{"id":17692,"date":"2023-11-27T08:07:10","date_gmt":"2023-11-27T08:07:10","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=17692"},"modified":"2024-02-22T04:45:21","modified_gmt":"2024-02-22T04:45:21","slug":"distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/","title":{"rendered":"Distinguish between Capital Budget and Revenue Budget | Edukemy Blog"},"content":{"rendered":"<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-gs-advance-and-mentorship-program-ampcsat?utm_source=Blog&amp;utm_medium=Link&amp;utm_campaign=GS+Advanced\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/07\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-8.png\" alt=\"\" class=\"wp-image-43397\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/07\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-8.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/07\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-8-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/07\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-8-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/figure><\/div>\n\n\n<p>Capital Budget focuses on long-term investments like infrastructure and assets, while revenue Budget pertains to day-to-day operational expenses. Capital Budget includes capital expenditure and loans, while Revenue Budget comprises revenue receipts and revenue expenditure like salaries and maintenance costs. Distinct management is crucial for fiscal health.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><strong>UPSC Mains General Studies Paper \u2013 3 Mains 2021<\/strong><\/p><\/blockquote>\n\n\n\n<p><a href=\"https:\/\/edukemy.com\/blog\/upsc-mains-civil-services-ias-exam-question-paper-2021\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>UPSC Mains Civil Services IAS Exam Question Paper \u2013 2021<\/strong><\/a><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69ddd08635617\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ddd08635617\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Approach\" title=\"Approach&nbsp;&nbsp;&nbsp;\">Approach&nbsp;&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Answer\" title=\"Answer\">Answer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Introduction\" title=\"Introduction&nbsp;&nbsp;\">Introduction&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Body\" title=\"Body&nbsp;&nbsp;\">Body&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Capital_Budget\" title=\"Capital Budget\">Capital Budget<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Revenue_Budget\" title=\"Revenue Budget&nbsp;\">Revenue Budget&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#1_Capital_Budget\" title=\"1. Capital Budget\">1. Capital Budget<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#2_Revenue_Budget\" title=\"2. Revenue Budget:&nbsp;\">2. Revenue Budget:&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Conclusion\" title=\"Conclusion&nbsp;&nbsp;&nbsp;\">Conclusion&nbsp;&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/edukemy.com\/blog\/distinguish-between-capital-budget-and-revenue-budget-explain-the-components-of-both-these-budgets-150-words-10-marks\/#Visit_our_YouTube_Channel_%E2%80%93_here\" title=\"Visit our YouTube Channel &#8211;&nbsp;here\">Visit our YouTube Channel &#8211;&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Approach\"><\/span>Approach&nbsp;&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Start with a brief introduction of the&nbsp; budget and its constitutional provisions.&nbsp;<\/li><li>Discuss the Distinguish between Capital Budget and Revenue Budget.&nbsp;<\/li><li>Explain the components of both the Capital Budget and Revenue Budget.&nbsp;<\/li><li>Conclusion accordingly.&nbsp;&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Answer\"><\/span>Answer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Article 112 of the Indian Constitution, the Annual Financial Statement (AFS) is the term used to denote the Union Budget for a given year. The AFS presents an overview of the Government&#8217;s anticipated income and expenses during a financial year, commencing on 01 April of the present year and concluding on 31 March of the subsequent year. The Objectives of Budget Reallocation of resources, Reducing inequalities in income and wealth, Contributing to economic growth, Bringing economic stability, Managing public enterprises .&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Body\"><\/span>Body&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The Distinguish between Capital Budget and Revenue Budget:<\/strong> The capital budget and revenue budget are two distinct components of the Union Budget. Here&#8217;s key points :-&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capital_Budget\"><\/span>Capital Budget<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Deals with capital expenditure and investments made by the government.&nbsp;<\/li><li>Focuses on long-term infrastructure development and asset creation.&nbsp;<\/li><li>Includes expenditure on acquiring or creating assets like buildings, roads, bridges, machinery, etc.&nbsp;<\/li><li>Aims to enhance the productive capacity of the economy and improve public services.&nbsp;<\/li><li>Examples: Construction of highways, airports, dams, investment in education and healthcare infrastructure.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Revenue_Budget\"><\/span>Revenue Budget&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Deals with day-to-day operational expenses and recurring income of the government.