CBSE Class 12-commerce Answered

Objectives of the government budget are

1. Redistribution of income and wealth: Government through fiscal tools of taxation transfer payment brings fair distribution of income.
2. Reallocation of resources: Through the budgetary policy, the government can reallocate resources so that social and economic objectives can be met.
3. Economic growth: Growth rate of a country depends on the rate of savings and investment.
4. Generation of employment: Government needs to promote labour intensive technology, public work programmes to undertake employment specific projects.
5. Economic stability: Government tries to maintain price and employment stability. It stimulates inducement and to invest and increase the rate of growth and development.
6. Management of public enterprises: Public sector enterprises are encouraged in area of natural monopolies.