Budget is a financial statement that coins down the expected revenue and expenditure of a particular fiscal year. There are different types of Budget that may be discussed in the following section:
Partial Budget: Partial Budget aims to make small changes in the financial condition of a corporation. The process of Partial Budgeting involves a comparison between the plus and minus effects occurring due to the implementation of the proposed changes on the net income.
Partial Budgets are in fact helpful while evaluating changes like:
Improving the capital condition
Expansion in the size of a company
Searching for alternative companies, where changes need to be introduced
Employment of a custom operation, and not a purchasing instrument
Variations in the methods of productions
Business Set Up Budget: A Business Set Up Budget deals with the financial expenses required during the establishment of a commercial firm or enterprise. The expenses in this case include the costing of the basic infrastructures. It is considered as one of the fundamental means of introducing, improving and maintaining a business house. Hence, it explicitly studies the inflow of cash in the form of income, and plans the expenses of the concerned organization, based on the available funds in hand. Since a Business Set Up Budget is only based on assessments of the expected income and expenditures, the predictions and calculations are subject to variations. Hence arises the requirement of reviewing the budgetary documents from time to time, to adjust the estimated facts and figures with the actual ones.
Government Budgets: are the summarized versions of the anticipated revenues and expenses of a government. Formulated by the executive and passed by the legislature as a legal document, Government Budgets focus on the distribution of wealth for economic as well as political and social purposes. Some areas covered by the budget include:
Exemption from personal income tax
Estimating the status of the national exchequer, both during the last and coming fiscal years
Enhancing sectoral productivities
Corporate Budgets: formulate the annual fiscal agendas, plans and programs of a commercial organization. It works for putting forward the expected income and expenditure figures of a company, for the next financial year.
The revelation of the leaked Luxembourg tax files and the related reporting of the extent of the tax avoidance industry in the UK should come as little surprise. Tax legislation, and its enforcement in the UK, has been based on a school of thought that encourages the unchecked forces of supply and demand to reign supreme. This, in turn, has infused business culture in Britain.
Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. IMF’s Chief Economist from September 2003 to January 2007. Inaugural recipient of the Fischer Black Prize.
Mario I. Blejer is a former governor of the Central Bank of Argentina and former Director of the Center for Central Banking Studies at the Bank of England. Eduardo Levy Yeyati is Professor of Economics at Universidad Torcuato Di Tella and Senior Fellow at The Brookings Institution.
Vice President and Director of the Global Economy and Development Program at the Brookings Institution. Former Turkish Minister of State for Economic Affairs. Head of the United Nations Development Program (UNDP) from 2005-2009.
Andrea Edwards has worked in marketing and communications all over the globe for 20 years, and is now focused on her passion – writing. A gifted communicator, strategist, writer and avid blogger, Andrea is Managing Director of SAJE, a digital communications agency, and The Writers Shop – a regional collaboration between the best business writers in Asia Pacific
James W. Harpel Professor of Capital Formation and Growth at the John F. Kennedy School of Government in Harvard University. Director of Program in International Finance and Macroeconomics at the National Bureau of Economic Research.