CHAPTER NO.

8
PULIC FINANCE
IN INDIA
PUBLIC FINANCE
PUBLIC FINANCE IS ONE OF THE

OLD BRANCHES
OF ECONOMIC

WHICH HIGHLIGHTS THE

ROLE AND FUNCTION

OF THE GOVERNMENT IN THE ECONOMY
FUNCTION OF GOVERNMENT
FUNCTION OF GOVERNMENT
OBLIGATORY OPTIONAL
FUNCTION FUNCTION
( COMPLUSORY ) ( VOLUNTARY )
• PROTECTION FROM • PROVISION OF
EXTERNAL ATTACKS. EDUCATION & HEALTH
SERVICE.
• MAINTAINING INTERNAL • PROVISION OF SOCIAL
LAW & ORDER. SECURITY LIKE PENSION &
OTHER WELFARE
MEASURE.
OBLIGATORY FUNCTION
1. DEFENCE
2. MAINTAINANCE OF INTERNAL LAW & ORDER
3. FOREIGN RELATIONS
4. ELECTRICITY
5. WATER SUPPLY
6. REGISTERING BIRTH AND DEATH
7. PUBLIC VACCINATIONS
8. PROVIDING SPECIAL MEDICAL AID AND ACCOMODATION FOR THE SICK IN
TIME OF DANGEROUS DISEASE
9. GIVING
10. GIVING RELIEF WORKS AT THE TIMES OF NATURAL CALAMITY
11. EXTINGUISING FIRES AND PROTECTING LIFE AND PROPERTY WHEN FIRE
OCCURS
12. REGULATING OR ABATING OFFENSIVE OR DANGEROUS TRADES OR
PRACTICES
13. LIGHTING PUBLIC STREETS, PLACES AND BUILDINGS
14. CLEANING PUBLIC STREETS, PLACES & SEWERS
15. PLANTING AND MAINTAINING OF ROADSIDE TREES
16. MAINTAINANCE OF UP-TO-DATE RECORD OF ALL BUILDING & SITES
OPTIONAL FUNCTION
1. EDUCATION
2. PUBLIC HEALTH AND MEDICAL RELIEF
3. MORAL & SOCIAL REFORMS
4. REGULATION OF TRADE AND INDUSTRY
5. CONSTRUCTING, ESTABLISHING AND MAINTAINING
- PUBLIC PARKS
- GARDEN
- LIBRARIES
- MUSEUMS
- HALLS
- OFFICES
- DHARMASALAS
- HOMES FOR DISABLED
6. PROVIDING ACCOMODATION TO GOVERNMENT SERVANTS
7. PROVIDING CHEAP PUBLIC TRANSPORT
8. SUPPLYING CHEAP PUBLIC TRANSPORT
9. PROVIDING OF MUSIC OR OTHER ENTERTAINMENTS IN PUBLIC PLACES
10. TAKING STATISTICS BY MAKING A SURVEY
MEANING & NATURE PUBLIC FINANCE
IT IS A COLLECTIVE FOR THE INDIVIDUALS
PUBLIC LIVING WITH AN ADMINISTRATIVE TERRITORY

