How many Types of Budgets are there in India?

By Harshal Vispute|Updated : November 2nd, 2022

According to estimates, there are three types of budget in India such as surplus, balanced, and deficit. The government's budget is said to be balanced if anticipated revenues are expected to equal anticipated expenses within a given fiscal year. A balanced budget will not help to establish a financially stable economy if the economy is experiencing deflation or depression.

Types of Budgets in India 

A budget is typically created and re-evaluated on a regular basis, and it is defined as an estimate of income and expenses over a specific future period of time. The Finance Minister of the country prepares the government budget, which is debated in the legislature and approved by the President or Chief Executive.

Surplus Budget: The budget is referred to as a surplus budget when anticipated revenues for the year exceed anticipated expenses. The surplus budget demonstrates the financial stability of the government. The government can adopt a surplus budget plan in times of excessive inflation, which lowers aggregate demand.

Balanced Budget: A balanced budget is one in which the anticipated revenue and expenses of the government for the year are equal. Total budget expenditure = Total budget receipts.

Deficit Budget: A budget is said to be in deficit when anticipated government spending exceeds anticipated revenue. The government's budgeted expenditures exceed its expected revenue. When expenses exceed revenues, a budget is said to be in deficit. A deficit budget is a liability for the government because it increases debt or reduces the government's reserve stock.

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FAQs on Types of Budget in India

  • There are three different sorts of budgets: balanced, deficit, and surplus. A budget is an estimate of income and spending for a predetermined future time period that is often created and updated on a regular basis.

  • A government's budget is an overview or plan of the anticipated income (often but not always from taxes) and expenses of that government. There are three different sorts of government budgets: operating or current, capital or investment, and cash or cash flow.

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