Enhancing distribution of income:To enhance distribution of income and wealth in the community for lessening economic inequalities:
The national income must be appropriately distributed; therefore the fruits of development are fairly shared by every people. Equality in income, wealth and opportunities should form an integral portion of economic development and social advance. Furthermore, redistribution of income in favor of the poorer parts of the society is necessary. This can be attained via taxation. We can also attain this via a augment in public expenses for promoting welfare to the less privileged group. Expenditure on irrigation, agriculture, education & health and medical expenses will enhance the economic conditions of the weaker parts of the society.
Fiscal policy can affect net spending (i.e., aggregate demand determinant) in two manners. The first is the direct modify in net spending brought about by the government rising or reducing its own expenses. And the second one is raising or decreasing private spending by differing its own tax revenue.
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