Question

Long answer type questions:
What is meant by budget expenditure? Distinguish between revenue expenditure, and capital expenditure.

Answer 1

Budget expenditure refers to estimated expenditure of the government relating to its development as well as non-development programmes during the fiscal year.

Revenue expenditure refers to the estimated expenditure in a fiscal year which do not create assets for the government or cause reduction in liabilities for the government.

Capital expenditure refers to the estimated expenditure in a fiscal year which creates assets for the government and causes reduction in liabilities for the government. For example: expenditure on lands and building, purchase of shares, expenditure on machinery and equipment.