Budget and Its Objectives
Meaning of Budget A government budget is an annual financial statement that estimates the government's receipts and expenditures for the fiscal year There are two components of govt budget – Revenue budget and Capital Budget. Key Components of the Budget: Revenue Budget: This deals with the government's regular income and expenses. Revenue Receipts: These are receipts that do not increase government liabilities or decrease assets (e.g., taxes, interest receipts, dividends). Revenue Expenditure: These are expenses that do not create assets or reduce liabilities (e.g., salaries, subsidies, interest payments). Capital Budget: This focuses on transactions that affect the government's assets and liabilities. Capital Receipts: These receipts either create liabilities (borrowings) or reduce assets (disinvestment). Capital Expenditure: These expenses either create assets (infrastructure) or reduce liabilities. Objectives...