Redistribution function of Government Budget
A. Budget Proposal
B. More tax on Progressive taxation
C. Government plan to redistribute
D. Bring the fair society
E. Government Expenditure on Public Goods
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → C, A, B, E, D
Through its budget, the government collects taxes and makes payments. In this way it changes how income is shared among people. The aim is a distribution that society thinks is fair. This is the redistribution function of the budget. The steps follow from the aim to the result.
(C) Government plan to redistribute — the government first decides to share income more fairly.
(A) Budget Proposal — the plan is put into the budget, the statement of what the government will collect and spend.
(B) More tax on Progressive taxation — a progressive tax takes a larger share from people with higher incomes.
(E) Government Expenditure on Public Goods — the tax money is spent, and the benefits of public goods are available to all, the poor included.
(D) Bring the fair society — the end result: a fairer sharing of income.
Note: The NCERT books do not give these steps as a sequence. The order follows from the redistribution function itself: the aim comes first and a fair society is the end result. In the book, providing public goods is the allocation function. The redistribution function works through taxes and transfers.
NCERT (2026-27): “Redistribution Function of Government Budget From chapter two we know that the total national income of the country goes to either the private sector, that is, firms and households (known as private income) or the government (known as public income). Out of private income, what finally reaches the households is known as personal income and the amount that can be spent is the personal disposable income. The government sector affects the personal disposable income of households by making transfers and collecting taxes. It is through this that the government can change the distribution of income and bring about a distribution that is considered ‘fair’ by society. This is the redistribution function.” |