Syllabus T. Y. B. A. Paper : IV advanced economic theory with effect from academic year 2010-11 in idol

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Evaluation of Benefit Principle 
The benefits principle has the following advantages: 
1. It suggests that the government should impose tax on 
people when they received benefits from public services. 
2. It simultaneously determines both the public services and 
the tax shares, as it combines both the income and 
expenditure sides of the budgeting process. 
3. It links the provision of public services to the preference 
pattern of the individuals.
 
Disadvantages: 
1. Contributions are not strictly taxes: This principle does 
not consider the contributions made by the people for the 
public services as strictly taxes. Instead in the nature of 
prices where the people willingly agrees to pay for the public 
services. 
2. Difficulties in measuring benefits: It is difficult to measure 
the benefits to individual members of the society accurately. 
Benefit is ultimately a subjective experience. 
3. Non applicability to welfare activities: This principle 
cannot be applied to welfare functions which are basically 
undertaken for the needy and the poor. It will be unfair to 
charge for these services.  
4. Increase income inequalities: If taxes are imposed 
according to the benefits received, it may increase income 
inequalities.