Budget, taxation & public finance

Answer: (b) 2 only

The amended Act (in force from 1 November 2016) expressly counts a deal as benami even when the recorded owner is unaware of it, lets the Government confiscate benami property, and provides an appeal route through an Adjudicating Authority and an Appellate Tribunal. Only statement 2 is correct.

• ✗ 1. The definition of a benami transaction includes an arrangement where the owner of the property is not aware of, or denies knowledge of, the ownership. Lack of awareness makes it benami; it does not exempt it.
• ✓ 2. Property held benami can be provisionally attached and then confiscated by the Government, without payment of compensation.
• ✗ 3. Income-tax officers act as Initiating Officer, Approving Authority and Administrator, and there is an Adjudicating Authority too; appeals lie to the Appellate Tribunal, so an appellate mechanism does exist.

Remember · PBPT Act (amended 2016, effective 1 Nov 2016): 'owner unaware' still counts as benami; benami property confiscated without compensation; appeals via Adjudicating Authority and Appellate Tribunal.

Question and answer: UPSC's official GS Paper I (2017, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (a) 1 only

Only the first statement describes what GST does: it merged many central and state indirect taxes into one tax, so goods and services move across India as in a single market. GST is a tax reform, so claims of a sharply lower current account deficit or of overtaking China are exaggerations.

• ✓ 1. GST amalgamated a large number of central and state taxes and cesses into one tax that applies throughout the country, with one rate for one type of goods or service.
• ✗ 2. The current account deficit depends on trade, oil prices, capital flows and similar factors. NCERT lists GST's expected gains as more revenue, less tax evasion and one national market; it does not list a fall in the deficit.
• ✗ 3. No official source promises that GST will enormously raise growth or let India overtake China. A tax reform can help growth only indirectly; the claim is too strong.

Remember · GST (operational 1 July 2017): one destination-based indirect tax replacing many central and state levies, meant to create 'one nation, one tax, one market'.

📘 Read it in NCERT: Class 12 Introductory Macroeconomics, Ch 5 (practise this chapter) · Class 11 Indian Economic Development, Ch 3 (practise this chapter)

Question and answer: UPSC's official GS Paper I (2017, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (d) Neither 1 nor 2

Neither ratio rose steadily over the decade to 2016-17. The tax-to-GDP ratio hovered around 10 per cent from 2008-09 and crossed 11 per cent only in 2016-17, while the Centre's fiscal deficit jumped to 6.5 per cent of GDP in 2009-10 and then fell to 3.5 per cent by 2016-17.

• ✗ 1. The Union Budget documents for 2017-18 say the gross tax-to-GDP ratio had been stagnating in the range of 10 per cent since 2008-09; it was estimated to cross 11 per cent only in 2016-17, for the first time since 2007-08. That is stagnation and a late rise, not a steady increase.
• ✗ 2. The Centre's fiscal deficit was 6.0 per cent of GDP in 2008-09 and 6.5 per cent in 2009-10, then fell year after year to 3.5 per cent in 2016-17. The trend was downward consolidation, not a steady increase.

Remember · Tax-to-GDP stayed near 10 per cent for most of 2008-09 to 2015-16, and the Centre's fiscal deficit fell from 6.5 per cent (2009-10) to 3.5 per cent (2016-17).

Question and answer: UPSC's official GS Paper I (2017, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error