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Question
Explain clearly tour ways by which the state can promote economic growth and development.
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Solution
Role of State in Economic Development:
- The provision of economic infrastructure is mainly the government's responsibility, which is essential for economic development.
- Capital formation is an essential condition for economic development. The state can use its fiscal and monetary policy to generate resources for capital formation. In our country, public sector investment in industries and expenditure on infrastructure has led to huge capital formation.
- Basic and heavy goods industries require huge investment and have a long gestation period. The private sector is reluctant to invest in the development of these industries, but our government has established such industries.
- Economic development in India would be incomplete without agricultural development. The government can promote agricultural development by providing various facilities and incentives to the agricultural sector.
RELATED QUESTIONS
Observe the relationship of the first pair of words and complete the second pair:
Tax paid by person on whose it is imposed : Direct tax.
A tax is paid by some person and the final burden is born by some other person : ______.
The state can promote economic development by ______.
Which of the statement is true for income tax?
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What is meant by regressive taxation?
Give an example of Indirect tax.
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Explain how indirect taxes can be made progressive.
Citing reasons state the superiority of Fostering civic consciousness by direct tax over the same by indirect tax.
