This is Set 6 of 48 in the smartvidya question bank on the General Financial Rules (GFR) 2017, updated up to 31.01.2026. Part II: Budget formulation and implementation. This set covers Rules 50 to 56: expenditure estimates, Demands for Grants, Outcome Budget and Vote on Account.
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Set 6: Expenditure Estimates and Demands for Grants
1. Expenditure estimates must show separately sums charged on the Consolidated Fund under
(a) Article 112(3) and sums requiring a vote of the Lok Sabha under Article 113(2)
(b) Article 266(1) and Article 267(1)
(c) Article 150 and Article 151
(d) Article 114(3) and Article 115(1)
Ans. (a) Article 112(3) and sums requiring a vote of the Lok Sabha under Article 113(2) — Explanation: Rule 50(1) requires charged and voted expenditure to be shown separately. [Ref: Rule 50(1)]
2. Expenditure estimates must also distinguish
(a) domestic from foreign vendors
(b) Central from State expenditure
(c) salaried from non-salaried staff
(d) revenue account from capital account
Ans. (d) revenue account from capital account — Explanation: Rule 50(2) requires separate provisions for revenue and capital account, including loans and repayments. [Ref: Rule 50(2)]
3. Detailed estimates of expenditure are prepared up to the final unit of appropriation, which is the
(a) Object Head
(b) Minor Head
(c) Sub-Major Head
(d) Major Head
Ans. (a) Object Head — Explanation: Rule 50(3) requires estimates up to the Object Head under the prescribed Major and Minor Heads. [Ref: Rule 50(3)]
4. Revised and Budget Estimates, after scrutiny by the Financial Adviser, are approved by
(a) the Minister of Finance
(b) the Secretary of the Administrative Ministry or Department
(c) the Head of Office
(d) the CAG
Ans. (b) the Secretary of the Administrative Ministry or Department — Explanation: Rule 50(5) requires approval by the Secretary before forwarding to the Budget Division. [Ref: Rule 50(5)]
5. Estimates of expenditure for which a vote of the Lok Sabha is required are presented in the form of
(a) Finance Accounts
(b) Demands for Grants
(c) Appropriation Accounts
(d) Outcome Budget
Ans. (b) Demands for Grants — Explanation: Rule 51(1) states that voted expenditure estimates are in the form of Demands for Grants. [Ref: Rule 51(1)]
6. Generally, how many Demands for Grants are presented for each Ministry or Department?
(a) One, though large Ministries may have more than one
(b) One for each object head
(c) Two, one for revenue and one for capital
(d) One for each scheme
Ans. (a) One, though large Ministries may have more than one — Explanation: Rule 51(2) provides for one Demand per Ministry, with more for large Ministries. [Ref: Rule 51(2)]
7. Detailed Demands for Grants are laid on the Table of the Lok Sabha for consideration by
(a) the Public Accounts Committee
(b) the Committee on Public Undertakings
(c) the Estimates Committee
(d) the Departmentally Related Standing Committees
Ans. (d) the Departmentally Related Standing Committees — Explanation: Rule 51(3) refers to the DRSCs. [Ref: Rule 51(3)]
8. The main Demands for Grants are presented to Parliament by
(a) the CAG
(b) the Cabinet Secretariat
(c) the Ministry of Finance, Budget Division, along with the Annual Financial Statement
(d) each Ministry separately
Ans. (c) the Ministry of Finance, Budget Division, along with the Annual Financial Statement — Explanation: Rule 51(3) distinguishes main Demands (Budget Division) from Detailed Demands (Ministries). [Ref: Rule 51(3)]
9. The form of the Annual Financial Statement and Demands for Grants is laid down by
(a) each Ministry
(b) the Lok Sabha Secretariat
(c) the CAG
(d) the Finance Ministry
Ans. (d) the Finance Ministry — Explanation: Rule 52(1) states no alteration of arrangement or classification can be made without the Finance Ministry's approval. [Ref: Rule 52(1)]
10. The authorised heads for expenditure in a year are those shown in
(a) the previous year's actuals
(b) the vendor contracts
(c) the Finance Accounts
(d) the Detailed Demands for Grants passed by Parliament
Ans. (d) the Detailed Demands for Grants passed by Parliament — Explanation: Rule 52(2) also bars changes without formal approval of the Finance Ministry. [Ref: Rule 52(2)]
11. Detailed instructions for preparation of the budget are available in
(a) Form GFR 1
(b) Appendix 1 only
(c) Appendices 2, 3 and 4 of GFR 2017
(d) Appendix 12
Ans. (c) Appendices 2, 3 and 4 of GFR 2017 — Explanation: The note under Rule 52 refers to Appendices 2, 3 and 4 of GFR 2017. [Ref: Note below Rule 52]
12. Pre-budget meetings to discuss requirements of funds are held by
(a) Secretary (Expenditure) with Secretaries or Financial Advisers of Ministries
(b) the Lok Sabha Speaker with Secretaries
(c) the CAG with Ministers
(d) NITI Aayog with State Governments
Ans. (a) Secretary (Expenditure) with Secretaries or Financial Advisers of Ministries — Explanation: Rule 53 describes scrutiny by the Budget Division and pre-budget meetings with Secretary (Expenditure). [Ref: Rule 53]
13. The Outcome Budget is prepared by the Department of Expenditure in consultation with
(a) the RBI
(b) the Lok Sabha Secretariat
(c) the CAG
