OBJECTIVE OF GOVERNMENT BUDGET
DR SHASHI AGGARWAL
Budge cot is not only a financial statement but also is a reflection of government policies. In India it is prepared according to the requirements of Articles 112 of the constitution. It is financial statement of the country.
■ HIGH RATE OF GDP: central objective of the government budgetary policy. It is achieved in:
I. by making public investment expenditure
II. By encouraging private investment
ALLOCATION OF RESOURCES: through budgetary policy the government of a country directs the allocation of resources in a manner such that there is balance between the goals of profit maximization and social welfare
■ Balanced Regional Growth: liberal tax laws. Establishment of special Economic zones in the backward region.
■ Economic Stability: free play of market forces is bound to generate trade cycles also called business cycles. These refers to the phases of recession, depression, recovery and boom of the economy. Budget is an important policy instrument to correct the situation of deflation and inflation
■ PROVISION OF PUBLIC GOODS: Government provide those public goods which satisfy collective needs of the society
■ EQUAL DISTRIBUTION OF INCOME AND WEALTH: by imposing tax on wealthy and riches
■ EMPLOYMENT OPPORTUNITIES: BY establishing public enterprises. Government scheme MGNREGA