Explain how government budget can be used to influence distribution of income ?

The government's budget and  budgetary policy can influence distribution of income in the following ways:
i. The government uses the taxation and expenditure policy, through the taxation policy the government imposes the higher taxes on higher income group and through expenditure policy it transfers purchasing power in the hands of the poor section of societies in terms of subsidies etc.
ii. The government regularises the activities of the private sector to provide social benefit to the poor.
iii. A tax is a legally compulsory payment imposed by the government on households and producers. The government imposes taxes on socially unsafe goods such as alcohol and tobacco. Thereby resources will be shifted to the production of socially essential goods.
iv. The government also provides subsidies for necessary goods such as wheat, rice and sugar. Thereby the resources are shifted from the
production of goods for the rich to the production of goods for the poor.