Balanced Budget

Unbalanced Budget

1. In case of balanced budget, the proposed govt. expenditure is equal to the estimated govt. receipts in the budget year.

2. Balanced budget reduces unproductive and extravagant expenditure of the govt.

3. It is ineffective during economic instability.

4. It fails to achieve full employment from under-employment equilibrium.

5. It cannot solve the problems of under-developed countries (UDCs).

1. In case of unbalanced budget, the proposed expenditure and the estimated receipt are unequal during the budget year.

2. Unbalanced (deficit) budget helps the govt. to incur unproductive and extravagant expenditure.
3. It is effective during economic instability (surplus during inflation and deficit during deflation).

4. Unbalanced (deficit) budget is a powerful instrument to achieve full employment.
5. Unbalanced (deficit) budget is a powerful instrument of resource mobilisation for economic development of UDCs.