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UPSC 2015: 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
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Not attemptedCorrect Answer: (a) 1 and 3 only
Lowering a persistent fiscal deficit requires cutting non-productive revenue expenditure and rationalising subsidy bills, as these directly reduce the gap between revenue and expenditure. Launching new welfare schemes generally raises expenditure, while merely ‘expanding industries’ is an indirect, long-term growth measure and does not automatically narrow the current-year budget deficit. Thus only statements 1 and 3 help reduce the deficit.
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Frequently Asked Questions
What is the correct answer to this UPSC 2015 Indian Economy question?▼
The correct answer is option (a): 1 and 3 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Fiscal Policy & Budget question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2015, GS Paper 1, as Question 98. It falls under Indian Economy > Fiscal Policy & Budget.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from Fiscal Policy & Budget?▼
UPSC has asked 44 questions from Fiscal Policy & Budget (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.