Which of the following is a measure to reduce the fiscal deficit?
Answer & explanation
Correct answer: option 4
In order to reduce the fiscal deficit, we can either reduce the public expenditure or increase the revenue:
- Measures to reduce public expenditure: reduction in wasteful expenditure i.e. subsidies, reducing the non-plan expenditure etc.
- Measures to increase revenue: Increase in existing tax rate, Increase in non-tax revenue receipts etc.