Deficit financing means that the government borrows money fr...........

Indian Economic System(PCS) Budgeting and Fiscal policy

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Deficit financing means that the government borrows money from the

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PCS Previous year General Studies paper (2018)

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Revenue Department

World Bank

RBI

None of the above

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Explanation:

When the revenue of the government is shorter than its expenditure then this situation is dealt by printing more currency, buying from public and foreign institution. This temporary arrangement of the money is known as the deficit financing. The deficit financing is done in three ways;

1. Printing new currency notes

2. Borrowing from internal sources (RBI, General Public, Ad-hoc Treasury Bills & government bonds etc.)

3. Borrowing from External Sources (like borrowing from developed countries and International institutions like World Bank, IMF, etc.)

By: Dr. Vivek Rana

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Paramvir Gill

is world bank also the answer? as per explanation world bank should also be the answer

Sarthak Hans

RBI is the priority in Deficit financing. That's why RBI is the answer between RBI and World Bank.

Mashkeen Brar

Since there is confusion between world bank and RBI. How can RBI be the closest correct answer? Are these three ways of financing done in this sequence?

Sarthak Hans

RBI is the priority in Deficit financing. That's why RBI is the answer between RBI and World Bank