Budgeting and Fiscal policy

Indian Economic System(CSC)

Title

45:30

8 of 24 completed

5 of 15 completed

38 of 100 completed

8 of 20 completed

Indian Economy - Understanding the basics of Indian economic system

In India, deficit financing is used for raising resources for (2013)

economic development

redemption of public debt

adjusting the balance of payments

reducing the foreign debt

- Option 1: Economic Development

- Used to finance infrastructure and public services.

- Helps in stimulating economic growth and employment.

- Correct Answer: Deficit financing is often employed to support economic development.

- Option 2: Redemption of Public Debt

- Refers to paying off existing government debt.

- Deficit financing usually increases rather than reduces public debt.

- Option 3: Adjusting the Balance of Payments

- Involves managing foreign exchange reserves.

- Not directly related to deficit financing, which mainly deals with internal budgetary considerations.

- Option 4: Reducing the Foreign Debt

- Aims at lowering external borrowings.

- Deficit financing might lead to increased foreign debt if the government borrows from abroad.

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