India is suffering from the problem of inequalities in the distribution of income and wealth. How can a budget be used as an instrument?
A budget can be used as an instrument to reduce the inequalities in the distribution of income and wealth in the following ways:
(i) Tax rates should be made progressive, i.e. rate of tax should increase with increase in income.
(ii) Strict measures should be adopted to check tax evasion by the rich people.
(iii) Subsidies should be provided where ever needed.