Question 38 of 38
Q.Explain capital receipts and capital expenditure as a part of the capital budget.
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2020Subjective· 4mImportance★★★★★
100% · 38/38 Questions
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →Capital budget = capital receipts (create liability/reduce assets) + capital expenditure (create assets/reduce liability).
The government budget has two parts: the revenue budget and the capital budget. The capital budget deals with receipts and expenditure that affect the assets and liabilities of the government.
Capital receipts — receipts that either create a liability or reduce an asset of the government:
- Market borrowings and loans (internal and external) — create a liability.
- Recovery of loans granted earlier — reduces a financial asset.
- Disinvestment (sale of shares of public-sector units) — reduces an asset.
- Small savings, provident fund deposits, etc.
Capital expenditure — spending that either creates an asset or reduces a liability:
- Building infrastructure — roads, bridges, dams, buildings (creates assets).
- Purchase of machinery, land and equipment (creates assets). …
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.