Consider the following statements regarding Direct Benefit Transfer and Financial Inclusion Ethics:
1. The Digital India initiative, inaugurated in July 2015, provides for the conversion of all physical ration cards into electronic versions to enable the portability of benefits under the Public Distribution System across state borders.
2. The Financial Inclusion Index, published annually by the Ministry of Finance, measures the depth of banking services and includes the total number of dormant accounts as a positive indicator of rural penetration.
3. The Direct Benefit Transfer (DBT) mission, launched on January 1, 2013, initially covered 20 districts and focused on the transfer of scholarship payments directly into the bank accounts of beneficiaries.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct as the DBT mission was launched on January 1, 2013, initially covering 27 districts (later expanded) to streamline scholarship disbursements. Statement 1 is incorrect because the 'One Nation One Ration Card' (ONORC) scheme, not the Digital India initiative, facilitates the portability of PDS benefits. Statement 2 is incorrect because the Financial Inclusion Index is published annually by the Reserve Bank of India (RBI), not the Ministry of Finance, and it considers dormant accounts as a negative indicator of financial activity rather than a positive one.
Consider the following statements regarding Ethics of Fiscal Responsibility and Budget Management Act:
1. The FRBM Act incorporates the recommendations of the 12th Finance Commission regarding the reduction of revenue deficit and provides for a zero revenue deficit target by the 2009-10 fiscal year.
2. Section 4 of the FRBM Act specifies that the Central Government shall limit its fiscal deficit to 3 percent of the Gross Domestic Product by the end of the financial year 2007-08.
3. The Fiscal Responsibility and Budget Management Act was enacted by the Parliament of India in 2003 to introduce transparency in fiscal operations.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because the FRBM Act, 2003 originally mandated the elimination of revenue deficit by 2007-08, not 2009-10, based on the Act's own provisions rather than the 12th Finance Commission. Statement 2 is correct as Section 4 explicitly required the Central Government to limit the fiscal deficit to 3% of GDP by 2007-08. Statement 3 is correct because the Act was enacted in 2003 to institutionalize fiscal discipline, reduce the fiscal deficit, and improve transparency in the management of public finances.
Consider the following statements regarding Transparency and Accountability in Public-Private Partnerships:
1. The 2015 Report of the Committee on Revisiting and Revitalizing the PPP Model of Infrastructure, chaired by Vijay Kelkar, recommended the creation of a PPP Cell within the Department of Economic Affairs.
2. The 2016 Model Concession Agreement for Public-Private Partnerships in Infrastructure includes a provision for the appointment of an Independent Engineer to monitor project milestones.
3. Section 12 of the Fiscal Responsibility and Budget Management Act of 2003 provides for the disclosure of contingent liabilities arising from PPP projects in the annual Union Budget documents.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the 2015 Kelkar Committee report explicitly recommended establishing a dedicated PPP Cell within the Department of Economic Affairs to act as a nodal agency for policy and monitoring. Statement 2 is correct because the Model Concession Agreement (MCA) framework mandates the appointment of an Independent Engineer to ensure objective oversight of technical milestones and project quality. Statement 3 is correct as the FRBM Act, 2003, and its subsequent rules require the government to disclose all fiscal risks, including contingent liabilities stemming from PPP guarantees, in the 'Statements of Fiscal Policy' presented with the Union Budget to ensure transparency.
Consider the following statements regarding Ethics of Fiscal Responsibility and Budget Management Act:
1. The 2012 amendment to the FRBM Act introduced the concept of the Effective Revenue Deficit and established a statutory timeline for its elimination by the 2015-16 budget cycle.
2. The N.K. Singh Committee was constituted in 2016 to review the implementation of the FRBM Act and suggest a fiscal glide path for the Indian economy.
3. The 2018 amendment to the FRBM Act introduced a target for the debt-to-GDP ratio of the Central Government at 40 percent by the financial year 2024-25.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because the 2012 amendment introduced the Effective Revenue Deficit concept but set the elimination target for 2014-15, not 2015-16. Statement 2 is correct as the N.K. Singh Committee was established in 2016 to propose a new fiscal framework, which led to the transition from deficit-based targets to debt-based targets. Statement 3 is correct because the 2018 amendment formally mandated a Central Government debt-to-GDP ratio of 40% to be achieved by 2024-25, alongside a 20% target for State Governments.
Consider the following statements regarding Concept of Value for Money in Public Procurement:
1. The 1958 Report of the Estimates Committee on Public Undertakings established the principle of cost-benefit analysis as the legal basis for rejecting the lowest-priced tender in defense acquisitions.
2. Section 6 of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, emphasizes the importance of fiscal transparency and the reporting of public expenditure performance.
3. The Public Procurement (Preference to Make in India) Order, 2017, provides a framework for evaluating bids based on local content to support domestic industrial growth.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because the 1958 Estimates Committee report focused on parliamentary control over public undertakings, not the legal basis for defense tender rejections, which are governed by the Defence Acquisition Procedure (DAP). Statement 2 is correct as Section 6 of the FRBM Act mandates the government to lay before Parliament statements on fiscal policy strategy and medium-term fiscal policy to ensure transparency. Statement 3 is correct because the 2017 Order, issued under the Public Procurement (Preference to Make in India) policy, mandates preference for local suppliers in government procurement to boost domestic manufacturing and self-reliance.
Consider the following statements regarding Integrity in Public Financial Reporting and Disclosure:
1. The Fiscal Responsibility and Budget Management (FRBM) Act, 2003, introduced a statutory requirement for the government to place three policy statements before Parliament along with the annual budget.
2. The Public Financial Management System (PFMS) was initially launched in 2009 as a Plan Scheme of the Planning Commission to track the utilization of funds released under various central sector schemes.
3. Article 150 of the Constitution of India specifies that the accounts of the Union and of the States shall be kept in such form as the President may prescribe on the advice of the Comptroller and Auditor General.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the FRBM Act, 2003 mandates the government to present the Medium Term Fiscal Policy Statement, Fiscal Policy Strategy Statement, and Macro-Economic Framework Statement to Parliament. Statement 2 is correct because the PFMS, formerly known as the Central Plan Scheme Monitoring System (CPSMS), was initiated in 2009 by the Planning Commission to monitor fund flow and utilization. Statement 3 is correct as Article 150 empowers the President to prescribe the form of accounts for the Union and States based on the advice of the Comptroller and Auditor General of India.
Consider the following statements regarding Financial Impropriety and Administrative Responsibility:
1. Article 151 of the Constitution provides that the reports of the Comptroller and Auditor General of India relating to the accounts of the Union shall be submitted to the President, who causes them to be laid before each House of Parliament.
2. The Consolidated Fund of India, governed by Article 266, includes all revenues received by the Government of India and allows for the withdrawal of funds through executive decree during the interim budget period.
3. The Public Accounts Committee, established in 1921 under the Montagu-Chelmsford Reforms, examines the appropriation accounts and the annual finance accounts of the Government of India.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as Article 151 mandates the CAG to submit audit reports to the President for tabling in Parliament, ensuring legislative oversight of public funds. Statement 3 is correct because the Public Accounts Committee, established in 1921, serves as the primary watchdog for scrutinizing appropriation and finance accounts to ensure financial propriety. Statement 2 is incorrect because, under Article 266, no money can be withdrawn from the Consolidated Fund of India except in accordance with law passed by Parliament, meaning executive decrees cannot authorize such withdrawals.
Consider the following statements regarding Role of the Comptroller and Auditor General in Financial Accountability:
1. The Comptroller and Auditor General submits reports relating to the accounts of the Union to the Finance Minister, who causes them to be laid before each House of Parliament.
2. The Public Accounts Committee examines the audit reports submitted by the Comptroller and Auditor General, and its findings are presented to the President under Article 151 of the 1950 Constitution.
