement/Item 2: Incorrect - India’s fiscal-deficit-to-GDP ratio also fluctuated and notably declined during parts of the period.
Option-wise Analysis:
A: Incorrect - includes incorrect statement/item 1.
B: Incorrect - includes incorrect statement/item 2.
C: Incorrect - includes incorrect statement/items 1, 2.
D: Correct - none of the listed statements/items is true.