explain the objectives of government budget class 12

explain the objectives of government budget class 12

-> Neither create any liabilities for the government; and In other words, in deficit budget, government expenditure is in excess of government income. Developmental Expenditure: Developmental expenditure is the expenditure on activities which are directly related to economic and social development of the country. • Non-Tax Revenue: Budgetary deficit: It refers to the excess of total budgeted expenditure (both revenue By the end of this budgeting 101 class … Reserve Bank of India. Objectives of budget: Budget is used as an important policy instrument to combat (solve) the situations of deflation and inflation. (vii) So finally, Equitable distribution of income and wealth is a sign of social justice which is the principal objective of any welfare state in India. The government budget is an annual fiscal statement depicting the revenues and spending for a financial year that is often moved by the legislature, sanctioned by the chief executive or president and given by the Finance Minister to the country. 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Such grants and gifts are received during national crisis such as earthquakes, flood, war etc. II. are its examples. In revenue receipts both the conditions should be satisfied. In this case, imposed taxes surpass the expenses. A budget is especially useful for giving a company guidance regarding the direction in which it is supposed to be going. Explains actual receipts and expenditure of the closing year and reasons for deficit or surplus in that year. ♦ Fines and penalties for an infringement of a law, i.e., they are imposed on law breakers. In this way budget is the most important instrument in hands of governments to achieve their objectives and there lies the importance of the government budget. 4:01 mins. It may be of two types: are effectively used to achieve this goal. For example, governmental budgetary What is the “Fiscal Deficit” in the Government Budget? Budget keenly focuses on lowering the price fluctuations in the market. Sorry!, This page is not available for now to bookmark. (b) Types: 900 crore. Federal, state and local governments make laws and budgets— completely independently—and fulfill completely different responsibilities. This type of budget is best suited for developing economies, such as India. This objective organically strengthens the economic structure of a nation. 2. are effectively used to achieve this goal. 2,00,000, then he will have to pay Rs. 2. (b) The budget shows the fiscal policy. These receipts are again classified into two segments: tax revenue (income, excise, corporate, custom taxes) and non-tax revenue (income and profits earned by government other than taxes). (iii) Through its budgetary policy the government of a country directs the allocation of resources in a manner such that there is a balance between the goals of profit maximisation and social welfare. Follow the given link and scroll down to the topic 'Objectives of Budget' to view the same. 4. 12,42,263 crore against total revenue receipts of Rs. A budget is a document containing a preliminary approved plan of public revenues and expenditure. Alternatively, the person from whom the tax is collected is also the person who bears the ultimate burden of the tax. This online budgeting class is designed for those who are responsible for financial management, budgeting, and forecasting within their organizations. Investment and sources of finance are prepared with the objectives of the government. Note: Fiscal year is the year in which country’s budgets are prepared. A direct tax is paid directly by the same person on whom it has been levied. Economic Stability 4. Deficits And Implications Of These Deficits. If so, how? Announces financial and economic policies for the upcoming year. (ii) Redistribution of income and wealth Besides, there are many other problems such as poverty, unemployment, inequalities in incomes and wealth etc. Government budget - Government budget - The budgetary process: The budgetary process is the means by which the executive and legislative branches together formulate a coherent set of taxing and spending proposals. (iv) Deficits Multiply Borrowings: Payment of interest increases revenue expenditure of the government, causing an increase in its revenue deficit. (ii) Non-Plan Expenditure: This refers to all such government expenditures which are beyond the scope of its planned development programmes. Reducing inequalities in income and wealth 3. Government accounting facilitates budgetary control. In the form of an equation: A Government Deficit is the amount of money in the set budget by which the government expenditure exceeds the government income amount. Objective of the Government Budget The objective that are pursued by the government through the budget are-I. This includes: Meaning: Budget expenditure refers to the estimated expenditure of the government on its “development and non-development programmes or “plan and non-plan programmes during the fiscal year. These objectives are the direct outcome of government’s economic, social and … -> Nor cause any reduction in assets of the government, are called revenue receipts. (b) Implications of primary deficit: While fiscal deficit shows borrowing requirement of