PYQ 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. Reducin

August 6, 2026 en

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: A

Explanation

Budget deficit is used to define a status of financial health in which expenditures exceed revenue. Reducing the revenue expenditure will certainly help in bridging the gap. Subsidies are a part of expenditure and rationalizing them would reduce the deficit. Introducing new welfare schemes will most likely result in increasing expenditure and so will expanding industries which would require capital infusion. Budget deficit is used to define a status of financial health in which expenditures exceed revenue. Reducing the revenue expenditure will certainly help in bridging the gap. Subsidies are a part of expenditure and rationalizing them would reduce the deficit. Introducing new welfare schemes will most likely result in increasing expenditure and so will expanding industries which would require capital infusion.