ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Once the government puts its revenue estimates in place, it starts to decide where it will spend. A large part of the expenditure-over 85% to be precise-is categorised as revenue expenditure, which is essentially short-term expenses in the day-to-day running of the economy.

Detailed explanation-2: -To supply goods and services that are not supplied by the private sector, such as defense, roads, and bridges; merit goods such as hospitals and schools, and welfare payments and benefits including unemployment and disability benefits.

Detailed explanation-3: -Discretionary spending is money formally approved by Congress and the President during the appropriations process each year. Generally, Congress allocates over half of the discretionary budget towards national defense and the rest to fund the administration of other agencies and programs.

Detailed explanation-4: -Budgeting for the national government involves four (4) distinct processes or phases : budget preparation, budget authorization, budget execution and accountability. While distinctly separate, these processes overlap in the implementation during a budget year.

Detailed explanation-5: -A government budget is the means of providing control over expenditure and revenue by the government. Budgets help in maintaining stability and control over the government’s finances and are also a means of providing accountability through financial reporting.