General Knowledge
Public Finance
Understand government revenue, expenditure, public debt, taxation and budgeting basics.
Study progress
1. Meaning
Public finance studies government revenue, expenditure, borrowing and financial management.
2. Revenue
Tax revenue comes from taxes; non-tax revenue includes fees, dividends, interest and other receipts.
3. Expenditure
Government spending can be classified in several ways; exam questions often contrast capital and revenue expenditure.
4. Budget
The Union Budget presents estimated receipts and expenditure and related fiscal measures for the financial year.
5. Fiscal Deficit
In simple terms, fiscal deficit represents the gap between total expenditure and total receipts excluding borrowings; borrowings finance the gap.
Memory Tricks & Quick Recall
Remember R-E-B-D: Revenue → Expenditure → Borrowing → Deficit. Capital expenditure generally creates/strengthens assets; revenue expenditure mainly relates to recurring operations.