Government provide essential items of food grains almost free to the families below the poverty line . Which government objective os trying to fulfill through government budget. Class12
Answers
Government of India Budget: Meaning, Elements, Objectives and Types!
Meaning
“A government budget is an annual financial statement showing item wise estimates of expected revenue and anticipated expenditure during a fiscal year.”
Just as your household budget is all about what you earn and spend, similarly the government budget is a statement of its income and expenditure. In the beginning of every year, government presents before the Lok Sabha an estimate of its receipts and expenditure for the coming financial year.
The government plans expenditure according to its objectives and then tries to raise resources to meet the proposed expenditure. Government earns money broadly from taxes, fees and fines, interest on loans given to states and dividend by public sector enterprises. Government spends mainly on (i) securing and providing goods and services to citizens, (ii) on law and order and (iii) internal security, defence, staff salaries, etc. In India there is constitutional requirement to present budget before Parliament for the ensuing financial year. The financial (fiscal) year starts on April 1 and ends on March 31 of next year. For example, fiscal or budget year 2010-11 is from April 1, 2010 to March 31, 2011. Obviously, the budget is the most important information document of the government because government implements its plans and programmes through the budget.
Main elements of the budget are:
(i) It is a statement of estimates of government receipts and expenditure.
(ii) Budget estimates pertain to a fixed period, generally a year.
ADVERTISEMENTS:
(iii) Expenditure and sources of finance are planned in accordance with the objectives of the government.
(Iv) It requires to be approved (passed) by Parliament or Assembly or some other authority before its implementation.
Objectives of a Government Budget:
It should be kept in mind that rapid and balanced economic growth with equality and social justice has been the general objective of all our policies and plans. General objectives of a government budget are as under:
(i) Economic growth:
To promote rapid and balanced economic growth so as to improve living standard of the people Economic growth implies a sustained increase in real GDP of the economy, i.e., a sustained increase in volume of goods and services. Public welfare is the main guide.
(ii) Reduction of poverty and unemployment:
To eradicate mass poverty and unemployment by creating employment opportunities and providing maximum social benefits to the poor .In fact, social welfare is the single most important objective. Every Indian should be able to meet his basic needs like food, clothing, housing (roti, kapda, makaan) along with decent health care and educational facilities.
(iii) Reduction of inequalities/Redistribution of income:
To reduce inequalities of income and wealth, government can influence distribution of income through levying taxes and granting subsidies. Government levies high rate of tax on rich people reducing their disposable income and lowers the rate on lower income group.
Again, government provides subsidies and amenities to people whose income level is low. Again public expenditure can be useful in reducing inequalities. More emphasis is laid on equitable distribution of wealth and income. Economic progress in itself is not a sufficient goal but the goal must be equitable progress.
Redistribution of income:
Equalities in income distribution mean allocating the income distribution in such a way that reduces income inequalities and also there is no concentration of income among few rich. It primarily requires that rate of increase in real Income of poor sections of society should be faster than that of rich sections of society. Fiscal instruments like taxation, subsidies and public expenditure can be made use of to achieve the object.