Which among the following activities can result in widening of revenue deficit of the government?
1. Government approves the revised pay scale as per 7th Pay commission
2. Government announces a waiver of farm loans
3. Oil prices decrease sharply
4. Government launches successful auction of coal mines
Select the correct option from the codes given below:

Answer: [A] Only 1 & 2

From Finance Commission Report

Union Government undertook several fiscal expansionary measures such as revision of pay scales based on the recommendations of the Sixth Pay Commission, waiver of farm loans and the expansion of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to all districts from the 200 districts it was originally slated to cover. In addition, oil prices escalated sharply, leading to a rise in subsidy.

It then rose to 5.2 per cent in 2009-10 because of a substantial increase in revenue expenditures on subsidies, interest payments and salaries and pensions.

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