Explain how the government can use the budgetary policy in reducing inequalities in incomes.
CBSE OUTSIDE DELHI - SET 1 2015
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Government can reduce inequalities through its tax and expenditure policy. Government can charge higher rate of tax from higher income groups by imposing higher rate of income tax and higher rate on goods and services purchased by the rich. The money so collected can be spent on the poor in the form of free education, free medical facilities, cheaper housing, etc. in order to raise their disposable income.
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