The policies useful to reduce inequalities of income are thea)Public distribution policiesb)Budgetary policiesc)Foreign policiesd)Monetary policiesCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Option B budgetary policy is a right answer ,since in the objectives of budget there is Economic equality or Reducing Inequality of Income and Wealth and the function says the Government uses fiscal instruments of taxation and subsidies to improve the distribution of income and wealth in the Economy. Higher taxes  can be imposed by the government on income earned by the rich and also on the goods consumed by them. Inorder to reduce their personal income, equitable distribution of income is a way to Social Justice. It is also known as distributive function of the government.

Answer

In budgetary policies are the pre planned statements in which government pre decided that how much expenditure on poverty alleviation programs and other Developmental activities

Answer

Introduction:
Reducing income inequalities is a crucial goal for governments worldwide. It helps in promoting social justice, reducing poverty, and fostering economic stability. Various policies can be implemented to achieve this objective. Among these, budgetary policies play a significant role in reducing income inequalities.

Budgetary Policies:
Budgetary policies refer to government measures concerning taxation and public spending. These policies are crucial in reducing income inequalities as they directly impact the distribution of income and wealth within a society. Here's how budgetary policies help in reducing income inequalities:

1. Progressive Taxation:
Progressive taxation is a key aspect of budgetary policies aimed at reducing income inequalities. Under this system, individuals with higher incomes are taxed at a higher rate, while those with lower incomes are taxed at a lower rate. This helps in redistributing wealth from the rich to the poor, narrowing the income gap.

2. Income Redistribution:
Budgetary policies can be used to redistribute income through various mechanisms. This can include social welfare programs, such as unemployment benefits, healthcare subsidies, and cash transfer programs. By providing support to lower-income individuals and families, budgetary policies ensure a more equitable distribution of income.

3. Investment in Education and Skills:
Budgetary policies that allocate resources towards education and skills development can significantly reduce income inequalities. By providing access to quality education and training opportunities, individuals from disadvantaged backgrounds can enhance their skills and increase their earning potential, thereby reducing income disparities.

4. Minimum Wage Legislation:
Budgetary policies can also include the implementation of minimum wage legislation. This ensures that workers receive a fair and livable wage, reducing income inequalities between different segments of the workforce.

5. Subsidies and Tax Incentives:
Budgetary policies can provide subsidies and tax incentives to industries and sectors that create employment opportunities and promote inclusive growth. This can help in reducing income inequalities by generating more income opportunities for individuals across various income brackets.

Conclusion:
While various policies can contribute to reducing income inequalities, budgetary policies play a crucial role in achieving this objective. By implementing progressive taxation, income redistribution measures, investing in education, and providing support to low-income individuals, budgetary policies help create a more equitable distribution of income and reduce income inequalities in society.

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