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. |
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