Revenue Budget Vs Capital Budget

Pre-School :

1. Each of these documents have receipts and expenditure .
2. Loans raised by govt from public are called MARKET LOANS .
3. Govt can borrow money from " banks " and other institutions through T- Bills


Revenue Budget : It Includes revenue receipts and revenue expenditure

Revenue Receipts

1. Receipts from tax and other levies
2. Receipts from interest on loans and dividends on investments
3. Receipts in terms of fees collected for the services offered by the govt

Revenue Expenditure

1. Expenditure from the revenue receipts
2. Expenditure that does not culminate into asset creation
3. Expenditure on interest charges as well as the normal running expenses of the govt.

NOTE :

All grants given to State Governments and other parties are also treated as revenue expenditure even though some of the grants may be for creation of assets.

Capital Budget : It includes capital receipts and capital expenditure

Capital Receipts

1. Market loans , Sale of T-bills and other loans borrowed from foreign bodies .
2. Recoveries of Loans given to state govt and Union Territories
3. Provident Funds and other deposits into the Public Account

Capital Expenditure

1. Expenditure on aquistion of assets like land, building, machinery ,etc..
2. Loans and advances granted to State govt and Union Territs.
3. Disbursements from The Public Account

Note : Grants come under revenue expenditure where as loans and advances come under capital expenditure