- A. Borrowings: This is a way to finance a revenue deficit. The government can borrow money from domestic or international sources to bridge the gap between its revenue and expenditure.
- B. Tax Revenue: This is not a way to finance a deficit, but rather a way to generate revenue to avoid a deficit in the first place. Increased tax revenue would help close the deficit gap, but it's not directly financing it.
- C. Disinvestment:This can be a way to finance a deficit. Disinvestment refers to the government selling its assets in public sector companies or other holdings. This generates revenue that can be used to cover the deficit.
- D. Indirect Taxes: This is not a way to directly finance a deficit. Like tax revenue in general, increased indirect taxes (taxes levied on goods and services) can help raise revenue and potentially reduce the deficit, but it's not a financing mechanism itself.
Therefore, borrowing and disinvestment are the two main options for financing a government budget with a revenue deficit. These methods essentially provide the government with additional funds to cover the shortfall between revenue and expenditure.