What is government budget? Explain the role of government budget in influencing allocation of resources in the economy.
CBSE FOREIGN - SET 1 2016
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Government budget is a statement showing estimated government expenditure and receipts during a financial year.
Government can encourage production of selected goods and services by providing tax concessions. For example electricity generation etc. Government can also give subsidies to enterprises who are willing to undertake production in backward areas etc. In this way, government budget can be used to influence allocation of resources in the country. Increasing taxes and reducing subsidies will have the opposite effect.
Government can encourage production of selected goods and services by providing tax concessions. For example electricity generation etc. Government can also give subsidies to enterprises who are willing to undertake production in backward areas etc. In this way, government budget can be used to influence allocation of resources in the country. Increasing taxes and reducing subsidies will have the opposite effect.
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