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It is defined as a statement of estimates of the government receipts and government expenditure during the period of the financial year. “A government budget is a statement of estimates of the government receipts and government expenditure during the period of the financial year.” The financial period is from 1st April to 31st March of the next year. QUESTIONS BASED ON HOTS WITH MODEL ANSWERS. 4. The entire NCERT textbook questions have been solved by best teachers for you. With the help of Notes, candidates can plan their Strategy for particular weaker section of the subject and study hard. Redistribution of income is one of the important objectives of government budget. Class 10 Class 12. So, go ahead and check the Important Notes for Class 12 Economics : Macroeconomics – Government Budget and Economy. Deficit budget: In this type of budget, the government’s estimate expenditure is more than the government’s estimates receipts. Through the budget, the government deals with the condition of inflation and deflation. Lessen the inequalities of income and wealth. UNIT – IX. Economics Class 12 - Government Budget and the Economy By … There are provisions made in the budget to aid these enterprises financially. Class 10 Class 12. The Government : Budget And The Economy. Zigya App. Reducing inequalities in income and wealth 3. In a mixed economy, the private producers aim towards profit maximisation, while, the government aims towards welfare maximisation. ADVERTISEMENTS: Some of the important objectives of government budget are as follows: 1. Extra Question for Class 12 Economics Government Budget and … Main objectives of budget are: (i) Reallocation of resources. Economic stability can be achieved by correcting the situations of deficient and excess demand in the economy. He has published various articles in leading news and laws websites including livelaw.in and barandbench.com. Hence borrowing in government budget is a fiscal deficit. Higher Order Thinking Skills (HOTS) download and print. The government can take the following measures: In backward areas, the government can give tax reduction to the units which are set up in these areas, also grant some financial aids and relaxation in rules and regulations. importance of govt budget are : (i) Economic growth: To promote rapid economic growth so as to improve living standards of the people. The main objective of public enterprise is social welfare. Multiple Choice Quiz Questions, which are covered in this chapter, relate to the topic, To reduce the disparities between developed areas and not developed area. for the coming fiscal or financial year. Question 1. Aug 11, 2020 - Government budget and it's objectives(Class 12,CBSE,Macroeconomics) Commerce Video | EduRev is made by best teachers of Commerce. Your email address will not be published. Government of India Budget: Meaning, Elements, Objectives and Types! Through the budget, the government tries to bring equal distributions of resources and wealth. The public goods promote social welfare, and private goods promote aims at profit maximization. Production of goods and services by the government itself (Direct producing goods and services). In this, the government increase the tax rate and decrease its expenditure. The merit of a balanced budget is that it ensures financial stability. Free PDF download of Class 12 Macro Economics Chapter 5 - Government Budget and the Economy Revision Notes & Short Key-notes prepared by our expert Economics teachers from latest edition of CBSE(NCERT) books. “A government budget is a statement of estimates of the government receipts and government expenditure during the period of the financial year.” The financial period is from 1st April to 31st March of the next year. It also determines the financial soundness of the country’s government. When there is growth in GDP, there is economic growth. All the budget needs to be passed by assembly or parliament before implementing. One of the objectives of a government is to maintain the economic stability. NIOS(National Institute of Open Schooling) Admission, NIOS Study Centre, nios syllabus, nios question paper & Solved Assignments for Class 10 and 12. Reallocation of Resources 2. ... Allocation of resources is one of the important objectives of government budget. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Economics Government Budget and the Economy. The main goal of this site is to provide study material, notes, in-depth analysis and other study-related resources that allow aspirants to achieve their goal. 1. The government prepares an expenditure according to its objective and then starts gathering the resources and funds to fulfil the proposed investment. Answer. Social welfare is the single most objective of the government. The finance minister of India announces the budget every year on 1st February. Q. The budget word is derived from the Latin word “bougette” which means leather bag. The government, in their budget, make some savings and investments in order to increase the Gross Domestic Product. Learn about Objectives of Government Budget topic at Vedantu. One of the reasons the private enterprise do not take interest is high investment and low profit. The areas in which the government won’t increase the production of goods and services the government gives tax concession or subsidiaries while on the harmful products government impose the high taxes to discourage their production. The merits of the deficit budget types are: However, it has some demerit as well, which are: Unlike the deficit budget, in the surplus budget, the government’s estimated receipts are more than the government’s estimated expenditure. at TopperLearning.. Answer: (a) April I to March 31 It improves the aggregate financial policy by controlling expenditure, given the number of revenues. ? 