Which one of the following governmental steps has proved relatively effective in controlling the double-digit rate of inflation in the Indian economy during recent years ?

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Q: 35 (IAS/1994)
Which one of the following governmental steps has proved relatively effective in controlling the double-digit rate of inflation in the Indian economy during recent years ?

question_subject: 

Current Affairs

question_exam: 

IAS

stats: 

0,100,113,34,44,35,100

keywords: 

{'indian economy': [0, 3, 3, 5], 'inflation': [0, 1, 0, 3], 'budgetary deficits': [0, 1, 0, 2], 'streamlined public distribution system': [0, 1, 0, 0], 'digit rate': [0, 1, 0, 0], 'rate': [2, 3, 13, 20], 'consumer goods': [0, 1, 0, 1], 'unproductive expenditure': [0, 1, 0, 0], 'following governmental steps': [0, 1, 0, 0], 'production': [16, 4, 20, 51]}

Among the options provided, containing budgetary deficits and unproductive expenditure has proved relatively effective in controlling the double-digit rate of inflation in the Indian economy during recent years.

High budgetary deficits and unproductive expenditure can lead to increased money supply in the economy, which can contribute to inflationary pressures. By implementing measures to contain budgetary deficits and reduce unproductive expenditure, the government can effectively manage inflation.

Reducing budgetary deficits helps to stabilize government finances and reduces the need for borrowing, which can lead to lower inflationary pressures. Controlling unproductive expenditure ensures that resources are allocated efficiently and effectively, reducing wasteful spending that can contribute to inflation.

While the other options mentioned, such as enhanced production of consumer goods, a streamlined public distribution system, and pursuing an export-oriented strategy, can also have an impact on the economy, containing budgetary deficits and unproductive expenditure is specifically focused on addressing inflationary pressures by managing the overall fiscal situation.