What are the components of the Budget?

The components of the budget has 2 parts which are given below:

a. Revenue budget: It consists of revenue receipt and revenue expenditure:

i. Revenue receipt: These are the receipts that neither create any liability or reduce any asset. It includes items that are repetitive and routine. It consists of tax and nontax revenue. A tax is a compulsory payment levied by the government on the income of a person or a company.

ii. Revenue expenditure: These are the expenditures that neither create any assets or reduce any liability.

b. Capital budget: It consists of capital receipt and capital expenditure:

i. Capital receipt: These are the receipts that either create any liability or reduce any asset. It includes items that are nonrepetitive and nonroutine. It includes the following:

i. Borrowing: It is done to meet the financial requirements of the country either domestically from the general public by issuing bonds in the government market or externally from the international financial institutions and foreign countries.

ii. Recovery of loans and advances: the loans extended to other countries are an asset to the government. It includes the recovery of loans granted by the central government to the state and union territory government

ii. Capital expenditure: These are the expenditures that either create any assets or reduced any liability. For example, acquisition of land and machinery.