Question

Distinguish between revenue budget and capital budget.

Answer 1

Sr. No.	Revenue budget	Capital budget
1.	It consists of items that neither lead to a change in the assets nor change the liabilities of a government.	It consists of items that lead either to a change in the assets or a change in the liabilities of a government.
2.	It consists of revenue receipts and revenue expenditure.	It consists of the capital receipts and capital expenditure.
3.	It consists of revenue and expenditure that are incurred in day-to-day life.	These include items which are long-term in nature.
4.	Distinguish between revenue budget and capital budget.	Relates to asset creation and loan repayments.
5.	Does not create assets or reduce liabilities.	Leads to asset creation or reduces liabilities.
6.	Tax revenue, interest payments, and pensions.	Borrowings, disinvestment proceeds, and expenditure on roads and schools.