Solved UPSC CDS/OTA Question
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Q · Budget and Its TypesMedium · 45s
Which of the following is a common method of Deficit Financing in India?
TopicBudget and Its Types
Question Typemultiple choice
DifficultyMedium
Marking+1 / −0.33
Test Duration30 min
Step-by-Step Solution
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Deficit Financing in India primarily means the government borrows from the Reserve Bank of India (RBI), which leads to the creation of new money. This is called monetisation of the deficit. It is a key tool when government expenditure exceeds revenue.
Final Answer: Option C - Borrowing from the Reserve Bank of India