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Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsGovernment Budget and Economy3 Marks
Question
Explain any two objectives of a government budget.
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Answer

Objectives of a government budget:
  1. Reducing inequalities of income: It is done’ by taking measures such as imposing higher rate of tax on income of the rich, spending more on providing free services to the poor, etc.
  2. Reallocation of resources in the economy: This is done by imposing higher rates of taxation on goods the production of which is to be discouraged. Subsidies are provided on production of goods whose production is to be promoted.
  3. Reducing regional disparities: The government uses its taxation and expenditure policy for encouraging setting up of production unit in economically backwards regions, etc.

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