Types Of Budget ,Classification Of Budget (in English) – Indian Economy – Free PDF Download

TYPES OF BUDGETS

ON THE BASIS OF DURATION

• LONG TERM BUDGET
  • More than 2 years duration
  • Eg Rand D expenditure
  • SHORT TERM BUDGET
  • 1 to 2 years duration
  • Production/ Purchase expenditure
• CURRENT BUDGET/ FINANCE BUDGET
  • Few weeks or months
  • Prevailing expenditure conditions

BASED ON RECEIPT-EXPENDITURE BALANCE

• BALANCED BUDGET
  • Expected expenditure is equal to anticipated receipts for the fiscal year
  • SURPLUS BUDGET
  • Expected revenues surpass the estimated expenditure
  • DEFECIT BUDGET
  • Expenditure for the fiscal surpasses the receipts

BALANCED BUDGET

• MERITS OF A BALANCED BUDGET
  • Ensures economic stability, if implemented successfully.
  • Ensures that the government refrains from imprudent expenditures.
  • DEMERITS OF A BALANCED BUDGET
  • Unviable at times of recession and does not offer any solution to problems such as unemployment
  • Inapplicable in less developed countries as it limits the scope of economic growth
  • Restricts the government from spending on public welfare.

SURPLUS BUDGET

• government’s earnings from taxes levied are greater than the amount the government spends on public welfare.
• A surplus budget denotes the financial affluence of a country.
• Such a budget can be implemented at times of inflation to reduce aggregate demand.

DEFECIT BUDGET

• MERITS OF A DEFICIT BUDGET
  • Helps in addressing public concerns such as unemployment at times of economic recession.
  • Enables the government to spend on public welfare.
• DEMERITS OF A DEFICIT BUDGET
  • Can encourage imprudent expenditures by the government.
  • Increases burden on the government by accumulating debts.

BASED ON UNDERLYING POLICY

• CORPORATE BUDGET
• WELFARE BUDGET

BASED ON BASIS OF PLANNING

• PERFORMANCE AND PROGRAMME BUDGET
• OUTCOME BUDGET
• ZERO BASED BUDGET

PERFORMANCE AND PROGRAMME BUDGET

• Programs are subjected to test of actual performance
• Involve stage wise planning and standard fixation
• There is relation between input and physical output

OUTCOME BUDGET

• not only measures quantitative outcome of the budget but also in terms of quality of outcomes
• OBB enhances transparency and accountability with schemes being defined for positive interventions rather than mere numeric improvement.

ZERO BASED BUDGET

• Concept given by Peter Phyrr
• Zero based concept where funds are allocated without any reference to previous allocations (Base is zero)
• For new allocation, the funds are provided on utilization basis

GENDER BASED BUDGET

• Budget that includes gender sensitivity of a particular policy
• First introduced in 1984 by Australia
• India adopted it in 2004

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