Revenue Budget And Capital Budget Upsc

Asset which can be converted in cash in 1 year.

Revenue budget and capital budget upsc. Capital budget is prepared for the capital items income and expenditure on the capital assets. Capital budget has capital receipts and payments. In our developing economy it is absolutely essential that the government not only earn revenue but also incur expenditure. I the money earned by selling assets or disinvestment such as shares of public enterprises and ii the money received in the form of borrowings or repayment of loans by states.

This is the basis of classification between revenue expenditure and capital expenditure. Revenue budget is prepared for the revenue items income and expenditure on the current assets. Capital receipts indicate the receipts which lead to a decrease in assets or an increase in liabilities of the government. 11000 revenue exp 5000 capital exp minus 10000 revenue rec 5000 ndcr 1000.

However since 2017 the indian budget is presented on 1 february. Assets and liabilities of central government. Revenue expenditure and capital expenditure of india. In short revenue budget has revenue receipts and expenditure.

Capital budget it includes the capital receipts and capital expenditure. As a convention economic survey is also tabled in the parliament one day prior to budget submission ie on january 31. If it creates an asset or reduces a liability it is categorised as capital expenditure. So let us learn about some related concepts of capital expenditure revenue account etc.

Changes occurring capital is considered shows capital requirements of government and pattern of their financing. Capi tal budget on the other hand comprises capital receipts and capital expenditure of the government. Receipts creating liabilities and reducing financial assets. From the 1997 98 budget the practice of showing budget deficit has been discontinued in india.

Revenue budget consists of the revenue receipts of the government and the expenditure met from such revenues whereas the capital budget consists of capital receipt and payments. Revenue accounts cover those items which are of recurring nature and are non redeemable. Capital budget of government of india. That is correct to push along the development of the country the government must spend money.

Loans raised from public. The fiscal deficit is the difference between the government s total expenditure both revenue and capital and its total receipts excluding borrowings. It is for fixed assets. An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure.

The revenue deficit refers to the excess of government s revenue expenditure over revenue receipts. In an election year budget may be presented twice first to secure vote on account for a few months and later in full. Budget deficit refers to the excess of total expenditure both revenue and capital over total receipts both revenue and capital.