Which of the following is not an adverse effect of deficit financing?

It is not an adverse effect of deficit financing. In a country like India, government grants subsidies to encourage manufacturers to produce a particular type of product, especially the essential goods. The common people cannot pay such high price and thus government pays to the manufacturer to bridge the deficit between the cost paid and the price charged from public. Therefore, the government has to resort to deficit financing; thus granting of subsidies does not have an adverse effect, rather it gives advantage.