Check sibling questions

It is the expenditure incurred for purpose other than creation of physical or financial assets

It is a recurring expenditure.

It includes:

Expenses for Normal functioning of govt department

(like Salary to Employees, Office expenses)

 

Interest Payment on Debt

(Loan taken by Central govt on which it has to pay interest)

 

Grants given to State Govt and others

(Grants are non returnable, hence they are not asset)

 

Subsidies

It is a kind of financial aid given by govt to keep price of commodity low

Example - Cooking Gas cylinder whose cost is 600 is sold for 500 in market (as 100 Subsidy is given by govt)

 

Defense Expenditure

Expenditure on purchase of different weapons and paying salary of army, navy, airforce etc

Example of Different Revenue Expenses - Teachoo.JPG

Classification of Expenses of Budget

The expenditure in Budget is of 2 types:

  • Plan Expenditure
  • Non Plan expenditure

Revenue Expenditure Types - Teachoo.JPG

What is Plan Expenditure

Central Govt makes 5 year plans

Expenditure made as per these plans is called Plan expenditure

State govt also make its own Plans

For this, Central Govt provides assistance which is called Plan expenditure

 

What is Non Plan expenditure

All expenditure other than plan expenditure is called Non plan expenditure

They include economic and social expenditure such as interest payments, defense services, subsidies,

salary and pension.

Different Non Planned Revenue Expenditure - Teachoo.JPG

NCERT Questions

No questions in this part

Other Books

Question 1

In the following questions, select the correct answers:

Which one of these is a revenue expenditure?

  1. Purchase of shares
  2. Loans advanced
  3. Subsidies
  4. Expenditure on acquisition of land
View Answer

 

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Transcript

Example of Different Revenue Expenses Expenses of Business Salary to Employees Office Expenses Interest on Loan Discount Given Purchase of Goods for sale Donation Given Expenses of Govt. Salary to Govt Employees Office Expenses Interest on Debt Subsidy to Customers Purchase of Weapons (Defense Exp) Grants Given (To State govt or others) Revenue Expenditure Types Plan Expenditure Non Plan Expenditure Expenditure as per 5 year Plans of Central Govt Expenditure Other than 5 year Plans Cash Assistance To Plans of State Govt Example Interest Expense Salary Expenses Different Non Planned Revenue Expenditure Non Plan Expenditure It refers to expenditure other than as per Plan Expenditure like Interest Payment Defence Payment Subsidies Salary/Pension On Loan taken by Central Govt On Army, a Navy, Airforce Reduction in Price by Govt Of Staff working in Govt Departments

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CA Maninder Singh is a Chartered Accountant for the past 12 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.