The Union budget is the annual financial statement which contains the revenue and expenditure of the government for a financial year
The word budget comes from an old French word meaning purse. The Union budget is the annual financial statement which contains government revenue and expenditure for a financial year. It can also include expected sales and revenue volumes, resource quantities, costs and expenses, assets, liabilities and cash flows.
The statement details the income from all sources and the expenses of all activities that the government will undertake during the fiscal year. The fiscal year is calculated from April 1 to March 31.
The budget contains income and expenditure.
A revenue budget includes all government revenue and expenditure. If revenue expenditure is greater than revenue, the government suffers from a revenue deficit.
The investment budget is made up of government-related capital receipts and payments. It includes equity investments, loans, and advances made by the central government to state governments, public enterprises, corporations, and other parties.
A budget is one of the most important administrative tools. It also serves as an action plan to achieve quantified objectives, a standard for measuring performance and a mechanism for dealing with foreseeable adverse situations.
There are three types of budgets:
Balanced budget, surplus budget and deficit budget.
A balanced budget is a budget in which revenues equal expenses. Thus, there is neither a deficit nor a budget surplus.
A surplus budget is a time when revenues or revenues exceed expenses or expenses and indicates that the government is being managed effectively. A budget surplus often refers to the financial position of governments.
A budget deficit indicates the financial health of the country. It occurs when expenses exceed income.
Follow the full coverage of the 2019-2020 Union budget here