Q. With reference to budgetary practices in India, consider the following statements:
1.A deficit budget refers to a situation where the government proposes to spend more than it expects to receive in a given financial year.
2.Surplus budgets are generally avoided by developing countries as they may reflect reduced emphasis on developmental spending.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation:
- A deficit budget indicates that expenditure exceeds receipts, a common feature in development-focused budgets.
- Surplus budgets are typically avoided in developing economies, as they might signal low investment in public services or infrastructure, potentially hindering growth. However, they may occasionally be used as a political or symbolic tool.
Source- TMH Indian Economy by Ramesh Singh