3. Article 149 of the Constitution empowers Parliament to prescribe the duties and powers of the Comptroller and Auditor General in relation to the accounts of the Union and the States.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct as Article 149 empowers Parliament to regulate the CAG's duties, which it exercised via the CAG (DPC) Act, 1971. Statement 1 is incorrect because the CAG submits reports relating to the Union accounts to the President, not the Finance Minister, who then causes them to be laid before Parliament. Statement 2 is incorrect because while the Public Accounts Committee examines the CAG's reports, it presents its own findings to the respective House of Parliament, not the President.
Consider the following statements regarding Internal Control Systems and Financial Oversight:
1. The Internal Audit Wing within a ministry functions under the administrative control of the Secretary and reports findings on the adequacy of internal control systems to the Principal Accounting Officer.
2. The Integrated Financial Adviser system, introduced in 1976, aims to provide financial advice to the administrative departments while maintaining the accountability of the Chief Accounting Authority.
3. The General Financial Rules 2017, issued by the Department of Expenditure, serve as a compendium of executive orders and instructions for financial management in central government ministries.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
All three statements are correct: the Internal Audit Wing reports to the Principal Accounting Officer to ensure independent oversight of financial propriety; the Integrated Financial Adviser (IFA) system, established in 1976, decentralizes financial advice while keeping the Secretary as the Chief Accounting Authority; and the General Financial Rules (GFR) 2017 constitute the primary executive framework governing all financial operations and procurement within the Central Government.
Consider the following statements regarding Role of the Comptroller and Auditor General in Financial Accountability:
1. The 1971 Act grants the Comptroller and Auditor General the authority to audit the receipts and expenditure of bodies substantially financed by grants from the Consolidated Fund, including private sector banks.
2. The Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act was enacted in 1971 to provide for the administrative powers and audit functions of the office.
3. Article 148 establishes the office of the Comptroller and Auditor General, and the salary of the incumbent is charged upon the Contingency Fund of India to ensure financial independence.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 1 is incorrect. Statement 3 is incorrect.
Statement 2 is correct as the CAG (Duties, Powers and Conditions of Service) Act, 1971, was enacted under Article 149 to define the office's mandate. Statement 1 is incorrect because while the CAG audits bodies substantially financed by the Consolidated Fund, this does not extend to private sector banks, which are governed by the Banking Regulation Act. Statement 3 is incorrect because the CAG's salary and administrative expenses are charged upon the Consolidated Fund of India, not the Contingency Fund, to ensure independence from executive interference.
Consider the following statements regarding Regulatory Framework for Public Expenditure Management:
1. The Contingency Fund of India is placed at the disposal of the Finance Minister, who oversees its operations to meet unforeseen expenditures pending parliamentary authorization.
2. The Consolidated Fund of India includes all revenues received by the Government, and its withdrawals are authorized by the Reserve Bank of India through the issuance of a formal legislative warrant.
3. The Fiscal Responsibility and Budget Management Act of 2003 established the National Financial Reporting Authority to oversee the fiscal deficit targets of the Union government.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund of India is placed at the disposal of the President, not the Finance Minister. Statement 2 is incorrect as withdrawals from the Consolidated Fund of India require authorization by the Parliament through an Appropriation Act, not the Reserve Bank of India. Statement 3 is incorrect because the FRBM Act, 2003 focuses on fiscal discipline and deficit targets, whereas the National Financial Reporting Authority was established under the Companies Act, 2013 to oversee auditing and accounting standards.
Consider the following statements regarding Direct Benefit Transfer and Financial Inclusion Ethics:
1. The JAM Trinity framework, conceptualized in the 2014-15 Economic Survey, links Aadhaar with the Public Financial Management System to automate the procurement of food grains at the Minimum Support Price.
2. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act of 2016 allows the use of biometric authentication for the withdrawal of cash from any private sector bank branch across India.
3. The Pradhan Mantri Jan Dhan Yojana, introduced in August 2014, provides for an automatic overdraft facility of 10,000 rupees for all account holders regardless of their transaction history or account age.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the JAM Trinity (Jan Dhan-Aadhaar-Mobile) links Aadhaar with bank accounts and mobile numbers for subsidy delivery, not the procurement of food grains. Statement 2 is incorrect as the Aadhaar Act, 2016 mandates authentication for subsidies and services, but it does not grant a legal right to withdraw cash from any private bank branch. Statement 3 is incorrect because the overdraft facility under PMJDY is capped at ₹10,000, but it is not automatic for all; it is subject to conditions such as satisfactory operation of the account for at least six months and is generally limited to one account per household, usually for the woman of the house.
Consider the following statements regarding Prevention of Leakage and Corruption in Welfare Schemes:
1. The GeM (Government e-Marketplace) portal, launched in August 2016, facilitates transparent procurement of goods and services by government departments to reduce instances of over-invoicing and corruption.
2. Section 7 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, provides the legal framework for using Aadhaar authentication for the receipt of government subsidies.
3. The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 encompasses mechanisms for debt reduction, and the 2018 amendment introduced a new fiscal council to approve the daily expenditure of welfare departments.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as the GeM portal, launched in August 2016, ensures transparency and cost-efficiency in public procurement by eliminating intermediaries. Statement 2 is correct because Section 7 of the Aadhaar Act, 2016, mandates Aadhaar authentication for individuals to receive subsidies, benefits, or services funded from the Consolidated Fund of India. Statement 3 is incorrect because, while the FRBM Act focuses on fiscal discipline and debt reduction, the 2018 amendment did not introduce a fiscal council to approve daily departmental expenditure; such an administrative oversight mechanism does not exist under this Act.
Consider the following statements regarding Regulatory Framework for Public Expenditure Management:
1. Article 150 of the Indian Constitution provides that the accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor General of India, prescribe.
2. The Public Accounts Committee examines the appropriation accounts and the annual finance accounts of the Government of India, which are presented to the Lok Sabha under the authority of the Finance Commission.
3. The General Financial Rules 2017 were introduced by the Department of Expenditure to consolidate and streamline the existing financial procedures for the procurement of goods and services by government ministries.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as per Article 150, which mandates the President to prescribe the form of accounts based on the advice of the CAG. Statement 3 is correct because the General Financial Rules (GFR) 2017 were indeed issued by the Department of Expenditure to consolidate and streamline financial procedures for procurement and expenditure. Statement 2 is incorrect because the Appropriation and Finance accounts are presented to the Lok Sabha under the authority of the CAG, not the Finance Commission, which is primarily concerned with the distribution of tax revenues between the Union and the States.
Consider the following statements regarding Legislative Control over Public Finance through Parliamentary Committees:
1. Article 113 of the Indian Constitution provides that the estimates relating to expenditure charged upon the Consolidated Fund of India shall not be submitted to the vote of Parliament.
2. The Public Accounts Committee reviews the findings of the Comptroller and Auditor General, and its chairman is appointed by the Speaker of the Lok Sabha from the panel of presiding officers of the Rajya Sabha.
3. The Estimates Committee was expanded to 30 members in 1956, and its jurisdiction covers the examination of autonomous bodies created by specific statutes alongside the departmental expenditure of ministries.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as Article 113(1) mandates that expenditure charged upon the Consolidated Fund of India is discussed but not submitted to a vote. Statement 2 is incorrect because the Public Accounts Committee chairman is appointed by the Speaker from among its members, not specifically from a panel of Rajya Sabha presiding officers. Statement 3 is incorrect because, while the Estimates Committee was expanded to 30 members in 1956, its mandate is restricted to examining departmental expenditure and does not extend to autonomous bodies created by specific statutes.
Consider the following statements regarding Fiscal Federalism and Ethics in Inter-governmental Transfers:
1. Section 12 of the Fiscal Responsibility and Budget Management Act, 2003, outlines the requirement for the government to place a medium-term fiscal policy statement before both Houses of Parliament.
2. The 15th Finance Commission recommended a vertical devolution of 41 percent of the net proceeds of divisible central taxes to the states for the 2021-26 period.
