Question

Explain any two objectives of government budget.

Hint:

Government budgets play a crucial role in promoting economic stability, growth, and social welfare through targeted spending and taxation policies.

Answer 1

Step 1: Defining the Government Budget:
A government budget is a financial document that outlines the estimated revenues and planned expenditures for a government over a specific period, usually a year. The budget is an essential tool for managing the country’s finances and ensuring economic stability.
Step 2: Objectives of Government Budget:
The two key objectives of the government budget are:
- Economic Stability and Growth: One of the primary objectives of a government budget is to manage the economy by regulating expenditure and taxation. The government aims to ensure economic stability by reducing inflation and maintaining full employment through fiscal policies. A budget can also aim for sustainable growth by focusing on investments in infrastructure, education, and healthcare, which can drive long-term economic growth.
- Wealth Redistribution and Social Welfare: Another important objective is to redistribute wealth to reduce inequality. Governments use the budget to allocate funds for social welfare programs, such as unemployment benefits, pensions, and subsidies. These funds help improve the standard of living of the underprivileged segments of society and ensure social equity.
Step 3: Final Conclusion:
The government budget serves multiple objectives, including stabilizing the economy and promoting growth, while also ensuring fair distribution of wealth and providing essential public services.