BUDGET (lit. a bag or small sack), the name applied to an account of the ways and means by which a minister of finance purposes to defray the expenditure of the state. In the United Kingdom the chancellor of the exchequer, usually in April, lays before the House of Commons a statement of the actual results of revenue and expenditure in the past finance year ending March 31, showing how far his estimates have been realized, and what surplus or deficit there has been in the income as compared with the expenditure. This is accompanied by another statement in which the chancellor gives an estimate of what the produce of the revenue may be in the year just entered upon, supposing the taxes and duties to remain as they were-in the past year, and also an estimate of what the expenditure will be in the current year. If the estimated revenue, after allowing for normal increase of the principal sources of income, be less than the estimated expenditure, this is deemed a case for the imposition of some new, or the increase of some existing, tax or taxes. On the other hand, if the estimated revenue shows a large surplus over the estimated expenditure, there is room for remitting or reducing some tax or taxes, and the extent of this relief is generally limited to the amount of surplus realized in the previous year. The chancellor of the exchequer has to take parliament into confidence on his estimates, both as regards revenue and expenditure; and when the taxation and expenditure obtain the assent of parliament, the results as thus adjusted become the final budget estimate for the year. This system of annual review and adjustment of the public finances obtains not only in the British colonies, but is carried out, with remarkable despatch for so great an empire, in British India. The ...Indian budget, giving the results of income and expenditure in the year ending December 31, and the prospective estimates, is laid before the Imperial Parliament in the course of the ensuing session. The budget, though modified by different forms, has also long been practised in France, the United States, and other constitutional countries, and of late years has in some cases been adopted by arbitrary powers. Russia began the publication of annual budgets in 1866; Egypt has followed the example; and Turkey, if financially reinstated, will have to submit to a more strict account of her income and expenditure. Apart from national budgets, to be discriminated (1) as budgets passing under parliamentary scrutiny and debate from year to year, and (2) budgets emitted on executive authority, there are in all the greater countries local and municipal taxations and expenditures of only less account than the national. The ordinary budget of the city of Paris has increased from £1,600,000 in the reign of Louis Philippe to £8,000,000 at the present time; while the extraordinary budget, relating chiefly to public improvements and the city debt, is over £4,000,000 more. In federal governments, such as the United States, the German Empire, or the Argentine Republic, the budgets of the several states of the federation have to be consulted, as well as the federal budget, for a knowledge of the finances. The local taxation of the United Kingdom is equal to nearly one half the imperial revenue, and requires in its various provinces the same process of examination. The budget is an essential part of the machinery of representative Governments; and in the rapid progress of state loans, it has begun to be acknowledged by despotic Governments as a necessary basis of confidence between them and their creditors.
