A budget is a financial roadmap — a plan that estimates how much money will come in (income) and how much will go out (expenses) over a specific period. Everyone from households to multinational corporations to governments uses budgets to manage their finances.
Government budgets are massive and consequential. India's Union Budget 2024-25 was Rs 48.2 lakh crore ($580 billion). The US federal budget exceeds $6.5 trillion. These budgets decide how much goes to defense, healthcare, education, infrastructure, and social programs — affecting the lives of billions.
When a government spends more than it earns (through taxes), it runs a budget deficit — financed by borrowing. When it earns more than it spends, it has a surplus (extremely rare). The famous 50/30/20 personal budgeting rule suggests: 50% on needs, 30% on wants, 20% on savings and debt repayment.