3. The Gadgil Formula, as modified in 1991, served as the primary mechanism for the distribution of central plan assistance to states before the establishment of the NITI Aayog.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as Section 3 (not 12) of the FRBM Act, 2003 mandates the government to lay the Medium-Term Fiscal Policy Statement before Parliament. Statement 2 is correct because the 15th Finance Commission, chaired by N.K. Singh, recommended a 41% vertical devolution to states, adjusting the previous 42% to account for the creation of the Union Territories of J&K and Ladakh. Statement 3 is correct as the Gadgil Formula, modified in 1991, was the standard mechanism for allocating central plan assistance until the Planning Commission was replaced by NITI Aayog in 2015.
Consider the following statements regarding Conflict of Interest in Public Procurement Processes:
1. In the case of R.K. Anand vs. Registrar, Delhi High Court (2009), the judiciary highlighted that the integrity of the procurement process is compromised when the decision-maker maintains undisclosed professional associations with the successful contractor.
2. The Competition Commission of India, established under the 2002 Act, provides for the automatic cancellation of government contracts if a bidder is found to have a subsidiary relationship with a member of the technical evaluation committee.
3. The Manual for Procurement of Goods 2017, published by the Department of Expenditure, suggests that procuring entities should obtain a signed declaration from committee members regarding the absence of any personal interest in the tender outcome.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the R.K. Anand vs. Registrar, Delhi High Court (2009) judgment emphasized that judicial and administrative integrity is undermined by undisclosed conflicts of interest. Statement 3 is correct because the Manual for Procurement of Goods 2017 mandates that committee members must sign a declaration confirming they have no pecuniary or personal interest in the tender to ensure transparency. Statement 2 is incorrect because, while the Competition Act, 2002 deals with anti-competitive agreements and abuse of dominance, it does not mandate the 'automatic cancellation' of government contracts based on subsidiary relationships, which is instead governed by administrative procurement guidelines and the Prevention of Corruption Act.
Consider the following statements regarding Public Debt Management and Intergenerational Equity:
1. The Consolidated Sinking Fund was introduced by the 10th Finance Commission in 1996 to assist states in debt servicing, and it operates as a mandatory escrow account held by the Comptroller and Auditor General.
2. The 14th Finance Commission recommended a fiscal deficit target of 3.5 percent for states in 2015, linking the additional borrowing space to the implementation of the Goods and Services Tax Network.
3. The Sinking Fund was historically utilized by colonial administrations in India to systematically accumulate reserves for the redemption of long-term public debt obligations.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct as colonial administrations historically maintained sinking funds to ensure the systematic redemption of long-term debt. Statement 1 is incorrect because the Consolidated Sinking Fund is maintained by the Reserve Bank of India, not the Comptroller and Auditor General, and it is not a mandatory escrow account. Statement 2 is incorrect because the 14th Finance Commission recommended a fiscal deficit limit of 3 percent for states, and the additional borrowing space was linked to interest payment-to-revenue receipts ratios rather than the implementation of the Goods and Services Tax Network.
Consider the following statements regarding Audit of Public Accounts and Performance Auditing:
1. The Estimates Committee, which was first constituted in 1950 based on the recommendation of John Matthai, conducts a post-expenditure audit of public accounts to verify the propriety of financial transactions against legislative grants.
2. The Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act of 1971 grants the audit authority the power to inspect any office of accounts under the control of the Union or of a State, including treasuries and offices responsible for the initial or subsidiary accounts.
3. Section 13 of the CAG (DPC) Act 1971 provides for the auditing of all expenditure from the Consolidated Fund of India and of each State and of each Union Territory having a Legislative Assembly.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because the Estimates Committee examines the budget estimates and suggests 'economies' in expenditure before it is voted upon, whereas the Public Accounts Committee (PAC) conducts the post-expenditure audit. Statement 2 is correct as Section 18 of the CAG (DPC) Act, 1971 explicitly empowers the CAG to inspect any office of accounts under the control of the Union or State governments. Statement 3 is correct because Section 13 of the same Act mandates the CAG to audit all expenditures from the Consolidated Fund of India, States, and Union Territories with Legislative Assemblies to ensure financial propriety.
Consider the following statements regarding Principles of Financial Propriety in Public Expenditure:
1. The Department of Expenditure under the Ministry of Finance issues the Delegation of Financial Powers Rules 1978, which allows heads of departments to reappropriate funds between different primary units of appropriation without seeking approval from the Finance Ministry.
2. Article 151 of the Constitution of India provides that the reports of the Comptroller and Auditor General of India relating to the accounts of the Union shall be submitted to the President, who causes them to be laid before each House of Parliament.
3. The Public Financial Management System (PFMS) provides for the real-time tracking of funds, and its implementation in 2013 was linked to the consolidation of all state-level treasury accounts into a single federal ledger managed by the Reserve Bank of India.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 1 is incorrect. Statement 3 is incorrect.
Statement 2 is correct as per Article 151, which mandates the CAG to submit audit reports to the President for tabling in Parliament. Statement 1 is incorrect because while the Delegation of Financial Powers Rules 1978 exists, reappropriation of funds is subject to specific restrictions and often requires Finance Ministry approval if it involves moving funds between different grants or major heads. Statement 3 is incorrect because the PFMS, while tracking fund flow, does not consolidate state treasury accounts into a single federal ledger managed by the RBI; state treasuries remain independent entities under the state governments' constitutional authority.
Consider the following statements regarding Fiscal Federalism and Ethics in Inter-governmental Transfers:
1. The National Development Council, established in 1952, functioned as the final authority for the approval of the Five-Year Plans and oversaw the direct transfer of funds under the 1950 Planning Commission guidelines.
2. The 14th Finance Commission increased the horizontal tax devolution share to 42 percent, which included a specific 2 percent weightage for the newly created Union Territory of Ladakh.
3. Article 275 of the Indian Constitution provides for grants-in-aid to such states as Parliament may determine to be in need of assistance.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct as Article 275 empowers Parliament to provide grants-in-aid to states in need of assistance, forming a key pillar of fiscal federalism. Statement 1 is incorrect because while the National Development Council approved Five-Year Plans, the Planning Commission's fund transfers were primarily based on the Gadgil Formula, not a singular set of 1950 guidelines. Statement 2 is incorrect because the 14th Finance Commission increased the tax devolution to 42 percent, but this occurred in 2015, years before the creation of the Union Territory of Ladakh in 2019.
Consider the following statements regarding Concept of Value for Money in Public Procurement:
1. The Manual for Procurement of Goods 2017 incorporates the 1994 WTO Agreement on Government Procurement as a binding framework for all state-level infrastructure projects.
2. The 2012 Committee on Public Procurement chaired by Vinod Rai suggested that life-cycle costing should be the primary evaluation criterion for every tender exceeding 50 crore rupees.
3. Article 282 of the Indian Constitution allows the Union to make grants for public purposes, and the Comptroller and Auditor General uses this provision to conduct performance audits of private sector entities.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because India is an observer, not a signatory, to the WTO Agreement on Government Procurement, and the 2017 Manual is a domestic guideline, not an international treaty implementation. Statement 2 is incorrect as the Vinod Rai Committee report focused on transparency and efficiency, but did not mandate life-cycle costing as a primary criterion for tenders exceeding 50 crore rupees. Statement 3 is incorrect because while Article 282 allows for public purpose grants, the CAG's mandate under the DPC Act 1971 is restricted to auditing government accounts and entities substantially financed by the state, not private sector entities in general.
Consider the following statements regarding Internal Control Systems and Financial Oversight:
1. The Contingency Fund of India, established under Article 267(1) of the Constitution, operates as an imprest placed at the disposal of the Comptroller and Auditor General to meet unforeseen expenditure pending parliamentary authorization.
2. The Estimates Committee, which traces its origin to the 1950 recommendation of John Matthai, reviews the efficiency of public expenditure and possesses the authority to suggest alternative policies for the government.
3. The Public Financial Management System, launched in 2009 as the Plan Scheme Information Management System, tracks the flow of funds from the Consolidated Fund of India directly to the final beneficiaries through the Reserve Bank of India.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund of India is placed at the disposal of the President, not the Comptroller and Auditor General. Statement 2 is incorrect because while the Estimates Committee examines public expenditure, it cannot suggest alternative policies, as its mandate is limited to suggesting economies and administrative reforms within the existing policy framework. Statement 3 is incorrect because the Public Financial Management System (PFMS) is a platform for fund tracking and accounting, but it does not directly transfer funds to beneficiaries; instead, it facilitates the flow of funds through various levels of implementing agencies and bank accounts.
