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- In this type of budget, government plans for years of development and improvement required through budgeting.
- While the annual budget happens yearly long term budget is planned for few years. For ex – 5 to 10 years of Research and Development Budget, Capital Expenditure Budget, etc.
- This has few advantages like focus on long term projects instead of shorter one etc.
- But long term budget cannot be planned for uncertain events such as cyclones for 5-10 year.
- Generally Long term budget is complemented with yearly review or short term budget for uncertain event and other events.