Q.Distinguish between a Balanced Budget, a Surplus Budget and a Deficit Budget.

The three types of budget simply describe the relationship between the government's total estimated receipts and total estimated expenditure. …

A Balanced Budget is one in which the government's total estimated receipts for the year are exactly equal to its total estimated expenditure — neither a shortfall nor an excess.

A Surplus Budget is one in which total estimated receipts EXCEED total estimated expenditure — the government expects to take in more than it plans to spend.

A Deficit Budget is one in which total estimated expenditure EXCEEDS total estimated receipts — the government plans to spend more than it expects to receive, and must make up the shortfall through borrowing. This is the most common situation for most modern governments in most years, including India's, since a Deficit Budget also allows the government to use higher spendi …

Assuming a Deficit Budget is always a sign of poor financial management — a government may deliberately choose a Deficit Budget as an active tool of fiscal pol …