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Sources of State and Local government tax revenues for a financial year
Answer the following questions based on common knowledge and picture:
Sources of State and Local government tax revenues for a financial year
Answer the following questions based on common knowledge and picture:
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Question : 26
Total: 49
"Government has started spending more on providing free services like education and health to the poor."
In the light of above statement, explain how the government can use the budgetary policy in reducing 'inequalities of income'.
In the light of above statement, explain how the government can use the budgetary policy in reducing 'inequalities of income'.
Solution:
Government uses the budgetary policy in reducing 'inequalities of income' in following ways:
(i) Progressive taxation system is imposed i.e., higher income, higher tax; lesser income, lesser tax.
(ii) Tax Receipts are used for welfare of poor people. For example, giving free ration to BPL, free education and free health facilities etc.
(iii) Provision of public goods like roads, railways, water, street lights etc. at nominal price so that poor people are not deprived of these facilities.
(iv) Direct benefit transfer like subsidy on essential goods.
(i) Progressive taxation system is imposed i.e., higher income, higher tax; lesser income, lesser tax.
(ii) Tax Receipts are used for welfare of poor people. For example, giving free ration to BPL, free education and free health facilities etc.
(iii) Provision of public goods like roads, railways, water, street lights etc. at nominal price so that poor people are not deprived of these facilities.
(iv) Direct benefit transfer like subsidy on essential goods.
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