Definitions [4]
Definition: Government Budget
"A Government Budget is a statement of estimated receipts and expenditures of the government for a financial year."
Define of the following concept.
Balanced budget
A balanced budget occurs when the government’s total expenditure equals its total revenue during a financial year.
Balanced Budget = Total Expenditure = Total Revenue
Define or Explain.
Budget
Budget is a financial statement showing item-wise expected government receipts and government payments during a financial year. It also presents the government's report on the financial performance during the previous fiscal year. A government budget is not only a financial statement, but also a reflection of the government objectives, policies and their expected effects.
A budget is a financial statement of the estimated receipts and expenditures of the government for a given financial year.
Define the following concept:
Budget
According to Prof. Johnson, “A state budget is a statement of the states estimated income and expenditure in a commencing period usually one year.”
According to Prof. Dimock, “Balanced estimate of expenditure and receipt for the given period of time.”
Formulae [3]
Formula: Revenue Deficit
Revenue Deficit = Revenue Expenditure − Revenue Receipts
Formula: Fiscal Deficit
Fiscal Deficit = Total Expenditure − (Revenue Receipts + Non-Debt Capital Receipts)
Formula: Primary Deficit
Primary Deficit = Fiscal Deficit − Interest Payments
Key Points
Key Points: Government Budget
- A government budget is a statement of estimated receipts and expenditures of the government for a financial year.
- The term "Budget" comes from the French word "Bougette" (leather bag).
- A financial year in India runs from 1st April to 31st March.
- It is constitutionally mandated - Article 112 (Union Budget) and Article 202 (State Budget).
- The budget has two parts: Revenue Budget and Capital Budget.
- It covers different types of budget deficits and government debt in a mixed economy.
- The Union Budget is presented and discussed in Parliament every financial year.
Key Points: Objectives of Government Budget
- The government budget has three core functions: Allocation, Distribution, and Stabilisation.
- Public goods are non-rivalrous and non-excludable — the private sector will not supply them due to the free rider problem.
- Redistribution is achieved through progressive taxes and transfer payments to alter personal disposable income.
- The stabilisation function manages aggregate demand to counter inflation and recession.
- Employment generation includes promoting labour-intensive technology and funding public works.
- The budget also controls PSU finances (revenues and expenditures) to manage public enterprises.
Key Points: Types of Budget
- A Balanced Budget keeps government receipts and expenditure equal.
- A Surplus Budget means receipts exceed expenditure; used to control inflation.
- A Deficit Budget means expenditure exceeds receipts; used to tackle recession/depression.
- Deficit budgeting is the most commonly used approach in modern welfare states and developing economies.
- Budgets can also be classified as Revenue/Capital, Union/State, Ordinary/Emergency, Plan/Non-Plan (historical) and Development/Non-Development.
- Surplus and deficit budgets are used to influence aggregate demand in opposite directions.
Key Points: Components (Structure) of the Government Budget
- The government budget has two main parts: Revenue Budget and Capital Budget.
- Revenue receipts do not create liabilities or reduce/sell assets.
- Revenue expenditure covers day-to-day operations and does not create assets or reduce liabilities.
- Capital receipts either create a liability or reduce government assets.
- Capital expenditure creates physical/financial assets or reduces liabilities.
- Disinvestment proceeds, public borrowing, and RBI/foreign loans are examples of capital receipts.
- Land, buildings, machinery, and loans to states/PSUs are examples of capital expenditures.
Important Questions [32]
- The budget consists of revenue receipts and revenue expenditure ______
- State Whether the Following Statements Are True Or False with Reason. Government Budget is a Family Budget.
- Choose the Correct Answer : the Government Budget is for _________.
- In India Budget is Presented in the Parliament by the
- Explain the Budget Expenditure of the Government.
- Define of the following concept. Balanced budget
- Explain the types of a government budget.
- Write Explanatory Note.Components of Government Budget.
- Distinguish Between the Following Revenue Budget and Capital Budget.
- During Depression _____________ Budget is Preferable
- Define 'Or' Explain the Following Concept.
- Define or Explain. Budget
- Give Reasons Or Explain the Following Statement: For the Period of Inflation Surplus Budget is Prepared.
- Write the answers in ‘one’ or ‘two’ paras each: Explain the types of Government budget.
- Find the odd word out: Types of budget: Deficit budget, Zero budget, Balanced budget, Surplus budget
- Surplus Budget and Deficit Budget.
- During the Period of Inflation Surplus Budget is Advisable.
- Define or explain the following concept: Budget
- State Whether the Following Statement is True Or False :Budget is a Monthly Statement - False.
- Write Short Answer for the Following Question:What Are the Typing of Budget.
- Fill in the Blank with Proper Alternatives Given in the Bracket:Budget is the __Of the Revenue and Expenditure of the Coming Year.
- Fill in the Blank Using Proper Alternatives Given in the Bracket:During Depression .............. Budget is Preferable.
- Write Short Answer for the Following Question:Explain the Components of Government Budget ?
- Budget where total revenue equals to total expenditure is called ______.
- Write Short Notes (Any Two) Revenue Receipts
- State Whether the Following Statements Are True Or False with Reasons: the Expenditure is More than Income in Balanced Budget.
- Distinguish Between: Deficit Budget and Balanced Budget
- Give Reasons Or Explain the Following Statement: It is More Appropriate to Tax the Rich in Excess than the Poor.
- _____________ is an Example of Direct Tax
- State Whether the Following Statement is True Or False with Reason: Autonomous Consumption Expenditure Cannot Be Zero.
- Distinguish between the following. Direct tax and Indirect tax.
- Fill in the Blank with Appropriate Alternatives Given Below __________ is an Example of Direct Tax.
Concepts [12]
- Introduction of Public Economics
- Features of Public Economics
- Government Budget
- Objectives of Government Budget
- Features of Government Budget
- Public Economics - Budget (1 Year)(1 April to 31 March)
- Types of Budget
- Taxable Income
- Budgetary Accounting in India
- Budgetary Accounting - Consolidated , Contingency and Public Fund
- Components (Structure) of the Government Budget
- Factor Influencing Government Budget
