Explain with examples public revenue and public expenditure.

The income of the government is known as public revenue. Public revenue is composed of tax revenue and non-tax revenue. Tax revenue comes from direct and indirect taxes. Non-tax revenue includes fees paid for governmental services, fines and penalties for violating laws, grants form external governments or organisations, interest received from the loans given, and profit from the enterprises operated by the government, like Indian Railways, Postal Services, etc.

The expenditure incurred by the government in undertaking its various activities are known as public expenditure. This expenditure can be classified into two broad categories of developmental and non-developmental. The expenditure incurred in the creation of new assets is called developmental expenditure. For instance, the construction of new roads, bridges, airports, etc. This expenditure is more visible to the general public. While those expenses which are less visible in the public eyes are called non-developmental expenses. These are incurred to provide governmental services like defence, pension, poverty alleviation schemes, etc.