Q.Write a short note on: Budget

A budget is the government's annual statement of its estimated income (receipts) and expenditure for a financial year. It shows planned revenue and spending and may be balanced, surplus or deficit. It is divided into a revenue budget and a capital budget.

Meaning

The word budget comes from a term meaning a small bag. In public finance, the budget is the annual financial statement presented by the government, showing the estimated receipts and estimated expenditure for the coming financial year (in India, from 1 April to 31 March).

Components

The budget has two main parts:

• Revenue budget: Deals with the revenue receipts (tax and non-tax revenue) and revenue expenditure of the government.
• Capital budget: Deals with capital receipts (such as borrowings and recoveries of loans) and capital expenditure (such as spending on assets and development projects).

Types of budget

On the basis of the relation between receipts and expenditure, a budget may be:

• Balanced budget: Estimated receipts are equal to estimated expenditure.
• Surplus budget: Estimated receipts are greater than estimated expenditure. …