Summary |
Credit planning is a must for a developing economy. Its basic tenet is the wise utilization of scarce resources among competing demands for funds from merchants, manufacturers, individuals and of course the Government itself, which is the biggest spender. Credit planning by the government is done through the budget, the objective being generally to match the expenditure on revenue and capital accounts by taxation and non-inflationary borrowing, that is to say borrowing from outside the banking system. The budget in the modern times is the major instrument of economic policy, endeavouring to serve the objectives of economic growth, social justice and price stability. Government expenditure, in relation to aggregate national expenditure, is now of vast dimensions, governments undertaking a variety of economic activities not generally contemplated in the pre-war years. Consequently, managing the budget of the government is a complex and onerous task.
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