UPSC solved previous year questions

UPSC Public finance PYQ with Answers

12 solved Public finance questions from previous UPSC papers, each with an answer and explanation.

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Questions
12
Years covered
2016–2025
Exam years
7
With answers
12

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UPSC Public finance PYQ with Answers

1–3 of 3
  1. Q1 2025 Mains GS3

    Explain how the Fiscal Health Index (FHI) can be used as a tool for assessing the fiscal performance of states in India. In what way would it encourage the states to adopt prudent and sustainable fiscal policies? (Answer in 250 words)

    Answer explanation

    Introduction The Fiscal Health Index is a comparative framework that evaluates the quality, sustainability and resilience of state finances rather than merely their expenditure size.…

    EconomyFiscal healthPublic finance
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  3. Q3 2024 Prelims GS

    Consider the following statements:
    Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment.
    Statement-II: The USA Government debt is not backed by any hard assets, but only by the faith of the Government.
    Which one of the following is correct in respect of the above statements?

    1. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
    2. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
    3. Statement-I is correct, but Statement-II is incorrect
    4. Statement-I is incorrect, but Statement-II is correct✓
    Answer explanation

    Statement-I is incorrect, but Statement-II is correct Statement I is incorrect because a US default would mean failure to make payments when due; it would not automatically extinguish bondholders' legal claims to repayment.…

    Indian economyPublic financeSovereign debt and government bonds
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