&nbsp;<\/li><li>Includes revenue receipts and revenue expenditure.&nbsp;<\/li><li>Revenue receipts consist of tax revenues, non-tax revenues, grants, and interest earned.&nbsp;<\/li><li>Revenue expenditure includes salaries, subsidies, pensions, maintenance costs, etc.&nbsp;<\/li><li>Examples: Salaries of government employees, subsidies on essential commodities, welfare schemes, healthcare expenses.&nbsp;<\/li><\/ul>\n\n\n\n<p><strong>The components of both the Capital Budget and Revenue Budget:<\/strong> the components of both the Capital Budget and Revenue Budget:&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Capital_Budget\"><\/span>1. Capital Budget<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Capital Receipts:<\/strong> These are the receipts that lead to a decrease in assets or an increase in liabilities of the government. In India, capital receipts mainly include:&nbsp;<ul><li>Disinvestment proceeds: Money earned by selling assets like shares of public enterprises.&nbsp;<\/li><li>Borrowings and loans: Funds received through borrowings or repayment of loans by the government or states.&nbsp;<\/li><\/ul><\/li><\/ol>\n\n\n\n<ol class=\"wp-block-list\" start=\"2\"><li><strong>Capital Expenditure:<\/strong> This refers to the expenditure incurred by the government that leads to the creation of assets or reduces liabilities. The components of capital expenditure in India include:&nbsp;<ul><li>Investments in infrastructure: Long-term investments made by the government to create assets such as building roads, bridges, hospitals, schools, etc.&nbsp;<\/li><li>Loans to states: Funds provided by the central government to the states or repayment of its own borrowings.&nbsp;<\/li><\/ul><\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Revenue_Budget\"><\/span>2. Revenue Budget:&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Revenue Receipts:<\/strong> These are the receipts that do not directly impact the assets or liabilities of the government. In India, revenue receipts primarily consist of:&nbsp;<ul><li><strong>Tax revenues:<\/strong> Money earned through various taxes imposed by the government, such as excise duty, income tax, GST, customs duty, etc.&nbsp;<\/li><li><strong>Non-tax revenues:<\/strong> Income generated through sources like dividends from public sector undertakings, interest receipts, profits from government enterprises, fees, fines, etc.&nbsp;<\/li><\/ul><\/li><\/ol>\n\n\n\n<ol class=\"wp-block-list\" start=\"2\"><li><strong>Revenue Expenditure:<\/strong> This refers to the day-to-day operational expenses incurred by the government. The components of revenue expenditure in India include:&nbsp;<ul><li><strong>Salaries and pensions:<\/strong> Payments made to government employees, including salaries, allowances, and pensions.&nbsp;<\/li><li><strong>Interest payments:<\/strong> Payments of interest on loans and debts.&nbsp;<\/li><li><strong>Subsidies:<\/strong> Financial support provided by the government to individuals or sectors to promote economic activities or alleviate hardships.&nbsp;<\/li><li><strong>Administrative expenses:<\/strong> Costs associated with running the government machinery, such as maintenance, office expenses, and other administrative costs&nbsp;<\/li><\/ul><\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Hence, While the Capital Budget contributes to long-term economic growth and development, the Revenue Budget ensures the smooth functioning of government operations and public service delivery. Both budgets play critical roles in managing financial resources, balancing expenditures, and addressing the diverse needs of the country.&nbsp;<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel &#8211;&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. 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Mains Answer Writing Practice &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3mZuVxl\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Visit_our_YouTube_Channel_%E2%80%93_here\"><\/span>Visit our YouTube Channel &#8211;&nbsp;<a href=\"https:\/\/www.youtube.com\/@ShabbirsEduKemyforIAS\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>Capital Budget focuses on long-term investments like infrastructure and assets, while revenue Budget pertains to day-to-day operational<\/p>\n","protected":false},"author":17,"featured_media":17705,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[185],"tags":[186,299,142,232,145,353],"class_list":["post-17692","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-upsc-mains-solved-papers","tag-general-studies-1","tag-geography-general-studies","tag-previous_year_questions","tag-upsc","tag-upsc-mains-question-paper","tag-upsc-model-answers"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/17692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/comments?post=17692"}],"version-history":[{"count":3,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/17692\/revisions"}],"predecessor-version":[{"id":28972,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/17692\/revisions\/28972"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media\/17705"}],"wp:attachment":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media?parent=17692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/categories?post=17692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/tags?post=17692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}