Factors or determinates affecting consumption function

According to Keynes, the factors affecting consumption function can be broadly classified into two categories:- 1)Objective factors, 2)Subjective factors

1)    Objective factors:-The objective factors are exogenous in nature and cause shift in the consumption function. Following are the main objective affecting consumption function ---

(a)  Changes in wage level:-In general, there is positive relationship between wage and consumption expenditure. If the wage rate rises, consumption function shifts upward and vice versa.

(b)  Distribution of income:-Consumption function not only depends upon income, but also on the way in which the income is distributed. Greater the inequality in income distribution lower will be the propensity to consume and greater the equality in income distribution, higher will be the propensity to consume.

(c)   Windfall gains and losses:-windfall gains and losses also affect consumption function. Windfall gained tends to raise the propensity to consume while windfall losses are likely to shift the consumption function downward.

(d)  Introduction of new products:-Introduction of new products in the market, by changing the scale of preferences of the consumer, leads to increase in consumption expenditure.

2) Subjective factors:-Subjective factors are endogenous in nature which determines the slope and position of consumption function. According to Keynes there are eight motives which leave the individual to refrain from spending out of their income.

a) To build the reserve for unforeseen contingencies like death, diseases etc.

b) To provide for anticipated future needs like retirement, future higher studies of children.

c) To enjoy an enlarged future income by investing funds of correct income.

d) To enjoy a sense of independence.

e) To process power or to get higher social or political status.

f) To secure enough funds to carry out speculation because speculation is an essential part of money market.

g) To bequeath a fortune. (Bequeath means give or hand on)

h) To satisfy purely, miserly, instinct.

  

ভাৰতীয় খাদ্য সুৰক্ষা অধিনিয়ম 2013

    2013 চনৰ ভাৰতীয় খাদ্য সুৰক্ষা অধিনিয়মখন আইনত পৰিণত হয় 2013 চনৰ 12 ছেপ্টেম্বৰ  তাৰিখে ৷এই আইনখনৰ প্ৰধান লক্ষ্য হ’ল ভাৰতৰ 1.2 বিলিয়ন জনসাধাৰণৰ তিনিভাগৰ দুই অংশ জনসাধাৰণক উপযুক্ত খাদ্য –সামগ্ৰী যোগান ধৰা ৷এই অধিনিয়মখনৰ অধীনত ভাৰতীয় জনসাধাৰণে তলত দিয়া দৰত  প্ৰতি কি.গ্ৰা. খাদ্য-সামগ্ৰী ক্ৰয় কৰিব পাৰিব –

    

    

    

     চাউল-        প্ৰতি কেজিত 3 টকাকৈ

    ঘেহুঁ-          প্ৰতি কেজিত 2 টকাকৈ

    গোটা শস্য-   প্ৰতি কেজিত 1 টকাকৈ

খাদ্যসুৰক্ষা অধিনিয়মখনৰ কিছুমান গুৰুত্বপূৰ্ণ বৈশিষ্ট্য আছে –

ক) গ্ৰামাঞ্চলৰ 75% আৰু নগৰাঞ্চলৰ 50% জনসাধাৰণে প্ৰতি মাহত চৰকাৰৰ পৰা যোগান ধৰা খাদ্যদ্ৰব্য যেনে :-চাউল,ঘেঁহু আৰু গোটাশস্য প্ৰতি কেজিত ক্ৰমে 3 টকা,2 টকা আৰু 1 টকা দৰত ক্ৰয় কৰিব পাৰিব ৷

খ ) ৰাজ্যচৰকাৰ সমূহে খাদ্যদ্ৰব্য সমূহ বিতৰণৰ ক্ষেত্ৰত প্ৰধান দায়িত্ব গ্ৰহন কৰিব ৷

গ) ৰাজহুৱা বিতৰণ কেন্দ্ৰসমূহ পুনৰ গঠন কৰা হ’ব ৷

ঘ ) পৰিয়ালৰ জেষ্ঠ মহিলাগৰাকী (18 বছৰ বা ওপৰৰ)ৰ নামত “ৰেচন কাৰ্ড “ মুক্ত কৰা হ’ব ৷

