DMPQ- . Write a short note on followings: (A) Performance budget (B) Revenue deficit (C) Quantitative Easing

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(A) Performance budget

Unlike the traditional line item budget, a performance budget reflects the  goal/objectives of the organization and spells out performance targets. These targets are sought to be achieved through a strategy(s). A Performance Budget gives an indication of how the funds spent are expected to give outputs and ultimately the outcomes. However, performance budgeting has a  limitation – It is not easy to arrive at standard unit costs especially in social programmes which require a  multi-pronged approach.

Revenue deficit

Revenue deficit is the gap between the consumption expenditure (revenue  expenditure) of the Government (Union or the State Governments) and its current revenues (revenue  receipts). It also indicates the extent to which the government has borrowed to finance the current  expenditure. Revenue receipts consist of tax revenues and non-tax revenues. When the ‘net amount  received’ (revenues less expenditures) falls short of the ‘projected net amount to be received’ (i.e. what  is actually received and what was expected). This occurs when the actual amount of revenue received  and/or the actual amount of expenditures do not correspond with predicted revenue and  expenditure figures.

(C) Quantitative Easing

Quantitative Easing (QE) is an unconventional monetary policy used by central banks to stimulate  the economy by  supplying excess liquidity and bringing interest rates close to zero. To carry  out QE central banks create money by buying securities, such as government bonds, from banks. Such  measures were taken by American Fed Bank and European banks during the time of slowdown.

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