FINANCE MEANS INCOME AND EXPENDITURE

IS NOTHING BUT A STUDY OF THE

PUBLIC PRINCIPLES OF INCOME AND
FINANCE EXPENDITURE OF THE GOVERNMENT
AT CENTRAL, STATE AND LOCAL LEVELS

PUBLIC
= FINANCE
DEFINITIONS PUBLIC FINANCE
ACCORDING TO ACCORDING TO PROF.
HUGH DALTON FINDLAY SHIRRAS

“ PUBLIC FINANCE IS ONE OF “ PUBLIC FINANCE IS THE STUDY

THOSE SUBJECTS WHICH ARE OF THE PRINCIPLES
ON THE BORDERLINE BETWEEN UNDERLYING THE SPENDING
ECONOMICS AND POLITICS. IT IS AND RAISING OF FUNDS BY
CONCERNED WITH THE INCOME PUBLIC AUTHORITIES.”
AND EXPENDITURE OF PUBLIC
AUTHORITIES AND WITH THE
ADJUSTMENT OF ONE WITH THE
OTHER.”
DIFFERENCE BETWEEN
PUBLIC FINANCE AND PRIVATE FINANCE
OBJECTIVE TO OFFER MAXIMUM SOCIAL TO FULFILL PRIVATE INTEREST
ADVANTAGE TO THE SOCIETY
DETERMINATION GOVERNMENT FIRST AN INDIVIDUAL CONSIDERS HIS
OF EXPENDITURE
DETERMINES THE VOLUME AND INCOME & THEN DETERMINES
DIFFERENT WAYS OF ITS THE VOLUME OF EXPENDITURE
EXPENDITURE
CREDIT STATUS HIGH DEGREE OF CREDIT IN THE CREDIT OF PRIVATE INDIVIDUAL
MARKET IS LIMITED
RIGHT TO PRINT THE GOVT. CAN PRINT NOTES PRIVATE INDIVIDUAL DOES NOT
CURRENCY
THROUGH RBI ENJOY SUCH RIGHT
ELASTICITY OF PUBLIC FINANCE IS MORE THERE IS NOT MUCH SCOPE FOR
FINANCE
ELASTIC CHANGES IN PRIVATE FINANCE
I.E. LESS ELASTIC
ELASTICITY OF TREMENDOUS IMPACT ON THE MARGINAL EFFECT ON THE
FINANCE
ECONOMY OF COUNTRY NATIONAL ECONOMY
STRUCTURE OF PUBLIC FINANCE
PUBLIC PUBLIC PUBLIC FISCAL FINANCIAL
EXPENDITURE REVENUE DEPT POLICY ADM

A. REVENUE TAX INTERNAL 1. PUBLIC REVENUE

EXPENDITURE EXPENDITURE EXPENDITURE &
B. CAPITAL DIRECT EXTERNAL 2. PUBLIC DEBIT POLICY
EXPENDITURE REVENUE FOR OVERALL
C. DEVELOPMENTAL 1. PROPORTIONATE
3. PUBLIC DEBT GROWTH
EXPENDITURE 2. PROGRESSIVE
D. NON- 3. REGRESSIVE
DEVELOPMENTAL INDIRECT
EXPENDITURE
GST

NON -TAX
1. FEES
2. PRICES OF PUBLIC
GOODS AND SERVICES
3. SPECIAL ASSESSMENT
4. FINES & PENALTIES
5. GIFTS, GRANTS AND
DONATIONS
6. SPECIAL LEVY
7. BORROWINGS
PUBLIC EXPENDITURE
IT IS THAT EXPENDITURE WHICH IS INCURRED BY THE PUBLIC
AUTHORITY [ CENTRAL, STATE AND LOCAL BODIES ] FOR
PROTECTION OF THEIR CITIZENS FOR SATISFYING THEIR
COLLECTIVE NEEDS AND FOR PROMOTING THEIR ECONOMIC
AND SOCIAL WELFARE.

TILL 20TH CENTURY

RESTRICTED TO THE OBLIGATORY
FUNCTION

MODERN GOVERNMENT
PERFORMS OBLIGATORY AS WELL
AS OPTIONAL FUNCTION
CLASSIFICATION PUBLIC EXPENDITURE

A C
REVENUE DEVELOPMENTAL
EXPENDITURE EXPENDITURE

B D NON-
CAPITAL DEVELOPMENTAL
EXPENDITURE EXPENDITURE
PUBLIC EXPENDITURE
REVENUE EXPENDITURE CAPITAL EXPENDITURE
 DAY TO DAY FUNCTIONS  PROGRESS & DEVELOPMENT OF
 ( REGULAR / RECURRING) COUNTRY. [ NON-RECURRING]

