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  Kinds of Budget

Kinds of Budget:

1) Balanced Budget:

A balanced budget is that, over a time period, revenue does not drop short of expenditure. In another words government budget is said to be balanced whenever its tax revenue and expenses are equivalent.

2) Unbalanced Budget (Surplus or deficit):

An unbalanced budget is that, over a time period, revenue surpasses expenses or expenditure exceeds returns. In another words, the government’s income or tax revenue and expenses are not equivalent. Whenever there is an excess of income over expenditure, it is termed as surplus budget. On other hand, whenever there is a surplus of expenditure over income, it is a situation of deficit budget

Traditional economists promoted balanced budget. However it is not always obliging in attaining and sustaining economic growth.

Current economists argue that an unbalanced budget is very helpful for attaining and maintaining economic stability.

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