There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?

1. Reducing revenue expenditure — Correct. Lowering routine government spending directly helps reduce the fiscal/revenue deficit.

2. Introducing new welfare schemes — Incorrect. New welfare schemes usually increase government expenditure, so they tend to widen the deficit unless fully offset elsewhere.

3. Rationalizing subsidies — Correct. Cutting leakages or reducing excessive subsidies lowers expenditure and helps contain the deficit.

4. Reducing import duty — Incorrect. Import duty is a source of government revenue; reducing it generally lowers receipts and can worsen the deficit.

Hence, 1 and 3 only are correct.