EG EG
ADMINISTRATION COST, 1. HUGE INVESTMENT
SALARY DEVELOPMENT PROJECT
ALLOWANCES 2. LOANS GRANTED TO THE STATE
PENSION GOVT & GOVT COMPANIES
MEDICAL 3. REPAYMENT OF GOVT LOAN
PUBLIC HEALTH SERVICES
PUBLIC EXPENDITURE
DEVELOPMENTAL
EXPENDITURE
 PRODUCTIVE IN NATURE
 GENERATION OF EMPLOYMENT
 INCREASE IN PRODUCTION
 PRICE STABILITY
EG
1. EXPENDITURE ON HEALTH,
EDUCATION
2. INDUSTRIAL DEVELOPMENT
3. SOCIAL WELFARE
4. R & D
5. INFRASTRUTURAL DEVELOPMENT
NON-DEVELOPMENTAL
EXPENDITURE
 [ UNPRODUCTIVE IN NATURE ]
DOES NOT YIELD ANY DIRECT
PRODUCTIVE IMPACT ON THE
COUNTRY.
EG
1. ADMINISTRATION COST
2. WAR EXPENDITURE
PUBLIC EXPENDITURE
REVENUE CAPITAL DEVELOPMENTAL NON-DEVELOPMENTAL
EXPENDITURE EXPENDITURE EXPENDITURE EXPENDITURE

 DAY TO DAY  PROGRESS &  PRODUCTIVE IN  [ UNPRODUCTIVE

FUNCTIONS DEVELOPMENT OF NATURE IN NATURE ]
 ( REGULAR / COUNTRY. [ NON-  GENERATION OF DOES NOT YIELD
RECURRING) RECURRING] EMPLOYMENT ANY DIRECT
 INCREASE IN PRODUCTIVE
PRODUCTION IMPACT ON THE
 PRICE STABILITY COUNTRY.

EG EG EG EG
ADMINISTRATION COST, 1. HUGE 1. EXPENDITURE ON 1. ADMINISTRATION
SALARY INVESTMENT HEALTH, COST
ALLOWANCES DEVELOPMENT EDUCATION 2. WAR
PENSION PROJECT 2. INDUSTRIAL EXPENDITURE
MEDICAL 2. LOANS GRANTED DEVELOPMENT
PUBLIC HEALTH TO THE STATE 3. SOCIAL WELFARE
SERVICES GOVT & GOVT 4. R&D
COMPANIES 5. INFRASTRUTURA
3. REPAYMENT OF L DEVELOPMENT
GOVT LOAN
TRENDS OF TREMENDOUS GROWTH
IN PUBLIC EXPENDITURE IN INDIA

SR. NO. YEAR TOTAL EXPENDITURE ( RS. CR )

1 1991 - 92 72,317
2 2001 - 02 3,62,450
3 2005 - 06 5,06,123
4 2009 - 10 10,24,487
5 2015 - 16 11,95,025
6 2016 - 17 13,74,203
7 2017 - 18 14,35,233
8 2018 - 19 17,29,682
REASON FOR GROWTH
IN PUBLIC EXPENDITURE
1. INCREASE IN THE ACTIVITIES OF THE GOVERNMENT
 MODERN GOVT PERFORMS MANY FUNCTIONS FOR THE SOCIAL
AND ECONOMIC DEVELOPMENT.
SPREAD OF PUBLIC PUBLIC PUBLIC WELFARE
EDUCATION HEALTH WORK RECREATION SCHEMES
A B C D E

 OLD FUNCTIONS ARE BEING PERFORMED MORE EFFICIENTLY ON

LARGE SCALE.
 NEW FUNCTION ARE CONTINOUSLY UNDERTAKEN
2. RAPID INCREASE IN POPULATION
2011 CENSUS – 121.02 CRORES
REASON FOR GROWTH
IN PUBLIC EXPENDITURE
3. GROWING URBANISATION
 IT IS A GLOBAL PHENOMENON
 IT LEAD TO INCREASE IN GOVT. EXPENDITURE ON
1. WATER SUPPLY
2. ROADS
3. ENERGY
4. SCHOOL AND COLLEGES
5. PUBLIC TRANSPORT
6. SANITATION ETC.

