Revenue Expenditure in Government Budget – definition, types examples class 12

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Looking for what is revenue expenditure. Its definition, types, and examples, as per the class 12 syllabus.

This topic is concerned with the government budget chapter of Macroeconomics.

Revenue Expenditures are one of the components of a Capital Budget or Budget Expenditures.

What is Revenue Expenditure (Class 12)

Revenue expenditure is expenditure incurred for purposes other than the creation of physical and financial assets of the central government.

It relates to those expenses incurred for the normal functioning of the government departments and various services such as

  1. interest payments on debt incurred by the government
  2. Grants given to state governments and other parties

Definition of Revenue Expenditure (Class 12)

Following are the various definition of revenue expenditure.

Revenue expenditure refers to estimated expenditure of the government is a fiscal year which does not create assets or causes a reduction in liabilities.

T. R Jain

Revenue expenditure refers to the expenditure which neither creates any assets nor causes reduction in any liability of the government.

Sandeep Garg

Revenue expenditure is the expenditure which does not lead to any creation of assets or reduction in liabilities.

S.K Aggarwal

Examples of Revenue Expenditure (Class 12)

Expenditure on salaries by government, pensions, interest, subsidies, grants etc.,

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