Quiz: Reading Comprehension

Dear Friends,
                           Today’s article is presented on the Union Govts decision on certain State List’s matter where some schemes are delinked and some are continued. It is important and certain facts presented in it might be valueable with exam perspective.

(Q.1-10): Read the following passage carefully and answer the questions given
below. Certain words/phrases have been printed in bold to help you locate them.
The Fourteenth Finance
Commission’s recommendation to increase tax devolution to 42 per cent of
the shareable pool of taxes has increased the flow of untied resources (or
resources transferred without condition) to States. Estimates shows that post
the 14th commission award, the untied statutory transfers would be more than 70
per cent of the aggregate resource transfers from the Union to the States.
Although this increase in the share of untied funds is a marked improvement in
the structure of a transfer away from a conditional to an unconditional one, it
is time that attention is paid to reform the transfer system by focussing on
non-Finance Commission transfer to enable States to effectively utilise the
enhanced untied fiscal space. This can only be done by reforming the coverage,
content and architecture of the non-Finance Commission transfers and a further
consolidation of schemes. This article discusses this important issue and
provides a possible way forward keeping in view the recommendations made by the
14th commission in this regard.
A major issue, post Budget 2015-16,
is the sharp decline in allocations to the social sector in the form of various
conditional grants to the States. This decline has happened to accommodate a
large increase in tax devolution. As per the Budget estimates, enhanced tax
devolution should result in an increase in the flow of untied funds to the tune
of Rs.1,86,150 crore and a reduced flow of grants to the tune of Rs.87,730
crore. This decline in grants has happened in two categories: in a specified
list of schemes where the Centre’s contribution has been reduced, implying a
corresponding increase in contribution by the States and for a set of schemes
where Central support has been withdrawn. Important schemes in the first
category are the Rashtriya Krishi Vikas Yojana, the Integrated Child Development
Services (ICDS), Swacch Bharat Abhiyaan and allocation for elementary
education under the midday meal schemes and the Sarva Shiksha Abhiyan (SSA)
financed by the Gross Budgetary Support (GBS). Major schemes delinked from
Central support are the Jawaharlal Nehru National Urban Renewal Mission, the
Backward Regions Grant Fund and Normal Central Assistance. The Union Budget
does not provide the details of the additional contributions States have to
make for schemes where Central support has been reduced. This change in the
structure of grants has also to be viewed in the context of a restructuring of
Centrally sponsored schemes (CSS). Despite this emphasis on restructuring and
recommendations made by various committees in this regard, nothing much has
happened on the ground. In fact, CSS and other conditional grants as a
percentage of GDP have increased from 0.67 per cent in 2000-01 to 1.39 per cent
in 2015-16. Post the 14th Commission’s recommendation, the reduction in grants
to accommodate a large increase in tax devolution — of which many are CSS — is
certainly a step in the right direction. However, this reduction in grants in
quantum without clarity on the design, architecture and sharing pattern between
the Union and States has the following implications for States: a) reducing the
share of contribution of the Centre to CSS has the potential to reduce untied
fiscal space available from higher tax devolution as States have to make a
higher contribution to these schemes now; b) this reduction does not
automatically imply that States are insulated from the conditionalities and
‘one size fits all’ CSS intervention and the uncertainties associated with CSS
fund flow.
In the last decade, the proliferation
of big-ticket CSS has emerged as the key fiscal strategy to transfer grants to
States to achieve a certain outcome in a specific sector, especially in health,
education, agriculture and rural development. Though the money allocated under
CSS has declined, these schemes, if not reduced in numbers, and, in many cases,
consolidated and restructured, may result in States having to fund these
schemes with a higher matching contribution. And, they may have to bear the
same burden of CSS conditionalities, reducing fiscal autonomy and the available
untied fiscal space. Restructuring is not only important from the perspective
of State finances. It is also about getting the expenditure priorities right
for both the Union and the State governments. As articulated in the 14th
commission’s report, “between 2002-05 and 2005-11, revenue expenditure by the
Union Government on State List subjects increased from an average of 14 per
cent to 20 per cent, and on Concurrent List subjects from an average of 13 per
cent to 17 per cent. This implies a reduction in expenditure, in percentage
terms, on Union List subjects. Expenditure functions under the Union List fall predominantly
under General and Economic Services. The share of expenditure on these has
progressively declined from 66.3 per cent in 2001-02 to 53.2 per cent in 2014-15(BE).”
One of the primary reasons for this is the proliferation of CSS, especially in
the social sector and on right-based spending. For better service delivery
outcome, these need to change as most of these functions are primarily in the
functional domain of the States. The Union government should move its focus
from spending on overlapping functional domain to subjects that squarely
fall in the functional domain of the Union, as in the Union List, and limit
its intervention on the ‘State List’ and ‘Concurrent List’
on subjects of
national priority having a consideration of externality.
-Source The Hindu, Delhi Edition, 8th May
Q.1. Choose
and appropriate title for the passage.
1) Income-Expenditure
2) Tax and
Getting Federal Transfers Rights
4) It’s All
About Economy
5) No One
Q.2.Which of
the following is true according to the passage?
A) Post
Budget 15-16, there is the sharp decline in allocations to the social sector in
the form of various conditional grants to the States.
B) Major
schemes delinked from Central support are the Jawaharlal Nehru National Urban
Renewal Mission, Rashtriya Krishi Vikas Yojana etc.
C) Between
2002-05 and 2005-11, the revenue expenditure by Union Government on State List
subjects increased from an average of 14 per cent to 20 per cent
1) All A, B
and C
2) A and B
3) B and C
A and C
5) None is
Q.3. What
are the different schemes that is not delinked from central support?
Sarva Shiksha Abhiyan
Jawaharlal Nehru National Urban Renewal Mission
3) Backward
Regions Grant Fund
4) Normal
Central Assistance
5) All of
the above
does the author suggest to the Union Government about the intervention in State
or Concurrent List?
1) The
author suggested the Union Govt. to take the matter seriously and act
2) To convey
clear message to states to act against the tax defaulters.
To reduce their interference in the domain that comes under state list and
concurrent list
4) All of
5) None of
Q.5.What is
the synonym of the word “proliferation”?
1) Assiduous
2) Apprise
3) Anarchy
does the author mean by the phrase “limit its intervention on the ‘State List’
and ‘Concurrent List’”?
1) Govt.
should Intervene the states whenever there is something wrong that a state
cannot handle.
Should check the amount of interference in states jurisdictions and common
3) Should
limit the revenue expenditure in the matters of State and Concurrent List.
4) Should be
concerned about the happenings in the country.
5) None of
Q.7.What is
the synonym of the word “squarely”, according to the passage?
2) Square in
3) Craven

4) conundrum

5) None of

Q.8.What is
the synonym of the word “predominantly”?
1) preponderantly
2) Mainly
3) Primarily
All of the above
5) None of
Q.9. What is
the antonym of the word “elementary”?
1) Basic
2) Rudimentary
3) Fundamental
4) All of
the above
None of these
Q.10. What
is the antonym of the word “devolution”?
1) Decentralisation
2) Transfer
3) Surrender
4) All of
the above

5) None
of the above

1. 3
2. 4
3. 1
4. 3
5. 4
6. 2
7. 1
8. 4
9. 5
10. 5