Types Of Budgets
                     TYPES OF 
BUDGETS
Introduction
• The three types of budgets are a surplus budget, 
a balanced budget, and a deficit budget. The 
state budget is a financial document including 
income and expenditure for the year.
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What is Budget?
• An income- and expense-based spending plan is 
referred to as a budget. 
• In other words, it’s an estimation of the amount 
of money you’ll earn and spend over a specific 
time frame, like a month or a year.
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How Budget helps?
• Financial stability is facilitated by a budget. A 
budget makes it simpler to save for major 
expenses like a car or home by keeping track of 
spending and sticking to a plan. 
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How Budget helps cont.
• It also makes it easier to pay bills on time and 
accumulate an emergency fund. Overall, having 
a budget helps a person’s financial situation, 
both now and in the future.
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Balanced Budget
• In this budget, estimated income and projected 
expenses are equal. Many economists believe 
that government spending should not exceed its 
revenue.
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About Balanced Budget
• A balanced budget cannot translate into 
financial stability automatically in terms of 
economic depression or deflation due to the 
absence of any scope for additional spending.
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Surplus Budget
• In this budget, estimated government revenues 
are higher than estimated government 
expenditures. It serves to reduce the state’s 
public debt or increase its savings.
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About Surplus Budget
• The extra funds can be used to pay fees, which 
decreases the interest payable and is suitable 
for the economy in the long run.
• Most useful in times of inflation to reduce 
aggregate demand.
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Deficit Budget
• The estimated government revenue in this 
budget is below estimated government 
spending. Either the government’s liabilities or 
reserves are affected. It is most helpful during 
periods of deflation.
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