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Question
Distinguish between Surplus budget and Deficit budget.
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Solution
| Points | Surplus Budget | Deficit Budget | |
| 1. | Meaning | A surplus budget takes place when the estimated receipts are more than the estimated expenditure. | A deficit takes place when its estimated expenditure is more than estimated receipts. |
| 2. | Formula | Surplus Budget = Estimated Receipts > Estimated Expenditure | Deficit Budget = Estimated Receipts < Estimated Expenditure |
| 3. | Preference by Countries | A country will prefer a surplus budget because the surplus can be used to repay outstanding loans or liabilities. | A country does not prefer a deficit budget, as it affects economic growth and development. |
| 4. | Leads to | It leads to a decrease in the liabilities of the government or causes an increase in its savings. | It leads to an increase in the liabilities of the government or causes a reduction in its reserves. |
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The classification of budgets into Development Budget and Non-Development Budget is based on:
From which Union Budget was the Plan/Non-Plan classification discontinued?
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