There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?

  1. Reducing revenue expenditure
  2. Introducing new welfare schemes
  3. Rationalizing subsidies
  4. Reducing import duty

Select the correct answer using the code given below.

[UPSC Civil Services Exam – 2016 Prelims]

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2, 3 and 4


Answer: (c)        

Explanation:

  • A budget deficit occurs when government spending exceeds its revenues. Reducing revenue expenditure and rationalizing subsidies are effective measures to reduce the deficit. Statements 1 and 3 are correct.
  • Increasing taxes is another strategy to address the deficit by boosting revenue. However, introducing new welfare schemes can contribute to the budget deficit, so statement 2 is incorrect.
  • Similarly, expanding industries in the short run may not immediately contribute to tax revenues, potentially increasing the budget deficit, making statement 4 incorrect.

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:                                               

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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:                                               

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