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.
[amp_mcq option1=”1 and 3 only” option2=”2 and 3 only” option3=”1 only” option4=”1, 2, 3 and 4″ correct=”option1″]
This question was previously asked in
UPSC IAS – 2015
Actions 1 (Reducing revenue expenditure) and 3 (Rationalizing subsidies) can be taken by the government to reduce a persistent deficit budget.A budget deficit occurs when a government’s total expenditures exceed its total revenues. To reduce the deficit, the government must either increase revenue or decrease expenditure.