Read the following passage and answer the question :

In a multiparty parliamentary system, electoral concerns play an important role in determining expenditure policies. The enactment of the FRBMA, on Aug. 2003, marked a turning point in fiscal reforms, binding the Govt, through an institutional framework to persue a prudent fiscal policy. The act mandates the Central Govt, to take appropriate measures to reduce fiscal deficit to not more than 3 percent of GDP and to eliminate the revenue deficit by 31 March, 2009. It requires the reduction in fiscal deficit by 0.3% of GDP each year and revenue deficit by 0.5 percent. If it is not achieved through tax revenues, the necessary adjustment has to come from a reduction in expenditure. The Central Govt. must ensure inter-generational equity and long term macro economic stability by achieving sufficient revenue surplus, removing fiscal obstacles to monetary policy and effective debt management  by limiting deficits and borrowings. The rules under the act were notified with effect from July 2004.

If there is no reduction in fiscal deficit, what adjustments has to be done :

Reduction in Expenditure

The correct answer is option (4) : Reduction in Expenditure

This is explicitly mentioned in the passage: "If it is not achieved through tax revenues, the necessary adjustment has to come from a reduction in expenditure."