Classification of Revenue Receipts Introductory Macroeconomics Subject Chosen. (VBQ; Foreign 2014) These questions are repeatedly asked in exams in one or other way round. What is revenue expenditure in government budget? (i) Redistribution of income and wealth. (ii) Value Added Tax It is a kind of indirect tax as it is imposed on one person and its burden shifts to other person. Ans.The expenditure of the government which neither cause any increase in the government assets nor cause any reduction in government liabilities, are termed as revenue expenditures, e.g. (i) Tax receipts are revenue receipts for the government because neither they create a liability nor they lead to reduction in any assets. This is one of the most fundamental objectives behind framing a government budget. burden of this tax is not possible to shift to the other person. Here are a few reasons why it’s important for the government to have a budget: Proper resource pool allocation When it comes to budgeting, identifying areas of weakness helps the government to allocate resources in a useful and sustainable manner. Oct 10, 2020 - Important Questions : Government Budget & the Economy Class 12 Notes | EduRev is made by best teachers of Class 12. Distinguish between revenve expenditure and capital expenditure. (ii) Expenditure on building a bridge is a capital expenditure because it increases the assets of the country. 9. Giving reason, state whether the following is a revenue expenditure or a capital expenditure in a government budget: actual burden of these taxes cannot be shifted, e.g. Government Budget And The Economy. 6. These ncert book chapter wise questions and answers are very helpful for CBSE board exam. There are mainly two types of budget in India: Union and State budget. Currently only available for. CBSE Gujarat Board Haryana Board. A budget is a tool that transfers a general idea into a productive, action-oriented and aspirational goal. Ans. Ans. This allocation is done with the help of government budgetary policy. salaries and pension of government employees. Government encourages the production of certain commodities by giving tax reliefs and providing necessary infrastructural requirements. 15. The government prepares an expenditure according to its objective and then starts gathering the resources and funds to fulfil the proposed investment. On the other hand, interest received on loans, dividend received from public enterprises, and grants from foreign government are revenue receipts as they neither create liability nor any reduction in assets of the government. Which economic value does it reflect? Explain the redistribution of income objective of government budget. This course will help you understand the various aspects of government budget on the economy. Allocation of resources (ii) Recovery of loans It refers to that inflow of cash which the government has disbursed previously. Ans. Social welfare is the single most objective of the government. (All India 2013) Economic stability an objective of government budget Government tries to establish economic stability by its budgetary policies. (i) Wealth Tax It is a kind of direct tax as it is paid by the same person on which it is levied or imposed, i.e. Ans. Explain the economic stability objective of government budget. or (i) Recovery of loans Define a direct tax. (ii) Difference between revenue expenditure and capital expenditure. Give meanings of revenue receipts and capital expenditures with one example for each. (All India 2010) The government budget is an annual statement, showing item wise estimates of receipts and expenditures shown in the budget are not the actual figures, but the estimated values for the coming year. (ii) Reallocation of resources for maximisation of social welfare. (ii) Reduction of poverty and employment: To eradicate mass poverty and unemployment by creating maximum employment opportunities and providing maximum social benefits to the poor. Explain. CBSE Class 12 Economics Chapter- Government Budget and the Economy Important Questions – Free PDF Download. 23. 33.Government raises its expenditure on producing public goods. Ans. Define government budget. The main objective of the budgetary policy of the government is to reduce inequalities of income and wealth in the country. Class 9 NCERT Economics. Get all questions and answers of The Government Budget And The Economy of CBSE Class 12 Commerce Economics on TopperLearning. (v) Economic stability The government allocates the resources in accordance with the social and economic priorities of the country. 11. 4 docs 8 tests. Capital receipts The receipts which create corresponding liability for the government or lead to reduction in assets of the government are termed as capital receipts, e.g. (iv) Grants from foreign government. (Delhi 2010c, 2009 c) For this, it performs the allocative function. (i) Expenditure on scholarships is a revenue expenditure because neither it lead to decrease in liabilities nor lead to an increase in assets. Prepared by teachers of one of the best CBSE schools in Delhi. Receipts and expenditure of the government is ‘ promoting social welfare ’ of. High tax rates on higher income group is the principal objective of the prepares., 9, 10, 11 and 12 s financial report explaining item-wise calculations of revenue! Plans and programmes through the budget is classified into two segments: ( i ) tax revenue it of. Network, etc assets of the most important information document of the society as device. More, stay tuned to BYJU ’ s good to recap the Concept thanks uploading. 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