INDIAN ECONOMIC SERVICE (IES)

Previous years Question Paper (Topic wise)

Public Finance

1. How is an optimum tax rate defined? (2024)

2. What do you mean by balanced budget? What are the arguments for and against
balanced budget? (2024)

3. Give a theoretical analysis of the growth of the public expenditure in terms of

Adolph wagner’shypothesis. What are the criticisms levelled against it? (2024)

4. Explain the relevance of Public-private Partnership (PPP) Model in the context of

a market economy. (2024)

5. What is meant by equity in taxation? How do you justify for the ability to pay
approach as a tool in achieving equity? (2024)

6. Briefly explain Domar Approach, Solvency Approach and Ricardian Equivalence

for the problem of sustainability of public debt. Which of the three will you prefer
and why? (2024)

7. “It is being increasingly believed that development planning is no longer –

relevant in today’s context.” Do you agree? Justify your position. (2024)

8. Critically examine the role of social cost-benefit analysis in the context of

formulating a public investment decision. (2024)

9. Explain the concept of social rate of discount in the context of cost-benefit

analysis. (2023)

10. How is the incidence of a commodity tax related to the elasticity of demand and
supply curves? (2023)

11. Discuss Lindahl’s Voluntary Exchange Theory for determining the optimum level
of public expenditure. (2023)

12. Explain the burden of internal public debt. Does a large public debt result in
inflation in a country? Give reasons for your answer. (2023)

13. Distinguish between ‘Internal Rate of Return (IRR)’ and ‘Net Present Value (NPV)’
criteria of evaluating public investment projects. What is the role of shadow
prices in this context? (2023)

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14. Elaborate the appropriate valuation method of the amenities affered by a public
park to its visitors. (2023)

15. Whatis the rationale behind zero-based budgeting? (2022)

16. Explain LafferCurve with a diagram. (2022)

17. Discuss the significance of the principle of Ability to pay in the context of
justified equality in the payment of Tax. (2022)

18. Elucidate the importance of monetary policy in managing the public debt.
(2022)

19. Cost-Benefit Analysis has been developed to make expenditure decision more
appropriate. Explain the statement with your comments. (2022)

20. Distinguish between Revenue Deficit, Effective Revenue Deficit, Fiscal Deficit
and Primary Deficit. (2021)

21. How does Mrs. Hicks make a distinction between formal incidence and effective
incidence? (2021)

22. Examine the effects of public expenditure on production and distribution of

resources in an economy. (2021)

23. What is cost benefit analysis? Enumerate basic features of cost benefit analysis.
(2021)

24. Comment on the important reforms introduced in respect of direct taxes in the
Union Budgets for 2020-21 and 2021-22. (2021)

25. How does the Principle of Least Aggregate Sacrifice lead to horizontal and vertical
equity in taxation? Discuss. (2021)

26. Distinguish between money and real burden of public debt. Also discuss the
issues of debt burden and integration equity. (2021)

27. What are the components of revenue receipt in the budget of State Government
in India? (2020)

28. What is ‘balanced budget multiplier? Is its value always equal to unity? Discuss.
(2020)
29. Differentiate between ‘revenue deficit’ and ‘fiscal deficit’. What are the successes
and failures of the Fiscal Responsibility and Budget Management (FRBM) Act,
2003? (2020)

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30. “The expansionary impact of fiscal policy is offset by the rise in the value of the
currency.” Examine this statement in the context of an emerging economy.
(2020)

31. Differentiate between the Goods and Services Tax(GST) and value Added
Tax(VAT) in term of their operations in India Federation. (2020)

32. What are the components of revenue receipts of the Union Budget? (2019)

33. “When crowding out effect is very high, fiscal policy may not be effective in
increasing the income, output and employment.” Comment. (2019)

34. Explain the causes and desirability of fast growth of public expenditure in
developing economies like India. (2019)

35. Critically examine the use of shadow prices in planning as enunciated by Prof.
H.B. Chenery. (2019)

36. Discuss the concepts of direct and indirect money burden and direct and
indirect real burden of a tax. How is the tax shared between the producer and
the consumer in case of usual shaped demand and supply curves? (2019)