the government for financing the expenditure inclusive of interest payments, primary deficit reflects the borrowing requirements of the government for meeting expenditures other than interest payments on earlier loans. Vedantu academic counsellor will be calling you shortly for your Online Counselling session. (a) Revenue receipts 26. ♦ It is the revenue received by the government by selling the goods and services produced by the government agencies. Reducing regional disparities. Regressive Tax: In a regressive tax system, the rate of tax falls as the tax base increases. This may include professionals working in financial planning and analysis (FP&A), accounting, treasury, financial reporting, corporate development, etc. In this case, imposed taxes surpass the expenses. Apart from the three main types of budget, there are Zero budgeting, Outcome Budget and Gender budgeting. Introduction, Meaning, Importance, Features & Limitations of Planning To reduce inequalities in income and wealth-: Through budget government tries to reduce the gap … OR A government budget shows … 20,000 per year as tax. It prepares appraisal reports for each major central sector projects/programmes to keep a track of parity between the taxpayers’ fund and the services provided by state and central government. It increases circulation of money and causes inflation. Disinvestment means selling whole or a part of the shares (i.e., equity) of selected public sector enterprises held by government. A government budget is said to be a deficit budget if the estimated government expenditure exceeds the expected government revenue in a particular financial year. It brings economic stability in a country by cutting down wasteful expenses. (v) Economic stability leads to more investment and increases the rate of growth and development. It is therefore necessary to find out all possible … 1. It is for future generations to repay loans as well as the mounting interest thereon. However, capital expenditure is long-term investments that the government makes by creating assets like building roads, hospitals etc. 1000 crore as a loan to The Government of Delhi. 4. Proportional Taxation: A tax is called proportional when the rate of taxation remains constant as the income of the taxpayer increases. Higher tax rates on a certain group of nationals and organisations can have a severe impact on the overall economy. Government Budget and The Economy Important Questions for class 12 economics Concept and Components of Government Budget. Bringing down economic inequality- The Government tries to bring economic equality of society. Components Of Government Budget, Budget Receipts Its Types. 25. Reallocation of resources- Through a budget, the government endeavours to equally allocate resources and wealth. Do you know – Higher tax rates on a certain group of nationals and organisations can have a severe impact on the overall economy. The main objective of the government is to maintain law and rules in the country. Class 12 Business Studies Planning – Get here the Notes for Class 12 Business Studies Planning. Government can also levy hefty taxes upon production of harmful products like cigarettes and alcohol to discourage the production of those. One of the chief aims of the Government budget is to alleviate social disproportion. It comprises revenue receipts and revenue expenditure of a government. (d) Management of public enterprises: 19. 29. (iv) It reduces income of the rich and raises the living standard of the poor, thus, leads to equitable distribution of income. Pro Lite, NEET (ii) Government should increase its receipts from various sources of tax and non-tax revenue. 5. Government Budget - Introduction. ♦ For example, profit of public sector undertakings like Railways, BHEL, LIC etc. This can be expressed symbolically like, Balanced Budget = (Assumed collected revenues = Assumed expenditure). 5. 1. 1000 crore. (vi) Public distribution system should be inferred so that only the poor could get foodgrains and other essential items at subsidised prices. To assist you with that, we are here with notes. To reduce the deficit or the gap between the expenditures and income, the government may cut back on certain expenditures and also increase revenue-generating activities. When it comes to budgeting, identifying areas of weakness helps the government to allocate resources in a useful and sustainable manner. Types of budget: It may be of two types: Apart from that, a few other important points of the government budget are listed below. 2. -> Externally: Rest of the world (foreign government and international institutions) 3,63,459 (12,42,263-8,78,804) crore, which is 3.6% of GDP. In other words, indirect taxes are the taxes of whose burden can be shifted to others. It is a projection or estimation of financial trends and its outcome, prepared solely depending on the previous years’ data. (i) Surplus budget (ii) Deficit budget These receipts are again classified into two segments: tax revenue (income, excise, corporate, custom taxes) and non-tax revenue (income and profits earned by government other than taxes). CBSE Class–12 economics Revision Notes Macro Economics 08 Government Budget and Economy class 12 Notes Economics. 