GOVERNMENT BUDGET AND ECONOMY
ORIGIN AND MEANING
The term ‘budget’ has been derived from the French word ‘bougette’
which means a leather bag or purse. Finance ministers used to carry the
financial proposals in a leather bag.
Budget can be defined as “an annual statement of the estimated receipts and
proposed expenditure of the government over the fiscal year”. The
Institution constitution defines the budget in the following words: “Budget
means the annual financial statement containing an estimate of all
anticipated revenue and expenditure of the government for the coming
financial year”. In India, the financial year starts form the I st April and ends
on the 31 st of March next year.
OBJECTIVES OF THE BUDGET
Every government will have may policies to implement. Implementation
of policies involves expenditure by the government (public expenditure). To
meet this expenditure, revenue (public revenue) has to be raised. We have
seen that the budget is an annual statement of the proposed expenditure
and estimated revenue of the government. Thus, the budget becomes a fiscal
instrument of the government for implementing its policies.
These objectives may be summarised are as follows:
1. Reallocation of resources: Government priorities change with time.
Change in priorities call for change in allocation of resources for
different purposes. For instance, now in India the government is
withdrawing from running industry and business leaving it to private
enterprise. On the other hand, more resources are allocated for
infrastructure development like road construction.
ORIGIN AND MEANING
The term ‘budget’ has been derived from the French word ‘bougette’
which means a leather bag or purse. Finance ministers used to carry the
financial proposals in a leather bag.
Budget can be defined as “an annual statement of the estimated receipts and
proposed expenditure of the government over the fiscal year”. The
Institution constitution defines the budget in the following words: “Budget
means the annual financial statement containing an estimate of all
anticipated revenue and expenditure of the government for the coming
financial year”. In India, the financial year starts form the I st April and ends
on the 31 st of March next year.
OBJECTIVES OF THE BUDGET
Every government will have may policies to implement. Implementation
of policies involves expenditure by the government (public expenditure). To
meet this expenditure, revenue (public revenue) has to be raised. We have
seen that the budget is an annual statement of the proposed expenditure
and estimated revenue of the government. Thus, the budget becomes a fiscal
instrument of the government for implementing its policies.
These objectives may be summarised are as follows:
1. Reallocation of resources: Government priorities change with time.
Change in priorities call for change in allocation of resources for
different purposes. For instance, now in India the government is
withdrawing from running industry and business leaving it to private
enterprise. On the other hand, more resources are allocated for
infrastructure development like road construction.
