There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit?<br/>1. Reducing revenue expenditure<br/>2. Introducing new welfare schemes<br/>3. Rationalizing subsidies<br/>4. Expanding industries<br/><br/>Select the correct answer using the code given below.

1. Reducing revenue expenditure — This directly lowers government spending and helps reduce the fiscal deficit. Correct.

2. Introducing new welfare schemes — New schemes usually increase revenue expenditure unless fully offset elsewhere; by itself this worsens the deficit. Incorrect.

3. Rationalizing subsidies — Better targeting or reducing inefficient subsidies cuts expenditure and helps contain the deficit. Correct.

4. Expanding industries — This may raise growth and revenue in the long run, but it is not a direct budgetary action to reduce a persistent deficit; it can even require more public spending initially. Incorrect.

Hence, only 1 and 3 are correct.