Q94. Consider the following statements:
- Tax revenue as a percent of GDP of India has steadily increased in the last decade.
- Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given- above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
The correct answer is Neither 1 nor 2.
- Tax to GDP
- Decade 2001-2011: Consistent decline following the subprime mortgage crisis (2007-2010) and then recovery.
- Decades 2006-2016: Except for the 2008-2010 recession, there has been steady growth. Hence, statement 1 is incorrect.
- Fiscal Deficit to GDP
- Decade 2001-2011: Decline between 2009-11.
- Decade 2006-2016: Steadily declining from 2011 to 2016. Hence statement 2 is also incorrect.
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