NCERT Solutions for Class 12 Clat Introductory Macroeconomics Chapter 5 The Government : Budget And The Economy

Meaning of a Government Budget. “A government budget is an annual statement of the estimated receipts and expenditure of the government during a fiscal year.' Just as your household budget is all about what you earn and spend, similarly the government budget is a statement of government income and expenditure. The government first plans expenditure according to its objectives and then tries to raise resources to meet the proposed expenditure. Thus, a budget is a statement of anticipated expenditure under various heads and proposed resources of financing the expenditure for the ensuring financial year. The financial (fiscal) year starts on April 1 and ends on March 31 of next year. For example, fiscal or budget year 2010-11 is from April 1, 2010 to March 31, 2011. In India, on last day of February, the Finance Minister presents annual budget of the government in the Lok Sabha for its approval. Again it needs to be noted that government cannot make expenditure under this budget unless budget is approved by the Parliament. Needless to mention that budget is the most important document as according to Keynes budgetary policies play a significant role in stabilisation of the economy.