Question

Short answer type questions:
Reduction in income inequalities raises welfare of the people. How can government help through government budget, in this regard? Explain.

Answer 1

The distribution of income and wealth is highly unequal in countries like India. 'Economic Divide' is huge and alarming. The problem of the economic divide is combated by the revenue and expenditure policy of the government. 'Taxation and subsidies' is the key policy instrument used by the government in this context.