Question

The following table shows the percentage distribution of revenue expenditure of Government of India in 1989-90 and 1994-95 :

Expenditure Head (percent to total)

Based on this table, it can be said that the Indianeconomy  is in poor shape because the Central government  continues to be under pressure to :

(a) reduce expenditure on defence

(b) spend more and more on interest payments

(c) reduce expenditure on subsidies

(d) spend more and more as grants-in-aid to State government/Union Territories

Answer 1

(b) According to the data showing revenues expenditure of Indian Government, it can be said that the Indian economy is in poor shape due to it’s increasing debt payments. Due to the burden of debt payments there remains little scope to utilize this money for any other purpose.