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? |ForumIAS

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

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

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