GS PrelimsEconomyFiscal Policy1995

The largest source of financing the public sector outlay of the Eighth Five-Year Plan comes from

A

balance from current revenue

B

contribution of public enterprises

C

government borrowings

D

deficit financing

Correct Answer: Option C

Explanation

1. The question asks about the largest source of financing for the public sector outlay in the Eighth Five-Year Plan (1992-1997). 2. The financing of Five-Year Plans typically involves several sources: Balance from Current Revenue (BCR), contribution of public enterprises (Internal and Extra-Budgetary Resources - IEBR), government borrowings (including market borrowings, small savings, provident funds, external assistance), and deficit financing. 3. According to the Eighth Plan documents and subsequent analyses, government borrowings (domestic and external combined) constituted the largest single source of financing for the public sector outlay during that period. 4. While BCR and IEBR are significant internal sources, borrowings typically represented the largest component of the financing package for large public sector investments.

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