UPSC CSE Prelims
Question 39
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?
- Reducing revenue expenditure
- Introducing new welfare schemes
- Rationalizing subsidies
- Expanding industries
Select the correct answer using the code given below.
View correct answer and explanation
Correct answer: A
Correct Option: A
Explanation: Directly curbing revenue expenditure and rationalising subsidies can reduce a budget deficit; launching new welfare programmes usually raises it, and industrial expansion is not an immediate definite fiscal corrective.
Statement/Pair-wise Analysis:
Statement/Item 1: Correct - Lower recurring revenue spending, other things equal, reduces government outlays.
Statement/Item 2: Incorrect - New welfare schemes typically require additional expenditure and may worsen the deficit.
Statement/Item 3: Correct - Reducing poorly targeted subsidy costs lowers expenditure while preserving essential support where possible.
Statement/Item 4: Incorrect - Expanding industries may have longer-run economic benefits, but does not by itself guarantee an immediate lower fiscal deficit.
Option-wise Analysis:
A: Correct - includes all and only the correct items.
B: Incorrect - includes incorrect statement/item 2; omits correct statement/item 1.
C: Incorrect - omits correct statement/item 3.
D: Incorrect - includes incorrect statement/items 2, 4.
Review Note: The interpretation of “expanding industries” is broad; the answer targets direct expenditure-side measures.