Official Answer Key & Detailed Solution
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Correct Answer: Option (A) — 1 and 3 only
Concept & Option Breakdown
Standard Reference Verified1 is correct: Reducing revenue expenditure directly curbs non-productive routine spending, reducing the budget deficit. 2 is incorrect: Introducing new welfare schemes increases government spending, worsening the deficit in the short term. 3 is correct: Rationalizing subsidies eliminates leakages and targeted waste, lowering government outlay. 4 is incorrect: Industrial expansion may require immediate capital investment from the government and yields tax revenues only in the long term, thus it is not an immediate deficit-reduction tool.
Eliminate Option 2: New welfare schemes increase government expenditure, which widens deficits. This eliminates (b) and (d) immediately.
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