Question

In which of the following ways can deficit in the budget be financed?

• A. Borrowing from RBI
• B. Borrowing from the public
• C. Both A and B
• D. Neither A nor B

Answer 1

The correct option is C

Both A and B

A deficit in the budget can be financed by using savings or existing assets, or by incurring debt. Incurring debt includes borrowing from the RBI and the public.