Which among the following would you suggest the government to help in fiscal consolidation?
1.Raise the tax-GDP ratio
2.Reduce Subsidies
3.Convert central sector schemes into centrally sponsored schemes
Choose the correct option from the codes given below:

Answer: [A] Only 1 & 2

Fiscal consolidation calls for efforts both to raise the tax-GDP ratio and to lower the expenditure. In this context, we need to take a close look at the growth of our revenue expenditure, particularly on subsidies. The major subsidies at the Centre are for food, fertilisers and petroleum products. Some subsidies at this juncture in our development are inevitable. But they become undesirable if they compromise the macroeconomic fundamentals of the economy, more  so, when they don’t reach the intended.

This question is a part of GKToday's Integrated IAS General Studies Module