question_answer

Distinguish between receipts and receipts in a government budget. Give example in case.

Or

Explain the role of government budget in economic stability.

Answer:

Revenue receipts are those which do not either create a liability or lead to a reduction in assets, such as tax revenue.

Capital receipts are those funds which government raises either by incurring liability or by disposing of assets, such as recovery of loans, loans raised etc.

Or

Ensuring economic stability is one of the important objectives of a government budget. Government aims at insulating me economy from major economic fluctuations (such as inflation, unemployment, etc.) and the business cycles such as boom recession, depression and recovery. It aims at achieving higher economic growth rate while combating such situations.

Through the budget policy, government aims at maintaining price and employment stability. This aim of economic growth with stability ensures a smooth and efficient functioning of an economy.