Budget 2019: Understanding its types
Meaning of the term:
The budget includes all the revenues and expenditures incurred in a financial year. It is a specified amount of sum. Budget 2019 will be declared on February 1.
We can simply understand it through the budgets made in our family. At the beginning of each year, a budget is prepared in which all the fixed incomes and expenditures are recorded. It also has expected incomes like debts, rents etc. And expected expenditures too. Savings are also an important part of the budget as it saves us at the time of crisis. Money kept as savings are used at the time of any emergency or unseen situation.
The same applies to the government budget. It plans the whole thing for the country at once.
Article: Union budget of India comes under Article 112 of the Constitution of India.
Types of government budget:
There are three categories of government budget –
Balanced Budget– This is a kind of budget, where the government receipts are equal to government expenditures, which clearly means that there is neither any loss nor there’s any need of extra money or borrowing.
Deficit Budget– This is a kind, where government expenditure exceeds government receipts, which in turn forces the government to print new notes or borrow from some other country. This is the type of budget which is made in India so that at the time of crisis the extra money can be used for the welfare of the citizen.
Surplus– In this kind of budget, the government receipts are more than its expenditure. This is just a type which can be mentioned and never happened in reality.
Principal Elements of Budget :
There are two basic elements of any budget whether it’s balanced, deficit or surplus and they are revenues and expenses.
Revenues are acquired primarily from taxes. Government expenses include buying of current good which according to the economists are government consumption and investment and transfer payments like unemployment or retirement benefits.
Revenues and Expenditures can also be understood as receipts and expenditures. There are two types of receipts, revenue receipt and capital receipt, and two types of expenditures, revenue expenditure and capital expenditure.
Difference between Interim budget and Vote on Account
Interim budget is a temporary budget. it is made for a particular period of time. It has all the details related to the incomes or expenditure that will occur in the coming months. This is maintained until the new government comes into power.
Whereas, vote on account only deals with the expenditure side, i.e. when the parliament gives permission to the government, to withdraw or use the extra money for an emergency or for any unexpected situation. Vote on account comes under Article 26 which makes it compulsory for the government to take permission from the parliament before using consolidated fund.