There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?

1. Reducing revenue expenditure
2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Reducing import duty

Select the correct answer using the code given below.

Reducing Revenue Expenditure:

• Revenue expenditure relates to recurring government costs like salaries, maintenance expenses etc.
• Reducing these large regular non-capital expenses is the most direct way to lower overall spending and hence fiscal deficit without hurting growth-focused capital investments.

Introducing New Welfare Schemes:

• Additional schemes will expand the number of beneficiaries entitled to state support and subsidies. This will only bloat government expenditure further and increase the deficit.

Rationalising Subsidies:

• Review and optimization of leakage-prone subsidies across sectors like fuel, fertilizers where lot of benefits leak to unintended beneficiaries. Plugging these gaps can generate major savings in wasteful spending every year, reducing expenditure and deficit.

Reducing Import Duty:

• While this impacts trade balance positions, it does not address issue of high fiscal deficits driven by excess government expenditure over revenues.