Consider the following statements regarding Ethical Dimensions of Public Sector Undertaking Investments:
1. The General Financial Rules 2017, issued by the Department of Expenditure, provide that public sector undertakings maintain a debt-equity ratio that reflects prudent fiscal management.
2. Article 151 of the Indian Constitution tasks the Comptroller and Auditor General with submitting audit reports on the accounts of government companies to the President.
3. The Department of Public Enterprises issued guidelines in 2010 stating that corporate social responsibility expenditure by central public sector enterprises should be linked to the profit after tax of the preceding three years.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as GFR 2017 mandates fiscal prudence for PSUs, including debt-equity monitoring to ensure financial stability. Statement 2 is correct because Article 151 requires the CAG to submit audit reports of government companies to the President, who then causes them to be laid before Parliament. Statement 3 is correct as the 2010 DPE guidelines mandated that CPSEs allocate a percentage of their Profit After Tax (PAT) from the previous three years for CSR activities, a framework that predates and aligns with the subsequent Section 135 of the Companies Act, 2013.
Consider the following statements regarding Financial Impropriety and Administrative Responsibility:
1. The Integrated Financial Adviser system, introduced in 1976, grants the administrative heads of departments the power to override the financial concurrence of the Ministry of Finance in cases of national emergency.
2. The Finance Commission, constituted under Article 280, holds the authority to audit the accounts of state-owned enterprises and submit its findings directly to the state legislatures.
3. The Estimates Committee, which consists of 30 members elected from the Lok Sabha, conducts a post-mortem of expenditure after the audit reports are presented by the Comptroller and Auditor General.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Integrated Financial Adviser system makes the adviser responsible to the administrative head, but they cannot override the Ministry of Finance's financial rules. Statement 2 is incorrect as the Finance Commission's primary role is to recommend the distribution of tax proceeds between the Union and States, while the audit of state-owned enterprises is the mandate of the Comptroller and Auditor General (CAG). Statement 3 is incorrect because the Estimates Committee examines budget estimates before they are voted upon by Parliament, whereas the Public Accounts Committee is the body responsible for the post-mortem of expenditure based on CAG reports.
Consider the following statements regarding Role of the Comptroller and Auditor General in Financial Accountability:
1. The audit of government companies is conducted by the Comptroller and Auditor General in accordance with the Companies Act 2013, which allows the appointment of auditors by the Board of Directors.
2. The Comptroller and Auditor General oversees the maintenance of accounts for both the Union and the States, a function reinforced by the 1976 amendment to the departmental accounting rules.
3. Under Section 13 of the 1971 Act, the Comptroller and Auditor General audits all expenditure from the Consolidated Fund of India and of each State and Union Territory having a Legislative Assembly.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because under Section 13 of the CAG (DPC) Act, 1971, the CAG is mandated to audit all expenditures from the Consolidated Funds of the Union, States, and UTs. Statement 1 is incorrect because, for government companies, the CAG appoints the auditors, and the Board of Directors has no role in this selection process. Statement 2 is incorrect because the CAG was relieved of the responsibility of maintaining accounts for the Union government in 1976 (Separation of Accounts from Audit), though he continues to compile accounts for the State governments.
Consider the following statements regarding Ethics of Fiscal Responsibility and Budget Management Act:
1. The Medium Term Fiscal Policy Statement presented under the FRBM framework outlines a three-year rolling target for fiscal indicators.
2. The escape clause invoked under Section 4(2) of the FRBM Act allows the government to deviate from fiscal deficit targets due to unforeseen national security or calamity grounds.
3. The FRBM Rules of 2004 provide for the submission of three mandatory policy statements along with the annual budget, including the Macroeconomic Framework Statement.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
All three statements are correct: the FRBM Act mandates a three-year rolling target for fiscal indicators in the Medium Term Fiscal Policy Statement to ensure multi-year planning. Section 4(2) of the Act, amended in 2018, explicitly incorporates an 'escape clause' allowing for a deviation of up to 0.5% of GDP from fiscal targets during exceptional circumstances like war, national security crises, or natural calamities. Furthermore, the FRBM Rules, 2004, require the government to present the Macroeconomic Framework Statement, the Medium Term Fiscal Policy Statement, and the Fiscal Policy Strategy Statement alongside the Union Budget to ensure transparency and fiscal discipline.
Consider the following statements regarding Concept of Value for Money in Public Procurement:
1. Rule 149 of the GFR 2017 facilitates the procurement of common-use goods and services through the Government e-Marketplace (GeM) portal to enhance transparency.
2. The General Financial Rules (GFR) 2017 define Value for Money as the effective, efficient, and economic use of resources to achieve intended policy outcomes.
3. The CVC guidelines of 2004 introduced the concept of reverse auctions for all government contracts, which remains the primary mechanism for determining the lowest financial bid.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as Rule 149 of GFR 2017 mandates the use of the GeM portal for common-use goods and services to ensure transparency and efficiency. Statement 2 is correct because GFR 2017 emphasizes the '3Es' (Economy, Efficiency, and Effectiveness) as the core pillars of Value for Money in public procurement. Statement 3 is incorrect because reverse auctions are not mandatory for all government contracts and are primarily used for specific high-value or standardized procurements, rather than being the universal mechanism for determining the lowest financial bid.
Consider the following statements regarding Social Audit as a Tool for Financial Accountability:
1. The Public Accounts Committee of the Parliament of India provides for the periodic review of social audit reports, and these reports are submitted to the committee by the Gram Sabha to ensure transparency in the utilization of central grants.
2. The 2008 guidelines issued by the Planning Commission for the Rashtriya Krishi Vikas Yojana refer to the implementation of social audits, and these audits are conducted by private chartered accounting firms appointed by the state government.
3. Section 17 of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, provides for the conduct of social audits by the Gram Sabha to monitor the execution of projects.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because Section 17 of the MGNREGA, 2005, explicitly mandates the Gram Sabha to conduct regular social audits of all projects implemented within the Gram Panchayat. Statement 1 is incorrect as social audit reports are primarily discussed within the Gram Sabha itself, and the Public Accounts Committee does not have a constitutional or statutory mandate to review these specific local-level reports. Statement 2 is incorrect because social audits are participatory processes conducted by the community and civil society organizations, not by private chartered accounting firms, which perform financial audits rather than social audits.
Consider the following statements regarding Regulatory Framework for Public Expenditure Management:
1. The 15th Finance Commission recommended a fiscal consolidation roadmap for the states, which was incorporated into the Union Budget of 2019 to provide a statutory framework for debt management.
2. The Public Financial Management System is an integrated platform managed by the Controller General of Accounts, which serves as the primary mechanism for the direct transfer of subsidies to state-level treasuries.
3. The Estimates Committee of Parliament reviews the efficiency of public expenditure and suggests organizational improvements, operating under the administrative supervision of the Ministry of Parliamentary Affairs.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the 15th Finance Commission submitted its report in 2020-21, not 2019, and the statutory framework for fiscal discipline is governed by the FRBM Act, 2003. Statement 2 is incorrect as the Public Financial Management System (PFMS) is managed by the Controller General of Accounts for tracking fund flow, but it facilitates direct benefit transfers to beneficiaries, not merely transfers to state treasuries. Statement 3 is incorrect because the Estimates Committee is a parliamentary committee that functions under the direction of the Speaker of the Lok Sabha, not the Ministry of Parliamentary Affairs.
Consider the following statements regarding Fiscal Federalism and Ethics in Inter-governmental Transfers:
1. Article 280 of the Constitution provides for the constitution of the Finance Commission every five years, and the 16th Finance Commission was appointed in 2023 to determine the tax sharing ratio for the 2026-31 period.
2. The FRBM Review Committee, chaired by N.K. Singh in 2016, proposed a debt-to-GDP ratio of 60 percent for the general government, incorporating a 40 percent target for the states and 20 percent for the Union.
