Mercy E. Biney Asked: February 11, 20212021-02-11T19:25:32+00:00 2021-02-11T19:25:32+00:00In: Public Sector Accounting in India How many types of budget are there in India How many types of budget are there in India how many types of budget are there in indiatypes of budget are there in india Share Facebook Related Questions How much is the Consolidated Fund of India? Who is the guardian of public funds in India Is the consolidated fund of India kept in State Bank of India What is Consolidated Fund of India treasury of government of india Who is the guardian of public funds in India Who controls Contingency Fund of India How many types of funds are there in India Who controls Consolidated Fund of India Who get salary from Consolidated Fund of India 2 Answers Voted Oldest Recent PSAmaster 2022-03-17T21:52:09+00:00Added an answer on March 17, 2022 at 9:52 pm According to estimates, India’s government budgets fall into three categories: surplus budgets, balanced budgets, and deficit budgets. The Union Budget 2021-22 Summary can be found at the provided link. If the anticipated government receipts equal the anticipated government expenditure in a fiscal year, this is referred to as the government’s balanced budget. A balanced budget will not contribute to financial stability if the economy is experiencing deflation or economic depression. Types of budget In India According to the government, there are three types of budgets: Balanced budget. Surplus budget. Deficit budget. 1. Balanced budget When a government’s estimated revenues and anticipated expenditures are equal, the budget is said to be balanced. Specifically, government receipts and expenditures. That’s because the government raises money through taxes and other ways. In the past, a balanced budget was thought to be a good way to keep the government from spending too much money. The government has to be fiscally responsible and keep its spending within the limits of what it can afford. Classical economists such as Adam Smith popularized the concept of a balanced budget. They regarded a balanced budget as being neutral in terms of its effect on the functioning of the economy and thus the best. However, contemporary economists believe that a balanced budget policy may not always be optimal for the economy. For example, during a depression, there is less economic activity, which leads to jobless people being out of work The government may intervene to save the populace. It has the authority to borrow funds and spend them on public works projects. This will lead to more jobs, more demand for goods and services, and more investment. 2. Surplus budget When estimated government receipts exceed estimated government expenditures, a surplus budget exists. When the government spends less than it receives, the budget is said to be in surplus. Government expenditure projections exceed anticipated government expenditures. A surplus budget is used to either reduce the public debt or increase the government’s savings. A surplus budget may be advantageous during times of inflation. While there is more work during times of inflation, there is also a tendency for prices to rise quickly. This must be checked, particularly for those with a more or less fixed income. This inflationary imbalance can be closed by lowering the economy’s effective demand level. It is a situation that can be corrected by increasing taxes. This would increase the government’s revenue but erode the people’s purchasing power. As a result, aggregate demand will be reduced. This inflation discrepancy can be closed by reducing government spending. The surplus budget should not be used for purposes other than to close the inflationary gap, as it may result in increased unemployment and low economic output. 3. Deficit budget when the government’s revenue is expected to be less than its expenditure. The majority of budgets in modern economies are of this type. That the anticipated government expenditure exceeds the estimated government receipts. A deficit budget increases the government’s liability or depletes its reserves. A deficit budget may be advantageous during times of depression when economic activity is at a low level. It results in job losses, business closures, and even bankruptcy, as well as inflation. Through deficit financing, the government can borrow money and increase expenditure on public works. This will result in an increase in employment and total effective demand for goods and services, which will stimulate investment. As a result, a deficit budget is helpful in eradicating depression and unemployment. Any country in the world strives to avoid a deficit budget, despite the fact that achieving a surplus budget is difficult, which is why countries strive for a balanced budget in order to avoid inflation, unemployment, or other negative consequences. Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp PSAmaster 2022-03-18T10:44:57+00:00Added an answer on March 18, 2022 at 10:44 am There are three different types of budge in India. Indian government budgets are thought to fall into three groups: surplus, balanced, and deficit. According to estimations, India’s government budgets fall into three categories: surplus budgets, balanced budgets, and deficit budgets. The Union Budget 2021-22 Summary can be found at the provided link. If the anticipated government receipts equal the anticipated government expenditure in a fiscal year, this is referred to as the government’s balanced budget. A balanced budget will not contribute to financial stability if the economy is experiencing deflation or economic depression. source Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Leave an answerCancel replyYou must login to can add an answer. Username or email* Password* Remember Me! Forgot Password?