Suchergebnisse

Income inequality is one of the critical barriers to growth
and development in most of the developing countries including Pakistan.
Every third man in Pakistan falls below the poverty line1. Moreover, the
budget deficit has also been a serious issue throughout the history of
Pakistan"s economy. The persistent budget deficit is the constant source
of increasing poverty and deterioration of income distribution. Since
deficit is financed by increasing indirect taxes and money supply, it
causes the reduction in purchasing power and leads the masses towards
poverty [Arif and Farooq (2011)]. Therefore, it is a dire need of the
economy to have a good public policy such that it could reduce budget
deficit, alleviate poverty and redistribute income. Malik and Saqib
(1985) suggest that the resources of the economy can be distributed
equally only through appropriate changes in the tax system. Fiscal
policy can have a significant influence on removing the gap between
haves and havenots both directly and indirectly. It directly affects the
disposable income of individuals, whereas affecting their future earning
capacities indirectly