3. The State Disaster Response Fund is constituted under Section 48 of the Disaster Management Act, 2005, and acts as the primary fund available to state governments for responses to notified disasters.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct as the State Disaster Response Fund (SDRF) is indeed established under Section 48 of the Disaster Management Act, 2005. Statement 1 is incorrect because the 16th Finance Commission was constituted in December 2023 for the 2026-31 period, but the commission itself is mandated to be constituted every five years or earlier as the President deems necessary, not strictly 'every five years'. Statement 2 is incorrect because the N.K. Singh Committee recommended a debt-to-GDP ratio of 60 percent for the general government, but specifically proposed 40 percent for the Union and 20 percent for the states, reversing the figures mentioned in the statement.
Consider the following statements regarding Direct Benefit Transfer and Financial Inclusion Ethics:
1. The National Payments Corporation of India launched the Unified Payments Interface in 2016, which functions as a real-time settlement system for international remittances under the Foreign Exchange Management Act.
2. The DBT portal, managed by the Cabinet Secretariat, displays real-time data on the total number of beneficiaries for the Mahatma Gandhi National Rural Employment Guarantee Act since its inception in 2005.
3. The Direct Benefit Transfer of LPG (DBTL) scheme, known as PAHAL, was rolled out nationwide in 2015 and utilizes the Aadhaar-linked bank account to provide a fixed subsidy amount regardless of the fluctuating market price of cylinders.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because UPI is primarily a domestic real-time payment system, not a mechanism for international remittances under FEMA. Statement 2 is incorrect as the DBT portal is managed by the DBT Mission under the Cabinet Secretariat, but it does not provide real-time data for MGNREGA since its 2005 inception, as the scheme predates the portal's digital tracking infrastructure. Statement 3 is incorrect because the PAHAL subsidy is not a fixed amount; it is a dynamic 'Permanent Advance' that adjusts based on the difference between the market price of LPG cylinders and the subsidized rate.
Consider the following statements regarding Social Audit as a Tool for Financial Accountability:
1. Under the 2011 Social Audit Rules framed by the Ministry of Rural Development, the Social Audit Unit is tasked with facilitating the verification of records against physical progress in MGNREGA works.
2. The Meghalaya Community Participation and Public Services Social Audit Act, 2017, represents the first instance of a state legislature enacting a dedicated law for institutionalizing social audits.
3. The Comptroller and Auditor General of India issued the Auditing Standards for Social Audit in 2017 to provide a framework for evaluating the performance and financial propriety of public welfare schemes.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the MGNREGA Audit of Schemes Rules, 2011, mandates Social Audit Units to conduct independent verification of records and physical assets. Statement 2 is correct because Meghalaya became the first state in India to enact the 'Meghalaya Community Participation and Public Services Social Audit Act, 2017' to institutionalize social audits across various government schemes. Statement 3 is correct as the CAG of India released the 'Auditing Standards for Social Audit' in 2017 to provide a standardized framework for ensuring financial propriety and transparency in the implementation of public welfare programs.
Consider the following statements regarding Zero-Based Budgeting and Resource Allocation Ethics:
1. Financial propriety in public expenditure, as outlined in the General Financial Rules 2017, dictates that an officer should exercise the same vigilance as a person of ordinary prudence would in respect of their own money.
2. Zero-based budgeting requires that every function within an organization be analyzed for its needs and costs, starting from a base of zero as introduced by Peter Pyhrr in 1970.
3. The Government of India introduced the Zero-Based Budgeting (ZBB) approach in the Department of Science and Technology during the 1986-87 budget cycle to improve fiscal efficiency.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as it reflects the 'Canons of Financial Propriety' under GFR 2017, which mandate that public officials must exercise the same vigilance as a person of ordinary prudence over their own funds. Statement 2 is correct because Zero-Based Budgeting (ZBB), pioneered by Peter Pyhrr in 1970, requires all functions to be re-evaluated from scratch rather than relying on historical incremental budgets. Statement 3 is correct as the Government of India formally adopted ZBB in the 1986-87 budget cycle, initially implementing it within the Department of Science and Technology to enhance fiscal discipline and eliminate redundant expenditure.
Consider the following statements regarding Budgetary Control Mechanisms and Fiscal Discipline:
1. The Contingency Fund of India, established by the Act of 1950, operates as an imprest account placed at the disposal of the Parliament to meet unforeseen expenditures pending legislative authorization.
2. The 15th Finance Commission, chaired by N.K. Singh, recommended a vertical devolution of 41 percent of the divisible pool of taxes to states, which includes the revenue deficit grants for the period 2021-2026.
3. The Estimates Committee, which was first constituted in 1950 on the recommendation of John Matthai, possesses the authority to suggest alternative policies to the government during the budget scrutiny process.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund is placed at the disposal of the President, not the Parliament, to meet unforeseen expenditure. Statement 2 is incorrect because the 41% vertical devolution recommended by the 15th Finance Commission excludes revenue deficit grants, which are provided separately under Article 275. Statement 3 is incorrect because the Estimates Committee is explicitly barred from suggesting alternative policies, as its mandate is limited to suggesting economies and administrative reforms within the policy framework laid down by Parliament.
Consider the following statements regarding Conflict of Interest in Public Procurement Processes:
1. Rule 173 of the General Financial Rules 2017 outlines that public procurement should be conducted in a transparent manner to prevent any potential conflict of interest between the procuring entity and the bidders.
2. The Central Vigilance Commission issued circular number 02/01/16 in January 2016, which emphasizes that government officials should recuse themselves from procurement committees if they have a financial interest in the bidding firm.
3. Section 13 of the Prevention of Corruption Act 1988 covers instances where a public servant obtains for any person any valuable thing or pecuniary advantage by abusing their position during the procurement process.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as Rule 173 of the GFR 2017 mandates transparency and fairness to avoid conflicts of interest in public procurement. Statement 2 is correct because the CVC circular 02/01/16 specifically directs public officials to declare interests and recuse themselves from decision-making processes to maintain integrity. Statement 3 is correct as Section 13(1)(d) of the Prevention of Corruption Act, 1988, criminalizes the abuse of official position by a public servant to obtain pecuniary advantages for themselves or others, which directly applies to biased procurement practices.
Consider the following statements regarding Budgetary Control Mechanisms and Fiscal Discipline:
1. The Fiscal Responsibility and Budget Management Act of 2003 established a statutory framework to reduce the fiscal deficit to 3 percent of the Gross Domestic Product by the end of the 2008-09 financial year.
2. The Supplementary Grants mechanism under Article 115 allows the government to seek additional funding from Parliament if the amount authorized for a particular service is found insufficient for the current financial year.
3. The Department of Expenditure under the Ministry of Finance issues the General Financial Rules, which serve as a compendium of executive orders and instructions for handling public finances.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the FRBM Act, 2003, originally mandated a fiscal deficit target of 3% of GDP by 2008-09. Statement 2 is correct because Article 115 of the Constitution empowers the government to seek Parliament's approval for Supplementary Grants when authorized funds prove insufficient for the financial year. Statement 3 is correct as the General Financial Rules (GFRs) are indeed a set of executive instructions issued by the Department of Expenditure to ensure financial propriety and transparency in the utilization of public funds.
Consider the following statements regarding Ethical Dimensions of Public Sector Undertaking Investments:
1. The Public Enterprises Selection Board, established in 1987, functions as a high-level body responsible for the selection and placement of personnel in top management posts of public sector undertakings.
2. The 2017 Cabinet decision on the 'Strategic Disinvestment' framework allows the NITI Aayog to identify central public sector enterprises for minority stake sale or complete privatization.
3. Section 135 of the Companies Act 2013 provides that companies with a net worth of rupees five hundred crore or more constitute a Corporate Social Responsibility Committee of the Board.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the PESB was constituted in 1987 to advise the government on top-level management appointments in CPSEs. Statement 2 is correct because the 2017 Cabinet framework empowered NITI Aayog to identify CPSEs for strategic disinvestment based on national priority and economic viability. Statement 3 is correct as Section 135 of the Companies Act, 2013 mandates that companies meeting the threshold of Rs 500 crore net worth, Rs 1000 crore turnover, or Rs 5 crore net profit must constitute a CSR Committee.
