Question

'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.

• A.
  1 and 3 only
• B.
  2 and 3 only
• C.
  1 only
• D.
  1,2,3 and 4

Answer 1

The correct option is A

1 and 3 only
Reducing government deficit, can happen when there is higher revenues and lower expenditure by the government. Rationalizing the subsidies and reduction in government spemding, will lower the expenditure of the government while spending on welfare schemes or expanding Industries will only increase spending.