UPSC CSE Prelims
Question 96
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?
- Reducing revenue expenditure
- Introducing new welfare schemes
- Rationalizing subsidies
- Reducing import duty
Select the correct answer using the code given below.
View correct answer and explanation
Correct answer: C
Correct Option: C
Explanation: Reducing recurrent revenue spending and rationalising subsidies can shrink the fiscal deficit. New schemes generally increase outlays, while lower import duty may reduce customs receipts.
Statement/Pair-wise Analysis:
Statement/Item 1: Correct - Reducing avoidable revenue expenditure lowers government outgo.
Statement/Item 2: Incorrect - Launching new welfare schemes typically increases expenditure unless offset elsewhere.
Statement/Item 3: Correct - Targeting and rationalising subsidies can cut government spending.
Statement/Item 4: Incorrect - Reducing import duty ordinarily lowers revenue per unit of imports, not a direct deficit-reduction method.
Option-wise Analysis:
A: Incorrect - omits correct statement/item 3.
B: Incorrect - includes incorrect statement/item 2; omits correct statement/item 1.
C: Correct - includes all and only the true statements/items.
D: Incorrect - includes incorrect statement/items 2, 4.