Roles/benefits/Objectives of the Budget as an instrument of Social and Economic development/significance of a government budget as a tool of economic policy

The budget can be used as an instrument of social and economic policy to achieve the following objectives.·

1. To reduce income inequalities. This is done by taxing the rich heavily and subsidizing the poor. The tax revenue received can also be used to provide the people especially the poor with social services. For example free education, medical services
2. To protect the domestic infant industries from unfair foreign competition. This is done by imposing high import duties so as to discourage
3. To control  inflation. This is done by deliberately reducing government expenditure.
4. To discourage the production and consumption of harmful commodities like cigarettes. This is done by imposing high sumptuary taxes on such commodities
5. To improve on the balance of payment position of the country. This is done by rising import duties as a way of discouraging imports hence saving the scarce foreign
6. To control monopoly power. This is done by imposing heavy taxes on the super normal profits earned by the monopolist hence making it possible for other firms also to
7. To raise government revenue through taxation and borrowing. The revenue can be used to finance the government re-current and development
8. To discourage dumping. This is done by taxing the dumped commodities heavily so as to raise their prices and discourage their consumption by the local
9. To increase employment opportunities in the country. This is done by adopting a deficit budget as a way of increasing aggregate demand in the economy. This helps to stimulate investments and production which generates more employment
10. To allocate and regulate the use of the scarce resources so as to achieve maximum economic growth. This is done by using the government revenue collected to set up productive ventures which benefit the whole economy e.g. setting up power generation projects, construction of social and economic infrastructure
11. To control population growth. This is done by imposing heavy taxes on people with large families as a way of discouraging child birth.
12. To attract foreign aid by informing donors how resources are to be used
13. Guide the government on how to spend public funds in order to achieve economic stability and national growth.
14. It helps the country in manpower planning by increasing expenditure on education.
15. To inform government on the performance of the previous budget and fix loop holes in the current budget.
16. To encourage capital inflow by providing incentive to foreign investors.