The budget is the most important economic policy tool of the national government and is thus the fundamental indicator of what government put forwards to do and what objectives it pursues. It presents the government’s financial plans for an upcoming period and is a comprehensive statement of the priorities of the nation by determining the activities that governments will spend funds on in the pursuit of development goals; which sectors of the economy will be expected to pay for said activities; how government will respond to economic disturbances in the short term; and who will be the direct and indirect beneficiaries of public services.
Annual Budget Statement is the intended financial plan for a single fiscal year. It also serves as a policy document. An excess of government’s proposed expenditures over its estimated revenues is called a ‘budget deficit’, whereas an excess of revenues over the expenditure is generally termed ‘budget surpluses. Budget deficit is financed through borrowings, both domestic and foreign, and a surplus is normally utilized to reduce such borrowings.
Budget is presented usually in the first week of June every year by the federal government in the National Assembly and is followed by each of the provincial governments in their respective Provincial Assemblies.
Following pictures depicts the budget mechanism in Public Sectors in Pakistan: