Question : Statement 1: Inclusive growth is not within the ambit of the budgetary policy of the government.
Statement 2: Taxes and subsidies are an important element of budgetary policy and promote inclusive growth.
Option 1: Both the statements are true
Option 2: Both the statements are false
Option 3: 1 is true and 2 is false
Option 4: 2 is true and 1 is false
Correct Answer: 2 is true and 1 is false
Solution : The correct answer is (d) 2 is true and 1 is false.
Inclusive growth, which refers to a pattern of economic growth that benefits all segments of society, can indeed be a consideration within the ambit of the budgetary policy of the government. Budgetary policy includes decisions related to government revenue (taxation) and government expenditure (including subsidies). These policy choices can be used to promote inclusivity by directing resources towards sectors and programs that benefit marginalized or disadvantaged groups.
Taxes and subsidies are integral components of budgetary policy and can play a role in promoting inclusive growth. Taxes can be designed to ensure a fair distribution of the tax burden and raise revenue to fund social welfare programs and infrastructure development that contribute to inclusive growth. Subsidies, when targeted effectively, can provide support to sectors such as agriculture, education, healthcare, and social welfare, thereby reducing inequalities and promoting inclusivity.
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