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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
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.
[2015]
- a)1 and 3 only
- b)2 and 3 only
- c)1 only
- d)1, 2, 3 and 4
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
There has been a persistent deficit budget year after year.Which of th...
Reducing the deficit in the budget requires the government to take certain actions to manage its finances effectively. Let's break down the options provided and analyze which ones can help in reducing the deficit:
Reducing revenue expenditure:
- By cutting down on unnecessary expenses and optimizing resources, the government can reduce its revenue expenditure.
- This can involve streamlining processes, reducing administrative costs, and eliminating inefficiencies in government operations.
Rationalizing subsidies:
- Subsidies are a significant portion of government spending, and by rationalizing them, the government can save a substantial amount of money.
- This can involve targeting subsidies to those who need them the most, eliminating subsidies that are no longer effective, and ensuring that subsidies are not misused.
Introducing new welfare schemes:
- Introducing new welfare schemes can increase government spending, which may not be conducive to reducing the deficit.
- While welfare schemes are important for social development, the government needs to prioritize existing schemes and ensure their efficient implementation before introducing new ones.
Expanding industries:
- Expanding industries can lead to economic growth and increased revenue for the government through taxes.
- However, this may not directly reduce the deficit in the short term as it takes time for industries to grow and contribute significantly to government revenue.
Based on the above analysis, options 1 and 3 are the most effective actions that the government can take to reduce the deficit. By reducing revenue expenditure and rationalizing subsidies, the government can effectively manage its finances and work towards balancing the budget.
Reducing revenue expenditure:
- By cutting down on unnecessary expenses and optimizing resources, the government can reduce its revenue expenditure.
- This can involve streamlining processes, reducing administrative costs, and eliminating inefficiencies in government operations.
Rationalizing subsidies:
- Subsidies are a significant portion of government spending, and by rationalizing them, the government can save a substantial amount of money.
- This can involve targeting subsidies to those who need them the most, eliminating subsidies that are no longer effective, and ensuring that subsidies are not misused.
Introducing new welfare schemes:
- Introducing new welfare schemes can increase government spending, which may not be conducive to reducing the deficit.
- While welfare schemes are important for social development, the government needs to prioritize existing schemes and ensure their efficient implementation before introducing new ones.
Expanding industries:
- Expanding industries can lead to economic growth and increased revenue for the government through taxes.
- However, this may not directly reduce the deficit in the short term as it takes time for industries to grow and contribute significantly to government revenue.
Based on the above analysis, options 1 and 3 are the most effective actions that the government can take to reduce the deficit. By reducing revenue expenditure and rationalizing subsidies, the government can effectively manage its finances and work towards balancing the budget.
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Community Answer
There has been a persistent deficit budget year after year.Which of th...
To reduce the budget deficit, the government has to increase income and reduce Expenditure. Introducing new welfare schemes and Expanding industries will increase the government expenditure.
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