Study the following information carefully and answer the question given below:
The Centre reportedly wants to continue providing subsidy to consumers for cooking gas and kerosene for five more years. This is not good news from the point of view of reining in the fiscal deficit. Mounting subventions for subsidies means diversion of savings by the government from investment to consumption, raising the cost of capital in the process. The government must cut expenditure on subsidies to create more fiscal space for investments in both physical and social infrastructure. It should outline a plan for comprehensive reform in major subsidies including petroleum, food and fertilizers and set goal posts.
Which of the following is an inference which can be made from the facts stated in the above paragraph?
1) India's fiscal deficit is negligible in comparison to other emerging economies in the world.
2) Subsidy on food and fertilizers are essential for the growth of Indian economy.
3) Reform in financial sector will weaken India's position in the international arena.
4) Gradual withdrawal of subsidy is essential for effectively managing fiscal deficit in India.
5) None of these

Explanation

4,