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Questions
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 |
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