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Distinguish Between Revenue Expenditure and Capital Expenditure in Government Budget. Give an Example of Each. - Economics

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Distinguish between revenue expenditure and capital expenditure in Government budget. Give an example of each.

What is the difference between revenue expenditure and capital expenditure?

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Solution

Basis of Difference Capital Expenditure Revenue Expenditure
1. Meaning A decline in the government liabilities and creates assets for the government. No decline in government liabilities and does not create assets for the government.
2. Examples Purchase of shares and bonds Salaries, pensions and interest payments
Concept: Classification of Expenditure
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