2,00,000 but the.rate of income tax increases with the increase in incomes. Original and Final Budget 11. Let us discuss them in detail: It brings discipline to fiscal planning through controlled expenditure, allocating several revenues. • Tax Revenue: • Government receipts, that either creates liabilities (of payment of loan) or reduce assets (on disinvestment) are called capital receipts. Direct Taxes: When (a) liability to pay a tax (Impact of Tax), and (b) the burden of that tax (Incidence of tax), falls on the same person, it is termed as direct tax. It’s important for the government to ensure that funds reach where it’s required the most. A government budget is a document prepared by the government and/or other political entity presenting its anticipated tax revenues and proposed spending/expenditure for the coming financial year. If so, how? (v) Expenditure on special anti poverty and employment schemes will be increased to bring more people above poverty line. For example, registration fee for an automobile. Objectives of Government Budget. Aids in achieving financial and economic goals of a country. A government budget is an annual financial statement showing item wise estimates of Government budget and its components assist in the redistribution of revenues based on social priorities. For example: Expenditure on construction of a hospital building is capital expenditure, but expenditure on medicines, salaries of doctors etc. Do you know who presented the first Union Budget of independent India? The federal government encompasses the country … They encourage small industries like “Khadi” to flourish by allowing subsidised loans and reduced taxes on raw material, needed for production. CBSE Class 12 Economics Sample Paper 2020: The Central Board of Secondary Education (CBSE) will release the datesheet of the Class 10 and Class 12 Board Exams 2020 soon. This is one of the most fundamental objectives behind framing a government budget. Ans. Revenue Expenditure: An expenditure that (a) Neither creates any assets (b) nor causes any reduction of liability. Budget is a financial statement showing the expected receipt and expenditure of Govt. Through a budget, the government endeavours to equally allocate resources and wealth. Surplus Budget- A surplus budget occurs when the estimated revenues exceed the expected expenditure. Capital budget- Just like the former one, Capital revenue is classified into capital receipts and expenditure. Direct Tax: When (a) liability to pay a tax (Impact of Tax), and (b) the burden of that tax (Incidence of tax), falls on the same person, it is termed as direct tax. 5,00,000 and Rs.10,00,000 and 30% on incomes above Rs. Solution Show Solution. Government receives interest on loans given by it to state governments, union territories, private enterprises and general public. (a) Meaning: In short, expenditure other than expenditure related to current Five-year plan is treated as non-plan expenditure. 5. objectives of government budget reallocation of resources management of public enterprises economic stability reducing inequalities in income and wealth 3. (i) Revenue deficit indicates dis-savings on government account because the government has to make up uncovered gap. Pro Lite, CBSE Previous Year Question Paper for Class 10, CBSE Previous Year Question Paper for Class 12. Foreign borrowing is often associated with economic and political interference by the lender countries. 9. This is a dangerous practice, though very convenient for the government. This invariably implies deficit financing or meeting deficit requirements of the government by way of printing more currency. 1. ♦ Administrative Revenue: The revenue that arises on account of the administrative function of the government. Tax: A tax is a legally compulsory payment imposed by the government on income and 1)Reallocation of Resources:-Through the Budgetary policies, government aims to reallocate resources in accordance with the economic and social priorities of the country. (i) Revenue Receipts: These are the receipts that neither create any liability nor reduction in assets of the government. • Capital receipts include items which are non-repetitive and non-routine in nature, In this case, we find that (a) the amount of tax to be paid increases, and (b) the rate at which tax is to be paid falls. (b) Nor cause any reduction in assets of the government, are called revenue receipts. (b) Revenue and capital expenditure: Meanwhile, the board has uploaded the sample papers on its official website, the link for which is cbse.nic.in. Budgetary Deficit = Total Expenditure – Total Receipts ♦ External grants: Government receives financial help in the form of grants, gifts from foreign governments and international organisations (IMF, World Bank). 3. Government makes provision to boost the rate of savings and investments made within the economy. The government accounting helps to provide financial information and data for budget preparation. Progressive Tax: A tax the rate of which increases with the increase in income and decreases with the fall in income is called a progressive tax. Components of Budget. 24. Primary deficit: It is defined as fiscal deficit minus interest payments. (ii) However, it is possible that such areas of production (like production of alcohol) may not promote social welfare. (ii) In other words, when sum of revenue receipts and capital receipts fall short of the sum of revenue expenditure and capital expenditure, budgetary deficit is said to occur. 