Which of the below mentioned elements is NOT a way to finance the government deficits?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Deficit financing .
While deficit financing is a method used to cover a government's budget deficit, it is not a source of revenue like the other options listed. Instead, it refers to the process of financing a deficit by printing new money or borrowing, which can lead to inflation.
On the other hand:
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Higher taxation
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Borrowings (domestic and international)
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Non-tax revenues (like fees, dividends, etc.)
are all actual sources of funds used to finance the deficit.
So, deficit financing is the result or process, not a source.