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Budget — Economics STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsBudget3 Marks
Question
Discuss Merits and Demerits of Balanced Budget
✓

Answer

  • Meaning :
    • According to the vision of calculation all the budget are balanced because the receipts and payments both the side of the Budget's financial values are shown same.
    • But it is divided into Balanced and Unbalanced budget to mention the real estimation of income and expense.
    • In simple word, a type of budget in which the government's estimated total expenditure is just equal to the estimated total income
    • Balance budget is ideal.
    • The budget in which the government's estimated income is equal to the estimated expenditure means Estimated Expenditure = Estimated Income then it is Balanced Budget.
    • In other words, A budget in which Current Expenditure and Current Income are same is called Balanced Budget.
    • It means all the government expenditure of the year are met by the tax income of that year is called Balanced Budget.
    • In this type of budget the provision of expenditure is made keeping in mind the income of taxes,
    • So there are no ups and down in the total expenditure.
    • In short, Balanced Budget accepts the economic situation in the form of present scenario and does not allow to affect the budget and remain stable.
    • If the budget is balanced then there is no change in the expenditure of society.
    • In short, there will be no efforts to change the total expenditure in balanced budget.
    • The budget in which the Government's Total Expenditure $($Revenue $+$ Capital$)$ is made equivalent with the revenue income is a Balanced Budget.
    • The conclusion behind this type of budget is that Government should cut down its expenses if the income is reduced.

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