UPSC Prelims 2015— Question 98

Correct answer: Option A. A persistent fiscal deficit can be reduced by lowering revenue expenditure and rationalizing subsidies, provided such measures are fiscally sustainable. Introducing new welfare schemes would normally increase expenditure, while expanding industries may improve growth and revenue over time but is not a direct deficit-reduction measure in the way the listed fiscal actions are. Hence statements 1 and 3 are relevant. Option-wise analysis: Option A: “1 and 3 only” is correct. It directly matches the factual or conceptual requirement tested by the question and is supported by the principle explained above. Option B: “2 and 3 only” is incorrect. It does not match the specific fact, definition, institutional role, geographical association, or constitutional/economic principle required here. The key distinction is the one identified in the core explanation, so this option can be eliminated. Option C: “1 only” is incorrect. It does not match the specific fact, definition, institutional role, geographical association, or constitutional/economic principle required here. The key distinction is the one identified in the core explanation, so this option can be eliminated. Option D: “1, 2, 3 and 4” is incorrect. It does not match the specific fact, definition, institutional role, geographical association, or constitutional/economic principle required here. The key distinction is the one identified in the core explanation, so this option can be eliminated. Prelims takeaway: Focus on the precise institutional role, constitutional provision, geographical association, or technical definition being tested. UPSC questions often place a broadly familiar fact beside a narrowly incorrect qualifier; identifying that qualifier is essential for elimination.