How Many Types of Budgets are There in India?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

There are three Types of Budgets in India, according to estimates, such as surplus, balanced, and deficit Budget. The government’s budget is said to be balanced if the anticipated revenues are equal to 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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