Define govenment budget?write five objectives of ...

Define govenment budget?write five objectives of government budget
  • 1 answers

Yogita Ingle 5 months, 4 weeks ago

A government budget is a year-long country’s financial report explaining item-wise calculations of future revenue and expenditure. The budget explains what the income and expense of a nation is.

Objectives of Government Budget

  • Reallocation of Resources – It helps to distribute resources keeping in view the social and economic advantages of the country. The factors that influence the allocation of resources are.
    • Allowance or Tax concessions – The government gives allowance and tax concessions to manufacturers to encourage investment.
    • Direct production of goods and services – The government can take the production process directly if the private sector does not show any interest.
  • Minimize inequalities in income and wealth – In an economic system, income and wealth inequality is an integral part. So, the government aims to bring equality by imposing a tax on the elite class and spending extra on the well-being of the poor.
  • Economic Stability – The budget is also utilized to avoid business fluctuations to accomplish the aim of financial stability. Policies such as deficit budget during deflation and excess budget during inflation assist in balancing the prices in the economy.
  • Manage Public Enterprises – Many public sector industries are built for the social welfare of the people. The budget is planned to deliver different provisions for operating such business and imparting financial help.
  • Economic Growth – A country’s economic growth is based on the rate of investment and saving. Therefore, the budgetary plan focuses on preparing adequate resources for investing in the public sector and raise the overall rate of investments and savings.
  • Decrease regional differences – It aims to diminish regional inequalities by implementing taxation and expenditure policy and promoting the installation of production units in underdeveloped regions.

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