There are a few main types of budgets that exist, as explained below:
A balanced budget is one in which the government’s expected revenue for the financial year is equal to its expended expenditure. In this budget, total budget expenditure = total budget receipts. For instance, if the budget expenditure is ₹5 lakh crores and if budget receipts are ₹5 lakh crores, then it will be called a balanced budget.
A deficit budget is one in which expected government spending exceeds expected revenue for the financial year. The budget is said to be a deficit if expenditures surpass revenue over time. The deficit is usually covered by borrowing from the public or pulling funds from the previously collected reserve surplus. A deficit budget is a government liability since it increases debt or diminishes the government’s reserve funds. A deficit budget is an important tool used to finance planned improvements in developing countries and to further provide stability in developed countries.
When the government’s predicted income or revenue exceeds planned expenditures, this type of budget is called a surplus budget. If the government’s long-term financial planning is stable and effective, it can lead to surplus budgets where the government has extra revenue to spare. When there is too much inflation, the government can use a surplus budget as a tool to lower aggregate demand and thereby reduce inflation.
Zero-based budgeting (ZBB) is an approach to planning and preparing the budget from scratch, or ‘zero bases’. This type of budget is a systematic cost management process that takes into account the efficient allocation of income to fixed expenditures, variable expenses, as well as savings.
Gender budgeting is a process of examining the budget of a government or other organization to assess the extent to which it promotes gender equality. It is used to identify and track the allocation of resources for women, men, and gender-related issues, as well as to assess the impact of these allocations on gender equality.
In conclusion, budgeting is an important aspect of managing finances, both for individuals and for governments. The types of budgets that can exist are balanced budget, deficit budget, surplus budget, zero-based budget and gender budget. Understanding the different types of budgets can help you make better financial decisions. It is also important to note that Gender Budgeting is an important aspect of budgeting as it ensures that the budget is inclusive and focuses on promoting gender equality.
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