Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

1.

Capital Budget Capital budget includes

Capital Receipt.

2.

1. Revenue Receipt: Government receipts that:

Neither creates liabilities for the government nor cause any reduction in assets of the government are called revenue receipts.

2. Revenue Expenditure: An expenditure that:

Neither creates any assets nor causes any reduction of liability.

1. Capital Receipt: Government receipts that Either creates liabilities (of payment of loan) or reduce assets (on disinvestment) are called capital receipts.

2. Capital Expenditure: Capital expenditure that Either creates assets for the government or causes reduction in liabilities of the government.

3.

Examples of revenue receipt are income tax, gift tax, sales tax, fees and penalties etc. Examples of revenue expenditure are old age pensions, salaries and scholarship, expenditure on the repayment of loan, defence, health etc.

Examples of Capital receipt are loans by the government, recovery of loans etc.

Examples of Capital expenditure, Equity (or Shares) of the domestic or multinational corporations purchased by the government, repayment of loans reduces liability of the government.