Question

Explain the term revenue expenditure of the government.

Explain the term revenue expenditure.

Answer 1

Revenue expenditure refers to the regular, recurring expenses of the government that do not create any asset or reduce any liability. These expenditures are mainly used for the day-to-day functioning of the government and the provision of services.

Examples include:

• Salaries of government employees
• Pensions
• Interest payments on loans
• Expenditure on subsidies and welfare schemes

Revenue expenditure is non-asset-creating and is generally consumed within the same financial year.