Government receipt and expenditure are the two components of a budget. In terms of the magnitudes of receipts and expenditure. We may have balance budget, deficit budget and surplus budget. When the government expenditure is exactly equal to its receipts, the government has balanced budget. When the government expenditure exceeds its receipts, it is deficit budget.
When the government revenue is greater than its expenditure, the government runs a budget surplus.
- Balance budget — Total Budgeted Receipt = Total Budgeted Expenditure
- Deficit budget — Total Budgeted Receipts < Total Budgeted Expenditure
- Surplus budget — Total Budgeted Receipts > Total Budgeted Expenditure
There was a time when budget surplus was regarded as an index of a good budget. However, in modern economy budget deficit has become order of the day