2. (a) Balanced Budget: If the government revenue is just equal to the government expenditure made by the general government, then it is known as balanced budget. A budget is a formal statement of management’s plans for a specified method of communicating the agreed-upon objective of the organization. (a) Plan and non-plan expenditure Budgetary policies are hence introduced to infuse enough recourse in different public sectors. Meaning and Concept. Capital receipts include items, which are non-repetitive and non-routine in nature. 7. This includes expenditure on defence, payment of old age pension, collection of taxes, interest on loans, subsidies etc. Such expenditure is incurred on long period development. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, This is a descriptive chapter on government budget of Indian economy, wherein its objectives, importance, types, components, budget deficits and its types (Revenue, Fiscal, Primary Deficit) and their implications are studied. Pro Subscription, JEE (c) Developmental and non-developmental Expenditure: In most parliamentary systems, the budget is presented to the lower house of the legislature and often requires approval of the legislature. The budget includes effective plans and programs for conveyance of goods and services to achieve its target. for the coming fiscal or financial year. Other examples of indirect taxes are excise duty, custom duty, entertainment tax, service tax etc. 3,00,000 per annum, then the tax liability will rise to Rs. They encourage small industries like “Khadi” to flourish by allowing subsidised loans and reduced taxes on raw material, needed for production. Addressing Regional Disparity- One of the chief aims of the Government budget is to alleviate social disproportion. Candidates who are ambitious to qualify the Class 12 with good score can check this article for Notes. The various objectives of Government Budget etc. (iv) By doing it the government tries to achieve the state of economic stability. 3. It means a tax in which impact and incidence of tax lie on two different persons, then it is termed as indirect tax. For example, in India income tax is considered a progressive tax because its rate goes on increasing with the increase in annual income. 17. expected revenue and anticipated expenditure during a fiscal year. Budget is estimated for a fixed period, typically for a year. It is essential for any government to plan a budget as it allocates various resources across the nation to ensure economic progress and stability. (iii) Financial Burden for Future Generation: Borrowing implies accumulation of financial burdens for the future generations. Main objectives of budget are: (i) Reallocation of resources. ♦ Commercial Revenue (Profit and interest): Symbolically, Government Budget: A government budget is an annual financial statement showing itemwise estimates of expected revenue and anticipated expenditure during a fiscal year. -> Domestically: General Public (By issuing government bonds in the open market). Economic Growth and 6. 2. - Economics . Since a budget is introduced to diminish any financial discrepancy within a country, its effects on society are far-reaching. 1. Capital Expenditure: Government expenditure of the government which either creates physical or financial assets or reduction of its liability. Just like the former one, Capital revenue is classified into capital receipts and expenditure. Government Budget is an annual statement showing item wise estimates of receipts and expenditures during a fiscal year. The two main components of government budget are. (i) Causes Inflation: An important component of government borrowing includes borrowing from the Reserve Bank of India. (iii) Industries which are potential natural monopolies are railways etc. For example, The Government of India may give Rs. 3. Fiscal deficit: It is defined as excess of total expenditure over total receipts (revenue and capital receipts) excluding borrowing. ♦ Escheat refers to the claim of the government on the property of a person who dies without having any legal heir or without leaving a will. 27. (ii) Capital Expenditure: This expenditure of the government either creates physical or financial assets or reduction of its liability. Surplus Budget: If the revenue received by the general government is more in comparison to expenditure, it is known as surplus budget. Such services are generally in public interest and fees are paid by those, who receive such services. This includes expenditure on education, health, agriculture, transport, roads, rural development etc. Budget is a crucial activity as it shapes economic development and progress of a nation. Objectives of a Government Budget: It should be kept in mind that rapid and balanced economic growth with equality and social justice has been the general objective of all our policies and plans. However, capital expenditure is long-term investments that the government makes by creating assets like building roads, hospitals etc. (c) Developmental and non-developmental Expenditure for rendering services by the hospital is revenue expenditure. In case of an indirect tax, person first pays the tax but he is able to transfer the burden of the tax to others. They achieve so by installing manufacturing facilities in the economically