Deficit Budget:
1. A deficit budget is one in which estimated expenditure exceeds estimated revenue.
2. It leads to flow of money from government to the economy and increases aggregate demand.
3. It is suitable for governments especially when the economy suffers from depression.
4. The policy of deficit budget would lead to employment and revival of economic activities.
5. Deficit budget is not desirable during inflation.
Surplus Budget:
1. A surplus budget is a budget in which estimated revenue are greater than estimated expenditures.
2. It leads to flow of money from economy to government and lead to decrease in aggregate demand.
3. It is suitable for individuals and families but not favoured for government.
4. The policy of surplus budget would lead to unemployment and recession due to low investment.
5. Surplus budget is advocated during inflation to reduce demand and prices by imposing high taxes.
