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Reduce Budget Deficit


This one of the easiest question you can find in the question paper, there is no need of any special knowledge.
Most important word ‘reduce the deficit’
Deficit meaning there is a shortfall (not enough money) in the budget. So the government loaned a lot of money to meet it's expenditure.

1.  Reducing revenue expenditure: Yes it definitely will reduce the deficit, less unnecessary spending means more money to spend, so there no need of any loan.

2.  Introducing new welfare scheme: Making anything new drains money, let alone a welfare scheme where there is ‘zero profit making’. So No, this won’t help in reducing budget deficit.

3.  Rationalizing Subsidies: Yes this will absolutely help, rationalizing means giving the benefits of subsidy only to the needy. Not to anyone and everyone who ask for it. Often misused in a country like India for vote bank politics.

4.  Reducing import duty: No it won’t help. Levying import duty one most important medium through which a government makes money. So if you reduce that then there is no money to be spent, thereby increasing budget deficit.


So our answer is C) 1 and 3 only             
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