Is balanced budget good for India?
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- It is one when estimated revenues are equal to estimated expenditures. In other words, amount of tax is equal to the amount of expenditure.
- This kind of budget leads to slight increase in aggregate demand.
- Balanced budget is a good policy which can bring an economy to a full employment equilibrium level. It brings about financial stability.
- But it is not good for a less developed country like India.
- In such a country, the government should have more expenditures (than revenue) which will raise aggregate demand.
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