4. INCREASING DEFENCE EXPENDITURE

IT IS INCREASING EVEN IN THE PEACE TIME DUE TO UNSTABLE
AND HOSTILE INTERNATIONAL RELATIONSHIP
REASON FOR GROWTH
IN PUBLIC EXPENDITURE
5. SPREAD OF DEMOCRACY
 MAJORITY OF THE COUNTRIES IN THE
WORLD ARE DEMOCRATIC IN NATURE.
 IT IS EXPENSIVE DUE TO REGULAR ELECTIONS &
OTHER SUCH ACTIVITIES.
6. INFLATION

FOR ECONOMIC GOVT. HAS TO PRICE GOVT. HAS TO

& SOCIAL BUY GOODS & LEADS TO PAY MORE
ACTIVITIES SERVICES INFLATION PRICE
REASON FOR GROWTH
IN PUBLIC EXPENDITURE

7. INDUSTRIAL DEVELOPMENT
 INCREASE IN PRODUCTION
INDUSTRIAL DEVELOPMENT  EMPLOYMENT INCREASES
LEADS TO
 OVERALL GROWTH IN ECONOMY
 GOVT. MAKES HUGE EFFORTS FOR IMPLEMENTING VARIOUS
SCHEMES & PROGRAMMES FOR INDUSTRIAL DEVELOPMENT.
 IT RESULTS IN INCREASE IN GOVT. EXPENDITURE
8. DISASTER MANAGEMENT
MANY NATURAL AND MAN-MADE CALAMITIES

EARTHQUAKES
FLOODS
FAMINES
CYCLONES
SOCIAL UNREST ETC.
IT INCREASES TOTAL EXPENDITURES
PUBLIC REVENUE
 THE NECESSITY OF PUBLIC REVENUE ARISES DUE
TO PUBLIC EXPENDITURE.

 PR MEANS THE AGGREGATE OF COLLECTION OF

INCOME WITH THE GOVT. THROUGH VARIOUS
SOURCES.
SOURCE OF PUBLIC REVENUE
A. TAXES B. NON-TAX REVENUE
SOURCE OF PUBLIC REVENUE
A.TAXES

1. ACCORDING TO PROF. TAUSSIG, “ THE ESSENCE OF A TAX AS DISTINGUISHED

FROM OTHER CHARGES BY GOVERNMENT IS THE ABSENCE OF A DIRECT
QUID PRO QUO BETWEEN THE TAX PAYER AND THE PUBLIC AUTHORITY.”

2. ACCORDING TO PROF. SELIGAM, “ A TAX IS A COMPULSORY CONTRIBUTION

FROM THE PERSON TO THE GOVERNEMENT WITHOUT REFERENCE TO
SPECIAL BENEFIT CONFERRED.”
ESSENTIAL CHARACTERISTICS OF TAXES
IT IS A COMPLSORY
CONTRIBUTION TO THE IF ANY PERSON DOES
GOVT. & EVERY CITIZEN IT IS A NOT PAY TAX, HE CAN BE
IS LEGALLY BOUND TO MAJOR PUNISHED BY THE GOVT.
PAY THE TAX IMPOSED SOURCE OF
UPON HIM. REVENUE.

TAXPAYER IS NOT TAX IS

ENTITLE TO RECEIVE IMPOSED ON
IT ENABLES GOVT. TO ANY DIRECT AND INCOME,
INCUR EXPENSES IN THE PROPORTIONATE PROPERTY OR
COMMON INTERESTS OF BENEFITS OR COMMODITIES
THE SOCIETY. SERVICES FROM THE & SERVICES.
GOVT.
CANONS [ PRINCIPLES ] OF TAXATION
PROPOUNDED BY ADAM SMITH
1. CANON OF EQUITY OR EQUALITY

TAX IS PAID AS PER HIS “ ABILITY TO PAY.”

