What is Capital Budget and Revenue Budget?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

Capital Budget and Revenue Budget: While the revenue budget includes items that do not impact the government’s assets and liabilities, the capital budget includes items that do affect the government’s assets and liabilities. The government creates an annual budget that includes capital and revenue budgets.

Capital Budget and Revenue Budget

The government’s assets and liabilities are affected by capital revenues and expenditures. Capital receipts refer to borrowings, loans from a public or foreign government, or borrowings from the central bank made by the government of a country. Here are some factors about revenue budget and capital budget:

Type of Budget Components Examples
Revenue Budget Revenue Receipts,

Revenue Expenditure

Excise Duty, Income Tax, Dividend Income, Salaries, Administrative Costs
Capital Budget Capital Receipts,

Capital Expenditure

Disinvestments, Long-term Investments, etc.

Difference between Revenue Budget and Capital Budget

The key differences between Revenue Budget and Capital Budget are as follows:

Revenue Budget Capital Budget
Revenue receipts are money earned by the government as taxes and non-taxes like dividend income, profits, etc. Capital receipts cause a decrease in the assets of the government or increase its liabilities.
Revenue expenditure includes administrative expenses, salaries, pensions, etc. Capital expenditure creates or reduces liabilities.
Revenue and spending have no effect on the government’s assets and liabilities. Assets like hospitals are a part of capital expenditure for the government.

Related Questions:

Our Apps Playstore
SSC and Bank
Other Exams
GradeStack Learning Pvt. Ltd.Windsor IT Park, Tower - A, 2nd Floor, Sector 125, Noida, Uttar Pradesh 201303
Home Practice Test Series Premium