Government Budget

FRBM Act: Objectives and challenges

Introduction

  1. The FRBM Act was enacted in 2003 to ensure fiscal discipline and long-term financial stability in India.
  2. It aims to reduce the fiscal deficit, control public debt, and promote transparency in fiscal operations.
  3. Applies to both the Central and State Governments.

Objectives of the FRBM Act

  1. Ensure macroeconomic stability by reducing fiscal deficits and public debt.
  2. Promote fiscal discipline in government expenditure.
  3. Improve

Types of deficits: Fiscal, revenue, primary

Introduction

  1. A deficit occurs when a government's expenditure exceeds its revenue.
  2. There are three key types of deficits in public finance: Fiscal Deficit, Revenue Deficit, and Primary Deficit.
  3. Deficits indicate the financial health of a government and its reliance on borrowing.

Fiscal Deficit

  1. Fiscal Deficit is the difference between the government's total expenditure and its total revenue receipts (excl

Structure: Revenue and capital budgets

Introduction

  1. The Government Budget is a statement of estimated receipts and expenditures of the government over a financial year.
  2. It is divided into two main components: the Revenue Budget and the Capital Budget.
  3. The classification helps in understanding the sources of funds and the purpose of expenditures.

Revenue Budget

  1. The Revenue Budget deals with the government’s current receipts and current expenditures.
  2. Revenue Rec
Government Budget