How Many Types Of Budgets Are There In India?

A budget is a rough estimate of income and expenses for a specific future period of time; it is organised and revised on a regular basis. A person, family, group of people, organisation, nation, multinational corporation, government, or anything else that makes and spends money can all have a budget. Budgeting is a management-instituted internal process that is frequently not necessary for external reporting at institutions and organisations.

The three categories for budget are as follows:

• Balanced budget

• Surplus budget

• Deficit budget

Balanced Budget and Unbalanced Budget

Balanced Budget

A balanced budget is a situation in which the government's estimated revenue for the year is equal to its expected expenditure. Estimated Government Revenue = Proposed Government Expenditure.

Unbalanced budget

A budget whose revenues and expenses are unequal is called an unbalanced budget. There are 2 classification of unbalanced budgets:

• Surplus budget

• Deficit budget

1. Surplus Budget-

When forecast annual revenues exceed projected expenses, the budget is said to be in excess.The government proposed expenditures were greater than the revenue it anticipated.The government's financial stability is demonstrated by the surplus budget. The government may implement a surplus budget policy to limit aggregate demand when there is excessive inflation.

2. Deficit Budget-

A budget that is in deficit occurs when forecast government spending exceeds anticipated revenue. The expected revenue of the government is less than the proposed expenditure of the government.A budget is said to be unbalanced if expenditure exceeds income over a period of timeSuch deficits are usually covered by public borrowing or withdrawal of resources from excess accumulated reserves.

A budget deficit is a government liability because it creates a debt burden or reduces government reserves.In a developing country like India, huge resources are required for economic growth and development and such resources cannot be provided through taxation and deficit budget is the only option.In developing countries, deficit budgets are used to finance planned development, while in developed countries, they are used as a stabilising tool to control fluctuations in trade and the economy.

Zero Based Budgeting and Traditional Budgeting

Zero Based Budgeting- With zero based budgeting, all expenses are assessed each time a budget is created, and each new period's expenses must be supported. Beginning with a zero basis, every government activity is examined for its requirements and associated costs. Then, budgets are created depending on needs.

Traditional Budgeting-Traditional financial management urges for incremental improvements over previous years, like 2 percent expenditure increases.

While zero-based budgeting starts from scratch and requires justification of both new and ongoing spending, traditional budgeting just examines new expenditures.

Outcome Budget

• When it was first introduced in 2005. The budget analyses the progress results of each ministry and department and what the respective ministries have done with their budget expenditures.

• The results budget includes the annual plans or project-by-project expenditures of all listed ministries, departments and central agencies against the relevant results (measurable physical objectives) to be achieved in that year.

• It measures the development performance of all government programs. So, for example, if you want to know whether the funds allocated for the construction of schools and health centres have actually been provided, you may be able to do this. It also tells you if the money was used for authorised purposes and the consequences of using the funds.

Gender budget

• Gender budgets are a powerful tool to achieve gender mainstreaming and ensure that the benefits of development reach women as well as men.

• It is not an accounting treatment, but an ongoing process of maintaining a gender perspective in policy/program development, implementation and review.

• Gender budgeting requires analysing government budgets to determine the impact of their gender inequalities, and ensuring that gender commitments are translated into budget commitments.

• Experts define gender budgeting as a "gender budgeting initiative". Analysing how governments collect and use public funds with the aim of ensuring gender equality in decisions about the allocation of public resources.

• Gender equality in the distribution of influence on the benefits and burdens of government budgets.

• The impact of government budgets on the most deprived groups of women has been given special attention.

• The logic of gender budgeting stems from an understanding of the fact that national budgets affect men and women through different patterns of resource allocation.

• Women make up 48% of India's population but lag behind men in many social indicators such as health, education and economic opportunities.

• The way resources are allocated by the government budget has the potential to change these gender inequalities. From this point of view, gender budgeting is proposed as a tool to achieve gender mainstreaming.