In: Finance
Why is it important for citizens to know how to read a budget? What information would they be able to obtain from the budget document? Why and how would that information be helpful?
1.Why is it important for citizens to know how to read a budget?
Ensuring economic growth
A budget allows the government to regulate the imposition of taxes
in various sectors. Investment and expenditure are some of the most
prominent factors contributing to the growth of a nation’s economy.
The government can encourage people to emphasize more on savings
and investments by providing tax rebates and subsidies.
2.What information would they be able to obtain from the budget document?
Growth of business and trading
Businesses and enterprises look forward to the government budget as resources being allocated to various sectors are revealed. The government can encourage business owners to revise their policies accordingly and contribute to the country’s economic prosperity and the proposed budget provides this information.
Why and how would that information be helpful?
Here are a few reasons why it’s important for the government to
have a budget:
-Proper resource pool allocation
When it comes to budgeting, identifying areas of weakness helps the
government to allocate resources in a useful and sustainable
manner. This is one of the most fundamental objectives behind
framing a government budget. It’s important for the government to
ensure that funds reach where it’s required the most. Therefore
using past data to identify sections of the society in
need of economic welfare policies and implementing those policies
helps the government demonstrate efficient governance and achieve
economic stability in the country.
-Administering Operation of PSUs
Industries operating in the public sector contribute immensely to
the country’s economy by providing employment to a lot of people
and generating revenues. A budget helps the government focus
appropriately on companies in the public sector by introducing
policies to aid their growth.
Mitigating economic divide
Economic disparity and inequality is an imminent threat to any
country’s economy. The government can address these kinds of
threats by introducing public and economic welfare policies for the
underprivileged sections of the society through the
budget.