The Government Budget consists of which main component/s?a)Revenue Bud...
The Government Budget consists of two main components: the Revenue Budget and the Capital Budget.
Revenue Budget:
- The Revenue Budget includes the government's revenue receipts and expenditure that do not lead to the creation of assets or reduction in liabilities. It mainly focuses on the day-to-day functioning of the government.
- Revenue receipts include taxes, fees, fines, and other sources of income for the government. These receipts are used for meeting various day-to-day expenses, such as salaries, pensions, subsidies, interest payments, and maintenance of existing infrastructure.
- Revenue expenditure includes all the government's expenses on current operations and maintenance, such as salaries, wages, subsidies, and interest payments. It does not lead to the creation of assets.
Capital Budget:
- The Capital Budget includes the government's capital receipts and expenditure that lead to the creation of assets or reduction in liabilities. It focuses on infrastructure development and long-term investments.
- Capital receipts include loans raised by the government, disinvestment proceeds, and other capital receipts. These receipts are used for capital expenditure and repayment of loans.
- Capital expenditure includes investments in infrastructure projects, construction of roads, bridges, schools, hospitals, and other long-term assets. It also includes repayment of loans.
The Revenue Budget and the Capital Budget are essential components of the Government Budget as they represent different aspects of government finance and expenditure. The Revenue Budget takes care of the day-to-day functioning of the government, while the Capital Budget focuses on long-term investments and infrastructure development.
It is important for the government to maintain a balance between the Revenue Budget and the Capital Budget. While the Revenue Budget ensures the smooth functioning of the government and meets immediate expenses, the Capital Budget promotes economic growth, creates employment opportunities, and enhances the overall development of the country.
In conclusion, the Government Budget consists of both the Revenue Budget and the Capital Budget. These components play a crucial role in managing the government's finances, meeting expenses, and promoting economic development.
The Government Budget consists of which main component/s?a)Revenue Bud...
The Government Budget consists of the following main components:
A: Revenue Budget and Capital Budget
1. Revenue Budget
- The revenue budget includes the government's day-to-day operational expenses and revenue generation.
- It consists of:
a. Revenue Receipts: These are the earnings of the government from various sources like taxes, duties, and fines.
b. Revenue Expenditure: These are the expenses incurred by the government in its daily operations, such as salaries, pensions, subsidies, and interest payments on loans.
2. Capital Budget
- The capital budget deals with the government's long-term investments and capital assets.
- It consists of:
a. Capital Receipts: These are the funds raised by the government through loans, borrowings, and the sale of assets.
b. Capital Expenditure: These are the expenses incurred by the government on acquiring or maintaining long-term assets, such as land, buildings, infrastructure, and investments in various sectors.
Both the Revenue Budget and Capital Budget together form the Government Budget, which is a comprehensive financial plan for a specific fiscal year. This budget helps the government allocate resources and prioritize spending to achieve its short-term and long-term goals.
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