Government budget is a financial statement that shows the expenditures and receipts of the government in the fiscal year during aa accounting period.
Objectives of budgetary policy are the following:
a) Reallocation of resources:Through its Budgetary policy the government directs the allocation of resources in a manner such that there is a balance between the goal or of profit maximisation and social welfare. Government can provide subsidy and reduction in tax rate to motivate investment into areas where private sector initiative is not coming. Production of goods which
are injurious to social life is discouraged through heavy taxation
b) Redistribution of income and wealth:Budgetary policies are useful medium to reduce inequalities of income for the fair distribution of income. government can use tax policy and
public expenditure as a tool. govt can reduce the disposable income and wealth of Rich by imposing heavy tax and can spend more on providing free services to the poor. It raise the disposable income welfare of the poor.