37. What do you mean by optimal taxation? (2018)

38. Distinguish between Revenue deficit and Fiscal deficit. (2018)

39. Discuss the merits and demerits of recent ‘Demonetization Policy’ of India.
(2018)

40. Discuss the operational problem in implementing the Good and Services Tax
(GST) in India. (2018)

41. How would a social discount rate differ from private discount rate? Illustrate.
(2017)

42. Explain the concepts of revenue deficit, effective revenue deficit, fiscal deficit and
primary deficit. (2017)

43. What is public investment? What are the criteria for making decisions regarding
public investment? (2016)

44. Describe the main features of “Goods and Services Tax”. (2016)

45. Distinguish between private and social discount rates, highlighting the relevance
of the latter in environmental economics. (2016)

46. Explain the importance of Public Debt in the process of economic growth. What

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 are the issues in the debt management in India? (2016)

47. Assess the relative importance of indirect tax to direct tax. What are the
implications of indirect taxes for income inequalities in India? (2016)

48. Discuss the problems of Centre-State financial relations in India. How has India
been approaching the solutions to these problems? (2016)

49. How far have the recent tax reforms been effective in India? What further reforms
would you suggest for making the Indian tax system efficient and dynamic?
(2016)
50. Write short notes “The laffer curve”. (2015)

51. Write short notes “Merit goods”. (2015)

52. Write short notes “Tax interaction effect” (2015)

53. Write short notes “Shadow price of investment”. (2015)

54. What is the significance of the choice of discount rate in the cost-benefit
analysis? How a specific discount rate is determined for appraising a project?
(2015)
55. Assume that the Government decides to impose a unit tax on the producers of
the medicine insulin. Which are the plausible effects of the tax incidence on
producers and consumers? (2015)

56. Discuss how the saving is taxed under an Income Tax and a Consumption Tax.
Which tax is more efficient and equitable and why? (2015)

57. Write short notes “Optimal taxation”. (2014)

58. Write short notes “Criteria for public investment decision”. (2014)

59. Discuss the salient features of Direct Tax Code 2013. What would be the
difficulties in its implementation? (2014)

60. What are the burdens of public debt? ‘Internal Public debt has a neutral impact
on the economy’ – examine this statement. (2014)

61. Compare and contrast the capital-output ratio criteria and the marginal per
capita reinvestment quotient criteria of investment planning. (2014)

62. Write short notes “Wiseman – Peacock Hypothesis”. (2013)

63. Write short notes “Transfer and Non-transfer expenditure”. (2013)

64. Write short notes “Debt – Nature Swap”. (2013)

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65. “Canons of public expenditure reflect the philosophy of a judicious use of public
funds.” In the light of the above, what are the canons of public expenditure? Can
deficit budgeting render any positive response? (2013)

66. Critically examine the “Cost-of Service Approach” in Taxation. Do you think that
it is feasible in a democratic country like India? (2013)

67. “The U.S. tax system, like that of any other country, has developed in response
to many influences – economic, political and social. It has not been constructed
by a master architect in line with the optimal requirements for a good tax
structure. Yet, ideas about what constitutes a good tax system have had their
influence.” In this context, what are the requirements for “Good” tax structure in
India? (2013)

68. Write short notes “Public Choice Theory”. (2012)

69. Write short notes “New Orthodoxy of Public Debt”. (2012)

70. Write short notes “The Rationale for Social discounting”. (2012)

71. What are the difficulties of majority voting? How will you solve the problem of
paradox of cycling? (2012)

72. “The burden of present public debt is shifted to future generation.” Critically
examine this statement. (2012)

73. In the case of Corporate Tax, who bears the incidence? Substantiate youranswer
in the light of Harberger Model. (2012)

74. Explain the methods of determining shadow price. (2012)

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