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Question
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
Answer in Brief
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Solution
- Industrialisation is a process of growth and expansion of industries in a country. The government can come forward for the establishment of basic industries (e.g. steel industry, heavy chemical industry) which are generally not taken up by the private investor for want of risks and huge investments.
- The state can also provide various inputs at subsidised prices to encourage private investment in industries.
- The government can provide relief to certain industries in the shape of lowering the taxes so that they could compete with foreign industries.
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Role of State in Economic Development
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Chapter 6: The State and Economic Development - QUESTIONS [Page 184]
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RELATED QUESTIONS
Match the following:
| Column I | Column II | ||
| A. | Direct tax | (i) | Tax rate increases with tax base |
| B. | Indirect tax | (ii) | Tax rate remains constant |
| C. | Proportional tax | (iii) | Imposed on goods and services |
| D. | Progressive tax | (iv) | Impact and incidence lie on the same person |
Distinguish between fiscal policy and monetary policy.
Define a degressive tax.
What is meant by regressive taxation?
Explain the term proportional taxation.
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
Draw a neat labelled diagram for progressive taxation.
State the four merits of a direct tax.
With reference to the taxation policy.
Differentiate between progressive and regressive taxes giving an example for each.
Explain briefly two merits of indirect tax.
