The Important Points of a State Budget

Hide Menu

Government budgeting is an area of finance that needs proper guidance. It is a very important part of financial planning.

Since budget is an ‘uncertain plan’, there is always the risk of things not going right. This is the government releases canons to be followed when preparing a budget, especially a state level budget.

Given below are five such cannons that every state budget should follow for it to be strong and serve the purpose correctly.


A state budget should be flexible or elastic. If a budget is not flexible, it will be very difficult to fully implement it. Since a budget is based on expectations and the future, which is uncertain, a stringent/inflexible budget will create problems for the government or economy.

Since revenues and expenditure are uncertain, having an etched-on-stone budget will be problematic. It is also important because, at times, higher authorities demand certain changes in the budget, without which it cannot be fully legalized.


All the information in the budget and the procedure that goes in creating that budget must be readily available to everyone who is going to be affected by the budget. This is why federal or government budgets are released to the public.

It is important for the public to have access to the information as a lot of their decisions are based on the state budget, which can directly influence individual and corporation’s decisions.


State budgets should always be surplus budgets. The US Federal Budget is mostly in a deficit, mainly due the huge oil imports and aid given to third-world countries. However, state budgets should always be prepared keeping revenues in mind.

Deficit budget negatively impacts a state’s position. It is a very vital canon of budgeting, which if not followed may cause huge problems for everyone.

Law Obeying

A budget should be prepared keeping in mind all the laws and regulations. It is important that only those who have the authority to prepare the budget prepare it. Other important aspects should also be largely followed such as a minimum or maximum import/export quota set by the government.

A budget, if unlawful, may be discarded by the people or higher authorities. Generally, all the state budgets have to be passed by the President, after getting an approval from the legislature. A budget might not be accepted if it has any discrepancy.


A budget must be prepared keeping in mind all the important factors, such as the people or industries that will be affected by it. A biased budget will not be approved at any cost.

It must be prepared after taking inputs from all the relevant sections. Equality in every regard is very important. The best practice in this case is to have participation from all the sectors. This is why people often emphasize on including representatives from every sector (women, handicapped, industrial etc.) when a budget is being planned.

Contact Sitemap Links
Copyright 2024 All Rights Reserved.