QUESTION 2
GS3
10 marks
Distinguish between Capital Budget and Revenue Budget. Explain the components of both these Budgets.
WRITE IN
7 min
150 words
What the examiner wants
Distinguish the capital and revenue budgets and list the parts of each.
Distinguish + ExplainBring out the differences clearly, point by point. Make clear how and why it happens: causes, process, and an example for each point.
Demand-wise check
- 1Revenue budget: revenue receipts (tax, non-tax) and revenue expenditure (salaries, interest, subsidies, pensions) — no asset creation or liability reduction≈30 words
- 2Capital budget: capital receipts (borrowings, disinvestment, loan recovery) and capital expenditure (assets, loans given, debt repayment)≈30 words
- 3Key difference: effect on assets and liabilities; recurring vs non-recurring≈30 words
- 4Related deficits: revenue deficit, effective revenue deficit, fiscal deficit≈30 words
Open in about 20 words and close in about 20.
Answer plan
DefinitionsDifference tableComponents of eachDeficits linkConclusion
Where marks usually go
- Mixing up interest payments (revenue) and loan repayment (capital)
- Not listing components
Draw this
- Two-column table with receipts and expenditure in each budget
Value addition
- LawArticle 112 requires the Annual Financial Statement to distinguish expenditure on revenue account from other expenditure.Constitution of India, Article 112
- DataUnion capital expenditure was budgeted at ₹11.11 lakh crore (3.4% of GDP) in 2024–25.Union Budget 2024–25
Mapped topper copies
Reviewed public-source references related to this PYQ. Same-syllabus references are labelled separately.
- Mayank Purohit · AIR 33 · Page 3 ↗Same syllabus reference
- Aniket Ranjan · AIR 48 · Page 26 ↗Same syllabus reference
- Shakti Dubey · AIR 1 · Page 23 ↗Same syllabus reference
- Mayank Purohit · AIR 33 · Page 13 ↗Same syllabus reference
Links open original public sources. MainsBuddy does not host these answer sheets.
Next: plan for one minute, write it in 7 minutes, then get it checked.