RICH PEOPLE  MORE TAX [ in Proportion ]
POOR PEOPLE  LESS TAX
2. CANON OF CERTAINITY

TAX PAYER SHOULD KNOW IN ADVANCE

 HOW MUCH [ Amount ]
 WHAT TIME
 IN WHAT FORM
3. CANON OF CONVENIENCE
TAX SHOULD BE LEVIED IN SUCH A MANAGER & AT SUCH A TIME THAT IT
BECOMES CONENIENT TO THE TAXPAYER.
4. CANON OF ECONOMY
COST OF COLLECTION
MINUMUM GOOD TAX
OF TAX
A : DIRECT TAX
 CHARGED ON INCOME AND PROPERTY
 BORNE BY THE PERSON ON WHEN IT IS LEVIED
 CANNOT TRANSFER BURDEN TO OTHER PERSON

TYPE OF DIRECT TAX [ DEPENDING ON RATES OF TAXES ]

1. PROPORTIONATE TAX
SAME / CONSTANT RATES ON ALL INCOMES
2. PROGRESSIVE TAX
EVERY INCREASE ( DIRECT ) TAX RATE
IN INCOME INCREASE
IN INDIA, WE HAVE PROGRESSIVE TAX SYSTEM
3. REGRESSIVE TAX
LARGER THE ( INVERSE ) SMALLER IS
INCOME TAX RATE
B : INDIRECT TAX

 LEVIED / CHARGED ON GOODS AND

SERVICES
 PAID AT THE TIME OF PRODUCTION OR SALE
& PURCHASE OF A COMMODITY / SERVICE
 BURDEN / INCIDENCE CAN BE SHIFTED TO
OTHER PERSON FROM PRODUCER TO
OTHER PERSON

EG. GOODS AND SERVICE TAX [ GST ]

NON TAX REVENUE
1. FEES:-
IT IS PAID IN RETURN FOR CERTAIN SPECIFIC SERVICES RENDERED BY THE
GOVT.
EG:- EDUCATION FEES, REGISTRATION FEES, TOLL CHARGES

2. PRICES OF PUBLIC GOODS & SERVICES:-

MODERN GOVT. SELL VARIOUS TYPES OF COMMODITIES & SERVICES TO THE
CITIZEN
EG:- RAILWAY FARES, BST BUSES FARES, POSTAL CHARGES, PUBLIC
DISTRIBUTION SYSTEM ( RATION SHOP )

3. SPECIAL ASSESSMENT:-
PAYMENT BY CITIZENS OF PARTICULAR LOCALITY FOR CERTAIN EXTRA
SPECIAL FACILITIES GIVEN TO THEM BY LOCAL AUTHORITIES
EG:- LOCAL BODY CAN LEVY SPECIAL TAX ON ROADS, ENERGY, WATER SUPPLY
ETC. [ MUNICIPAL TAXES ]
NON TAX REVENUE
4. FINES AND PENALTIES:-
 CHARGED ON THOSE WHO VIOLATES THE LAWS
 OBJECTIVE IS NOT TO EARN INCOME, BUT DISCOURAGE CITIZEN FROM
VIOLATING THE LAWS
 THE INCOME FROM THIS SOURCE IS SMALL
EG:- VIOLATING TRAFFIC RULES
5. GIFTS, GRANTS & DONATIONS:-
IT IS RECEIVED BY GOVT FROM :- CITIZENS, INSTITUTION &
FOREIGN GOVT
6. SPECIAL LEVIES:-
 LEVIED ON CONSUMPTION OF COMMODITIES WHICH ARE HARMFUL TO
THE HEALTH OF WELL-BEING OF CITIZENS
 OBJECTIVE IS NOT TO EARN BUT TO DISCOURAGE
EG:- DUTIES LEVIED ON WINE, OPIUM & OTHER INTOXICANTS
7. BORROWINGS:-
1. PEOPLES  DEPOSITS & NONDS ETC
2. FOREIGN GOVT & IMF, WORLD BANK  LOANS
MORE POPULAR IN MODERN TIMES
PUBLIC DEBT
GOVT. EXPENDITURE