  

     এই খাদ্য সুৰক্ষা আইনমতে সমাজৰ দুৰ্বল ,পিছপৰা আৰু দৰিদ্ৰ সীমাৰেখাৰ  তলত বসবাস কৰা জনসাধাৰণৰ বাবে খাদ্য –সামগ্ৰী যোগান ধৰিছে যদিও বহুজনে ইয়াক সমালোচনাও কৰিছে ৷

  প্ৰকৃততে এই খাদ্য সুৰক্ষা আইনে দৰিদ্ৰ শ্ৰেণীৰ জনসাধাৰণক প্ৰতিনিধিত্ব কৰিছে ৷ কিন্তু সমাজৰ ধনী শ্ৰেণীৰ লোকেও ইয়াৰ বাবে আবেদন কৰা দেখা গৈছে ৷ফলত আইনখনৰ প্ৰকৃত উদ্দেশ্য শাধনত ব্যাঘাট জন্মাটৌ নিশ্চিত ৷

বিৰোধী দলৰ এজন নেতা মুৰলী মনোহৰ যোশীৰ মতে,”The bill is a measure for vote security rather than food security .”

খুচুৰা খণ্ডত প্ৰত্যক্ষ বৈদেশিক  বিনিয়োগ:

কি প্ৰভাৱ পৰিব ভাৰতীয় অৰ্থনীতিত

কি কি পাম আমি-

1)   অৰ্থনীতিৰ মুঠ ঘৰুৱা উৎপাদন বৃদ্ধি পোৱাৰ লগতে নিয়োগৰ সুবিধা বৃদ্ধি পাব ৷

2)   মধ্যভোগীৰ অনুপস্থিতিত সামগ্ৰীসমূহ অধিক কম দামত গ্ৰাহকসকলৰ ওচৰলৈ আগবঢাই দিব পৰা যাব ৷

3)   কৃষিজ সামগ্ৰীৰ বাবে খেতিয়কসকলে উচিত দাম পাব ৷

4)   মধ্যভোগী নথকাৰ বাবে কলা বজাৰ কৃত্ৰিম নাটনি আদি নাথাকিব ৷গতিকে পিয়াঁজৰ দাম বঢাৰ দৰে ঘটনা নঘটিব ৷

5)   চৰকাৰে কৰ ব্যৱস্থাৰ যোগেদি অধিক ৰাজহ আহৰণ কৰিব পাৰিব ৷

6)   উচ্চ মানদণ্ডৰ সামগ্ৰীয়ে বজাৰ ভৰিব ৷

7)   ৰপ্তানি বৃদ্ধি পাব ৷

8)   খাদ্য সামগ্ৰীৰ সংৰক্ষণৰ বাবে উন্নত ব্ৱ্যস্থাৰ সৃষ্টি হোৱা বাবে খাদ্যবস্তুৰ অপচয় ৰোধ হ’ব ৷

কি কি হেৰুৱাম আমি -

বৈদেশিক কোম্পানীৰ ব্যৱসায়িক দক্ষতাৰ সন্মুখত স্থানীয় ব্যৱসায়িক প্ৰতিষ্ঠান সমূহে টিকি থাকিব নোৱাৰিব ৷ঘৰুৱাভাৱে উৎপাদিত সামগ্ৰীসমূহৰ দামতকৈ কোম্পানীসমূক্ষে আগবঢোৱা দাম কম হ’ব বাবে থলুৱাভাৱে উৎপাদিত সামগ্ৰীসমূহৰ  উৎপাদন বন্ধ কৰিবলগীয়া হ’ব ৷

WISEMAN PEACOCK HYPOTHESES

 Peacock and Wiseman conducted a new study based on Wagner's low. They studied the public expenditure from 1891 to 1955 in UK. They found out that Wagner's low is still valid. According to this hypothesis, the increase in public expenditure doesn't follow any smooth and continuous trend but the increase in public expenditure occurred in step like manner. However, the approach of the hypotheses is made of three separate concepts.

