Introduction:

The term budget is derived from the word BOUGETTE which means a leather bag containing financial papers. Budget is a financial statement of anticipated revenue and expenditure of the govt. for the coming financial year. A budget is a financial plan that outlines the estimated revenues and expenses over a specific period, typically one year. Types of Budget are very important to understand the topic of budget.

It serves as a guideline for allocating resources and controlling spending within an economy or for an individual. Budgeting helps in setting financial goals, monitoring progress, and making informed decisions regarding resource allocation.

According to a W.E. Willoughby “A budget is at once a report , an estimate and a proposal , that instrument by which all the financial administration is corrected , compare and co ordinate “.

Govt. undertakes several social economic as well as other activities for the welfare of the citizen. In addition to that govt. will also implement different policies to attain economic development for which it has to insure certain expenditure. Budget provides actual financial accounts for the previous year along with the budget estimate, revises estimates of current year and budget estimates of ensure g financial year.

Types of Budget:

• Surplus budget: If the anticipated revenue of the government exceeds it anticipated expenditure in a year then it is known as surplus budget it indicates financial soundness of the government usually governments of developed countries plan for a surplus budget it has negative implication in terms of the welfare of the society this means that government is busy in making wealth from resources instead of spending for the welfare of the people.
• Deficit budget: If the anticipated expenditure of the government exceeds its anticipated revenue in a year then it is known as deficit budget it indicates deliberate extensive expenditure by the government over its revenue to set economy on the path of economic growth usually government of developing countries plan for a deficit budget. after the great depression of 1930 deficit budget has become popular in order to overcome from the shocking impact of the great depression it was felt the policy of deliberate excessive expenditure by the government over its revenue should be preferred.
• Balance Budget: If the anticipated revenue of the government equal its anticipated expenditure in a year then it is said to be a balance budget it indicates spending of exactly the same amount by the government which it collect as revenue it will have a neutral effect on the level of economic activity hence at present economy of the world really plan for balance budget on the basis of the policy of live within means ,most of the classical economists favor balance budget because minimum interference from the government was desired in the economic activities.

also read: explain the components of budget.