हिंदी

What is the Difference Between Revenue Expenditure and Capital Expenditure? Explain How Taxes and Government Expenditure Can Be Used to Influence.

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प्रश्न

What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence.

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उत्तर

Basis of Difference Capital Expenditure Revenue Expenditure
Meaning This refers to that government expenditure, which causes reduction in the government liabilities as well as creates assets for the government. This refers to the government expenditure which does not cause any reduction in government liabilities and also does not create assets for the government.
Examples Expenditure on purchasing shares, bonds, etc. Expenditure on salaries, pensions, subsidies, interest payments, etc.


The government through its budgetary policy attempts to promote fair and right distribution of income in a society. This is done through taxation and expenditure policy. On one hand, through its taxation policy, the government taxes the higher income group and on the other hand, through the expenditure policy (subsidies, transfer payments, etc.), it transfers the purchasing power in the hands of the poor sections of society. With the help of these policies, the government aims at fair distribution of income in the society. 

Note: The question is incomplete in the english version, however, on the basis of hindi version we have provided the solution. According to Hindi version the second part of the question is 'Explain how taxes and government expenditure can be used to influence income distribution in a society'.

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2015-2016 (March) All India Set 2

संबंधित प्रश्न

Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.

Expenditure on a collection of taxes.


Calculate investment expenditure from the following date about an economy which is in equilibrium :
National Income = 1000
Marginal propensity to save = 0.20
Autonomous consumption expenditure = 100


Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:

Expenditure on scholarships


Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:

Expenditure of building a bridge.


The government has started spending more on providing free services like education and health to the poor. Explain the economic value it reflects.


Distinguish between capital expenditure and revenue expenditure.


S. No. Content Rs (in crores)
1. Revenue Expenditure 100
2. Capital Receipts 40
3. Net Borrowings 38
4. Net Interest Payments 27
5. Tax Revenue 50
6. Non-tax Revenue 15

What is the revenue deficit?


S. No. Content Rs (in crores)
1. Revenue Expenditure 100
2. Capital Receipts 40
3. Net Borrowings 38
4. Net Interest Payments 27
5. Tax Revenue 50
6. Non-tax Revenue 15

What will be the primary deficit?


Level of planned output coincides with planned expenditure when ______


Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (1) is Rs 50 crores, MPS is 0.2 and the level of income (Y) is Rs 4000 crores.


The government uses ______ as proxy for income of households to identify the poor.


Subsidies and expenditure on scholarships are examples of ______


Which one of the following is not a capital expenditure?


Which of the following payments are included under Revenue Expenditure?


Non-Plan Revenue Expenditure covered which of the following?


What was the drawback of the Plan/Non-Plan classification of expenditure?


Non-Plan Capital Expenditure covered which of the following?


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