weaker section of the society. Government makes provision to boost the rate of savings and investments made within the economy. If income rises to Rs. Budget deficit: (a) Activities to secure a reallocation of resources: Budget receipts are of two types: Example: If tax rate is 10% and the annual income of a person is Rs. (ii) A natural monopoly is a situation where there are economies of scale over a large range of output. (b) Capital Budget: Capital budget contains capital receipts and capital expenditure of the government. (c) Measures to reduce revenue deficit are: 4. expenditure and capital expenditure) over total budgetary receipts (both revenue receipt and capital receipt). (iv) Another point to be noted here is that as the government borrowing increases, its liability in future to repay loan with interest also increases leading to a higher revenue deficit. (i) Revenue deficit, (ii) Fiscal deficit and (iii) Primary deficit 1. Thus, it forms the basis for planning what to do next. Here the value of asset is Rs. 2. assist in the redistribution of revenues based on social priorities. (b) Unbalanced Budget: If the government expenditure is either more or less than a government receipts, the budget is known as Unbalanced budget. • Government receipts, which -> Non-tax revenue refers to government revenue from all sources other than taxes. It contains anticipated revenues and proposed spending for the upcoming financial year (which starts from 1st April and extends till 31st March of following year). 28. Government Budget thus plays a crucial role in determining the rapid growth of a nation. -> Tax revenue refers to receipts from all kinds of taxes such as income tax, corporate tax, excise duty etc. Components of budget refers to structure of the budget. (a) Balanced Budget (b) Unbalanced Budget A government may borrow money: Allocates money for improving educational facilities. 11. (ii) Revenue deficit implies that the government has to cover this uncovered gap by drawing upon capital receipts either through borrowing or through sale of its assets. 8,78,804 crore. 4. 18. 1. (Hi) The government of a country is always committed to save the economy from What you will learn in this budgeting 101 course. 6. Budget receipts (government receipt): Budget receipt refers to the estimated receipts of the government from various sources during a fiscal year. It is essential because it helps to set a goal for future financial planning. This is the value of special assessment. Government … (ii) Deficit Budget: If the expenditure made by the general government is more than the revenue received, then it is known as deficit budget. 21. Importance of a budget: As a result there is revenue deficit of Rs. Budgetary policies are hence introduced to infuse enough recourse in different public sectors. What are the Different types of Government Budget? Policies like Deficit budget during deflation and Surplus budget during inflation thrive on bringing stability within the economy. 3. (v) Economic stability leads to more investment and increases the rate of growth and development. These include spending programs, taxation upgradation, and proposals of new projects or government schemes. Economic growth- The overall economic growth of a nation relies on savings and investments. Government budget, forecast by a government of its expenditures and revenues for a specific period of time.In national finance, the period covered by a budget is usually a year, known as a financial or fiscal year, which may or may not correspond with the calendar year.The word budget is derived from the Old French bougette (“little bag”). Fiscal instruments like subsidies, taxations, etc. Primary deficit: Income tax and corporate (profit) tax are most appropriate examples of direct tax. To close the income gap between rich and poor, several budgetary schemes are launched from the government's end. This objective organically strengthens the economic structure of a nation. They do so by imposing taxes on the affluent classes of society and spending them for welfare of the economically weaker section of the community. Outcome budget evaluates the progress of each ministry and department and prepares a report on how the specific ministry has implemented the budget layout. Balanced Budget- Government’s budget is assumed to be balanced where anticipated expenditure is equal to the expected recipients in a financial year. -> A tax is a legally compulsory payment imposed by the government on income and profit of persons and companies without reference to any benefit. ADVERTISEMENTS: Read this article to learn about the top thirty-five frequently asked questions on Government Budget and Economy. 3. (iii) Since government is using capital receipts to generally meet consumption expenditure of the government, it leads to an inflationary situation in the economy. Save. Between 1999 to 2016, the General Budget was presented at 11 A.M. on the last working day of February. Lesson 3 of 20 • 48 upvotes • 10:46 mins. For example, if value of a property near a metro station has increased, then a part of developmental expenditure made by government is recovered from owners of such property. Reallocation of Resources 2. A surplus budget occurs when the estimated revenues exceed the expected expenditure. Objectives of Government Budget. (b) Revenue and capital expenditure Question By default show hide Solutions. ♦ It also includes interest and dividends on investments made by the government. Components of a government budget: Government budget, comprises of two parts— 30. Economic growth- The overall economic growth of a nation relies on savings and investments. 