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Question

Select the correct code of the following statements related to Government budgeting in India:
1. Increasing primary' deficit is considered a better trait of fiscal consolidation.
2. Revenue deficit pushing fiscal deficit upward is considered had. 
3. Falling monetised deficit is needed to promote the process of economic reforms in India. 


A
1 and 2
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B
2 and 3
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C
1 and 3
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D
1,2 and 3
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Solution

The correct option is C 1 and 3
Increasing primary deficit means falling interest burden. Economic reforms promotes more investments from the private sector. It means lesser market borrowing by the governments (market borrowing by the government is known as monetised deficit).

Economics

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