- Revenue Expenditure: Recurring expenses for day-to-day government functioning; do not create assets.
Examples: salaries, pensions, interest payments, subsidies, defence, education, health. - Capital Expenditure: Non-recurring expenses that create assets or reduce liabilities.
Examples: purchase of land, buildings, machinery, shares, and loans to states or public enterprises.
Key Points
Key Points: Revenue Expenditure and Capital Expenditure
Key Points: Developmental and Non-developmental Expenditure
- Developmental Expenditure: Spending that promotes economic and social development.
Examples: agriculture, industry, education, health, and development grants/loans to states. - Non-Developmental Expenditure: Spending on general administrative and essential services.
Examples: defence, administration, interest payments, pensions, and non-development loans/grants.
Key Points: Public Expenditure
- Public expenditure is government spending by central, state and local bodies for public welfare and development.
- It includes spending on defence, administration, health, education, roads and social welfare schemes.
- Revenue expenditure covers day‑to‑day running costs like salaries, pensions and routine services.
- Capital expenditure creates assets and development, e.g. infrastructure projects and loans.
- Developmental expenditure is productive and raises employment, output and welfare (health, education, industry, R&D).
- Non‑developmental expenditure is mainly compulsory and less productive, such as defence and general administration.
- Public expenditure is rising due to more government welfare functions, population growth, urbanisation and higher defence and administration costs.
