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If revenue budget balances ,capital budget also balance : true or false with reason?
Most Upvoted Answer
If revenue budget balances ,capital budget also balance : true or fals...
Yes, it is possible (i) when revenue budget is balanced but capital budget shows a deficit or (ii) when revenue budget is in surplus but deficit in capital budget is greater than the surplus of revenue budget. ... Greater fiscal deficit implies greater borrowing by the government.
Community Answer
If revenue budget balances ,capital budget also balance : true or fals...
False

Explanation:
The statement "If revenue budget balances, capital budget also balances" is false. The revenue budget and capital budget are two separate components of a government or organization's overall budget, and they have different purposes and sources of funding.

Revenue Budget:
- The revenue budget is concerned with the day-to-day operational expenses and income of a government or organization.
- It includes items such as taxes, fees, grants, and other forms of income generated from ongoing operations.
- The revenue budget is used to fund regular expenses like salaries, utilities, maintenance, and other operational costs.
- The goal of the revenue budget is to ensure that the organization's income covers its everyday expenses and allows for efficient functioning.

Capital Budget:
- The capital budget, on the other hand, is focused on long-term investments and expenditures that are expected to have a lasting impact on the organization.
- It includes items such as the construction of new buildings, purchase of major equipment, infrastructure development, and other large-scale projects.
- The capital budget is typically funded through borrowing, grants, or savings accumulated over time.
- The purpose of the capital budget is to improve or expand the organization's assets, infrastructure, and capabilities.

Relationship between the Revenue Budget and Capital Budget:
- While the revenue budget and capital budget are related, they are not directly linked to each other in terms of balancing.
- It is possible for the revenue budget to be balanced, meaning that the organization's income covers its operational expenses, while the capital budget may still have a deficit or surplus.
- Similarly, the capital budget can be balanced, with enough funding to cover the planned investments, even if the revenue budget is in deficit or surplus.
- The two budgets serve different purposes and have different funding sources, so they can be managed independently of each other.

Conclusion:
In summary, the statement "If revenue budget balances, capital budget also balances" is false. The revenue budget and capital budget are separate entities with different objectives and funding sources. It is possible for one budget to be balanced while the other is in a deficit or surplus.
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If revenue budget balances ,capital budget also balance : true or false with reason?
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