2. In a mixed economy, the private producers aim towards profit maximisation, while, the government … TopperLearning’s Experts and Students has answered all of The Government Budget And The Economy of CBSE Class 12 Commerce Economics questions in detail. For more data on Business Studies Class 12 Syllabus, Commerce notifications and sample papers for Class 12 Commerce, stay tuned to BYJU’S. • Estimated expenditures and receipts are planned as per the objective of the government. 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This document is highly rated by Commerce students and has been viewed 8780 times. The word budget is derived from the Latin word “Bougette” which means leather bag. Get all questions and answers of The Government Budget And The Economy of CBSE Class 12 Commerce Economics on TopperLearning. The following are the merits or advantages of a surplus budget: A budget is called the balanced budget if the government’s estimated receipts are equal to the government’s estimated expenditure. CBSE Class 12 Economics Chapter- Government Budget and the Economy Important Questions – Free PDF Download. Required fields are marked *. This creates social harmony and ensures social justice. To register Online Tuitions on Vedantu.com to clear your doubts. Economic Growth and 6. In India, every beginning of a year, the government presents its budget in front of the Lok Sabha explaining an estimated receipt and expense for the upcoming financial year. Let us take an example, the construction of roads and parks is nor much profitable for private enterprise, and hence they do not take an interest in investment in these sectors. Investment and sources of finance are prepared with the objectives of the government. Mostly, it is lead to not too useful expenditure. The surplus budget is beneficial when there is inflation condition faced by the country. CBSE Class–12 economics Revision Notes Macro Economics 08 Government Budget and Economy class 12 Notes Economics. Budget is a financial statement showing the expected receipt and expenditure of Govt. This causes regional disparities. The private sector always tend to divert resources towards areas of high profit, while, ignoring areas of social welfare. The first budget was presented in 1860 by Scotsman James Wilson in India, and in independent India, it was presented by RK Shanmukham Chetty in 1947. Meaning “A government budget is an annual financial statement showing item wise estimates of expected revenue and anticipated expenditure during a fiscal year.” Just as your household budget is all about what you earn and spend, similarly the government budget is a statement of its income and expenditure. A budget is needed to know the financial performance of the government over the past one year and to know the financial programs and policies of the government for the next one year. A budget influences society in three steps. 3. (ii) Capital Budget – The capital budget includes the capital receipts (such as disinvestment, borrowing) and lengthy capital expenditure (for instance, long-term investments, creation of assets). Also Check: Objectives of Government Budget Components of Government Budget: There is a constitutional necessity in India according to the Article 112 to current before the Parliament passed a declaration statement of gauged receipts and expenditures of the government with respect of every financial year which functions from 1st of April to 31st March. In this receipt, both tax revenue (such as excise duty, income tax) and non-tax revenue (like profits, interest receipts) are recorded. Jan 11, 2021 - MCQs - Government Budget And The Economy Commerce Notes | EduRev is made by best teachers of Commerce. Reducing regional disparities. (ii) Redistribution of income and wealth Allocation of resources is one of the important objectives of government budget. For example: when a country is in deflation, the government adopt the deficit budget policy in which the government reduces the tax rates and increases its expenditure. Government Budget and the Economy Class 12 MCQs Questions with Answers. It provides a benchmark in evaluating success or failure in achieving goals and provides suitable improving measures. Circular Economy in India – Importance with Example. A budget is a tool that transfers a general idea into a productive, action-oriented and aspirational goal. Explore link: Central Problems of an Economy, Also Read: Concept of Government Budget and the Economy, You might want to know: Economic system in India. It is not suitable during the inflation period. For more data on Business Studies Class 12 Syllabus, Commerce notifications and sample papers for class 12 Commerce, stay tuned to BYJU’S. Explain the 'redistribution of income' objective of Government budget. Government budget is a statement of expected receipts and expenditures of the government over the period of a financial year, i.e. The budget explains what the income and expense of a nation is. The government wants there is stability in the economy and no condition of inflation and deflation in the country when there is a balanced economy of a country the investment increase which brings economic growth. The word budget is derived … Reallocation of resources -:It means managed and proper distribution of resources. The budget is classified into three categories deficit budget, surplus budget and a balanced budget. India is a diverse country there are areas which are highly developed whereas some regions which are not developed at all. This practice can be done when the private enterprise does not take an interest in production. Economic Stability 4. Budget is estimated for a fixed period, typically for a