The government budget is an annual financial document in which each ministry is given a fixed amount to meet its goals for the coming year. On the basis of estimates, the budget is divided into three categories – balanced budget, surplus budget and deficit budget. Students should know the budget and the important information related to it. Let us know the important things related to the budget.
When is the budget presented?
The Union Budget is the financial statement of the government, which also reflects the balance sheet of the government. It tells the people about the current and projected state of the country’s economy for the coming year. The Government of India presents the Union Budget on 1 February. Finance Minister Nirmala Sitharaman will present the general budget for the financial year 2022-23 in Parliament on February 1, 2023. The Economic Survey is released a day before on January 31.
budget period
Every year, the government presents the details of the expenditure and estimated receipts for the next year. In simple words, it is the details of the government’s financial plan for the next financial year. The period of the financial year is from 1st April of the current year to 31st March of the next year. The financial statement presented by the government shows the estimated receipts and expenditure of the central government in a particular financial year.
related news
Balanced Budget
In case of balanced budget, the estimated expenditure should be equal to the expected income or revenue in a particular financial year. A balanced budget does not guarantee financial stability in times of economic recession or deflation as it has no place. The biggest advantage of this type of budget is that it puts a stop to extravagance. However, one of the biggest drawbacks of this type of budget is that it can hinder the process of economic development and at the same time limit the scope of welfare activities of the government.
Surplus Budget
When the expected revenue for the year exceeds the expected expenditure, that budget is called a surplus budget. A surplus budget reflects the financial stability of the government. The government may adopt a surplus budget plan in times of hyperinflation, which reduces aggregate demand. Surplus budget reflects the financial prosperity of a country, the extra money can be used to pay off dues, which reduces the interest payable and is helpful to the economy in the long run. However, in cases of economic recession, a surplus budget is not considered a suitable option for the government.
Deficit Budget
A budget is said to be in deficit when the estimated expenditure is more than the estimated revenue in a particular financial year. This type of budget means that the revenue of the government is less than its expenditure. According to many experts, a deficit budget is suitable for developing economies like India and especially in times of recession, this type of budget helps in generating additional demand and increasing the rate of economic growth.
Modi government’s 10th budget
The Modi government has presented a total of 9 budgets since 2014 and is going to present the 10th budget this year. In the first term, the then Finance Minister Arun Jaitley presented the budget five times. At the same time, due to the Lok Sabha elections in 2019, the interim budget was presented in February 2019 and then the full general budget came in July 2019. Finance Minister Nirmala Sitharaman will present the general budget for the financial year 2022-23 in the Parliament on 01 February 2023.