10.

2 >Sou
n dj),
S a Pamimed pxoactory
(It is required to be approved by
reveals
parliament, before it can be im.
the
the financial performance of
the government :
acroecOnG
implemented.
The budget the last y
financialpolicies for the coming fiscal year.

10.3 OBJECTIVES OF GoVERNMENT BUDGET

GOvernment prepares the budget for fulfilling certaiñ objectives. These ohi
Outcome of government's economic, social he vari es âre
and political policies. The are thed
the.
various objecti
governent budget are:
Reallocation of Resources: Through the budgetary policy, Government.aims to rea
resources in accordancewith theeconomic (Profit maXimisation) and social allo
reallor
allocation of resourCa
priorities of the country. Government can influence
ugh
ax concessions or subsidiest To encourage investment, government an co

Concession, subsidies etc. to the producers.

For example, GOvernment d veta
aue
the production of harmful consumption goods (Ike liquor, cigarettes ete urags
throug
heavy taxes and encourages the use of 'Khadi products" by providing subsidiex

Oirectlyproducing goods and service5: 'There are manynon-profitable economic aci

activities
hich are notundertaken by the private sector like, water suPply, sanitation,
lavw
etc. These Publc Goods**. Such actiri
are called
and order, national defence,
are necessarily undertaken by the government in public interest and to raiseSOcial
soril
* * *

welfare.
Public Goods* and Private Goods
Public Goods:Publicgoods are those goods orservices thatare collectivelyconsumed
It is not possible to exclude anyone from enjoying their benefits and one person's
consumption does not reduce the availability to others. The two main features of Public
Goods are
.Public Goods are non-rivalrouis; The benefits of public goods are available to all and a
not only restricted to one particular consumer. For example, if we consider a public paik,
the benefits of park will be available to all.
.Public Goods are Non-excludable: In case of public goods, there is no possibe wy
exciude anyone from enjoying the benefits of the good. Due to this reason, pubiC go
the
are called non-excludable. Even
ifsome users do not pay, it is dificult to collect iees lor
public good. These non-paying users are known as free-riders.
2, Private GoodsíPrivate goods are those goods or services whose benefitaccru people
nwil
Whopay for them)For example, Chocolate purchased and consumed by a perou
benefit that person only and not public at
large