1. Displacement effect

2. Inspection effect and

3. Concentration effect.

1 DISPLACEMENT EFFECT:-

During the time of war, the govt. further increases the tax rates and enlarges the tax structure to generate more funds to meet the increase in the defense expenditure. After the war the new tax rate or tax structures may remain the same, as the people get used to them. Therefore the increase in revenue results in rise in govt. expenditure.

2. INSPECTION EFFECT:-

In the situation of kinky movement of public expenditure, the govt's existing revenue earning falls much short and so this requires a upward revision of revenue mobilization and a review of the situation is made both by the government and the tax paying public. Such review is referred to as inspection effect.

3. CONCENTRATION EFFECT

With the kinky rise in the public expenditure it is the central government that comes to fulfill larger and larger state activities leaving lesser responsibilities to the regional and local public authorities. This has been referred as to concentration effect of increasing state activities.

In short, Peacock Wiseman thesis of govt. spending trend is more convincing than Wagner's hypotheses.

THE MODERN THEORY OF TAXATION

INTRODUCTION:-

Modern theory of taxation is one of the important contributions of Dalton to economics. This theory is also known as the Modern theory of shifting and incidence. In this theory Dalton shows the relationship between the burden of taxation with elasticity of demand and supply.

ASSUMPTION

This theory is based on the assumption of "ceteris- paribus" means other things being unchanged.

THE THEORY

According to this theory

1. There is direct relationship between the elasticity of demand of the taxed good and the burden borne by the seller.

2. There is negative relationship between the elasticity of demand of the taxed good and the burden borne by the buyer.

3. There is positive relationship between supply elasticity of the taxed good and the burden borne by buyer.

DIAGRAMATICAL EXPLANATION

Elasticity of demand and supply of the taxed good has effect on the tax burden of both the seller and the buyer. It can be explained with the help of the following diagram.

 

In the above diagram, DD is demand and SS is supply curve. At the point E, the demand and the supply of the commodity is equal and thus this point represents the market equilibrium of the commodity. Hence, the equilibrium price is OP and equilibrium quantity is OQ.

Now, because of the imposition of tax at E1R, the supply curve shifts to S1S. The price also shifts to OP1. Therefore, the burden borne by buyer is E1T and the rest TR is borne by seller.

Symbolically,

                   Ed = ∆Qd/ ∆p * P/Q

                        = QQ1/PP1 * OP/OQ

                        = QQ1/E1T * QE/PE

Es  =  ∆QS/ ∆P × P/Q

= QQ1/PP1 × OP/OQ

= QQ1/TR × QE/PE

NOW,

      Ed/Es = QQ1/E1T × QE/PE × TR/QQ1 × PE/QE = TR/E1T //

             Therefore, Burden of seller (related to Ed) = TR

              Burden of buyer (related to Es) = E1T

PROPOSITIONS OF THE THEORY

1.       If elasticity of demand and supply of the taxed good is equal, then the burden of tax is also equal on both the seller and buyer.

2.       In case of elasticity of supply> elasticity of demand, the burden falls on buyer>burden falls on seller.

In the following diagram, burden of tax is ER

Burden borne by seller= TR

Burden borne by buyer= E1T

E1T> TR

3.       If elasticity of demand> elasticity of supply, the burden borne by seller> burden borne by buyer.

4.       If demand is perfectly elastic, the whole burden of tax is borne by the seller.

In the following diagram, we see that the price is unchanged. Therefore buyers don’t bear any burden. The whole burden has to be borne by the seller.

5.       If demand if perfectly inelastic and supply is elastic, then the whole burden of tax is borne by the buyer.

In the diagram, DD is the inelastic demand curve. We see that demand of a commodity remains the same. So price of the commodity rises. Therefore the whole burden of tax has to be borne by the buyer.

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