(d) NITI Aayog and the concerned Ministries
Ans. (d) NITI Aayog and the concerned Ministries — Explanation: Rule 54 links outlays with outputs and outcomes for each scheme. [Ref: Rule 54]
14. In the Outcome Budget, outputs and deliverables must be given
(a) only for capital schemes
(b) in measurable or quantitative terms
(c) only after audit
(d) in general descriptive terms only
Ans. (b) in measurable or quantitative terms — Explanation: Rule 54 mandates measurable outputs, based on projections in the Medium-Term Expenditure Framework. [Ref: Rule 54]
15. Performance against specified outcomes in the Outcome Budget forms the basis of
(a) transferring officers
(b) fixing user charges
(c) deciding continuation of the scheme and the quantum of budget allocation
(d) deciding dividend payments
Ans. (c) deciding continuation of the scheme and the quantum of budget allocation — Explanation: Rule 54 links outcomes to scheme continuation and allocation. [Ref: Rule 54]
16. A "Vote on Account" is obtained under
(a) Article 267 of the Constitution
(b) Article 150 of the Constitution
(c) Article 116 of the Constitution
(d) Article 112 of the Constitution
Ans. (c) Article 116 of the Constitution — Explanation: Rule 55 refers to Article 116 for obtaining a Vote on Account. [Ref: Rule 55]
17. A Vote on Account is needed when
(a) the CAG objects to expenditure
(b) a new scheme is approved mid-year
(c) the Appropriation Bill is likely to be passed after the start of the financial year
(d) there are savings in a grant
Ans. (c) the Appropriation Bill is likely to be passed after the start of the financial year — Explanation: Rule 55 provides for a Vote on Account pending completion of the procedure under Article 113 of the Constitution. [Ref: Rule 55]
18. Funds made available under a Vote on Account
(a) can be used only for salaries
(b) are not to be utilised for expenditure on a New Service
(c) can be used for any purpose
(d) are available for the whole year
Ans. (b) are not to be utilised for expenditure on a New Service — Explanation: Rule 55 specifically bars use of Vote on Account funds for a New Service. [Ref: Rule 55]
19. After the Appropriation Bill is passed, the grants are communicated to Ministries by
(a) the CAG
(b) the Ministry of Finance
(c) the Lok Sabha Secretariat
(d) the Reserve Bank
Ans. (b) the Ministry of Finance — Explanation: Rule 56 also requires Ministries to distribute funds to subordinate formations and inform PAOs. [Ref: Rule 56]
20. Pay and Accounts Officers exercise check against
(a) the allocation made to each subordinate authority
(b) the vendor's turnover
(c) the Outcome Budget targets
(d) the dividend policy
Ans. (a) the allocation made to each subordinate authority — Explanation: Rule 56 requires distribution of grants to be communicated to PAOs, who check payments against allocations. [Ref: Rule 56]
21. The major head wise provisions in the Detailed Demands for Grants must match
(a) the actuals of the previous year
(b) the Finance Accounts
(c) the State Budgets
(d) the provisions in the Demands for Grants presented by the Budget Division
Ans. (d) the provisions in the Demands for Grants presented by the Budget Division — Explanation: Rule 52(3) requires this match because appropriations are sought on the basis of Demands for Grants. [Ref: Rule 52(3)]
22. Each Demand for Grants normally includes provisions for
(a) only capital works
(b) only salaries
(c) revenue expenditure, capital expenditure, grants to States and UTs, and loans and advances relating to the service
(d) only grants to States
Ans. (c) revenue expenditure, capital expenditure, grants to States and UTs, and loans and advances relating to the service — Explanation: Rule 51(2) describes the normal content of a Demand. [Ref: Rule 51(2)]
23. Estimates of expenditure must include suitable provision for
(a) liabilities of previous years to be discharged during the year
(b) contingencies of State Governments
(c) liabilities of private contractors
(d) liabilities of the next five years
Ans. (a) liabilities of previous years to be discharged during the year — Explanation: Rule 50(3) requires provision for past liabilities payable during the year. [Ref: Rule 50(3)]
24. Allocations for each scheme or project in the Outcome Budget shall be against
(a) a firm set of deliverables to be adhered to
(b) last year's expenditure only
(c) estimates of the vendor
(d) no defined targets
Ans. (a) a firm set of deliverables to be adhered to — Explanation: Rule 54 requires allocations against firm deliverables. [Ref: Rule 54]
25. The estimates of scheme-related expenditure are processed in consultation with
(a) the Reserve Bank
(b) the Budget Division, Ministry of Finance
(c) the State Finance Departments
(d) the CAG
Ans. (b) the Budget Division, Ministry of Finance — Explanation: Rule 50(4) prescribes consultation with the Budget Division. [Ref: Rule 50(4)]
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These questions are prepared for practice from the General Financial Rules 2017 as updated by the Department of Expenditure up to 31.01.2026. Always check the latest Office Memorandums of the Department of Expenditure before relying on a limit or procedure.