Which of the following is are instruments of fiscal consolidation 1 Maintaining high debt GDP ratio ...........

Economic Affairs Public Finance and Debt Management

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Which of the following is/are instruments of fiscal consolidation?

1.Maintaining high debt-GDP ratio

2.Balancing spending cuts and revenue measures

3.Direct Benefit Transfer

4.Scaling back tax expenditures

Select the correct answer using the codes given below

2 and 3 only

2, 3 and 4 only

1, 2, and 3 only

All of the above

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Explanation:

2, 3 and 4 only

Maintaining a high debt-GDP ratio (Option 1) is not generally considered an instrument of fiscal consolidation. It's more about managing the existing debt rather than consolidating fiscal policies.

Balancing spending cuts and revenue measures (Option 2), scaling back tax expenditures (Option 4), and implementing direct benefit transfers (Option 3) are indeed instruments of fiscal consolidation. They involve managing government spending, revenue, and welfare programs to improve fiscal health and stability.

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