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

Economic and Social Issues Budgeting and Fiscal policy

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.

1 and 3 only

2 and 3 only

1 only

1,2,3 and 4

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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.