Explain the ‘ redistribution of income’ objective of a govt. Budge

1.	Explain the ‘ redistribution of income’ objective of a govt. Budget.
Answer» Through its budget government uses fiscal instruments of taxation and subsidies with a view of improving the distribution of income and wealth in the economy. A government reduces the inequality in the distribution of income and wealth by imposing taxes on the rich and giving subsidies to the poor and spending more on the welfare of the poor. It will reduce income of the rich and raises the living standard of the poor. Thus, it leads to equitable distribution of income. Expenditure on special anti poverty and employment schemes and public distribution system may increase the living standard of the poor.

Explain the ‘ redistribution of income’ objective of a govt. Budget.

Answer»

Through its budget government uses fiscal instruments of taxation and subsidies with a view of improving the distribution of income and wealth in the economy.

A government reduces the inequality in the distribution of income and wealth by imposing taxes on the rich and giving subsidies to the poor and spending more on the welfare of the poor.

It will reduce income of the rich and raises the living standard of the poor. Thus, it leads to equitable distribution of income.

Expenditure on special anti poverty and employment schemes and public distribution system may increase the living standard of the poor.

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