Which type of budget is best?

Deficit budgets are better suited for developing economies. Whenever there is a recession, a deficit budget will help in generating employment and boost the economy. If there is a surplus budget then it could indicate that the country is economically highly developed. You can read about the Union Budget 2021-22 Summary in the given link.

A balanced budget is not suitable when there is economic downturn or when there is recession. It indicates reduced expenditure on public welfare schemes and it will not help in addressing the problems of unemployment.

Further readings:

  1. Taxation in India – Direct taxes & Indirect Taxes, Features of Taxation System
  2. Revenue Receipts- Tax Revenue and Non-Tax Revenue

Related Links

Important Economic Terms Related to Union Budget

DTAA – Countries Involved, Income Tax Provisions, Benefits

Fiscal Responsibility & Budget Management (FRBM) Act – UPSC Economics Notes

Difference between Economic Survey and Union Budget

Goods and Services Tax Council – Background and Composition [UPSC Polity Notes]

Previous Years Economy Questions in UPSC Prelims [2013-2021]

Interim Budget – Difference between Interim Budget & Vote-On-Account 

Economics Notes For UPSC IAS Examination

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