Budget Measures are the tools which define the course of the budget. There are several budget measures which impact the planning and implementation of the budget. Budget measures need to include sustainable fiscal policies and regulated economic growth policies. Countries face economic problems which are the result of weaker budget systems which are not suitable for the country or sometimes are ill timed(Wildavsky, 1986).
Tax Rate:Tax rates are the shares of income earned by businesses or individual given to the government.Setting up tax rates is the most important aspect of budget as this determines the revenue collection for the government spending. Higher the tax rate is higher will be the revenue and vice versa. But this is not so simple;government often reduces the tax rates to promote the businesses in the country. Planning is critical while defining tax rate because the “Zone of Agreement” needs to be attained. It cannot be very low as this will reduce revenue and similarly it cannot be very high which will demotivate businesses.
Trade Policies:Trade policies are another important budgetary measure where all the trade related policies are set up. Many businesses have special interest in this part of budget which is critical in some of the major projects. Trade policies include export and import policies which determine capital account balances for the country. Every country will try to increase exports by setting up policies which promote exports.
Public Spending:Public spending is the area where government decides on how much of the revenue it will spend on public platform. It consists of several departments where the money will be spent such as health care, infrastructure, education, Defence, women empowerment etc… All the areas of spending are important but determining proper share is critical. Generally expenditures are requirement based and also revenue considerations are important.