Fiscal Consolidation is one of the objectives of India’s economic policy. Which of the following would help in fiscal consolidation?

1. Increasing taxes
2. Getting more loans
3. Reducing subsidies

Choose the correct answer using the codes given below:
a) 1 and 2 only
b) 1 and 3 only
c) 1 only
d) 1, 2 and 3

Ans- [B]

Explanation– According to OECD, Fiscal consolidation is a policy aimed at reducing government deficits and debt accumulation. It means taking steps to fix the fiscal deficit problem in its root and prevent heavy fiscal deficits situation from occurring in future. Some steps are:

1. Cutting down subsidies.
2. Stop leakages in subsidies.
3. Reform the tax structure (implement GST).
4. Improve the performance of PSUs.
5. Recover black money
6. Policy reforms and creating environment conducive for economy.
7. Controlling wasteful expenditures.