A glance at the Union Budget of 2009 reveals that there is a fiscal de

1.	A glance at the Union Budget of 2009 reveals that there is a fiscal deficit of 6.8% of GDP as compared to 6% last year. What are the various measures used for deficit reduction?
Answer» If the government increases taxes or decreases expenditure then the fiscal deficit gets reduced. Indian government is trying to reduce the fiscal deficit by increasing tax revenue by selling the share of PSUs and by reducing the government expenditure. The deficit reduction influences the different sectors of an economy in different ways. The government is trying to fill the gap of reduced fiscal deficit by making government activities more efficient through better planning of programmes and better administration. The cutting back government programmes in vital areas like agriculture, education, health, poverty alleviation has adverse effect on the economy. The same fiscal measures can lead to a large or small deficit government by the state of the economy. During recession period GDP falls which reduces tax revenue which increase the fiscal deficit.

A glance at the Union Budget of 2009 reveals that there is a fiscal deficit of 6.8% of GDP as compared to 6% last year. What are the various measures used for deficit reduction?

Answer»

If the government increases taxes or decreases expenditure then the fiscal deficit gets reduced. Indian government is trying to reduce the fiscal deficit by increasing tax revenue by selling the share of PSUs and by reducing the government expenditure. The deficit reduction influences the different sectors of an economy in different ways.

The government is trying to fill the gap of reduced fiscal deficit by making government activities more efficient through better planning of programmes and better administration.

The cutting back government programmes in vital areas like agriculture, education, health, poverty alleviation has adverse effect on the economy.
The same fiscal measures can lead to a large or small deficit government by the state of the economy. During recession period GDP falls which reduces tax revenue which increase the fiscal deficit.

A glance at the Union Budget of 2009 reveals that there is a fiscal deficit of 6.8% of GDP as compared to 6% last year. What are the various measures used for deficit reduction?

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