What are the types of government expenditure and receipts? What is the difference between revenue receipts and Capital receipts?What are the components of Revenue account and Capital Account of Union budget?These aspects are discussed here.
Union Budget presented contains two heads of account A.Revenue Account B. Capital Account.The types of government expenditure and receipts are part of these two head of accounts.
Types of government expenditure and receipts
A.Revenue Account: It shows a)revenue receipts and b)revenue expenditure.
Revenue receipts are receipts collected by the government for the discharge of its day to day functions. Revenue receipts are of two types.
- Tax receipts : which are receipts collected by the government by imposing various taxes.
- Non Tax receipts : The various non tax receipts are a)receipts from fees and fines b) user charges c)interest income d) remittances from PSU’s e) Grants received.
Revenue receipts are receipts which are largely having no repayment obligation.
Revenue expenditure is the expenditure incurred by the government for the discourage of its day to day functions. Revenue expenditure is of two types
- Developmental expenditure : it is the expenditure on maintenance of various services and assets of govt(roads,bridges, buildings etc).
- Non developmental expenditure:It is expenditure on a) defence b) interest payments c)law and order d)civil administration e) subsidies.
B. Capital Account :Capital Account consists of capital receipts and capital expenditure.
Capital receipts are of the following types
- borrowings both internal and external
- receipts from disinvestment of PSU’s
- receipts from sale of some govt assets like old building
- Recovery of past loans
Capital receipts by and large have repayment obligation.When loan is received it is capital receipt where as interest income is revenue receipt.
Capital expenditure means expenditure which is huge and having long term impact and implications.It is of three types
- Expenditure on infrastructure
- giving loan to state government
- Repayment of past loans.