Multiple Choice Questions on There has been a persistent deficit budget year after year Which of the following actions can be tak........... for UPSC Civil Services Examination (General Studies) Preparation

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Multiple Choice Questions

There has been a persistent deficit budget year after year Which of the following actions can be tak...........

Economic Affairs Public Finance and Debt Management
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    There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit?

    1. Reducing revenue expenditure

    2. Introducing new welfare schemes

    3. Rationalizing subsidies

    4. Expanding industries

    Select the correct answer using the code given below.

    This questions was previously asked in
    UPSC CSP Previous Year Paper (2015)
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    View All IAS Previous Year Papers

     1 and 3 only

    Correct Answer

    2 and 3 only

    Incorrect Answer

    1 only

    Incorrect Answer

    1,2,3 and 4

    Incorrect Answer
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    Explanation:

    Budget deficit is used to define a status of financial health in which expenditures exceed revenue. Introducing new welfare scheme  and Expanding industries by budgetary support will expand  the budget expenditure which will widen the deficit.
    Rationalizing subsidies and reducing revenue expenditure are two direct ways of reducing the fiscal burden of the government of India.

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