year. Candidates who are pursuing in Class 12 are advised to revise the notes from this post. The objectives of the budget are reallocation of resources, economic stability, economic growth, reducing the inequalities of income and wealth, management of public enterprises and reducing the regional disputes. It determines government expenditure and receipts. The budget in Indian constitution is mentioned as the annual financial statement in Article 112. CBSE Class 12 Economics HOTs Government Budget the Economy. • In India, Budget is presented in parliament on such a day as the president may direct by convention, It is presented on last working day of February, each year. Government Budget and the Economy - CBSE Notes for Class 12 … 1 Which type of revenue receipts are treated as legally compulsory payment imposed on the people by the govt. Government prepares the budget for fulfilling certain objectives. Budgetary policies create situations conducive for enhancement in savings and investments. In this, the interference of government in economic activities is minimum. Read more about Objectives of Government Budget … GOVT BUDGET AND THE ECONOMY. It’s good to recap the concept thanks to uploading good notes, Your email address will not be published. By means of budget, the government aims to Issuance of resources which is based on the moneymaking and social-first concern of the country. For example, the government gives tax concession on Khadi products while high tax is imposed on the wine and cigarettes which are harmful to the health of humans. The main elements of a budget are. The budget is classified into two segments: (i) Revenue Budget – The revenue budget contains revenue expenditure and receipts. Government budget is an annual financial statement of estimated receipts and expenditure of the government during a fiscal year, as recorded in Article 112 of the Indian Constitution. The funds are collected from fees, taxes, interest on loans given to states, fines, and dividends by public sector enterprises. It allocates resources of a nation on a foundation of social priorities. All the budget needs to be passed by assembly or parliament before implementing it. Objective of the Government Budget The objective that are pursued by the government through the budget are-I. The government through its budgetary policy attempts to promote fair and right distribution of income in an economy. II. Capital receipts are government liabilities or decrease financial assets, such as the recovery of loans, market borrowing, etc. It acts as a device that identifies and focuses on the development of an underprivileged person. Till 2016 it was presented on the last working day of February. Through taxes and concessions, the government tries to maintain equality in the country. The fiscal year starts from 1st April and concludes on 31st March of the next year. As private sector can not provide all the goods and services the government has to provide these goods. Though budgets do not assure 100% success in economic stability, however, it helps to bypass failure. This type of budget is favoured by classic economics as they believe that the government should not interfere in economics activities. If a public enterprise undergoes in loss, then the government can privatize them. It determines government expenditure and receipts. Investment and sources of finance are prepared with the objectives of the government. Free PDF download of Important Questions with Answers for CBSE Class 12 Economics Chapter – Government Budget and the Economy prepared by expert Economics teachers from latest edition of CBSE(NCERT) books only by CoolGyan to score more marks in CBSE … There are many objectives of the government budget, such as allocation of resources, public accountability, etc. Every year on 1st February the finance minister of India announces the budget. PSCNOTES.in is a free resource site for UPSC and PSC aspirants, founded by Sheshan Pradhan. Sheshan Pradhan is a blogger and author at pscnotes.in. The deficit budget is used during deflation while during inflation surplus budget is used. However, it is not mentioned in the Indian constitution. What are the objectives of the government’s budget? It comprises efficient and productive programmes to deliver goods and services goods and services and achieve targeted goals. Management of Public Enterprises 5. A government budget is a year-long country’s financial report explaining item-wise calculations of future revenue and expenditure. It can be done by: For the enhancement in investment, the government can grant subsidies or tax concession to stakeholders. Helpful in undertaking welfare program of humans. When a country is in inflation, the government adopt the surplus budget policy. Learn about it Measures from the CBSE Class 12 Commerce Economics chapter The Government Budget and the Economy by referring to our revision notes, sample papers, past year papers etc. A budget is a tool which helps to reduce these disparities. (ii) Reduction of poverty and employment: To eradicate mass poverty and unemployment by creating maximum employment opportunities and providing maximum social benefits to the poor. Financial Year in India is : (a) April I to March 31 (b) January 1 to December 31 (c) October 1 to September 30 (d) None of the above. Save my name, email, and website in this browser for the next time I comment. However, we restrict our studies to budget of central government known as Union Budget. The balanced budget is favoured by the classic economy. One of the objectives of the government budget is to manage the public enterprise. It is not useful in inflation and deflation condition. Budget is estimated for a fixed period, typically for a year. 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