| Question | 3. What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure. |
| Class | Class 12 |
| Subject | Economics (Macroeconomics) |
| Category | Class 12 Economics Solutions Sandeep Garg |
Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Long Questions – Q.3 What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure.
Solution:
Budget expenditure refers to the estimated expenditure of government during a financial/fiscal year.
| Basis | Revenue Expenditure | Capital Expenditure |
| Meaning | Revenue expenditure are those recurring expenditures of the Government which neither reduces its liabilities or creates an asset for the government. | Capital Expenditures are those non-recurring expenditures of the government which results in reduction of its liabilities or creation of an asset for the government. |
| Nature | It is recurring in nature | It is non-recurring in nature. |
| Example | Salary, interest etc. | Purchase of land, borrowings etc. |
Long Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy
- Define Government budget. Explain the various objectives of a government budget.
- What is meant by non-tax revenue? Explain the different sources of non-tax revenue
- What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure.
- What is the meaning of revenue receipts? What are the two main sources of revenue receipts?
- Discuss the meaning of following deficits: (i) Revenue Deficit; (ii) Fiscal Deficit; and (iii) Primary Deficit.
- Distinguish between: (a) Direct Tax and Indirect tax (b) Primary deficit and Revenue deficit
- Distinguish between the following (a) Revenue receipts and Capital receipts (b) Revenue deficit and Fiscal deficit