BUDGET

'Budget' (from french ''bougette'') generally refers to a list of all planned expenses and revenues. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms.

Contents

Personal or family budget

Government budget

Union Budget in India

Corporate budget

Budget for a non-profit

See also

References

Personal or family budget

In a personal or family budget all sources of income (inflows) are identified and expenses (outflows) are planned with the intent of matching outflows to inflows (making ends meet).

Government budget

The budget of a government is a summary or plan of the intended revenues and expenditures of that government. In the United States, the federal budget is prepared by the Office of Management and Budget, and submitted to Congress for consideration. Invariably, Congress makes many and substantial changes. Nearly all American states are required to have balanced budgets, but the federal government is allowed to run deficits.
In the UK the budget is prepared by the Chancellor of the Exchequer, the second most important member of the government, and must be passed by Parliament. Parliament seldom makes changes to the budget.

Union Budget in India

In India, the Finance Minister prepares the Union (Federal) Budget and presents it to the Lok Sabha, the House of the Indian People(s) on the last day of February. It has to be approved by Parliament before April 1, the start of India's fiscal year. The day the Union Budget is presented is considered by many observers to be the most important of India's political calendar. It usually has an immediate effect on the nation's stock exchanges and also has possible short term political implications. This is in addition to the long term changes that some budgets may lead to, for e.g. Manmohan Singh's budgets in the early 1990s.

Corporate budget

The budget of a company is compiled annually. A finished budget usually requires considerable effort and can be seen as a financial plan for the new financial year. While traditionally the Finance department compiles the company's budget, modern software allows hundreds or even thousands of people in the various departments (operations, human resources, IT etc) to contribute their expected revenues and expenses to the final budget.
If the actual numbers delivered through the financial year turn out to be close to the budget, this will demonstrate that the company understands their business and has been successfully driving it in the direction they had planned. On the other hand, if the actuals diverge wildly from the budget, this sends out an 'out of control' signal and the share price could suffer as a result.

Budget for a non-profit

A budget is a valuable accounting and planning tool for a small non-profit organization. It assists the trustees in making allocation decisions of funds and provides transparency to donors. It helps guide future fundraising efforts. ^[1]

See also

★ Personal finance

★ Deficit

★ Budget theory

★ Budget surplus

★ Budget crisis

★ Budget overrun

★ Chancellor of the Exchequer (UK budget)

★ United States budget process

★ Canadian federal budget

★ Union budget of India

★ Government financial reports

★ Variance analysis (accounting)

References

1. Budgeting: A Guide for Small Nonprofit Organizations Virginia Society of Certified Public Accountants