(a) Classify the following as Revenue receipts or Capital receipts. Give valid arguments in support of your answer: (i) Interest received on loan.…

Interest received on loan is a revenue receipt because it neither creates any liability nor causes a reduction in assets of the government.

Disinvestment receipts from sale of a government company are capital receipts as it causes a reduction in assets of the government.

Financial assistance by the Government of USA for promoting girl education in India is a revenue receipt as it neither creates any liability nor causes a reduction in assets of the government.

As indicated in the given chart:

Transport: The expenditure on transport accounted for ₹ $\displaystyle 3.32$ lakh crore in the year $\displaystyle 2021$-22. In the year $\displaystyle 2022$-$\displaystyle 23$, a Revenue expenditure of ₹ $\displaystyle 3.90$ lakh crore was allocated for this sector. Out of the total budget expenditure of the year $\displaystyle 2023$-$\displaystyle 24$, ₹ $\displaystyle 5.17$ lakh crore was allocated to transport.

Rural Development: In the year $\displaystyle 2021$-$\displaystyle 22$, the expenditure on rural development accounted for ₹ $\displaystyle 2.29$ lakh crore. In the year $\displaystyle 2022$-$\displaystyle 23$, of the total revenue expenditure ₹ $\displaystyle 2.43$ lakh crore was allocated for rural development. ₹ $\displaystyle 2.38$ lakh crore was allocated for the development of rural sector from the total budget expenditure in the year $\displaystyle 2023$-24.

Fiscal deficit refers to excess of the government’s total expenditure over its total receipts excluding borrowing for a fiscal year.

Whereas;

Revenue Deficit refers to the excess of government’s revenue expenditure over revenue receipts for a fiscal year.