Resources have to be used to uplift underprivileged sections of society, ensure financial inclusion, reduce regional disparities, strengthen defense capabilities, provide quality education, and much more. It then becomes essential for a well-planned budget for any government to achieve economic stability and growth.
Here are a few reasons why it’s important for the government to have a budget:
Proper resource pool allocation
Budgeting involves identifying areas of weakness and strategically allocating resources to address them. This is one of the primary goals of framing a government budget.
It is essential for the government to ensure that funds reach the sections of society that need them the most. The government can identify areas requiring economic welfare policies and effectively implement them by using past data.
Ensuring economic growth
A budget enables the government to regulate taxation in different sectors. Investment and expenditure are key factors contributing to a nation’s economic growth.
The government can encourage individuals to focus more on savings and investments by providing tax rebates and subsidies. This, in turn, fosters economic prosperity and contributes to the overall growth of the country.
Boosting business and trade
Business companies and enterprises wait for the government budget every year as it reveals the allocation of resources to various sectors.
This enables business owners to shape their policies and strategies accordingly and contribute to the country’s economic progress. The budget serves as a roadmap for economic development and guides businesses towards success.
Reducing economic disparity
Economic inequality is a threat to the country’s economy. Through the budget, the government can address this issue by introducing public and economic welfare policies for the underprivileged sections of society. By targeting these disparities, the government aims to create a more equitable and inclusive economy.
Supporting Public Sector Enterprises
Public sector industries play an important role in generating employment and revenue, significantly contributing to the nation’s economy.
A well-planned budget enables the government to focus on these industries and introduce policies that facilitate their growth. This ensures the continued operation and success of public sector enterprises.
