In India, deficit financing is used for raising resources for

[UPSC Civil Services Exam – 2013 Prelims]

(a) Economic development

(b) Redemption of public debt

(c) Adjusting the balance of payments

(d) Reducing the foreign debt


Answer: (a)        

Explanation:

  • Deficit financing is a necessary evil in a welfare state as the states often fail to generate tax revenue that is sufficient enough to take care of the expenditure of the state.
  • The basic intention behind deficit financing is to provide the necessary impetus to economic growth by artificial means.
  • Hence option 1 is correct.

Main objectives of Fiscal Policy in India

  • Economic growth: It helps to maintain the economy’s growth rate so that certain economic goals can be achieved.
  • Price stability: It controls the price level in the country so that when inflation is too high, prices can be regulated.
  • Full employment: It aims to achieve full employment, or near full employment, as a tool to recover from low economic activity.

Consider the following statements:                                                                   The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

Read More »

Consider the following statements:                                                         The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

Read More »

Useful Links

Download
Neyyar App

Left Menu Icon