Q. Which of the following measure/s are followed to directly control fiscal deficit in India?
1.Privatization of higher educational Institutions
2.Selling/offloading the shares of Public Sector Undertakings
3.Encouraging Foreign Direct Investment inflows
4.Down-sizing of bureaucracy
Select the correct answer from the codes given below:
Answer: D
Notes:
Statements 2 and 4 are correct: Downsizing of bureaucracy as well as selling offloading of the shares of public sector undertaking directly contributes to reduction in fiscal deficit.
Statements 1 and 3 are incorrect: Privatisation of higher educational institutions may improve the situation but its impact may not be effective in reduction of fiscal deficit.
Without knowing the destination and the effect of FDI inflows, it is difficult to determine its actual impact on the fiscal deficit.
Source: IE
