Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsBudget3 Marks
Question
Discuss effects of a Budget.
✓
Answer
Any budget is framed to fulfill three objectives.
Economic Stability,
Economic Growth,
Economic Equality.
The following are the Effect of budget on economy and society :
Government has to get the consent from the representatives of the assembly.
So it has to take in consideration income to plan the expenditure.
So there is control over unnecessary expenditure and fiscal situation is found in Government.
Distribution of financial tools is done according to Economic and Social importance between the different section like Agriculture, Industries, Services.
In Budget thus, limited financial resources are distributed in the country in proper way.
The objective of budget is to keep economic stability Government controls inflation and depression by managing tax revenue and expenditure that keeps the economy stable.
If the characteristics of inflation are seen then to control it surplus budget is framed and if depression arises then deficit budget is framed.
With the help of tax revenue, consumer's income affected and demand is controlled.
Thus efforts are made to control inflation while in depression through public expenditure and deficit supplement creates demand.
Budget is helpful to free the country from the effects of boom-recession of other countries in present globalization.
Economy is taken to a planned direction through budget by making optimum use of country's resource and thereby economic development is possible and proper distribution of financial resources with capital investment.
Through budget along with economic growth economic equality can be maintained. Proper balance is maintained between them.
In budget different steps are taken so that income and productivity of poor increases thereby reducing income inequality and can give speedy economic development.
Budget gives the idea of what type of economic policy will be adopted by the government means in which direction government plans to go.
Budget Effects Consumers, Producers, Distributors and all the class.
Every class gets the chance to make their plan in this respect.
Producers for their production, Jobbers for their tax planning. etc.
Through budget economic growth and economic development of the country Can be given proper direction.
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.