Consider the following statements regarding Public Debt Management and Intergenerational Equity:
1. The Fiscal Responsibility and Budget Management Act of 2003 established a statutory framework for the central government to reduce the fiscal deficit to 3 percent of GDP.
2. The FRBM Review Committee proposed the creation of a Fiscal Council in 2017, which functions as a constitutional body under Article 280 to oversee state-level debt sustainability.
3. The N.K. Singh Committee report submitted in 2017 recommended a debt-to-GDP ratio of 60 percent for the general government by the fiscal year 2022-23.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the FRBM Act, 2003 mandated the central government to limit fiscal deficit to 3% of GDP to ensure long-term fiscal stability. Statement 3 is correct because the N.K. Singh Committee (2017) recommended a consolidated debt-to-GDP target of 60% (40% for the Centre and 20% for States) to be achieved by 2022-23. Statement 2 is incorrect because the proposed Fiscal Council was intended to be an independent statutory body to advise the government, not a constitutional body under Article 280, which specifically pertains to the Finance Commission.
Consider the following statements regarding Principles of Financial Propriety in Public Expenditure:
1. The Audit of Financial Propriety is conducted under the provisions of the CAG (Duties, Powers and Conditions of Service) Act 1971, which empowers the auditor to disallow any expenditure that exceeds the budgetary allocation by more than 15 percent.
2. The Contingency Fund of India, established under Article 267 of the Constitution, allows for the withdrawal of funds for unforeseen expenses, provided that the Comptroller and Auditor General provides prior certification of the emergency nature of the expenditure.
3. The Public Accounts Committee, established under the Government of India Act 1919, examines the appropriation accounts and the annual financial reports of the Government to ensure that public money is spent in accordance with the intent of the Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because the Public Accounts Committee was indeed established in 1921 under the Government of India Act 1919 to scrutinize government expenditure and ensure financial accountability to Parliament. Statement 1 is incorrect because the CAG's audit of propriety is based on established canons of financial propriety rather than a specific 15 percent budgetary threshold defined in the 1971 Act. Statement 2 is incorrect because the Contingency Fund is placed at the disposal of the President, and withdrawals are made by executive order without requiring prior certification from the CAG, who only audits such expenditure post-facto.
Consider the following statements regarding Prevention of Leakage and Corruption in Welfare Schemes:
1. The Public Financial Management System (PFMS), initially known as the Central Plan Scheme Monitoring System, was established in 2008 to track the utilization of funds released under various central schemes.
2. The Direct Benefit Transfer (DBT) mission, launched on 1 January 2013, aims to transfer subsidies directly into the bank accounts of beneficiaries to minimize leakages in welfare delivery.
3. The National Social Assistance Programme (NSAP) provides for old-age pensions through the Ministry of Finance, and the 2014 revision increased the monthly central assistance to 500 rupees for all beneficiaries.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as PFMS was launched in 2008 by the Controller General of Accounts to track fund flow and ensure real-time reporting of expenditure. Statement 2 is correct because the DBT mission was initiated on 1 January 2013 to streamline the transfer of benefits directly into Aadhaar-seeded bank accounts, thereby reducing intermediaries and leakages. Statement 3 is incorrect because the NSAP is administered by the Ministry of Rural Development, not the Ministry of Finance, and the central assistance for the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) for beneficiaries aged 60-79 remains at 200 rupees per month, not 500.
Consider the following statements regarding Prevention of Leakage and Corruption in Welfare Schemes:
1. The 2005 Right to Information Act allows citizens to access records of local welfare committees, and the 2019 amendment added a specific clause for the automatic disclosure of individual bank transaction details.
2. The Pradhan Mantri Jan Dhan Yojana, initiated in 2014, is associated with the expansion of financial inclusion, and the 2017 cabinet notification linked it to the mandatory closure of all existing post office savings accounts.
3. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) includes provisions for social audits, and the 2011 guidelines established a permanent independent commission to oversee state-level fund disbursement.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the RTI Act 2005 does not mandate the automatic disclosure of individual bank transaction details, which are protected under privacy norms. Statement 2 is incorrect as the Pradhan Mantri Jan Dhan Yojana does not mandate the closure of existing post office savings accounts; rather, it encourages the integration of banking services. Statement 3 is incorrect because, while MGNREGA mandates social audits, there is no provision for a permanent independent commission to oversee state-level fund disbursement, as this responsibility remains with the Ministry of Rural Development and state governments.
Consider the following statements regarding Conflict of Interest in Public Procurement Processes:
1. The 2005 amendment to the General Financial Rules includes provisions for a centralized database of blacklisted contractors, which is managed by the Ministry of Finance to prevent conflict of interest in state-level infrastructure projects.
2. The Public Procurement Bill of 2012 provides for a mandatory cooling-off period of three years for retired government officials before they join private firms that participated in tenders under their previous jurisdiction.
3. The Integrity Pact, introduced by Transparency International in 1993, encompasses a legal framework that allows the Comptroller and Auditor General to disqualify bidders who fail to disclose their corporate shareholding patterns.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the General Financial Rules (GFR) do not mandate a centralized Ministry of Finance-managed database for blacklisted contractors, as blacklisting remains largely decentralized across departments. Statement 2 is incorrect because the Public Procurement Bill of 2012 was never enacted into law, and current civil service rules do not mandate a statutory three-year cooling-off period for all retired officials joining private firms. Statement 3 is incorrect because the Integrity Pact is a voluntary tool to prevent corruption and lacks the legal authority to empower the Comptroller and Auditor General to disqualify bidders, which remains an administrative function of the procuring entity.
Consider the following statements regarding Audit of Public Accounts and Performance Auditing:
1. Performance auditing, as defined by the INTOSAI Auditing Standards, involves an independent examination of the efficiency, economy, and effectiveness of government programs, often focusing on the achievement of specific policy objectives.
2. Article 151 of the Constitution of India specifies that the reports of the Comptroller and Auditor General relating to the accounts of the Union shall be submitted to the President, who causes them to be laid before each House of Parliament.
3. The Public Accounts Committee, established in 1921 under the Government of India Act 1919, examines the audit reports of the Comptroller and Auditor General to ensure that money shown in the accounts as having been disbursed was legally available for the service or purpose to which it was applied.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
All three statements are correct: Performance auditing (3Es: Economy, Efficiency, Effectiveness) is a core mandate under INTOSAI standards to assess program outcomes; Article 151 mandates the CAG to submit reports to the President for parliamentary scrutiny; and the Public Accounts Committee, originating from the 1919 Act, serves as the primary watchdog to ensure financial propriety and legal disbursement of funds. There are no incorrect statements among the three provided.
Consider the following statements regarding Transparency and Accountability in Public-Private Partnerships:
1. The 2014 Companies Act includes provisions for Corporate Social Responsibility, and it allows for the inclusion of PPP project expenditures as part of the mandatory 2 percent spend for private sector partners.
2. The 2009 Guidelines for Financial Support to PPPs in Infrastructure provides for the formation of an Infrastructure Debt Fund, and it is governed by the Reserve Bank of India under the 1934 Act.
3. The 2012 National Public Private Partnership Policy provides for the establishment of a PPP Appraisal Committee to ensure financial propriety in projects exceeding 250 crore rupees.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct as the 2012 National PPP Policy mandates the PPP Appraisal Committee (PPPAC) to appraise projects exceeding Rs 250 crore to ensure financial propriety. Statement 1 is incorrect because the Companies Act, 2013 (not 2014) and CSR rules explicitly exclude normal business activities or PPP project expenditures from counting toward the mandatory 2% CSR spend. Statement 2 is incorrect because while the Infrastructure Debt Fund (IDF) exists, it is regulated by the RBI under the RBI Act, 1934, but the 2009 Guidelines for Financial Support (Viability Gap Funding) focus on government grants rather than the creation of IDFs.