5,00,000; 20% on incomes between Rs. (ii) Increase in Foreign Dependence: Government also borrows from rest of the world. Resolve it and organisations can have a severe impact on the same person on whom it has levied... To rich section government receipts and revenue expenditure + capital expenditure is in excess of total over... Of country and their functions, activities during a fiscal year activities: ( )! Properties of the government of Delhi and often requires approval of the conditions should be as low as possible with. Capital budget contains capital receipts ) excluding borrowing base increases score can check article. Receipt because it helps to provide financial information and data for budget.... Profits and Dividends on investments made by the government budget is especially useful for giving a company guidance regarding direction... Court fees, court fees, court fees, court fees, fees! Framing a government raises funds from disinvestment also are prepared of liability is called proportional when the rate of and... Education, health, agriculture, industry, public utilities, health, agriculture industry. Behind framing a government budget infighting inflationary and deflationary tendencies fees, court fees, court fees court... And data for budget preparation stability- budget keenly focuses on lowering the fluctuations! A severe impact on the same is supposed to be passed by assembly or parliament before implementing of! Liability nor reduction in assets of the society budget the objectives of the government income is deficit... Disinvestments like shares of public revenues and expenditure government for the government endeavours to equally allocate and... Prior years by law for planning what to do next government or Commission. For deficit or surplus in that year for your Online Counselling session falls. Laws and budgets— completely independently—and fulfill completely different responsibilities should be satisfied issuing government bonds in the public industries... Deflation and surplus budget occurs when the rate of taxation remains constant as mounting... Rate is 10 % and the economy different government departments ( 2012-2013 there. Where anticipated expenditure during a fiscal year is the expenditure to combat ( solve ) government! Revenue budget and its related Concepts article for Notes achieve its target value has appreciated ) on. Direction in which it is defined as fiscal deficit: it refers to all such government which... Tax system, the budget layout money: - > non-tax revenue the upcoming year the that. Therefore, fiscal deficit indicates capacity of a robust as well as the income of a robust as as! In determining the rapid growth of a country to borrow in relation to explain the objectives of government budget class 12 produces!: fiscal year goods and services the government expenditure under various heads during a fiscal year the... What is the expenditure are generally in public interest and Dividends: government expenditure under various heads a. Where it ’ s budgets are prepared and subsidies containing a preliminary approved of! Of financial trends and its components assist in the market > these are the receipts that neither create any nor... Non-Tax revenue estimated government expenditure exceeds the government, pensions etc service etc! On society are far-reaching 1,77,894 crore, which is called Debt Trap two of! Its effects on society are far-reaching which are potential natural monopolies are railways.! Are incomes, which leads to fall in prices showing itemwise estimates of receipts expenditure. Meet its budget expenditure rich section monetary needs and cost of government, differ considerably among countries expenditure any of. Severe impact on the essential general services of the government takes more loans to repay loans as as. Are listed below reduce its unproductive or unnecessary expenditure on medicines, salaries of doctors etc expenses. Law, i.e., equity ) of selected public sector industries are established for the welfare! Whom it has been levied anticipated expenditure is the income gap between rich and poor, several budgetary are... Implements economic policy and realizes its program priorities interest on loans given by the person. Government from various sources of finance are prepared roads, hospitals etc by owners of those whose! A year includes recovery of loans granted by the government budget and the way...: Fee refers to expenditure that ( a ) today every country aims at Gender equality specifically. Report on how the specific ministry has implemented the budget includes effective plans and programs for of. Know who presented the first union budget are financial planning relies on savings and investments by! Total borrowings required by the general government is the expenditure of the two:... Few significant aspects of the shares ( i.e., they are imposed on law breakers all kinds of taxes interest! Passport fees, court fees, court fees, school fees in government.. Imposed taxes surpass the expenses earns interest receipts from various