GOVT. REVENUE

RAISING LOAN WHEN

GOVT. EXPENDITURE EXCEEDS GOVT. REVENUE

TWO TYPES OF PUBLIC DEBT

1. 2.
INTERNAL DEBT EXTERNAL DEBT
FROM WITHIN THE FROM OUTSIDE THE
COUNTRY COUNTRY
PUBLIC DEBT
SR. NO. INTERNAL DEBT EXTERNAL DEBT
1. RAISED WITHIN THE ECONOMY RAISED OUTSIDE THE ECONOMY
2. VOLUNTARY / COMPULSORY VOLUNTRY
3. USE OF DOMESTIC CURRENCY USE OF FAREIGN CURRENCY
4. LESS COMPLEX FOR MANAGEMENT MORE COMPLEX FOR MANAGEMENT

5. BORROWINGS FROM: BORROWING FROM:

CITIZENS FOREIGN GOVT
BANKS & FINANCIAL INSTITUTION FOREIGN BANK OR INSTITUTION
CENTRAL BANK IMF
BUSINESS HOUSES ETC WORLD BANK ETC
FISCAL POLICY
 FINANCIAL POLICY IMPLEMENTED BY THE GOVT.
 ADJUSTMENT OF SPENDING LEVELS & TAXATION.
FISCAL POLICY [ MANAGEMENT OF ]

PUBLIC PUBLIC PUBLIC

EXPENDITURE REVENUE DEBTS
FINANCIAL ADMINISTRATION
1. SMOOTH AND EFFICIENT IMPLEMENTATION OF
 REVENUE
 EXPENDITURE
 DEBT POLICY

2. PREPARATION & IMPLEMENTATION OF

GOVERNMENT BUDGET
GOVERNMENT BUDGET
1. THE WORD ‘BUDGET’ IS DERIVED FROM THE FRENCH WORD ‘
BOUGETTE’ WHICH MEANS A BAG OR A WALLET CONTAINING THE
FINANCIAL PROPOSALS.
2. IMPORTANT INSTRUMENT OF FINANCIAL ADMINSTRATION.

3. BUDGET IS A FINANCIAL STATEMENT WHICH SHOWS

EXPECTED RECEIPTS FOR COMING FINANCIAL YEAR
PROPOSED EXPENDITURE
4. FINANCIAL YEAR  1ST APRIL TO 31ST MARCH.

5. ARTICLE 112 OF THE CONSTITUTION OF INDIA HAS A PROVISION

FOR ANNUAL FINANCIAL STATEMENT

6. IN EVERY BUDGET, A SET OF SEVEN BUDGET DOCUMENT

DESCRIBES THE DETAILS OF GOVERNEMENT FINANCE IN INDIA
CENTRAL BUDGET IS OF TWO TYPES

REVENUE CAPITAL
BUDGET BUDGET
1. REVENUE BUDGET
[ REGULAR & RECURRING ]
A IT CONSIST
OF B REVENUE
RECEIPTS
REVENUE C REVENUE

RECEIPTS
TAX EXPENDITURE

& & INTEREST PAID ON

REVENUE NON-TAX GOVT. BORROWINGS.

EXPENDITURE REVENUE SUBSIDIES AND

GRANTS GIVEN TO
THE STATE GOVT.
2. CAPITAL BUDGET

A. IT CONSIST OF :-
[ NON - RECURRING ]
CAPITAL RECEIPTS & CAPITAL EXPENDITURE.
B. CAPITAL RECEIPTS:-
 LOANS RAISED FROM PUBLIC & RBI
 DISINVESTMENT OF EQUITY HEIOLDING IN PUBLIC SECTOR ENTERPRISE
 LOANS FROM FOREIGN GOVT & OTHER FOREIGN BODIES
 STATE DEPOSIT FUNDS
 SPECIAL DEPOSITS ETC.