Consider the following statements regarding Legislative Control over Public Finance through Parliamentary Committees:
1. The Estimates Committee, first recommended by John Matthai in 1950, examines whether the money laid out in the budget is well laid out within the limits of the policy implied in the estimates.
2. The Public Accounts Committee, established under the Government of India Act 1919, consists of 22 members with 15 from the Lok Sabha and 7 from the Rajya Sabha.
3. The Committee on Public Undertakings was constituted in 1964 based on the recommendation of the Krishna Menon Committee to examine the reports and accounts of public sector enterprises.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
All three statements are correct: the Estimates Committee was indeed established in 1950 based on the recommendation of then-Finance Minister John Matthai to ensure economy in expenditure; the Public Accounts Committee, originating from the 1919 Act, maintains its composition of 22 members (15 Lok Sabha, 7 Rajya Sabha) to scrutinize appropriation and finance accounts; and the Committee on Public Undertakings was formed in 1964 following the Krishna Menon Committee's suggestion to oversee the financial performance of public sector enterprises.
Consider the following statements regarding Zero-Based Budgeting and Resource Allocation Ethics:
1. The Expenditure Reforms Commission, chaired by K.P. Geethakrishnan in 2000, recommended the adoption of Zero-Based Budgeting as a permanent mechanism for all state-level welfare schemes.
2. The Estimates Committee, which traces its origin to the 1950 mandate by John Matthai, functions as the primary oversight body for reviewing the actual utilization of funds after the conclusion of the financial year.
3. The Fiscal Responsibility and Budget Management Act of 2003 includes provisions for the immediate dissolution of any department that fails to justify its baseline expenditure for three consecutive fiscal years.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because while the K.P. Geethakrishnan Commission recommended Zero-Based Budgeting (ZBB) for central ministries, it was never mandated as a permanent mechanism for all state-level schemes. Statement 2 is incorrect because the Estimates Committee examines budget estimates during the financial year to suggest economies, whereas the Public Accounts Committee (PAC) is the primary body that audits actual utilization after the financial year concludes. Statement 3 is incorrect as the FRBM Act, 2003 focuses on fiscal discipline through deficit targets and debt management, and it contains no provisions for the dissolution of government departments based on baseline expenditure justification.
Consider the following statements regarding Internal Control Systems and Financial Oversight:
1. The Finance Commission, constituted under Article 280, determines the criteria for the distribution of net proceeds of taxes between the Union and the States and exercises oversight over the daily audit of departmental accounts.
2. Article 151 of the Indian Constitution provides that the reports of the Comptroller and Auditor General of India relating to the accounts of the Union shall be submitted to the President, who causes them to be laid before each House of Parliament.
3. The Public Accounts Committee, established in 1921 under the Government of India Act 1919, examines the appropriation accounts and the annual finance accounts of the Government of India.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because the Finance Commission is a constitutional body focused on fiscal federalism and revenue sharing, whereas the audit of departmental accounts is the mandate of the Comptroller and Auditor General (CAG). Statement 2 is correct as Article 151 mandates the CAG to submit audit reports to the President for presentation to Parliament to ensure executive accountability. Statement 3 is correct because the Public Accounts Committee, originating from the 1919 Act, serves as the primary parliamentary watchdog to examine the CAG's reports on appropriation and finance accounts.
Consider the following statements regarding Social Audit as a Tool for Financial Accountability:
1. The Right to Information Act of 2005 establishes the Social Audit Committee as a statutory body, and these committees are empowered to impose financial penalties on officials for irregularities discovered during local inspections.
2. The 73rd Constitutional Amendment Act of 1992 includes provisions for the creation of District Planning Committees, which serve as the primary legal authority for conducting social audits of state-funded infrastructure projects.
3. The National Food Security Act of 2013 encompasses provisions for the establishment of Vigilance Committees at the fair price shop level, and these committees function under the direct administrative control of the Union Ministry of Finance.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
All three statements are incorrect: The RTI Act, 2005 does not establish Social Audit Committees as statutory bodies with penalty-imposing powers; rather, social audits are mandated under specific schemes like MGNREGA. The 73rd Constitutional Amendment Act provides for Gram Sabhas to conduct social audits, whereas District Planning Committees (Article 243ZD) are primarily for consolidating district-level development plans. Finally, while the National Food Security Act, 2013 mandates Vigilance Committees, they function under the administrative control of the State Governments and the Department of Food and Public Distribution, not the Union Ministry of Finance.
Consider the following statements regarding Ethical Dimensions of Public Sector Undertaking Investments:
1. The 2005 Right to Information Act applies to all public sector undertakings, and the Department of Personnel and Training provides for the appointment of a First Appellate Authority within the Ministry of Finance.
2. The Comptroller and Auditor General of India derives its power to audit public sector undertakings from the 1971 Act, which includes provisions for the appointment of auditors by the Union Finance Ministry.
3. The 1991 Industrial Policy Statement introduced the concept of Memorandum of Understanding for public sector undertakings, which allows the Ministry of Heavy Industries to finalize annual performance targets directly.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the RTI Act applies to all public authorities, but the First Appellate Authority is appointed within the respective PSU, not the Ministry of Finance. Statement 2 is incorrect because while the CAG derives power from the 1971 Act, auditors for government companies are appointed by the CAG under the Companies Act, not the Finance Ministry. Statement 3 is incorrect because the MoU system was introduced in the late 1980s (based on the Arjun Sengupta Committee report), and targets are finalized between the PSU and its respective Administrative Ministry, not exclusively the Ministry of Heavy Industries.
Consider the following statements regarding Integrity in Public Financial Reporting and Disclosure:
1. The Government Accounting Rules, 1990, serve as the primary framework for financial reporting, and these rules incorporate the recommendations of the 1949 Ayyangar Committee regarding the classification of departmental receipts.
2. The 14th Finance Commission report recommended a vertical devolution of 42% of the divisible pool of central taxes to the States, a significant increase from the 32% recommended by the 13th Finance Commission.
3. The Comptroller and Auditor General (CAG) derives its auditing authority from the CAG (Duties, Powers and Conditions of Service) Act of 1971, which allows the CAG to audit the accounts of private sector entities receiving government grants exceeding 50 lakh rupees.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 1 is incorrect. Statement 3 is incorrect.
Statement 2 is correct as the 14th Finance Commission (2015-20) increased the vertical devolution of central taxes to states from 32% to 42% to strengthen fiscal federalism. Statement 1 is incorrect because the Government Accounting Rules, 1990, are based on the Constitution and the CAG's advice, not the 1949 Ayyangar Committee. Statement 3 is incorrect because, under Section 14 of the DPC Act, 1971, the CAG can audit bodies or authorities substantially financed by grants or loans from the Consolidated Fund, but there is no specific statutory provision mandating the audit of private sector entities solely based on a 50 lakh rupee threshold.
Consider the following statements regarding Integrity in Public Financial Reporting and Disclosure:
1. The Consolidated Fund of India is established under Article 266, and the procedure for withdrawing money from this fund involves the presentation of a Finance Bill which outlines the specific accounting heads for each expenditure.
2. The General Financial Rules (GFR), 2017, provide guidelines for procurement and expenditure, and these rules include a specific provision for the mandatory electronic auction of all government land assets valued above 10 crore rupees.
3. The Public Accounts Committee (PAC) examines the appropriation accounts and the annual financial reports of the government, and its membership is drawn from both Houses of Parliament with a tenure of three years for each member.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because withdrawals from the Consolidated Fund require an Appropriation Bill, not a Finance Bill, which is strictly for tax proposals. Statement 2 is incorrect as GFR 2017 contains no such mandatory electronic auction provision for land assets valued above 10 crore rupees. Statement 3 is incorrect because the tenure of members of the Public Accounts Committee is only one year, not three years.
Consider the following statements regarding Legislative Control over Public Finance through Parliamentary Committees:
1. The Comptroller and Auditor General of India submits three audit reports to the President, namely the audit report on appropriation accounts, finance accounts, and public sector undertakings.
