The primary policy policy

///The primary policy policy
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The primary policy policy

In each stage of economic development, the government in each country should set a suitable fiscal policy to achieve the objectives of the macro economy.
Among the important contents of national financial policy, emerged two major contents are:
– Policy on creating capital and using capital in the economy.
– Policy regulating income through financial instruments.

1. Policy on creating capital and using capital in the economy

Economic development requires three elements: labor, capital, technology. These factors are also called scarce resources. For our country, labor is plentiful, but capital is too small and technology is backward. Of course, technological innovation also needs capital. Therefore, capital is a key issue in financial policy at this stage.

The goal of the macro economy in every country is to increase the gross national product (GNP). To increase GNP, it is necessary to increase capital for production, business and services. The question is how to identify capital needs in each period?

There are many ways of calculating the need for a country’s capital in a given period.
+ The first way: Identify the need for capital on the basis of solving social problems and employment.
+ Second method: Based on Harrod Domar model: KaYΔ = Δ.
With: YΔ – the increase in output.
KΔ – increase in capital investment

2 – is the growth factor.

Economists calculate growth in developing countries ranging from 0.14 to 0.30. In our country, this figure in the early 1990s was about 0.50.
In order to implement the policy on raising capital, it is necessary to address the following issues:

– By all means and form, financial instruments must be geared towards exploiting all potential capital in the economy.
– To step up external financial activities in order to attract foreign capital sources, with measures of borrowing, import and export and direct investment.
– Thoroughly implement the principle of thrift and efficiency in using capital to select an appropriate investment structure.
– Adjusting the state budget expenditure structure in line with reducing urgent spending needs.
– To make full use of intermediary financial instruments to clear capital sources and form the capital market and monetary market, expand the autonomy in all production and business activities as well as financial and monetary services. currency trading activities

3. Income adjustment policy

An acute conflict in the distribution of income is the conflict between social policy and the law of distribution in the market economy. The problem is that we must have a policy of reasonable distribution of wealth in the whole society, which must ensure the objectives of the macro economy.

Modern economists argue that there are two sharp tools of fiscal policy in distribution, namely: Taxes and government spending.

Taxation: While everyone acknowledges the impact of taxation on distribution, there are a number of differing views on how it is used, how it is used to stimulate economic development. Harmonize your income, and make sure that your budget is well-earned.

Use of tax tools, in which the use of taxes, taxable objects and tax rates are important contents suitable for each period and certain practical conditions. For example, income tax is a tax imposed on the income of the population and income entities – a tax commonly applied in economically developed countries, but in us is taxable area. substantial.

Real taxation is a double-edged sword. If it is used correctly, it has a positive effect on economic development, but if it is not used properly it has the opposite effect of slowing down development. In most countries, taxes are used as a means of ensuring revenue for the state budget, and it is also considered an important means of regulating the economy.

In Vietnam, the tax tool as a tool of fiscal policy has only really brought into play its role in the macroeconomic management of the economy since 1990, when the State of Vietnam officially issued The new tax system. With this system of taxation, the country’s fiscal policy has had a positive impact on the national finance: a significant reduction in budget deficit, which has contributed to stopping inflation from boosting the economy. Although there are limitations in the structure of the tax system and tax rates in some tax laws, we have seen positive results of this tool for socio-economic country in recent years.

+ Budget spending tool: Budget spending is a huge expenditure of the country to meet the needs of the whole society. In developed countries, budget expenditures are mainly for public expenditures, such as: cultural-social, educational, health, security-defense, and public sector expenditures. plus … In our country, budget spending is also aimed at ensuring social needs, especially for economic development occupy an important part. Because although the state advocates a multi-sectoral economy, in the public sector a large share of the economy is in the economy.

The problem is that, in a country’s fiscal policy, budget spending has a great deal of social and economic significance. Economists study the needs of the economy in one country, showing that: government spending has a huge impact on the total demand of the economy. Government expenditures on health, education, national defense and social objectives (subsidies for the poor, unemployment benefits, etc.) and investment in economic development have pushed social demand up. It is very easy to bring about the imbalance of supply-demand in the economy and the risk of inflation.

In fact, in our country, during the period of inflation, one of the reasons is the subsidy mechanism of the budget, the budget is too large to exceed the supply of the economy, of which expenditure on economic development The floods have not hit the key, has led to huge waste of resources of the country.

But it must be noted that the Vietnamese state – the socialist state, which, besides its economic objectives, has an important objective of social justice. In order to achieve social equality, the costs of government social assistance are of great significance for improving the well-being of people enjoying social welfare.

2018-04-26T11:29:26+00:0026 - 04 - 2018|