Union Finance Minister Nirmala Sitharaman is scheduled to present the budget on February 1, 2024. The union budget will reveal the government’s objectives for the next fiscal year. Do you realise that different people have different interpretations of the government’s planned budget? These use terms like balance budget, surplus budget, and deficit budget.
The new fiscal year (FY 2024–25) will start on April 1, 2024. In this case, the planning for the next fiscal year has already started. The administration will disclose details of its intentions on February 1, 2024. It is also known as the Union Budget.
This year, there will be Lok Sabha elections. Thus, after the elections, the Union Budget will be released. Nirmala Sitharaman, the Union Finance Minister, will submit the interim budget in this situation on February 1.
People’s interpretations of the budget vary every time the government announces it. These specifically use terms like surplus, deficit, and balanced budgets. In this essay, we shall discuss these criteria in great depth.
Maintain financial equilibrium
When the government’s projected spending for a given fiscal year is equal to its receipts, there is a balanced budget. Many economists believe that tax money shouldn’t be used to pay for government expenditures. A balanced budget does not guarantee a recession or financial disaster.
Sustaining a balance between income and expenses can be difficult. The ability of a balanced budget to ensure economic stability sets it apart from others. Additionally, it stops the government from incurring needless expenses.
A balanced budget is insufficient to address several problems, including the recession and unemployment. Less-developed countries cannot use it for anything else. This is so because it restricts the room for economic expansion. The government’s spending on public welfare is prohibited under the balanced budget.
Allocation of surplus funds
If government revenue in a given fiscal year exceeds anticipated government expenditures, the budget is deemed surplus.
A surplus budget, to put it this way, is one in which the amount of taxes collected by the government exceeds the amount spent on public welfare.
A budget like this demonstrates how rich the country’s finances are. The government can enact this budget several times in order to reduce inflation.
shortfall in the budget
Deficit budgeting is another term for it. If government spending exceeds government revenue in a given fiscal year, the budget is deemed to be in deficit.
The budget is best suited for an emerging economy. Additionally, it helps to increase the budget. The government intends to improve or raise the employment rate in the country after implementing this budget. There has also been an increase in the demand for goods and services.
The drawback of a deficit budget is another. In this instance, borrowing money by the government for the good of the people may present difficulties for them. It also encourages the government to spend more recklessly in the future.