2. Article 114 of the Indian Constitution deals with Appropriation Bills, and it allows the Parliament to modify the grants voted by the Lok Sabha during the final stage of the legislative financial process.
3. The Committee on Public Undertakings was established in 1964, and its functions include the periodic review of the performance of the Reserve Bank of India and other financial regulatory institutions.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as the CAG submits these three specific audit reports to the President under Article 151. Statement 2 is incorrect because, under Article 114, no amendment can be proposed to an Appropriation Bill in either House of Parliament that would vary the amount or alter the destination of any grant voted by the Lok Sabha. Statement 3 is incorrect because the Committee on Public Undertakings does not have the mandate to examine the Reserve Bank of India or other financial regulatory institutions, as they are specifically excluded from its purview.
Consider the following statements regarding Principles of Financial Propriety in Public Expenditure:
1. The General Financial Rules (GFR) 2017 define the principle of financial propriety, which holds that every public servant should exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of their own money.
2. Rule 21 of the General Financial Rules 2017 outlines that no authority should incur any expenditure or enter into any liability involving expenditure from public funds until the expenditure has been sanctioned by a competent authority.
3. The Fiscal Responsibility and Budget Management Act of 2003 encompasses the primary framework for financial propriety, which includes the creation of the Expenditure Management Commission to review the revenue deficit targets annually.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as it accurately reflects the definition of financial propriety under Rule 21 of the General Financial Rules (GFR) 2017, which mandates the standard of 'ordinary prudence' for public servants. Statement 2 is correct because Rule 21 explicitly stipulates that no expenditure shall be incurred without prior sanction from a competent authority. Statement 3 is incorrect because the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, focuses on fiscal discipline and deficit reduction targets rather than defining the principles of financial propriety, and the Expenditure Management Commission was an ad-hoc body established in 2014, not a permanent feature of the FRBM framework.
Consider the following statements regarding Budgetary Control Mechanisms and Fiscal Discipline:
1. Article 114 of the Indian Constitution provides that no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of the article.
2. The Public Accounts Committee, established in 1921 under the Government of India Act 1919, examines the annual audit reports of the Comptroller and Auditor General to ensure financial propriety.
3. The Vote on Account, provided under Article 116, allows the government to draw funds from the Consolidated Fund of India for the entire financial year before the passing of the full Appropriation Bill.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as Article 114 mandates the Appropriation Act for any withdrawal from the Consolidated Fund of India, ensuring legislative control over public spending. Statement 2 is correct because the Public Accounts Committee, introduced by the 1919 Act, scrutinizes the CAG's audit reports to verify that expenditure conforms to the intent of Parliament and principles of financial propriety. Statement 3 is incorrect because a 'Vote on Account' is a temporary provision granted under Article 116 to meet immediate expenses for a part of the financial year, not the entire year, pending the passage of the full Appropriation Bill.
Consider the following statements regarding Zero-Based Budgeting and Resource Allocation Ethics:
1. The 15th Finance Commission report, submitted in 2020, recommended that states adopt outcome-based budgeting to link resource allocation with measurable development indicators.
2. The Public Accounts Committee, established under the Government of India Act 1919, serves as the primary parliamentary body to ensure that public funds are spent in accordance with the appropriation acts.
3. Article 151 of the Constitution of India provides for the submission of the Comptroller and Auditor General's reports to the President, who then causes them to be laid before each House of Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the 15th Finance Commission emphasized outcome-based budgeting to enhance fiscal transparency and efficiency in state expenditures. Statement 2 is correct because the Public Accounts Committee was indeed first constituted in 1921 following the Government of India Act 1919 to scrutinize the appropriation accounts and finance accounts of the Union. Statement 3 is correct as Article 151 mandates the CAG to submit audit reports to the President, who ensures they are tabled in both Houses of Parliament to facilitate legislative oversight of public funds.
Consider the following statements regarding Public Debt Management and Intergenerational Equity:
1. The Public Debt Management Agency was established in 2015 as an independent statutory authority to oversee the consolidation of internal and external debt portfolios under the Ministry of Finance.
2. The Reserve Bank of India manages the public debt of the central government under the provisions of the Reserve Bank of India Act, 1934.
3. Article 292 of the Constitution of India empowers the executive power of the Union to borrow upon the security of the Consolidated Fund of India within limits fixed by Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because, although proposed in the 2015-16 Union Budget, the Public Debt Management Agency (PDMA) was never established as a statutory authority, and the debt management function remains with the RBI. Statement 2 is correct as the RBI manages the Central Government's public debt under Section 20 and 21 of the RBI Act, 1934, acting as its banker and debt manager. Statement 3 is correct because Article 292 explicitly grants the Union Government the power to borrow upon the security of the Consolidated Fund of India, subject to such limits as may be fixed by Parliament by law.
Consider the following statements regarding Transparency and Accountability in Public-Private Partnerships:
1. Under the 2020 guidelines for the Viability Gap Funding scheme, the Ministry of Finance allows for a maximum grant of 20 percent of the total project cost for economic infrastructure projects.
2. The 2017 amendment to the General Financial Rules includes provisions for the e-Procurement portal, and it functions under the oversight of the NITI Aayog to ensure competitive bidding in PPP contracts.
3. The 2006 Public Private Partnership Policy of the Ministry of Finance provides for a mandatory 10 percent equity stake for the government in all projects, and it was revised in 2011 to include social infrastructure.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct because the 2020 VGF scheme guidelines allow up to 20% grant for economic infrastructure projects, with an additional 20% available for social infrastructure. Statement 2 is incorrect because the e-Procurement portal under the General Financial Rules is overseen by the Ministry of Finance's Department of Expenditure, not NITI Aayog. Statement 3 is incorrect as there is no mandatory 10% government equity stake policy for all PPP projects, and the 2006 policy did not mandate such equity requirements.
Consider the following statements regarding Financial Impropriety and Administrative Responsibility:
1. The General Financial Rules 2017, issued by the Department of Expenditure, serve as a compendium of executive orders and instructions for the management of public finances in India.
2. The Contingency Fund of India, established under Article 267(1) of the Constitution, is placed at the disposal of the President to enable advances to be made for meeting unforeseen expenditure pending authorization by Parliament.
3. Under the Fiscal Responsibility and Budget Management Act of 2003, the government is tasked with limiting the fiscal deficit to 3 percent of the Gross Domestic Product by the end of the 2008-09 financial year.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the General Financial Rules (GFR) 2017 are a compilation of rules and orders by the Department of Expenditure to ensure financial discipline in public spending. Statement 2 is correct because Article 267(1) empowers the President to operate the Contingency Fund for unforeseen expenditures, which are later recouped through Parliamentary authorization. Statement 3 is correct because the original FRBM Act of 2003 mandated the government to reduce the fiscal deficit to 3% of GDP by the 2008-09 fiscal year, a target that was subsequently adjusted due to global economic conditions.
Consider the following statements regarding Audit of Public Accounts and Performance Auditing:
1. Performance auditing in India is governed by the 1976 Amendment to the CAG Act, which introduced the concept of 'Value for Money' audits as a mandatory requirement for all centrally sponsored schemes exceeding 500 crore rupees.
2. The Public Accounts Committee consists of 30 members, with 20 members elected from the Lok Sabha and 10 members from the Rajya Sabha, serving a term of two years to review the financial irregularities reported by the audit department.
3. The Comptroller and Auditor General submits the audit report on the accounts of the Government of India to the Finance Minister, who presents the findings to the Public Accounts Committee within 30 days of the budget session commencement.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the CAG's mandate for performance auditing is derived from the CAG (DPC) Act, 1971, and there is no specific 1976 amendment mandating 'Value for Money' audits for schemes over 500 crore. Statement 2 is incorrect as the Public Accounts Committee consists of 22 members (15 from Lok Sabha and 7 from Rajya Sabha) with a term of one year, not two. Statement 3 is incorrect because the CAG submits audit reports to the President, who causes them to be laid before each House of Parliament, not the Finance Minister, and there is no statutory 30-day timeline for presentation to the PAC.