This essay discusses the types of public budgets and the objectives of public budgeting. A is a document that sets out the government’s proposed revenues, expenditure for a specific financial year. It is prepared by the ministry of finance. The types of public budgets include a balanced budget – the expected expenditure is similar to anticipated receipts for a fiscal year. Surplus Budget – the expected revenues surpass the estimated expenditure for a fiscal year. Deficit Budget- the expenditure surpasses the revenue for a designated year. Investment and sources of finance are important in achieving the objectives of public budgeting. Additionally, the funds are collected from fees, taxes, interest on loans given to states, fines, and dividends. The two segments are: Revenue Budget – contains revenue expenditure and receipts. Thus, Capital Budget – capital receipts expenditure. Public budgeting techniques are essential in achieving objectives.
types of public budgets and objectives of public budgeting
OBJECTIVES OF PUBLIC BUDGETING
The objectives of public budgeting include reallocation and redistribution of resources, influenced by allowance or tax concessions, and direct production of goods and services by the government. Minimize inequalities in income and wealth by imposing a tax on the elite class and spending extra on the well-being of the poor. Economic Stability during fluctuations is achieved by the policies in the types of public budgets such as deficit budget during deflation and vice versa. Managing Public Enterprises for the promotion of social welfare. Economic Growth by preparing adequate resources for investing and saving in the public sector. Decrease regional differences by implementing taxation and expenditure policy and promoting the installation of production units in underdeveloped regions. Thus, to overcome the criticism and weaknesses of traditional budgeting, alternative public budgeting techniques have been adopted for the effective achievement of objectives.
the objectives of public budgeting
PUBLIC BUDGETING TECHNIQUES
The two main public budgeting techniques are incremental and zero-based. The incremental budgeting technique uses historic income and expenditure data of the previous year’s budget as a starting point. The historic data is used as the baseline to formulate the budget for the following year. Therefore, it is simple and quick although it is historic and doesn’t consider any necessary future changes. Zero-based budgeting is a method of budgeting in which all expenses must be justified and approved for each new period. This method promotes accuracy, efficiency, and cost and waste reduction. It is therefore the most effective in achieving the objectives of public budgeting. The budget setting process is crucial for effective budgetary control. Budgets should accurately reflect the services being provided. Lastly, these techniques can be used independently or in combination, depending on the type public of budget implemented.
the public budgeting techniques
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