State's general budgets

economic-dictionary

The General State Budgets are a forecast of the expenses and income of the State for a financial year. This forecast of expenses and income will be collected in a document that will be processed as law in parliament.

Before the Government begins to prepare budgets, public entities must provide them with a plan with the different expenses and income for a period of one year.

Based on these documents, the Government will begin to prepare a global forecast for the next fiscal year, that is, it will prepare the General State Budgets. Once the Government has prepared the budgets, it must present them to the parliament for debate and approval.

Budget Control

Content of public budgets

These are the contents that the State budget must include at least:

  • Economic objectives to be achieved during the fiscal year.
  • Detailed expenses and income of each of the entities and companies that are part of the public sector.
  • Economic policies that will be carried out to achieve the objectives set.

Phases of preparation of state budgets

These are the most typical phases in the preparation and implementation of budgets:

  1. Preparation: The Government, through the competent ministry (generally the Ministry of Economy and Finance), will collect the reports of public entities and prepare a realistic forecast of the economic needs of the State.
  2. Discussion and approval: The Government will have the obligation to present the budgets in parliamentary headquarters so that they are debated, amendments are presented for their modification and finally, they are approved.
  3. Execution: Implement proposed measures to collect revenue and execute planned expenditures.
  4. Intervention and control: The State administration is obliged to control public spending, as well as taking charge of collection. The control function will be carried out while the budgets are in force.

Budget deficit and budget surplus

Both taxes and the actions to be carried out by the public sector will be included in the budgets.

If expenses exceed income, we will talk about budget deficit. However, if income exceeds expenses, we will be facing what is known as a budget surplus. On the other hand, if the income were equal to the expenses, it will be a situation of budgetary balance.

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