All You Need To Know About Three Types Of Union Budgets

Finance Minister Nirmala Sitharaman on February 1 will present India’s Union Budget in Parliament for 2023- 2024. Various experts across the country have put forth their suggestions and recommendations for the budget 2023. But do you know the types of union budgets our country can adopt depending upon the economical circumstances? If not, then News18 classes will let you know more about the three types of union budgets in India.

Balanced Budget

A balanced budget is one in which the anticipated revenue for the fiscal year by the government equals the actual expenditures. The entire budget expenditure in this budget equals total budget receipts. For instance, if budget expenses total 5 lakh crore and budget revenues total 5 lakh crore, the budget is said to be balanced.

Deficit Budget

When anticipated government spending exceeds anticipated revenue for the fiscal year, it results in a deficit budget. A budget is said to be in deficit if expenses surpass revenues. The public’s debt or the surplus from previously accumulated reserves is typically used to offset the deficit. Since it increases debt or reduces the government’s reserve, a deficit budget creates a liability for the government. A deficit budget is a crucial tool for financing anticipated advancements in developing nations and enhancing stability in developed nations.

Surplus Budget

A surplus budget is one in which the anticipated income or revenue of the government outpaces the anticipated expenditures. The government may have surplus budgets if there is additional money to spare if its long-term financial planning is reliable and successful. A surplus budget can be used by the government as a weapon to lower aggregate demand and thus cut inflation when there is too much of it.

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