Difference Between Revenue Budget And Capital Budget Class 12

Plant machinery shares furniture etc.

Difference between revenue budget and capital budget class 12. The fiscal deficit is the difference between the government s total expenditure both revenue and capital and its total receipts excluding borrowings. Revenue budget is prepared for the revenue items income and expenditure on the current assets. It is for fixed assets. In government budget capital receipts are classified in three groups namely i borrowings ii recovery of loans and iii disinvestment and other receipts difference.

The differences between capital expenditures and revenue expenditures include whether the purchases will be used over the long term or. 11000 revenue exp 5000 capital exp minus 10000 revenue rec 5000 ndcr 1000. The main difference between revenue receipts and capital receipts is that in case of revenue receipts government is under no future obligation to return the amount i e. No decline in government liabilities and does not create assets for the government examples purchase of shares and bonds salaries pensions and interest payments taxes and government expenditure can be influenced as follows.

Asset which can be converted in cash in 1 year. Revenue budget orientation only to the receipt of revenue of government and laid less emphasis on development work but the capital budget has the capacity of creating development work with respect to the budgetary deficit and fiscal deficit. Basis of difference capital expenditure revenue expenditure meaning a decline in the government liabilities and creates assets for the government. Capital budget is prepared for the capital items income and expenditure on the capital assets.