Among the given options, ________ will reduce budget deficit.

Why Reduction in Expenditure Works The basic formula for a Budget Deficit is: {Budget Deficit} = {Total Expenditure} - {Total Receipts (excluding borrowings)} Mechanism: By cutting down on Revenue Expenditure (like subsidies or administrative costs) or Capital Expenditure (like non-essential infrastructure projects), the "Total Expenditure" value decreases. If revenue remains constant, the deficit narrows. Fiscal Consolidation: This process of reducing the deficit through spending cuts or revenue hikes is known as fiscal consolidation.