Friday, December 08, 2006

Revenue Budget

Under Article 112 of the Constitution of India, the Annual Financial Statement has to distinguish expenditure of the Government on revenue account from other expenditures.

Government Budget, therefore, comprises of:
Revenue Budget
Capital Budget.

Revenue Budget consists of the revenue receipts of Government,
Tax revenues
Other revenues like - 
        Interest and dividend on investments made by Government
        Other receipts for services rendered by Government,

 and the expenditure met from these revenues.

Revenue expenditure is for the normal running of Government departments and various services, interest payments on debt, subsidies, etc.

Broadly, the expenditure which does not result in creation of assets for Government of India is treated as revenue expenditure. 

All grants given to State Governments/Union Territories and other parties are also treated as revenue expenditure even though some of the grants may be used for creation of assets.

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