In India, as per Article 112 of the constitution, it is mandated to present a statement of projected revenues and expenditures of the government for each fiscal year, spanning from April 1st to March 31st, before the Parliament. The Annual Financial Statement serves as the primary budgetary document of the government.

While the budget document pertains to the government’s revenue and spending for a specific fiscal year, its effects will extend into subsequent years.

Hence, it is imperative to maintain two separate accounts: one for the financial activities pertaining exclusively to the present fiscal year, which is referred to as the revenue account or revenue budget, and another for the assets and liabilities of the government, known as the capital account or capital budget. In order to comprehend the financial records, it is imperative to initially grasp the aims and goals of the government budget.

Objectives Of Government Budget

Allocation Function Of Government Budget

The Allocation Function of the Government Budget is a crucial aspect of economic policy, aiming at a balanced distribution of resources in the economy. It’s primarily focused on the provision of public goods and correcting market failures.

Provision Of Public Goods