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Question
Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget:
Expenditure of building a bridge.
Solution
Expenditure incurred on building a bridge is considered a capital expenditure because this expenditure creates an asset and reduces the liabilities of the government.
RELATED QUESTIONS
Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
Expenditure on a collection of taxes.
Explain how taxes and government expenditure can be used to influence revenue expenditure and capital expenditure?
What is capital expenditure?
Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
Expenditure on purchasing computers
Calculate Autonomous Consumption Expenditure from the following data about an economy which is in equilibrium:
National income = 500
Marginal propensity to save = 0.30
Investment expenditure = 100
What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence.
Distinguish between revenue expenditure and capital expenditure.
Answer the following question.
How are capital expenditure different from Revenue expenditure? Discuss briefly.
Distinguish between capital expenditure and revenue expenditure.
The Government of India has decided to vaccinate the adult population of India (with Covaxin/Covishield), without any charge. This would be categorized as ____________.
The expenditure multiplier is the ratio of ______.
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is a non-tax revenue for the government?
Level of planned output coincides with planned expenditure when ______
Calculate Investment expenditure from the following data about an economy that is in equilibrium.
National Income = Rs 1,000
Marginal Propensity to Save = 0.20
Autonomous consumption expenditure = Rs 100
Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the central government.
Statement 2: Revenue Expenditure relates to those expenses incurred for the normal functioning of the government departments.
Identify the correctly matched pair of the items in Column A to those in Column B:
| Column A | Column B |
| 1. Revenue Expenditure | (a) Does not cause any reduction in government liability |
| 2. Capital Expenditure | (b) Which creates corresponding liability for the government |
| 3. Revenue Receipts | (c) Which causes a reduction in assets of the government |
| 4. capital Receipts | (d) Causes reduction in government liability. |
‘Under the Ayushmaan Bharat Scheme, the Government provides free medicines to the economically backward section of the society’.
Identify and discuss the nature of the government expenditure indicated in the given statement.
