India: Government Budget Components

India: Government Budget Components

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A government budget is a consolidated finance statement detailing the anticipated public expenditures and revenue for a given fiscal year. The budget of a government alludes to a summarization of the expected and intended item-by-item and the expenditures that is anticipated within a financial year. The fiscal or, the financial year starts on April 1 and ends on March 31. Government at all levels, whether focal, state or a nearby level, set up the Financial plan. The budget is made with the general government's policy toward the welfare of the people in mind.

The government spends money on a variety of things to provide basic services like health care and education. It also spends money to boost production, reduce poverty, unemployment, and income and wealth inequality, among other things. This kind of spending by the government helps the people's well-being. The government uses revenue from things like taxes, public debt, and other means to pay for this expense. People contribute the funds that are used to pay for government expenditures. The government plans expenditure items and financing sources in accordance with the public welfare objective. As a result, the government decides on behalf of the people how to spend public funds under various spending categories and raise funds from various sources. This makes government responsible to individuals. People exercise their right to know how the government spends public funds and raises funds from them through legislatures, parliaments, and other civic bodies. The budget of the government exemplifies this obligation of government to the people.

A government budget has three main components

• It is a consolidated financial statement of the government's anticipated expenditures and revenue sources.

• It has to do with a fiscal year.

• The declared policy goals of the government are used to plan the expenditures and revenue sources.

Types of budgets - The two parts of a budget are government receipts and expenditures. We might have a budget that is in balance, one that is in deficit, or one that is in surplus depending on the magnitudes of receipts and expenses. At the point when the public authority Use is precisely equivalent to its Receipts, the public authority has Adjusted Financial plan. At the point when the public authority Use surpasses its Receipts, it is Deficient budget. A budget surplus occurs when the government's revenue exceeds its expenditures. Thus:

• Balance Budget: Total Budgeted Revenue minus Total Budgeted Expenditure

• Deficit Budget: Total Budgeted Revenue minus Total Budgeted Expenditure

• Surplus Budget: Total Budgeted Revenue minus Total Budgeted Expenditure

There was a time when Budget Surplus was considered an indicator of a good Budget. However, in today's economy, budget deficits are commonplace.