124 | MEANING & OBJECTIVES OF GOVERNMENT BUDGET | CLASS 12 MACROECONOMICS | UPSC, BBA B.COM MBA Video Lecture

Ans. A government budget refers to a financial plan that outlines the estimated revenues and expenditures of a government for a specific period, usually one year. It serves as a policy document and a tool for economic management by allocating resources, controlling inflation, promoting economic growth, and addressing socio-economic objectives.

Ans. The main objectives of a government budget are: - Economic Growth: The budget aims to stimulate economic growth by allocating resources to sectors that have the potential for expansion and development. - Price Stability: The budget aims to control inflation and stabilize prices by implementing fiscal policies such as taxation and expenditure management. - Redistribution of Income and Wealth: The budget aims to ensure equitable distribution of income and wealth by implementing progressive taxation and social welfare measures. - Resource Mobilization: The budget aims to mobilize resources by collecting taxes, levies, and other forms of revenue to finance government expenditures. - Allocation of Resources: The budget aims to allocate resources efficiently by prioritizing and allocating funds to various sectors and projects based on their importance and impact on the economy.

Ans. The government budget contributes to economic growth by: - Allocating resources: The budget allocates funds to sectors such as infrastructure, education, healthcare, and research and development, which are crucial for economic growth. - Promoting investment: The budget provides incentives and subsidies to encourage private investment, which leads to increased production, job creation, and overall economic growth. - Controlling inflation: The budget implements fiscal policies to manage inflation, which is essential for a stable economic environment conducive to growth. - Public infrastructure development: The budget allocates funds for the development of public infrastructure, such as roads, bridges, and ports, which not only enhances connectivity but also attracts investment and promotes economic activities. - Human capital development: The budget allocates funds for education and skills development, which enhances the productivity and competitiveness of the workforce, thus contributing to economic growth.

Ans. The government budget addresses income inequality through various measures, such as: - Progressive taxation: The budget implements progressive tax rates, where higher-income individuals are taxed at a higher rate, reducing income disparities. - Social welfare programs: The budget allocates funds for social welfare programs like healthcare, education, and poverty alleviation, which aim to provide equal opportunities and support to the marginalized sections of society. - Subsidies and grants: The budget provides subsidies and grants to sectors that generate employment and benefit low-income individuals, such as agriculture and small-scale industries. - Wealth redistribution: The budget may introduce measures like estate taxes or wealth taxes to redistribute wealth from the rich to the poor, reducing income inequality. - Employment generation: The budget focuses on creating employment opportunities through public works programs and investment in labor-intensive sectors, reducing income disparities.

Ans. The government budget impacts resource mobilization through various measures, including: - Taxation: The budget sets tax rates and policies to collect revenue from individuals and businesses, thereby mobilizing resources for government expenditure. - Non-tax revenue: The budget identifies other sources of revenue, such as fees, fines, and dividends from public sector enterprises, to supplement tax revenue and increase resource mobilization. - Borrowing: The budget may include provisions for government borrowing through issuing bonds or taking loans from domestic or international sources, which helps mobilize additional resources. - Disinvestment: The budget may include plans for the sale of government-owned assets, such as shares in public sector enterprises, to generate revenue and mobilize resources. - Public-private partnerships: The budget may promote partnerships with the private sector for infrastructure development or service delivery, mobilizing private resources for public projects.