C. CAPITAL EXPENDITURE:-
 EXPENDITURE ON VARIOUS DEVELOPMENT PROJECT
 INVESTMENT BY THE GOVERNEMENT
 LOANS TO STATE GOVERNEMENT AND GOVT. COM
 LOANS TO CORPORATIONS & OTHER PARTIES
 EXPENDITURE ON SOCIAL & COMMUNITY DEVELOPMENT
 DEFENCE AND GENRAL SERVICES
GOVERNMENT BUDGET
BALANCE
BUDGET

DEFICIT SURPLUS
BUDGET BUDGET

GOVERNMENT
BUDGET
BALANCE BUDGET
ESTIMATED ESTIMATED GOVT.
A GOVT. RECEIPTS
=
[ EQUAL ] EXPENDITURE

B C D
MODERN
IT WAS ADVOCATED ECONOMIST BELIEVE
AS NEUTRAL IN ITS
BY CLASSICAL THAT THE POLICY OF
EFFECT, THEY
ECONOMISTS LIKE BALANCED BUDGET
REGARDED IT
ADAM SMITH MAY NOT BE
SUITABLE FOR THE
ECONOMY, BECAUSE
OF WELFARE ENTITIES
SURPLUS BUDGET
A ESTIMATED GOVT. RECEIPTS > [ MORE THAN ]
ESTIMATED GOVT. EXPENDITURE

B C D E
DURING GOVT. PLANS SURPLUS
THUS,
INFLATION SURPLUS BUDGET
INFLATIONAR
BUDGET SHOULD NOT
Y PRESSURE
CAN BE BE USED IN
PEOPLE HAVE
INCREASES SITUATION
MORE MONEY CONTROLLED
TAXES OTHER THAN
BY USING
INFLATION AS
SURPLUS IT MAY LEAD
PEOPLE HAVE
MORE PURCHASING BUDGET TO
PURCHASING POWER ALSO UNEMPLOYME
POWER FALLS NT & LOW
LEVEL OF
OUTPUT IN AN
PRICES RISES AGGREGATE
RAPIDLY DEMAND FALLS ECONOMY
DEFICIT BUDGET
A ANTICIPATED GOVT. < ESTIMATED GOVT. EXPENDITURE
RECEIPTS [ LESS THAN ]

B C D
DURING GOVT. PLANS
BORROWING DEVELOPING
DEPRESSION TO INCREASE
MONEY COUNTRIES
EXPENDITURE
LIKE INDIA
ECONOMIC HAVE
ACTIVITIES ARE CONSISTENTLY
INCREASE AGGREGATE DEMAND FOR
LOW RESORTED TO
GOODS & SERVICES
DEFICIT
BUDGET
RESULTS IN ENCOURAGES TECHNIQUE
INCREASES
UNEMPLOYMENTS EMPLOYMENT FUTHUR FOR ECONOMIC
INVESTMENT DEVELOPMENT
IMPORTANCE OF BUDGET
THE LEVEL OG
IT AFFECTS TAXES DISPOSABLE
PEOPLE AND DETERMINES INCOME OF
ECONOMY IN THE FATE OF TAXPAYERS
GENERAL IN A BUSINESSES DEPENDS ON TAX
NUMBER OF AND RATES
PRESENTED IN
WAYS INDIVIDUAL
BUDGET

GOVT. USES IT IT AFFECTS

GOVT. EXPENDITURE PRODUCTION, SIZE
ON VARIOUS HEADS AS A MEDIUM
SUCH AS DEFENCE,
AND DISTRIBUTION
FOR OF INCOME AND
ADMINSTRATION,
INFRASTRUCTURE, IMPLEMENT UTILIZATION OF
EDUCATION & HEALTH ECONOMIC HUMAN &
CARE ETC AFFECTS THE MATERIAL
LIVES OF CITIZEN & POLICIES IN THE
RESOURCES OF THE
OVERALL ECONOMY COUNTRY COUNTRY