A redistribution of income in a country can be best brought about through

The redistribution objective is best met by progressive taxation combined with progressive public expenditure (option 1). Progressive taxes impose higher rates on higher incomes, so the real burden falls more on the rich and less on the poor, reducing after‑tax inequality [1]. Fiscal guidance recommends progressive income taxation and heavy taxation of luxury goods, with proceeds directed toward productive uses or transfers to lower‑income groups to reduce inequality [1]. Empirical literature also shows progressive personal and corporate taxes can reduce inequality, while greater public spending on social welfare, education, health and housing improves income distribution; thus progressive expenditure complements tax progressivity to achieve redistribution [3]. Together they raise redistributive resources and target benefits to disadvantaged groups, amplifying income reallocation.

Sources

1. [4] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > TAX REVENUE > p. 85
2. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > 5.1.2 Classification of Receipts > p. 68
3. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Objectives of Fiscal Policy > p. 82
4. [3] https://icepp.gsu.edu/files/2015/03/ispwp1225.pdf