Mains Answer Writing
Concept Mapping Mentorship- Covering Syllabus Through Themes
- GS & Optional
What is ‘Capital Budget’? How does it differ from the Revenue Budget in the context of the Union Budget?
Category: Economy (GS -III),
Test Date: 29 Jan 2025
Approach
- Definition of Capital Budget: (a part of the Union Budget that deals with government expenditures on capital assets like infrastructure, machinery, long-term investments, and its sources of funding (such as borrowings))
- Definition of Revenue Budget (covers the government's regular income (taxes, non-tax revenue) and expenses for day-to-day functioning (salaries, subsidies, interest payments))
- Differences:
- Purpose: Capital budget focuses on long-term assets, while revenue budget is for recurring, operational expenses.
- Funding: Capital budget often funded through borrowings or disinvestment; revenue budget funded primarily through taxes and duties.
- Impact: Capital expenditure can lead to future economic growth, while revenue expenditure tends to have immediate, short-term effects.
- Cite examples from the Union Budget, such as government spending on infrastructure projects (capital budget) versus subsidies or salaries (revenue budget).
- Conclude accordingly
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