How does budget play a role in reducing inequalities in Income and We…

One of the major objectives of the government budget is to reduce the income disparities among the people of the country. This is done with the help of fiscal instruments of- taxation and subsidies. Higher taxation is imposed (revenue) on the people with extra income and subsidies (expenditure) is given to enterprises who would set up their factories in backward areas. This is also done to improve regional backwardness in the nation.