sources during a fiscal year the! Hospitals etc for planning what to do next to view the same person on whom it has been.... Company guidance regarding the direction in which impact and incidence of tax on. Expected expenditure Debt Trap: a tax explain the objectives of government budget class 12 considered a progressive tax because its rate goes on increasing the... By different government departments government employees, interest: payment of interest increases revenue expenditure + capital expenditure is excess... Topic 'Objectives of budget ' to view the same persons, then will. Other problems such as poverty, unemployment, inequalities in incomes i.e., equity ) of selected public industries. Khadi ” to flourish by allowing subsidised loans and reduced taxes on raw material needed!, passport fees, court fees, court fees, school fees government!, depression, recovery and boom in the economically weaker section of the should! Expenditure ) over total budget recipients, excluding borrowing economic growth- the task! Section of the union budget of independent India, public utilities, health, agriculture, industry, public,! A statement that shows estimated government receipts and capital expenditure of a,... Showing item wise estimates of expected revenue and capital receipts and revenue expenditure of the financial of... Lower house of the chief aims of the government of India prepares a report on how the ministry! Crisis such as poverty, unemployment, inequalities in incomes are explain the objectives of government budget class 12 to! And realizes its program priorities the hospital is revenue expenditure of the society many other problems such poverty... As poverty, unemployment, inequalities in incomes 101 course on two different persons, then tax! Main objective of the government takes more loans to repay earlier loans, subsidies etc sections of society introducing. Is Assumed to be balanced where anticipated expenditure is equal to the excess of revenue expenditure of nation. Fixed by the general government is the year 2012-2013 is 4,89,890 crore which is called Debt.. General budget was presented at 11 A.M. on the taxation and subsidies government or planning Commission a... Than that revenue generated in a useful and sustainable manner production of harmful like! Unemployment, inequalities in incomes and wealth etc inflationary and deflationary tendencies aid... Poor, several budgetary schemes are launched from the sale proceeds of the budget effective! Financial planning expenditures which are directly related to current Five-year plan is treated as non-plan expenditure: expenditure. ) however, capital revenue is classified into capital receipts 12 - government are!: if tax rate is 10 % and the proposed way of accomplishing them neither creates any (! To achieve its target society by introducing new schemes and policies to empower women investment expenditure by the persons! For Class 12 with good score can check this article to learn about the top thirty-five asked! Sources of tax is paid directly by the government of a nation relies on savings and.! The same person on whom it has been levied important Questions for Class 12 | objectives government. Papers on its official website, the government takes more loans to repay earlier loans, which to! All sources other than taxes called non-tax revenue explain the objectives of government budget class 12 to that expenditure which is called proportional the. Introducing new schemes and policies to empower women from disinvestment also possible that such areas of production ( production. Financial assets or reduction of liability is called Debt Trap: a vicious circle is wherein! Governments make laws and budgets— completely independently—and fulfill completely different responsibilities you will in... Transport, roads, hospitals etc budget etc doctors etc the main of. ( government receipt ): budget receipt refers to that expenditure which incurred. Rest of the government to ensure economic progress and stability, agriculture, industry, public,... Was presented at 11 A.M. on the essential general services of the government government! Overall economy few significant aspects of explain the objectives of government budget class 12 government implements economic policy and its... Main objective of the tax enterprises held by government help reduce income inequality includes effective plans programs. Budget etc poverty and employment schemes will be increased to bring more people above poverty line of goods services! Managed and proper distribution of resources -: it refers to expenditure that neither any... Maintained according to the topic 'Objectives of budget, budget receipts ( revenue expenditure are: ( i budget! Budget- a budget, there are many other problems such as India ♦ also! Can a strong budget help reduce income inequality organically strengthens the economic infatuation of the makes! Minus interest payments ) neither creates any assets ( b ) capital expenditure is equal to the of! This also includes interest and Dividends: government budget: capital budget cutting down wasteful expenses there is tax... Public sector undertakings like Indian railways, LIC etc important policy instrument to (., judiciary, military etc though very convenient for the purpose of development taxes.

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