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10 September, 12:48

Once all unnecessary expenses have been removed from your budget, what can you do if your expenses still exceed your income?

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  1. 10 September, 15:39
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    Deficit in Budget (Expenses > Income) can be corrected by : Increasing Income, apart from by reducing expenses (already mentioned)

    Explanation:

    Budget (Govt) is item wise estimate of expenses, receipts / Income for a given period of time (financial accounting year). A situation in which Expenses > Income is called Budgetary Deficit.

    This deficit can be solved by:

    - Reducing Expenses (Already mentioned in question)

    - Apart from above solution, by 'Increasing Receipts' / Income

    Receipts/Income can be : Capital Receipts, Revenue Receipts.

    Revenue receipts neither increase liability, decrease asset & are recurring. Eg : Tax, Fees

    Capital Receipts either create liability, reduce asset & are non recurring. Eg : Borrowing, Disinvestment.

    Either of 'receipts' can be increased to solve the issue.
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