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Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsGovernment Budget and Economy4 Marks
Question
Discuss the issue of deficit reduction.
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Answer

The deficit in a government budget can be reduced by the following steps:
  1. Taxes should be increased. Government can make a plan for rising direct taxes to increase its receipts can also be raised by increasing rates of taxes or by imposing new taxes.
  2. Reduction in Government Expenditures, It can be done through making government activities more efficient through better planning of programmes and better administration.
  3. The government can raise receipts through the sale of shares in PSUs (Public Sector Undertaking).
  4. Changing the scope and role of government by withdrawing from same areas where it operated before.

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