Which of the following is a major issue associated with the fiscal deficit in India?

CA Foundation · Business Economics · MTP · January 2026
Which of the following is a major issue associated with the fiscal deficit in India?
(A) A. Increased foreign exchange reserves
(B) B. Higher government borrowing leading to inflation
(C) C. Reduced taxation leading to a decrease in government revenue
(D) D. Increase in foreign direct investments

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Higher government borrowing leading to inflation

Topics: Public Finance

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