In India, deficit financing is used for raising resources for

Answer

economic development

(a) Economic development: Deficit financing means the government finances excess expenditure over revenue by borrowing from the central bank/creating new money. In India, it has traditionally been used to mobilize resources for planned development and capital expenditure. Verdict: Correct.
(b) Redemption of public debt: Public debt redemption is usually done through budgetary resources, fresh borrowing, or sinking funds; deficit financing is not meant as the standard instrument for this purpose. Verdict: Incorrect.
(c) Adjusting the balance of payments: Balance of payments problems are addressed through exchange rate policy, trade measures, external borrowing, reserves, etc.; deficit financing can actually worsen external imbalance by raising demand. Verdict: Incorrect.
(d) Reducing the foreign debt: Deficit financing creates domestic monetary expansion, not repayment capacity for foreign debt; it is not used to reduce external debt. Verdict: Incorrect.