SURPLUS BUDGET DEFICIT BUDGET

58. SURPLUS  BUDGET
DEFICIT  BUDGET
1.      Meaning
A surplus budget takes place when the estimated receipts are more than estimated expenditure.

2.      Formula
Surplus Budget = (Estimated Receipts > Estimated Expenditure)

3.      Preference by countries
A country will prefer surplus budget, because the surplus can be used to repay outstanding loans or liabilities.


A deficit takes place when its estimated expenditure is more than estimated receipts.


Deficit Budget = (estimated Receipts < Estimated Expenditure)


A country does not prefer deficit budget, as it affects economic growth and development.