Canon of Maximum Social Benefit
Canon of Maximum Social Benefit states that the government should plan its expenditure with the motive of maximising the social benefit. The government should allocate its expenditure to increase the social benefit. The canon of Maximum Social Benefit also focuses on improving overall production. To achieve this, the government should use the ‘Law of Equimarginal Utility’. In accordance with this law, the government should distribute its various expenditures under different heads in such a way that the marginal utility accruing from all the heads will be equal and the overall marginal utility will be maximum. The government should allocate its expenditure like an individual allocates his/her expenditure in order to maximise their overall satisfaction. However, the government faces difficulty in allocating its expenditure according to the Law of Equimarginal Utility. Evaluation of marginal utilities from various heads is the most difficult task. This canon tells the government to maximise the overall satisfaction of the society as a whole, and not that of any one section of the society. If the government tries to satisfy the needs of any one particular section over other sections, there is a violation of the Canon of Maximum Social Benefit. This canon also states that the inequalities in society should be reduced by the optimal allocation of the government’s expenditure.
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