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Government budgeting refers to the process by which the government prepares its annual financial statement, estimating the revenue and expenditure for the upcoming fiscal year. It is a fundamental tool for economic governance and policy implementation.
The concept of budgeting in India has evolved significantly since independence. Initially, budgets focused on resource allocation and revenue generation. Over time, the emphasis has shifted towards fiscal discipline and performance evaluation. For instance, the introduction of the Fiscal Responsibility and Budget Management (FRBM) Act in 2003 marked a significant shift towards managing fiscal deficits.
1. **Deficit Budget**: When the total expenditure exceeds the total receipts, leading to a fiscal deficit.
2. **Surplus Budget**: When the total receipts exceed the total expenditure, resulting in a fiscal surplus.
3. **Balanced Budget**: A budget where total receipts and total expenditures are equal.
4. **Performance Budgeting**: Focuses on the outputs and outcomes of various government programs and schemes.
5. **Zero-based Budgeting**: Requires justification of all expenses for each new period, starting from a 'zero base'.
| Feature | Deficit Budget | Surplus Budget | Balanced Budget |
|---------|----------------|----------------|------------------|
| Fiscal Situation | Expenditure > Receipts | Receipts > Expenditure | Receipts = Expenditure |
| Impact on Economy | Borrowing required | Surplus funds available | Balanced fiscal management |
| Focus | Stimulating growth | Reducing debt | Maintaining stability |
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Government Budgeting - The process through which the government estimates its revenue and expenditure for a financial year.
Budget - A financial statement that outlines the government's proposed revenue and expenditure for the upcoming fiscal year.
Deficit Budget - A budget in which expenditure exceeds revenue.
Surplus Budget - A budget in which revenue exceeds expenditure.
Balanced Budget - A budget where revenue equals expenditure.
Appropriation Bill - A bill that authorizes the government to spend money from the Consolidated Fund of India.
Finance Bill - A bill that gives effect to the financial proposals of the government.
Fiscal Responsibility and Budget Management Act, 2003 - An act to ensure fiscal discipline and reduce the fiscal deficit.
Zero-based budgeting - A method of budgeting where all expenses must be justified for each new period.
Performance budgeting - A budgeting process that focuses on the relationship between funds allocated and the outcomes achieved.
D, S, B - 'Deficit, Surplus, Balanced' - remember it as 'Dollars Spend Budget'.
112, 113, 114 - 'One-Twelve, One-Thirteen, One-Fourteen' - remember as '112 is the start, 113 is the process, 114 is the authorization'.
P, Z - 'Performance, Zero' - think of 'PZ as Performance Zeal in Budgeting'.