Official Answer Key & Detailed Solution
Ready to check the official UPSC Answer Key?
Click any option above to test yourself under exam conditions, or reveal the explanation directly.
Correct Answer: Option (C) — 1 and 3 only
Concept & Option Breakdown
Standard Reference VerifiedTo curb a persistent budget/fiscal deficit, the government must curtail expenditure or enhance revenue receipts:
- Reducing revenue expenditure (Statement 1) cuts non-capital outlays, directly reducing the deficit.
- Introducing new welfare schemes (Statement 2) raises expenditure and widens the deficit.
- Rationalising subsidies (Statement 3) reduces leakages and cuts fiscal burden, helping consolidate finances.
- Reducing import duties (Statement 4) decreases customs tax collections, further widening the deficit unless compensated by other revenue streams.
Practice Full-Length & Sectional Prelims Mocks on this Interface
50 simulated tests in the APT Prelims Test Series (₹1,493) or 1-on-1 Mentorship with Avinash Sir.